General Mills, Inc. v. Chobani, LLC

Citations: 158 F. Supp. 3d 106; 2016 U.S. Dist. LEXIS 10520; 2016 WL 356039Docket: 3:16-CV-58

Court: District Court, N.D. New York; January 28, 2016; Federal District Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

General Mills, Inc. has filed a lawsuit against Chobani, LLC in the United States District Court for the District of Minnesota, alleging false advertising in violation of the Lanham Act and Minnesota state law. The dispute centers around Chobani's "Simply 100 Campaign," which promotes its "Simply 100 Greek Yogurt" as containing no artificial sweeteners or preservatives while comparing it to General Mills’s Yoplait Greek 100 yogurt. General Mills sought a temporary restraining order and preliminary injunction to halt certain claims made in the campaign. In response, Chobani requested a transfer of the case to the Northern District of New York due to a related dispute involving The Dannon Company, Inc., and also sought a stay of proceedings pending the outcome of its venue transfer request. The court granted the transfer on January 14, 2016, and subsequently denied General Mills's request for a temporary restraining order but expedited the briefing for the preliminary injunction. Oral arguments were held on January 22, 2016.

General Mills is a leading food industry company, recognized for its Yoplait brand, which it has heavily marketed, spending over $900 million in the past five years. Yoplait Greek 100, a high-protein, low-calorie yogurt, is a significant revenue source, contributing approximately one billion dollars annually. Chobani, a newer entrant to the yogurt market since 2005, emphasizes its commitment to natural, non-GMO ingredients and environmental sustainability in its marketing campaigns, positioning itself as the "No. 1 Greek Yogurt brand in the United States."

In 2014, Chobani launched the “How Matters” campaign to emphasize the importance of their yogurt-making process alongside the final product. In 2015, the “To Love This Life Is [T]o Live It Naturally” campaign was introduced, promoting the use of natural ingredients in Chobani products and encouraging consumers to choose simpler food options. The core of the current legal case revolves around the “Simply 100” advertising campaign, which is presented as a continuation of these pro-natural-ingredients initiatives. 

The campaign promotes Chobani Simply 100 Greek Yogurt, which contains 100 calories per serving without preservatives or artificial sweeteners. It includes a multimedia approach featuring a commercial, print advertisement, and digital/social media content, launched in January 2016. 

1. **Commercial**: The commercial features a woman in a vintage convertible examining Yoplait Greek 100 yogurt, discovering it contains potassium sorbate, described negatively by the narrator. After discarding the Yoplait, she happily chooses Chobani Simply 100, which is presented as the only light Greek yogurt without preservatives. The ad concludes with a scenic view and the jingle, “to love this life is to live it naturally,” alongside the hashtag #NOBADSTUFF.

2. **Print Ad**: The print advertisement asks, "Did You Know Not All Yogurts Are Equally Good For You?" It warns consumers about "bad stuff" in yogurt, referencing artificial ingredients in a footnote. It features Yoplait Greek 100's ingredients label and echoes the commercial's negative portrayal of potassium sorbate. The ad asserts that Chobani Simply 100 is free from artificial sweeteners and preservatives.

3. **Digital Content**: The digital campaign includes a website and social media efforts across platforms like Facebook and Instagram, with messaging centered on consumer awareness of yogurt ingredients, asking, "Do You Know What’s In Your Cup?" 

Collectively, these elements highlight Chobani's commitment to natural ingredients while contrasting its products with competitors.

Ingredients in light yogurts are compared, highlighting Yoplait Greek 100, which features an image that, when selected, reveals its nutrition label, emphasizing several 'artificial' components in red. A section of the Digital Content discusses potassium sorbate, identified as a permissible food preservative and a 'minimum risk pesticide' according to regulatory classifications. Potassium sorbate, a potassium salt of sorbic acid, is recognized as safe by the FDA and has undergone extensive testing by the USDA, proving non-toxic even in large amounts. It decomposes in the body into water and carbon dioxide and is widely used in various food products for its mold and yeast inhibiting properties. While primarily a food preservative, it is also included in some pesticide products recognized by the EPA as exempt from certain regulations.

Concerning legal standards, a preliminary injunction is described as an extraordinary remedy, not granted as a right. The applicant must clearly demonstrate that specific criteria are met. Historically, a two-pronged test was used for obtaining preliminary injunctions, requiring proof of irreparable harm and either a likelihood of success on the merits or serious questions regarding the merits combined with a favorable balance of hardships. However, following the Supreme Court's 2008 Winter decision, a four-pronged standard emerged. A plaintiff must now show a likelihood of success on the merits, likely irreparable harm, a favorable balance of equities, and that an injunction serves the public interest. The Second Circuit later adapted this standard for copyright cases, allowing for injunctions if either a likelihood of success or serious questions on the merits are shown, along with proof of likely irreparable injury and a balance of hardships favoring the plaintiff.

The court is required to assess whether granting a preliminary injunction would serve the public interest, a standard stemming from the Salinger case, which, while initially applicable to copyright, is relevant to all injunctions. Despite apparent inconsistencies in the standards for preliminary injunctions between the Supreme Court and the Second Circuit, the Second Circuit has reaffirmed its established criteria. To obtain a preliminary injunction, a party must demonstrate four elements: 1) a likelihood of irreparable harm; 2) either a likelihood of success on the merits or serious questions regarding the merits with a favorable balance of hardships; 3) a balance of hardships that favors the party regardless of the likelihood of success; and 4) that the injunction aligns with the public interest.

The Lanham Act’s Section 43(a) addresses unfair competition through false advertising, holding individuals liable for using false or misleading descriptions in commerce that misrepresent the nature or qualities of goods or services. Claims can be based on literal falsehoods or misleading statements. Literal falsity can be established either by explicit falsehoods or by implication, where an advertisement implies a false claim that the audience would recognize. The entire advertisement must be considered, as only unambiguous messages can be deemed literally false. If literal falsity is proven, consumer deception is presumed, allowing for relief without requiring proof of actual consumer impact. Additionally, consumer deception may be presumed if the defendant intentionally deceived the public through egregious conduct. Alternatively, a claim may also be made for misleading advertisements that are literally true but deceptive.

To succeed in a case involving a statement that is not literally false, the claimant must provide extrinsic evidence showing that the challenged advertisements mislead or confuse consumers, and that a statistically significant portion of the audience holds the false belief allegedly conveyed by the ads. Specifically, under the Lanham Act, a claimant must establish: 1) a false or misleading statement, 2) connected to commercial advertising or promotion, 3) that is material, 4) made in interstate commerce, and 5) caused or is likely to cause damage to the plaintiff.

Chobani argues for a higher threshold for preliminary injunctive relief, claiming that General Mills's request to halt its advertisements constitutes a mandatory injunction, which necessitates a clear likelihood of success on the merits. This claim would eliminate the consideration of "fair grounds for litigation." The court's role in granting a preliminary injunction is to restore the status quo ante, which reflects the situation prior to the dispute, specifically before Chobani's Simply 100 Campaign began.

General Mills asserts it is likely to succeed in proving that Chobani’s campaign is "literally false by necessary implication," particularly through the statement that potassium sorbate is used to kill bugs, implying the product is unsafe. Chobani defends its claims by stating that the assertion about potassium sorbate is true and argues that its negative comparisons to General Mills’s ingredients are mere puffery—subjective opinions about product superiority. However, the court finds this argument unconvincing, noting that while puffery may not be actionable, Chobani's negative comparisons directly attack a competitor's safety, which crosses the line into potentially misleading advertising.

Chobani's statements regarding potassium sorbate, while possibly factually true, may convey a misleading message that its product is unsafe compared to General Mills' Yoplait Greek 100. Courts recognize that even true statements can lead to a literally false message if their clear meaning is false in context. General Mills has shown a strong likelihood of success on its false advertising claim under the Lanham Act, suggesting a factfinder would likely conclude that Chobani's Simply 100 Campaign implies that Yoplait Greek 100 is unsafe due to its ingredients. Despite Chobani’s argument regarding the ongoing scientific debate over potassium sorbate's safety, evidence indicates it is generally considered safe. Although there are some factual distinctions between this case and prior cases cited by General Mills, the similarities are significant enough to support the claim.

Regarding irreparable harm, General Mills claims it has suffered losses in sales, market share, and goodwill due to Chobani's advertising. Historically, a presumption of irreparable harm existed for plaintiffs demonstrating a likelihood of success on a false comparative advertisement claim. However, Chobani contests this presumption, citing evolving legal standards that may require plaintiffs to provide specific evidence of irreparable harm instead. The court acknowledges the shift away from a categorical presumption and emphasizes that movants must demonstrate irreparable harm based on traditional equity principles, concluding that no presumption of harm applies in Lanham Act cases.

Benchmarking irreparable harm has evolved following Supreme Court rulings in eBay Inc. (2006) and Winter (2008). Even without a presumption of irreparable harm, General Mills has proven this element. To establish irreparable harm in a Lanham Act case, a party must demonstrate: 1) the parties are competitors in the relevant market; and 2) a logical causal connection between the alleged false advertising and its sales position. The parties are indeed competitors in both the health food and yogurt markets, specifically in low-calorie Greek yogurt products. A logical causal connection exists as the sales of one party’s products influence the other’s. General Mills has shown that continued dissemination of false statements in the Simply 100 advertising campaign would cause irreparable harm.

Regarding the balance of hardships, General Mills has established its claim, while Chobani cannot claim an equitable interest in perpetuating false advertising. Therefore, the balance of hardships favors General Mills. 

In terms of public interest, preventing false or misleading advertising is crucial, particularly regarding food safety, and especially for products aimed at children. An injunction aligns with the public interest by preventing customer confusion.

In summary, General Mills has met the required elements for a preliminary injunction, with the only remaining issue being the bond amount. The parties agreed on a $1,000,000 bond, which the court deems appropriate. Chobani can promote the benefits of natural ingredients but cannot falsely claim that potassium sorbate makes Yoplait Greek 100 unsafe.

General Mills's motion for a preliminary injunction is granted, prohibiting Chobani and its associates from disseminating specific advertisements and claims related to General Mills products, particularly those involving Yoplait Greek 100, pending the case's final determination. The injunction restricts the dissemination of the Commercial, Print Ad, and Digital Content, as well as claims asserting that General Mills products are unsafe due to potassium sorbate or contain harmful substances. General Mills is required to post a $1,000,000 bond as security for potential damages incurred by Chobani. The injunction is effective immediately upon the Clerk of the Court's acceptance of this security. The excerpt notes that General Mills acquired a controlling interest in Yoplait SAS in 2011 and discusses legal standards for determining false advertising claims, indicating that a substantial number of consumers must receive misleading impressions for a claim to be actionable. The excerpt also mentions that evidence, such as expert testimony, may suffice at the preliminary injunction stage, without the need for extensive surveys. The materiality requirement is met, as product safety is deemed an inherent quality. Notably, Chobani acknowledges that potassium sorbate is generally recognized as safe for food use.