A Chicago federal judge will allow a portion of a class action lawsuit to continue against the makers of Blue Diamond-brand almonds, over claims they misled consumers over how much real smoke was used to make their "smokehouse" almonds.
Margo Clark said she bought Blue Diamond Growers’ Smokehouse almonds at a Chicago CVS store at least once in March 2022. She contends that, despite being labeled “Smokehouse,” the almonds are not flavored by smoking the almonds in an actual smokehouse. Rather, the almonds attain their smokey flavor through a liquid flavoring. Clark claims that by labeling the product in this manner, Blue Diamond misled consumers into believing they were purchasing a product flavored in a smokehouse rather than through added liquid smoke flavoring.
Clark seeks to represent a class of consumers from 12 states, including Illinois, and injunctive relief against Blue Diamond.
Spencer Sheehan of Sheehan & Associates, P.C.
| spencersheehan.com
Clark brought claims for violation of the Illinois Consumer Fraud and Deceptive Practices Act, a breach of express warranty, negligent misrepresentation, fraud and unjust enrichment. U.S. District Judge Jorge Alonso issued an opinion July 5 and the court granted in part and denied in part Blue Diamond’s motion to dismiss.
The ICFA dispute boils down to whether the “Smokehouse®” label is misleading and, thus, a deceptive practice, the judge said. Blue Diamond argued the label is not misleading and that no reasonable consumer could interpret it to mean the almonds were smoked in an actual smokehouse. In addition, it argued the label’s full context confirms the product is not flavored in a smokehouse. Clark argued the label is ambiguous and a reasonable consumer could be misled into thinking the almonds were flavored in a smokehouse.
The parties identified two district court decisions from other districts that are squarely on point but reach different conclusions, the judge said. The first is Colpitts v. Blue Diamond, in which a district court in the Southern District of New York held that it is plausible a reasonable consumer could be misled by Blue Diamond’s label into believing that its almonds were manufactured through an actual smoking process.
That court noted, like in Clark's case, the word “smokehouse” describes a physical structure where food is prepared through the process of using actual smoke. Because of that, the court distinguished the use of the word “smokehouse” from other cases where words like “vanilla” were used and commonly understood to denote a flavor.
The second case is Cummings v. Growers, in which the district court held that Blue Diamond’s “Smokehouse” label was not misleading and, therefore, the plaintiff could not maintain an action under Florida’s consumer protection statute, which is virtually identical to the Illinois law. The court held that an objective consumer would not interpret the smokehouse label to indicate the product was produced in a smokehouse. The court also found the trademark symbol and ingredients list further signaled that “Smokehouse” was a brand name and not a promise of the method of manufacture.
In this case, the court agreed with the district court in Colpitts.
“The court does not view Clark’s interpretation of the word ‘smokehouse’ to be unreasonable or fanciful,” Alonso wrote. “Indeed, between the label and associated imagery, Blue Diamond clearly seeks to evoke a connection between its product and a smokehouse. Although Blue Diamond may intend for the term ‘smokehouse’ to describe a flavor, it can also be used to describe a process.”
Unlike those cases holding that the alleged phrase described a common flavor, smokehouse is not a term like “vanilla” or “strawberry” frequently used to describe a flavor, he wrote.
“The phrase 'smokehouse,' on the other hand, describes a physical structure,” Alonso wrote. “And with respect to almonds in particular, it appears that flavoring almonds through the use of a smokehouse is a well-known process.”
At this stage, the court found it plausible that an objective consumer could be misled by Blue Diamond’s labeling.
Clark also alleged Blue Diamond was unjustly enriched when it obtained benefits and monies because the product was not represented as expected. Blue Diamond insisted Clark’s unjust enrichment claim should be dismissed because it is duplicative of other claims and because Clark has not alleged Blue Diamond retained any benefit from her since she purchased almonds that were fit for human consumption. In response, Clark claimed it would be premature to dismiss her unjust enrichment claim because Federal Rule of Civil Procedure allows parties to plead alternative claims, which the court agreed.
The claims of a breach of express warrant, negligent malrepresentation and fraud were denied.
Clark has been represented in the action by attorney Spencer Sheehan, of Great Neck, New York.
The ruling marked a rare win for Sheehan, known throughout the country for filing a litany of lawsuits against food producers and sellers over allegedly fraudulent misrepresentations on their product labels concerning ingredients. In other cases, judges have called Sheehan to task, asking him to explain why his lawsuits should not be considered frivolous.
A judge in Chicago federal court described him as a "wrecking ball" for requiring defendants to pay legal fees to mount defenses against his cases. A judge in southern Illinois described Sheehan as a "serial filer of frivolous litigation."
Blue Diamond is represented by attorney Yan Grinblat, and others with the firm of DLA Piper, of Chicag and New York.
Jonathan Bilyk contributed to this report.