Buzz Kill for Coffee Drinkers: Court Finds That Starbucks Did Not Defraud Customers by Adding Ice to its Cold Drinks  

A federal judge in California recently dismissed the claims of a proposed class accusing Starbucks Corp. of deliberately deceiving its customers by intentionally “underfilling” its cold drink cups with actual liquid by putting too much ice in the cup. Noting that even young children understand that ice will displace liquid, the Court ruled that a reasonable consumer would expect a cold drink includes both the actual liquid drink and ice; thus dismissing Plaintiff’s claims.  See  Alexander Forouzesh v. Starbucks Corporation, No. 2:16-cv-03830 (C.D. Cal. Aug. 19, 2016).

Plaintiff Alexander Forouzesh, on behalf of a putative class of California residents who had purchased an iced Starbucks drink in the last ten years, argued that Starbucks “systematically defrauds its customers by advertising its cold drinks as containing more liquid than they do by ‘underfilling’ its cups with liquid and then adding ice to make the cups appear full.” Id. at *1.  Plaintiff’s Complaint alleged claims for (1) breach of express warranty; (2) breach of implied warranty; (3) negligent misrepresentation; (4) fraud; (6) violation of the California’s Consumer Legal Remedies Act (“CLRA”); (7) violation of California’s Unfair Competition Law (“UCL”); and (8) violation of California’s False Advertising Law (“FAL”). Id.

The Hon. Percy Anderson found the Plaintiff’s claims wholly unavailing and dismissed the proposed class action with prejudice. Id. at *6 (noting that “no amendment could cure the deficiencies in Plaintiff’s theories of liability”).  Applying the “reasonable consumer test,” the Court explained that in order for Plaintiff to prevail on the CLRA, UCL, and FAL claims, he was required to establish that “members of the public are likely to be deceived” and to show more than “a mere possibility that [the defendant’s] label might conceivably be misunderstood by some few consumers viewing it in an unreasonable manner.” Id. at *3 (citing Ebner v. Fresh, Inc., 818 F.3d 799, 806 (9th Cir. 2016) (internal citations omitted).

The Court rejected Plaintiff’s position that, based upon the menu on Starbucks’ website, reasonable consumers were deceived into believing that when they ordered a “Tall Cold Drink” they would receive 12 fluid ounces of that drink. Rather, the Court noted that even young children learn that ice will displace the liquid.  Id. at *3.  Thus, the Court stated, “[i]f children have figured out that including ice in a cold beverage decreases the amount of liquid they will receive, the Court has no difficulty concluding that a reasonable consumer would not be deceived into thinking that when they order an iced tea, that the drink they receive will include both ice and tea and that for a given size cup, some portion of the drink will be ice rather than whatever liquid beverage the consumer ordered.”  Id.  Indeed, the Court went so far as to point out that Starbucks’ cold drinks are served in clear cups, thus allowing the customers to see for themselves that the drink consists of both liquid and ice.  Id.

The Court similarly dismissed Plaintiff’s claims sounding in fraud and negligent misrepresentation, reiterating that “a reasonable consumer would understand that the iced beverage…will contain some portion of liquid and some portion of ice,” finding , therefore, that “the Complaint fails to state sufficient well-pleaded facts that Starbucks has made any misrepresentation, or that a reasonable consumer could justifiably rely on the statements Starbucks makes concerning the sizes of its Cold Drinks to conclude that those sizes represent only the amount of beverage and exclude the amount of ice.” Id. at *4.

Further, the Court instructed that in order for Plaintiff to prevail on its breach of express warranty claim, “the plaintiff must prove (1) the seller’s statements constitute an ‘affirmation of fact or promise’ or a ‘description of the goods’; (2) the statement was ‘part of the basis of the bargain’; and (3) the warranty was breached.” Id.. at *4-5 (quoting Weinstat v. Dentsply Int’l, Inc., 180 Cal. App. 4th 1213, 1227 (2010)). The Court again pointed out that Starbucks sold cold drinks in cups of various sizes but does not specifically represent that the drinks contained a certain amount of liquid. Id. at *4. Because Plaintiff “alleged no well-pleaded facts suggesting that Starbucks has stated, or expressly warranted, that its Cold Drinks contain a specific amount of liquid,” the Court found that there was no statement by Starbucks of any “fact or promise” that it could have breached. Id. Thus, the Court dismissed the breach of express warranty claims against Starbucks. Id.

Finally, the Court found that Plaintiff’s claim for breach of the implied warranty of merchantability also failed because Plaintiff had not alleged “that [Starbucks’] Cold Drinks ‘did not possess even the most basic degree of fitness of ordinary use.’” Id. (quoting Mocek v. Alfa Leisure, Inc., 114 Cal. App. 4th 402, 406 (2003)).  Moreover, the Court pointed out that under California law, the implied warranty of merchantability also requires that the goods:

  1. Pass without objection in the trade under the contract description; and
  2. In the case of fungible goods, are of fair average quality within the description; and
  3. Are fit for the ordinary purposes for which such goods are used; and
  4. Run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and
  5. Are adequately contained, packaged, and labeled as the agreement may require; and
  6. Conform to the promises or affirmations of fact made on the container or label if any.

Id. (quoting Cal. Com. Code § 2314(2)). The Court noted that because Plaintiff had “not plausibly alleged any well-pleaded facts in support of this theory, and that theory is contrary to the expectations of the reasonable consumer, the implied warranty claim fails as a matter of law.” Id.

Despite its recent success, Starbucks still faces a nearly identical lawsuit in Illinois as well as  another putative class action in California centered on claims that Starbucks under fills its latte drinks.  Interestingly, the proposed class action alleging that Starbucks under fills its lattes by as much as 25% recently survived a motion to dismiss in a different California federal court. See Strumlauf et al v. Starbucks Corporation, No. 16-cv-01306 (N.D. Cal. June 17, 2016).  There, while the Court dismissed Plaintiffs’ breach of implied merchantability cause of action, the Court generally denied Starbucks’ motion to dismiss, citing questions of fact such as whether “the food science community would not measure the milk foam in its foam state.” Id. at *6.

We will continue to monitor these stimulating lawsuits; but in the meantime, loyal Starbucks customers would be wise to request “light ice” or “no foam” to maximize their daily caffeine intake.