Chobani, LLC v. Dannon Co.

• Decision Date: 29 January 2016
• Docket Number: 3:16–CV–30
• Citation: 157 F.Supp.3d 190
• Parties: Chobani, LLC, Plaintiff, v. The Dannon Company, Inc., Defendant. The Dannon Company, Inc., Defendant. v. Chobani, LLC, Counter–Defendant.
• Court: U.S. District Court — Northern District of New York

157 F.Supp.3d 190

Chobani, LLC, Plaintiff,

v.The Dannon Company, Inc., Defendant.

The Dannon Company, Inc., Defendant.

v.Chobani, LLC, Counter–Defendant.

3:16–CV–30

United States District Court, N.D. New York.

Signed January 29, 2016

JULIA HUSTON, ESQ., DAVID A. KLUFT, ESQ., ANTHONY E. RUFO, ESQ., FOLEY, HOAG LAW FIRM, Attorneys for Plaintiff, 155 Seaport Boulevard, Boston, MA 02210.

DOUGLAS A. FOSS, ESQ., SVETLANA K. IVY, ESQ., HARRIS, BEACH LAW FIRM, Attorneys for Plaintiff, 99 Garnsey Road, Pittsford, NY 13534.

RANDALL K. MILLER, ESQ., RANDALL K. MILLER, ESQ., ANGEL A. GARGANTA, ESQ., VENABLE LLP, Attorneys for Defendant, 8010 Towers Crescent Drive, Suite 300, Tysons Corner, VA 22182.

CHAIM J. JAFFE, ESQ., SCOLARO, SHULMAN LAW FIRM, Attorneys for Defendant, 507 Plum Street, Suit 300, Syracuse, NY 13204.

MEMORANDUM–DECISION and ORDER

DAVID N. HURD, United States District Judge

I. INTRODUCTION

This is a dispute between Chobani, LLC (“Chobani”) and The Dannon Company, Inc. (“Dannon”), direct competitors in the yogurt market, over what constitutes fair play in advertising. Chobani initially filed this action pursuant to the Declaratory Judgment Act, 28 U.S.C. §§ 2201 –02, seeking a determination that it had not made any false, misleading, disparaging, or deceptive statements or claims, as those terms are defined in the Lanham Act, 15 U.S.C. § 1125(a), in its recently launched online, print, and television advertising campaign (the “Simply 100 Campaign”), which touts the fact that Chobani's new “Simply 100 Greek Yogurt” contains no artificial sweeteners or preservatives while making certain comparisons to Dannon's yogurt offerings.

Dannon quickly answered Chobani's complaint, asserting counterclaims for false advertising and product disparagement pursuant to the Lanham Act and related state law based on the same advertising campaign Chobani sought to vindicate with a declaratory judgment. Dannon also moved for a temporary restraining order and a preliminary injunction, seeking to halt the Simply 100 Campaign pending a trial on the merits.

On January 11, 2016, an order issued denying Dannon's request, as counter-claimant, for a temporary restraining order. However, the parties were directed to expedite briefing on Dannon's request for a preliminary injunction, which Chobani, as counter-defendant, timely opposed. Oral argument was heard on January 22, 2016 in Utica, New York. Decision was reserved.

II. BACKGROUND

The relevant facts have been drawn from the parties' submissions and are largely undisputed. To the extent factual disputes exist, their resolution is unnecessary to the disposition of Dannon's motion.¹

A. Dannon

Dannon has been producing yogurt and dairy products under various brand names since its founding in 1942 in Bronx, New York. Rothman Decl. ¶ 4. In the decades since its inception, Dannon has expended hundreds of millions of dollars building its brand equity and has developed a reputation as a trusted and reliable producer of yogurt and dairy products. Id. ¶ 3. These days, Dannon products are sold in, or offered by, over 35,000 retail and institutional outlets. Id.

In 1988, Dannon first introduced “Dannon Light,” a reduced-calorie, nonfat yogurt. Rothman Decl. ¶ 5. Thanks to the success of Dannon Light and other products now marketed under the umbrella of the “Dannon Light & Fit” brand name, Dannon has become famous in the United States for its light yogurts and has developed enormous consumer goodwill in its light product offerings. Id. In fact, not only is the “Dannon Light & Fit” brand the company's top seller, Dannon currently enjoys success as the leading brand of light yogurt in the United States. Id. ¶¶ 5–6.

In 2012, and in line with developing health trends, Dannon produced “Light & Fit Greek,” an eighty-calorie sub-brand of its “Light & Fit” product line and the first eighty-calorie Greek nonfat yogurt available on the market. Rothman Decl. ¶ 7. This light yogurt is “an ideal food option for individuals who need to be mindful of their sugar intake, and [is] targeted to health-conscious consumers, often women, who make purchasing decisions for themselves and for their families.” Id.

According to Dannon, its highest proportion of light yogurt sales routinely occurs during the first three months of the year, “as this is the time when most American consumers resolve to make positive changes relating to weight loss, fitness, and overall health and diet.” Rothman Decl. ¶¶ 8–9. Importantly, this is also the time of year when consumers experiment with new yogurt products, such as Dannon Light & Fit Greek. Id. ¶ 8. Therefore, Dannon's marketing and sales efforts during each year's first quarter are crucial to the success of the business. Id. ¶ 9.

B. Chobani

Chobani may be a relative newcomer to the yogurt market when compared to Dannon, but it claims no less success. Since opening its first factory in South Edmeston, New York, in 2005, Chobani has quickly become, in its own words, the “No. 1 Greek Yogurt brand in the United States.” McGuinness Decl. ¶¶ 2–4.

Chobani actively seeks to differentiate itself from its competitors in the market by emphasizing its commitment to “natural, non-GMO ingredients” and “environmental sustainability practices.” McGuinness Decl. ¶¶ 2, 6–7. In its brief history, Chobani's advertising efforts have pointedly communicated this message. For example, 2013 saw the launch of Chobani's “Go Real Chobani” campaign, which sought to “empower consumers to choose to live their lives in the same ‘real’ and ‘authentic’ way that Chobani makes yogurt.” Id. ¶ 7.

Likewise, in 2014, Chobani launched its “How Matters” campaign, seeking to communicate to consumers that “the way Chobani makes its yogurt is just as important as the final product.” Id. More recently, in 2015, Chobani initiated its “To Love This Life Is [T]o Live It Naturally” campaign, “which celebrates the role that Chobani's products, made with only natural ingredients, play in fans' lives, and encourages fans to seek food made with the simplest ingredients possible.” Id.

C. The “Simply 100” Advertising Campaign

The advertising campaign at issue in this case purports to be an extension of Chobani's earlier advertising efforts. McGuiness Decl. ¶ 8. In particular, Chobani planned a multi-media blitz in connection with its latest offering, “Chobani Simply 100 Greek Yogurt,” which has “100 calories per serving with no preservatives or artificial sweeteners.” Id. Again, Chobani sought to “highlight its products' natural ingredients” and therefore “resolved to talk about the natural ingredients in Chobani Simply 100 Greek Yogurt, as well as the artificial preservatives and artificial sweeteners contained in some of its competitors' products, and to share its opinion on the subject.” Id. The campaign, which consists of a video advertisement (the “Commercial”), a print advertisement (the “Print Ad”), and digital/social media content (the “Digital Content”), began running in early January 2016. Rothman Decl. ¶ 10.

1. The Commercial²

The Commercial's opening shot focuses on a cup of Dannon Light & Fit Greek Yogurt sitting on a table, which is immediately picked up by a young woman lounging in a pool chair. Rothman Decl. ¶ 11. As she scrutinizes the product's ingredients label, a voiceover proclaims: “Dannon Light & Fit Greek actually uses artificial sweeteners like sucralose. Sucralose? Why? That stuff has chlorine added to it!” Id. ¶ 11. In response to this revelation, the woman scrunches her face in disgust and tosses the cup of Dannon yogurt into a distant receptacle, resembling a trash bin, labeled “towels.” See id.

Instead, the young woman selects a cup of Chobani Simply 100 Greek Yogurt sitting on a table to her right as a swimming pool becomes visible in the background. Rothman Decl. ¶ 12. The voiceover then states: “Now, there's Chobani Simply 100. It's the only 100 calorie light yogurt sweetened naturally.” See id. As she tears open the packaging, the Commercial pans to a wide shot of the swimming pool, where a child jumps in, making a big splash. McGuinness Decl., Ex. A. The camera returns to the woman, now smiling contentedly, before finishing with a wide shot of the entire swimming pool scene. Id. Text laid over this final shot includes a hashtag: “# NOBADSTUFF.” Id. As the Commercial ends, a cheerful jingle is heard playing in the background in which the singer states “to love this life is to live it naturally.” McGuinness Decl. ¶ 11.

2. The Print Ad³

The Print Ad's header prominently displays a question: “Did You Know Not All Yogurts Are Equally Good For You?” Rothman Decl. ¶ 14. The Print Ad continues, “[y]ou think you are doing something good for yourself and your family [b]y buying yogurt and instead of bad stuff [a]nd then you find that the bad stuff* [i]s in your yogurt!” Id. ¶ 15. The asterisk references a footnote printed at the very bottom of the full-page advertisement that explains, in a minuscule font size, that the “bad stuff” to which the Print Ad refers is “Artificial Ingredients.” Id.

The center of the Print Ad prominently depicts the ingredients label of a cup of Dannon Light & Fit Greek. Rothman Decl. ¶ 15. The text above and below the Dannon product mimics that of the Commercial's voiceover: “There's sucralose used as a sweetener in Dannon Light & Fit Greek! Sucralose? Why? That stuff has chlorine added to it!” Id. The Print Ad goes on to state, “If you want to do healthy things, know what's in your cup. Chobani Simply 100 is the only 100–[c]alorie Greek Yogurt without a trace of any artificial sweeteners or artificial preservatives.” Id. (emphasis in original).

3. Digital Content⁴

The Digital Content consists of a website and corresponding social media efforts, including Facebook, Twitter, Pinterest, Google+, and Instagram. Rothman Decl. ¶ 17. Text on the website also poses a simple question, asking “Do You Know What's In Your Cup?.... Scroll over to compare our ingredients with those in other light yogurts to see what's...