At the crux of this case (Rice v National Beverage Corp*) and a near-identical case (Graham v National Beverage Corp**), is whether four flavoring substances in LaCroix sparkling water (ethyl butanoate, limonene, linalool and linalool propionate) were sourced from natural ingredients or produced synthetically.
Plaintiff Lenora Rice alleges that the substances are synthetic in origin (without explaining how third party lab testing proves this), and says LaCroix should be compelled to “respond to discovery requests regarding (i) the ingredients that makeup LaCroix water, (ii) what Defendant knows about those ingredients, and (iii) who provides Defendant with those ingredients.”
National Beverage Corp, in turn, argues that its own “biobased and biogenetic carbon testing laboratory accredited under the strict standards set by the International Standards Organization… has conclusively confirmed that LaCroix sparkling water is all natural and contains no traces of synthetic or artificial additives or ingredients.”
In short, it claims, the plaintiff has smeared its brand without providing any evidence to show that the flavoring components in question were produced synthetically, and is now on a "fishing expedition."
According to Nielsen data collated by Wells Fargo (total US xAOC including convenience), National Beverage Corp’s sparkling flavored water sales were up 3.8% in the year to June 15, 2019, but were down -12.7% in the 12 weeks to June 15, and down -13.7% in the four weeks to June 15.
Attorneys’ eyes only provision provides ‘zero comfort’ to National Beverage Corp
The plaintiff claims that testing has “uncovered the existence of at least four ingredients that, as a practical matter, are produced via ‘highly industrialized’ processes,” noted LaCroix in documents filed with the court on August 2.
“This is affirmatively false… the analysis shows only that the four ingredients identified in the complaint were ‘observed’ in its analysis of a single flavor of LaCroix sparkling water. It says nothing whatsoever about the naturalness of those ingredients… much less how such ingredients were processed.”
While the plaintiff has suggested an ‘attorneys’ eyes only’ provision to address concerns about the release of trade secrets, this “offers National Beverage zero comfort and no protection,” claimed the firm.
“Plaintiff’s unfounded lawsuit, followed by an incendiary press release, with its tales of chemotherapy and cockroach insecticide – issued strictly to garner attention for Plaintiff’s counsel at the expense and incredible damage to National Beverage and its shareholders – suggests, at best, that Plaintiff’s counsel exercises poor judgment and could never be trusted with one of National Beverage’s most protected secrets.”
Judge: ‘This seems to be a real dispute, and the parties have not provided the court with any adequate basis for resolving it’
In a recent memorandum opinion and order on the case, Judge Joan B. Gottschall said she recognized LaCroix’s frustration with what it believes to be an “entirely frivolous” lawsuit, but said there were no grounds to sanction the plaintiff, as the company has demanded.
“At this point, the court is in no position even to agree that an ingredient entirely derived from plants is of necessity ‘all natural…’ Plaintiff argues that the type and degree of processing required must also be considered. This position is not manifestly unreasonable.”
She added: “This seems to be a real dispute, and the parties have not provided the court with any adequate basis for resolving it, neither with respect to how the four ingredients listed in the complaint are derived and/or processed nor with respect to which regulations apply to this dispute.”
- *Lenora Rice et al v National Beverage Corp d/b/a LaCroix Sparkling Waters. Case # 1:18-cv-07151 filed in Cook County Illinois. The plaintiff - who is represented by law firm Beaumont Costales LLC - alleges violations of the Illinois Consumer Fraud Act, breach of express warranties, and unjust enrichment, and seeks to represent a class comprising all individuals in Illinois who purchased LaCroix water in the last four years.
- ** Adenike Graham and Kimberly McNulty et al v. National Beverage Corporation 1:19-cv-00873 filed in the southern district of New York on January 29, 2019. The plaintiffs allege violations of New York’s Unfair and Deceptive Trade Practices Act, breach of contract/common law warranty, and unjust enrichment. They are represented by Simmons Hanly Conroy LLC, Greg Coleman Law PC, Barbat, Mansour & Suciu PLLC, and Bruca Law, PLLC