Consumers Say Kraft Heinz Can't Toss False Label Suit

By Kat Sieniuc

Law360, New York (July 19, 2016, 4:29 PM ET) -- A group of condiment buyers accusing Kraft Heinz Foods Co. of duping customers with labels that say their products are "made in the U.S." when they actually contain foreign ingredients asked a California federal judge on Monday to keep their suit alive, arguing that the company isn't playing by the rules, which don't apply retroactively. Calling the company's effort to toss the suit "a long-shot attempt to avoid liability," plaintiff Suzanne Alaei argued that killing the suit would be unfair to other competitive businesses that had to comply with the stricter 100 percent "made in U.S.A." standard, which her claims fall under and which was updated to make more lenient at the start of 2016.

Alaei said that from a public policy perspective, the new version of the California code that was enacted on Jan. 1 cannot be applied retroactively as Kraft Heinz claims, since consumers relied on that information for their purchases.

"Contrary to Kraft Heinz's assertion, this litigation is not a 'game'; it concerns a significant consumer protection issue. Many consumers care about product labeling claims because they care about what goes into their bodies," Alaei said.

Alaei added that "should [Kraft Heinz's] interpretations be accepted here, it would lead to an absurd result, namely, that all consumable food products containing more than one ingredient are not covered by [California's Business and Professions Code]," she said. "That would mean companies like Kraft Heinz could falsely claim - with impunity - that their consumable food products are 'Made in the U.S.A.' even if only a single ingredient is actually produced or comes from the U.S.A. "

Suzanne Alaei claims that she was tricked into paying a premium for Heinz 57 sauce because of an allegedly false "Made in the U.S." label. Consumers believe that products made wholly in the U.S. are subject to higher quality standards, and therefore are superior goods, and that buying them lends support to American jobs and the economy, she said in her original complaint.

Kraft Heinz has argued that Alaei hasn't presented a single fact showing where, if not in the U.S., the company gets its turmeric, tamarind extract and jalapenos from, nor has she explained how those ingredients make the "manufactured in the U.S." statement false, considering that tamarind and jalapenos aren't ingredients in the sauce she bought.

Alaei hit H.J. Heinz Co. and its parent company, Kraft Heinz, with a proposed class action in January. The shopper said that she bought a bottle of Heinz 57 sauce believing her purchase was supporting U.S. jobs, the economy and ethical working conditions, only to find out later the product contained foreign-made ingredients, including turmeric, tamarind extract and jalapenos, according to the complaint.

She claimed that Heinz violated a number of California consumer protection laws, including the False Advertising and Unfair Competition Law and the Consumer Legal Remedies Act. H.J. Heinz was later dropped from the suit, as it is no longer an independent company after it merged with Kraft in 2015.

Alaei sought to represent a class of California consumers who purchased any of Kraft Heinz's "consumable consumer packaged good products regardless of brand" that were advertised or sold by Kraft Heinz with the manufactured in the U.S. label, the complaint said.

An attorney representing Kraft Heinz did not immediately respond to a request for comment on Tuesday.

Heinz is represented by Vickie E. Turner, Meryl C. Maneker, Robert K. Dixon and Mark A. Rein of Wilson Turner Kosmo LLP.

Alaei is represented by Abbas Kazerounian of Kazerouni Law Group APC.

The case is Suzanne Alaei v. H.J. Heinz Co. et al., case number 3:15-cv-02961, in the U.S. District Court for the Southern District of California.

--Additional reporting by Steven Trader and Suevon Lee. Editing by Stephen Berg.