Dec 22, 2024

Judge Dismisses Lawsuit Against Costco Over Chocolate Dipped Ice Cream

by Nadia El-Yaouti | Jan 03, 2022
Exterior of a Costco Wholesale store displaying its signage. Photo Source: Adobe Stock Image

A lawsuit which was brought against warehouse retail giant, Costco, has been dismissed by a federal judge in California.

The lawsuit was brought forward by Plaintiff Ankush Puri. Puri alleged that Costco falsely advertised their Kirkland brand chocolate almond-dipped vanilla ice cream bars because the chocolate used in the ice cream consisted mainly of “ingredients consumers do not expect in chocolate - vegetable oil.”

Puri argued that Costco members would have reasonably expected the chocolate in the ice cream bars to be made out of chocolate from cacao beans. Instead, the complaint alleges that Costco favored a much cheaper substitute, vegetable oils including coconut oil and soybean oil in place of cocoa butter. By not disclosing that information to consumers, Puri alleges that the Ice cream bars touted misleading labels.

The complaint explains, “The representation as ‘Chocolate [Almond] Dipped,’ with pictures of chocolate and other key ingredients, is false, deceptive and misleading because the ‘Chocolate’ is mainly the opposite of chocolate – vegetable oils."

Citing the ingredients list on the ice cream nutrition label, the complaint explains that the ingredient “unsweetened chocolate processed with alkali” attested to the reality that it was not actual chocolate that was used but cocoa powder. The complaint explains, “This means that the Product contains even less chocolate than otherwise assumed, because cocoa powder lacks cocoa butter.”

After the lawsuit was filed, Costco filed a motion to dismiss which was later addressed by the plaintiff in an amended complaint. Costco then filed another motion to dismiss the amended complaint. In the second motion to dismiss, Costco goes on to argue that “Puri fails to state any claim because the Product is not misleading, Puri’s claims are preempted, Puri lacks standing to seek injunctive relief, and Puri has failed to comply with the requirements of the CLRA for seeking money damages.”

In mid-December, United States District Judge Edward J. Davila sided with the warehouse retail giant. Judge Davila detailed that Puri’s claims were not only preemptive but that neither of the regulations cited in the lawsuit “support a viable theory of liability.”

Judge Davila wrote, “Even assuming that less than 10% chocolate liquor is considered a ‘de minimis amount,’ Puri does not adequately allege that the Product contains only a de minimis amount of cacao bean ingredients or even that the Product is ‘mostly vegetable oils.’”

The dismissal continues, “Puri fails to state any claim because the Product is not misleading, Puri’s claims are preempted, Puri lacks standing to seek injunctive relief, and Puri has failed to comply with the requirements of the CLRA for seeking money damages.”

Puri’s lawsuit rings bells of similar cases in which food and beverage companies have been the target of misleading advertisement claims. In other cases, these allegations have cost companies big money. For example, a class-action lawsuit against the yogurt brand Activia cost the company $45 million in 2010 over a misleading ad campaign that alleged the yogurt had been “scientifically” and “clinically proven to boost immune health and regulate digestion.”

Redbull was also the target of a lawsuit in 2014 after the company’s tagline “Redbull gives you wings'' was the subject of misleading claim arguments. The company later settled the class action suit and customers who had bought the drink as early as 2002 were paid out a maximum of $13 million.

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Nadia El-Yaouti
Nadia El-Yaouti
Nadia El-Yaouti is a postgraduate from James Madison University, where she studied English and Education. Residing in Central Virginia with her husband and two young daughters, she balances her workaholic tendencies with a passion for travel, exploring the world with her family.

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