Planning to Advertise That You're "Fair Trade Certified"?

Chobani sells yogurt that is "Fair Trade Certified" -- and the front of the product packaging prominently displays the Fair Trade logo.  

The back of the packaging promotes the fact that Chobani is the first dairy company in the United States to become Fair Trade Certified, and explains that when consumers choose its products, that means: 

"Yes to products made under the highest standards.  Yes to promoting sustainable livelihoods.  Yes to safe working conditions for farmers and workers.  Yes to taking care of the people who take care of animals.  Yes to strong, transparent supply chains."

The top of the packaging also explains that:

"Eating this yogurt empowers dairy famers, supports safe working conditions and animal care, and provides extra income to the people who helped make this product." 

A purchaser of Chobani yogurt sued the company for false advertising under New York law, alleging that Chobani's description of what it means to be "Fair Trade Certified" is false and misleading.  Essentially, the plaintiff alleged that, "Despite these explicit marketing representations, Chobani's Fair Trade USA certified products do not adhere to the highest standards that are available to dairy workers under other programs, fail to improve key factors for sustainable livelihoods beyond the bare minimum under U.S. law, and include no standards whatsoever relating to animal care."  

Chobani moved to dismiss.  In order to survive a motion to dismiss, a plaintiff "must do more than plausibly allege that a label might conceivably be misunderstood by some few consumers."  Instead, the plaintiff must plausibly allege that "a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled."  

Initially, the court addressed the plaintiff's argument that Chobani's statements that its products were made under the "highest standards" and that they promote "sustainable livelihoods" are false and misleading.  The court determined that the plaintiff had not plausibly alleged a claim here, explaining that the plaintiff never alleged that Chobani failed to meet the Fair Trade standards or pointed to specific ways in which Chobani didn't promote sustainable livelihoods.  The court explained that, "Plaintiff's allegations are, at most, a criticism of the certification's methodology, not a description of a false, deceptive, or misleading statement about the Product."  

To the extent that the claims made on the packaging suggest that Chobani goes beyond what the Fair Trade certification requires, the court didn't think that the plaintiff had sufficiently alleged that Chobani had failed to do that.  The court explained, "Plaintiff instead rests upon a hypothetical, surmising that because the Fair Trade USA certifications guarantees are not as 'strong' as Milk for Dignity or other programs, the dairy farms must not be following those heightened requirements.  However, without more, there is no plausible basis to make such a leap where Plaintiff does not allege as such." 

The court next addressed the plaintiff's argument that Chobani misled consumers about whether it supports safe animal care, since the Fair Trade certification doesn't address animal treatment standards.  The court rejected this argument as well, holding that the certification's requirement that companies comply with "any local and national laws that govern the care and treatment of farm animals" was enough to support Chobani's animal treatment claim. 

What are some key take-aways here?  First, once you advertise that you're complying with voluntary standards, you've turned those voluntary commitments into legal obligations.  If you're advertising that you comply with a particular standard, then you'd better be able to substantiate that you are, in fact, in compliance.  Second, be careful about characterizing what the standard means.  If you're going to explain the standard, you should align your explanation as closely as possible with the specific criteria that the standard is examining.  Third, it's wise to avoid claims that you're complying with the most stringent standards, unless you're confident you can back that up.  Although the court wasn't too concerned about that issue here, in complaint pleaded differently, or with a different judge, the result could easily have been different. 

Herceg v. Chobani,

2023 WL 6162939 (S.D.N.Y. 2023).