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July 26, 2012 / Christian Przybylowski

Misleading Healthy Costco Chips Hit With Class Action Lawsuit

Costco is facing a class action lawsuit over their Kirkland Signature Brand Kettle Chips. The class action suit alleges that Costco made misleading claims about the nutritional value and ingredients of Kirkland Kettle Chips. The specific claim at issue is Costco’s representation that each bag contains “0 grams Trans Fat,” even though there are allegedly high levels of other unhealthy ingredients.  The suit asserts that Costco’s advertisements mislead consumers into thinking the chips are healthy when they are not.

The Federal Food Drug and Cosmetic Act (adopted as law in California by the Sherman Food Drug and Cosmetic Act) states that a product is “misbranded” if its labeling is false or misleading, or if it fails to provide certain information. If a product makes a nutrient-content claim promoting its healthfulness, even if the claim is true, the FDCA requires disclosure of other unhealthy contents alongside the claim, if those other contents are above certain thresholds that, according to the FDA, increase the risks of diet-related illnesses such as diabetes and heart disease.

The suit alleges that Kirkland Kettle Chips contain other fat, sodium, and cholesterol levels that surpass this FDA’s acceptable limits.  Specifically the lawsuit claims that Kirkland Kettle Chips contain more than 13 grams of fat per 50 grams, which is the minimum level requiring disclosure. Despite these allegedly high levels, there is apparently no disclosure made about the fat content of Kirkland Kettle Chips.

The FDA’s prohibition is designed to protect consumers who make purchases based on the claims made in product packaging, as well as consumers who do not or are not able to stop and analyze the nutrition label to determine if the product is healthy overall.  The prohibition is also in place to require “fairness” from producers:  when a product advertises a particularly healthful aspect, the product cannot then omit aspects that are unhealthy, particularly if there are high levels of sodium, fat, or cholesterol.

If Kirkland Kettle Chips are indeed “misbranded,” Costco could potentially face damages for  violation of California’s False Advertising Act (Business and Professions Code section 17500), Unfair Competition Law (Business and Professions Code section 17200), Consumer Legal Remedies Act (Civil Code section 1770), Beverly-Song Act (Civil Code section 1790), the Federal Magnuson-moss Act (15 U.S.C. section 2301), and unjust enrichment. Anyone who has purchased Costco Kettle Chips in California within the last four years is a potential class member.

If you or a loved one feels they have been misled consumer products manufacturers for false or deceptive food labels, please notify Khorrami, LLP for a confidential evaluation of your rights.



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