California’s unfair competition and consumer protection laws protect consumers from false representations about products or services. These laws include the Unfair Competition Law (Business and Professions Code §17200, et seq.), the False Advertising Law (Business and Professions Code §17500, et seq.), and the Consumer Legal Remedies Act (Civil Code §1750). Lawsuits for violation of the consumer protection laws are often brought as class actions on behalf of the general public. Such actions are important because, in many cases, there is no other practical way for an individual to obtain redress for a wrong that affects the public.
Sometimes, however, cases are filed under the unfair competition and consumer protection laws that are intended to correct real problems, but are simply attempts to make money. One of the best examples is a case filed against Starbucks for deceiving consumers by underfilling its iced drinks. The underfilling is allegedly due to the presence of ice in the drink. As ridiculous as it sounds, that was the plaintiff’s claim. A federal district judge in the Central District of California found the case to be just that – ridiculous – and dismissed it two and a half months after it was filed.
The plaintiff, Alexander Forouzesh, filed his complaint in Los Angeles County Superior Court on June 1, 2016. Forouzesh alleged that Starbucks advertises its cold drinks by fluid ounce: a Tall is 12 oz., a Grande is 16 oz., a Venti is 24 oz., and a Trenta is 30 oz. The plaintiff alleged that Starbucks intentionally filled its clear plastic cold drink cups with less than the advertised amount of liquid, and then added ice to fill up the cup. The plaintiff apparently purchased some Starbucks drinks, removed the ice, and measured the volume of liquid in the cup. Naturally, he found that the volume of liquid was less than the size of the cup. He found that a Venti contained 14 oz. of fluid beverage, not 24 oz. as advertised. So, for example, if you order a Venti iced tea (as I have many times), you get about 14 oz. of tea and the rest of the 24-oz. cup is filled with ice. The plaintiff alleged that because ice is not a liquid, Starbucks misrepresents its drink sizes. He claimed that he and the class would not have purchased Starbucks’ drinks had they known that the actual amount of liquid in the cup was less than the volume of the cup, or, at least, would not have paid as much money as Starbucks charged for the drinks.
The complaint asserts claims for violation of the Unfair Competition Law, False Advertising Law, Consumer Legal Remedies Act, breach of express warranty, breach of implied warranty, fraud, negligent misrepresentation, and unjust enrichment.
Starbucks removed the case to the Central District of California and filed a motion to dismiss. In its motion, Starbucks argued that all of the plaintiff’s claims failed the plausibility standard because no reasonable consumer would be misled by Starbucks’ drink sizes. Any reasonable consumer would know that a 24-oz. cup of iced tea or iced coffee does not contain 24 oz. of liquid because consumers expect the cup to contain ice (which will take up some of the space in the cup), they can see the ice in the clear plastic cup, and they ordered an iced drink. As Starbucks emphasized, how can consumers be deceived when they order an “iced” drink and it arrives with the named ingredient, ice, in it?
Judge Percy Anderson wasted no time in ruling for Starbucks. Starbucks’ reply brief was filed on August 9, 2016, and the court vacated the oral agreement shortly thereafter, taking the matter under submission (perhaps the court enjoyed an iced drink while reviewing the motion!). On August 19, 2016, the court issued its decision granting Starbucks’ motion, dismissing the case with prejudice, and entering judgment for Starbucks.
The court stated that:
“. . . [Y]oung children learn they can increase the amount of beverage they receive if they order ‘no ice.’ If children have figured out that including ice in a cold beverage decreases the amount of liquid they will receive, the Court has no difficulty concluding that a reasonable consumer would not be deceived into thinking that when the order an ice tea, that the drink they receive will include both ice and tea and that for a given size cup, some portion of the drink will be ice rather than whatever liquid beverage the consumer ordered.”
The court relied on the fact that Starbucks’ cups are clear and consumers can see the ice in the cups. The court also found that Starbucks did not actually state that its drinks had specific amounts of liquid, but only that the drinks were of certain sizes. According to the court, a reasonable consumer “knows the size of the cup that drink will be served in and that a portion of the drink will consist of ice. Because no reasonable consumer could be confused by this, plaintiff fails to state viable . . . claims.” Sounds logical.
Interestingly, Starbucks faces a similar class action lawsuit over its hot drinks. In that case, Strumlauf v. Starbucks Corporation (N.D. California), the plaintiff alleged that Starbucks underfilled its hot drinks because of the foam and because it uses standardized fill lines in the hot drink cups that are less than the listed size of the drinks. Recently, the court in that case granted Starbucks’ motion to dismiss in part, dismissing certain claims, but denied the motion as to the plaintiff’s claims for breach of express warranty, fraud, and violation of the Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act. The court found that the plaintiff had stated facts sufficient to support claims that consumers were likely to be deceived with Starbucks’ hot drink sizes. Thus, Starbucks has had more difficulty getting rid of this case at the pleading stage than the iced drink case, possibly because the hot drinks are not served in clear cups and do not contain the word “foam” in the name of the drink.
In both cases, Starbucks has emphasized that any customer not satisfied with their drink can ask that it be remade. That might be a better solution than the court awarding millions of dollars in damages to Starbucks’ customers!