Askin v. Quaker Oats: Overpayment Based on Misrepresentations Constitutes “Injury-in-Fact”

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A federal judge has denied the Quaker Oats Company’s request to dismiss a consumer class action arising out of the company’s questionable product advertisements.  The lawsuit alleges that the cereal manufacturer’s characterizations of its oatmeal and granola as “wholesome” and “heart-healthy” are deceptive, because the products actually contain unhealthy trans fats.  See Askin v. The Quaker Oats Co., No. 11-cv-0111 (N.D. Ill. Oct. 12 2011) (order denying motion to dismiss) (available here).    

The plaintiff claims that Quaker has “engaged in a wide-spread marketing campaign to mislead consumers about the nutritional and health qualities of its Products.”  Slip op. at 3.  Contrary to its health-focused advertisements, Quaker products “contain highly unhealthy, unwholesome artificial trans fat.”  Slip op. at 3.  The plaintiff alleges that he has suffered an “injury-in-fact” because he purchased Quaker products in reliance on these false advertisements and that, had he known the truth, he would not have been willing to pay as much as he did for the products.  Slip op. at 3-4.

Quaker moved to dismiss the case by a Rule 12 motion, arguing that the levels of trans fats are so insignificant that the plaintiff cannot establish standing.  Specifically, Quaker contended that the plaintiff’s health concerns are speculative, and therefore his economic damage is not “a real injury.”  Slip op. at 4-5. 

The court disagreed with Quaker. In the order denying Quaker’s Rule 12 motion, Magistrate Judge Young B. Kim found that “regardless of whether [Plaintiff] was physically harmed by the products he consumed, he alleges that he would not have purchased them absent the allegedly misleading statements.  That allegation states the kind of economic injury that is redressable through this suit.”  Slip op. at 9.

 Quaker was likewise unsuccessful in attempting to dismiss a California consumer action with similar claims.  See Chacanaca v.The Quaker Oats Co., 752 F. Supp. 2d 1111 (N.D. Cal. Oct. 14, 2010) (available here).