362 F. Supp. 3d 109
S.D. Ill.2019Background
- Dannon (Danimals) and Chobani (Gimmies) compete in the kids’ drinkable yogurt market; Danimals is the market leader sold in 3.1 oz bottles (9 g sugar per serving); Gimmies launched in 4 oz bottles with 7–9 g sugar per serving.
- Chobani's packaging prominently stated “33% less sugar than the leading kids' drinkable yogurt,” with tiny asterisked footnotes on the back explaining an averaging method and a volume conversion to 4 oz.
- Dannon sued under Section 43(a) of the Lanham Act and N.Y. Gen. Bus. Law § 349, seeking a preliminary injunction to enjoin the 33% claim as false/misleading advertising.
- Parties presented expert marketing testimony and survey evidence at a preliminary-injunction hearing; Dannon’s expert (Dr. Steckel) concluded many consumers would interpret the claim per bottle/per flavor and would not parse the fine-print disclosures.
- Chobani had already (i) reformulated two Gimmies flavors to reduce sugar further, and (ii) prepared revised packaging using an explicit ounce-for-ounce comparison and a reduced claim (30% less sugar) to be rolled out soon.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the 33% claim literally false under the Lanham Act? | The claim is false because a single serving of Gimmies does not have 33% less sugar than a Danimals serving. | The claim is true when consumers apply the disclosed averaging and volume-conversion (4 oz common basis). | Not literally false; ambiguous in context so literal-falsity relief not appropriate. |
| Is the 33% claim misleading (impliedly false) and supported by extrinsic evidence? | The claim is misleading; Dr. Steckel’s survey shows many consumers interpret it per bottle/per flavor and would not understand the footnotes. | Survey flaws and lack of a yogurt-specific, in-market study undermine plaintiff’s evidence. | Misleading/impliedly false: plaintiff provided persuasive extrinsic evidence of likely consumer misunderstanding. |
| Has plaintiff shown irreparable harm to justify a preliminary injunction? | The misleading claim harms Dannon’s reputation and will cause lost sales and goodwill. | Dannon offered no concrete proof of lost sales; market data show Danimals’ market share rose; injunction would force costly recall for Chobani. | No irreparable harm shown; Nielsen data and Dannon’s stale-packaging practices undercut urgency. |
| Do the balance of hardships and public interest favor injunction? | Public interest in truthful labeling of children’s products supports injunctive relief. | Injunction would cause substantial, possibly ruinous, logistical and financial harms to Chobani; Chobani is already correcting labels and formulations. | Balance favors Chobani; public interest does not require injunction given Chobani’s corrective steps. |
Key Cases Cited
- Winter v. Natural Resources Defense Council, 555 U.S. 7 (preliminary injunction standard requiring likelihood of success and irreparable harm)
- Time Warner Cable, Inc. v. DIRECTV, Inc., 497 F.3d 144 (literal falsity requires unambiguous message)
- Merck Eprova AG v. Gnosis S.p.A., 760 F.3d 247 (Lanham Act false-ad elements)
- Mantikas v. Kellogg Co., 910 F.3d 633 (front-of-package claims not cured by fine-print disclosures)
- POM Wonderful LLC v. Coca-Cola Co., 573 U.S. 102 (regulatory compliance does not automatically preclude Lanham Act liability)
- Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118 (competitive injury suffices for Lanham Act standing)