N. Am. Olive Oil Ass’n v. Kangadis Food, Inc.

CASE SUMMARY

FACTS

Plaintiff North American Olive Oil Association ("NAOOA") brought false-advertising claims, among others, against defendant Kangadis Food, Inc. ("Kangadis"), alleging that Kangadis's use of the descriptor "100% Pure Olive Oil" for oil containing Pomace, an industrially processed oil produced from olive pits, skins, and pulp, was false and deceptive marketing. Following the grant to NAOOA of a preliminary injunction preventing Kangadis from selling as "100% Pure Olive Oil" any product containing Pomace and from selling any Pomace-containing product without expressly labeling it as such, Kangadis changed its products to not contain any Pomace but to be 100% refined olive oil. NAOOA subsequently went back to ask the court to preliminary enjoin Kangadis from selling its 100% refined olive oil as "100% Pure Olive Oil," relying upon a number of state, federal, and industry labeling standards distinguishing among "olive oil" or "pure olive oil" on one hand, which must contain some virgin olive oil, and "refined olive oil" on the other hand, which can be without any virgin olive oil. NAOOA also sought an affirmative injunction requiring Kangadis to inform potential consumers that earlier produced tins of "100% Pure Olive Oil" contained Pomace.

"Olive oil" comes from olives that are harvested, quickly carried to a mill, washed, crushed, and spun to separate out extraneous solids and excess water, an entirely mechanical process not involving heat or chemicals, resulting in "virgin olive oil." If virgin olive oil undergoes refining to remove impurities, it is no longer called "virgin," but remains "olive oil." By contrast, Pomace, also known as olive-Pomace oil, is made from the residue skins, pits, and pulp left over after olive oil has been mechanically extracted from the flesh of the olives. This residue is dried, heated, and treated with industrial solvents to produce Pomace.

ANALYSIS

The court found that NAOOA demonstrated the required irreparable harm, as the misleading labeling by Kangadis of its cheaper refined olive oil would likely come at the expense of NAOOA members selling more expensive virgin olive oil. The court found that Kangadis's misleading labeling provided an unfair competitive advantage as well as risking further damage to the industry and competitors if consumers lose faith in olive oil products in general.

The court also held, however, that NAOOA had not made the required showing of likelihood of success on...