Medium-plus Arsenic: A California Wine Lawsuit

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In a fraud and product liability lawsuit filed in the Los Angeles County Superior Court on March 19, four plaintiffs allege that more than 80 well-known California wines contain “toxic levels of inorganic arsenic.” The plaintiffs, Doris Charles, Alvin Jones, Jason Peltier, and Jennifer Peltier, claim that more than 25 defendant wine companies[1] knew or should have known that their wines contained dangerously high levels of arsenic, and that these companies actively concealed this fact from consumers by marketing their wines as safe for consumption. The plaintiffs seek, among other things, compensatory and punitive damages, restitutionary disgorgement, and injunctive relief. They also request class certification. The allegations have some consumers worried, as the allegedly contaminated wines include several very popular brands.

Background

There are two forms of arsenic—organic and inorganic—both of which occur naturally in soil, water, and air. They may also occur as a result of human activity, including the use of certain pesticides and other chemical compounds. Inorganic arsenic is a known carcinogen that has been associated with conditions such as heart disease, diabetes, kidney damage, gastrointestinal ailments, and low blood pressure. The federal Food and Drug Administration (FDA) has established a limit of 10 parts per billion (“ppb”) for drinking water, but the agency has not set limits for other beverages or for any foods. Nonetheless, complaints of arsenic in food and drinks are not new and should not come as a surprise to consumers. The FDA has investigated reports of high levels of this element in rice and apple juice, for example. In both cases, the agency found the levels of arsenic to be "too low to cause immediate health damage."

In this case complaint alleges that testing by three separate laboratories[2] found “dangerously high levels of inorganic arsenic, in some cases up to 500% or more [sic] than what is considered the maximum acceptable safe daily intake limit [sic]”in the wines that are the subject of the lawsuit.  Click here for the complete list of wines that are alleged to be toxic.

Causes of Action Asserted

The plaintiffs assert six claims, all of which arise under California law. To view the complaint and learn more about the lawsuit, visit www.taintedwine.com. The theme of this litigation is fraud, which one of my law professors succinctly described as “lying to somebody to get his stuff.”In this case, the alleged lie is an omission—the failure to disclose the presence of arsenic in the wine. The plaintiffs maintain that the defendants knew or should have known about the large quantities of arsenic in their wines. To date, I have not seen formal lab results. I have seen only the summary attached to the complaint, which lists the wines and their purported arsenic levels.

Violation of the California Consumers Legal Remedies Act
The CLRA prohibits several “methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer.” [C.L.R.A. § 1770.] The plaintiffs claim that the defendants engaged in prohibited practices by representing that their goods had characteristics that they did not have and by representing that they were of a certain standard or quality when in fact they were not. They argue that by failing to disclose the presence of high levels of inorganic arsenic in their wines, the defendants misrepresented the characteristics and quality of the wines to consumers, and that the plaintiffs would not have purchased these wines had they known of the arsenic contamination.

Unfair business practices in violation of the Business and Professions Code
Section 17200 of the California Business and Professions Code defines “unfair competition” as “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the Business and Professions Code [which addresses misleading and deceptive advertising].” [B.P.C. § 17200.] This statute provides for injunctive relief to stop such actions, as well as restitution. It also authorizes class actions. The plaintiffs allege that they are entitled to relief under this statute because, among other things, the defendants violated Section 25249.6 of the Health and Safety Code, which requires “clear and reasonable warning” before a person may, in the course of doing business, “knowingly expose any individual to a chemical known to the state to cause cancer or reproductive toxicity. . . .” [H.S.C. § 25249.6.]

Misleading and deceptive advertising in violation of the Business and Professions Code
Section 17500 of the Business and Professions Code prohibits the knowing use of false statements with intent to sell a product.  The plaintiffs claim that by failing to disclose the high levels of arsenic in their wines, the defendants marketed them as safe in order to sell them, in violation of Section 17500.

In addition to these three statutory claims, the plaintiffs assert the following common law claims:

  • Unjust enrichment
  • Breach of implied warranty of merchantability (essentially, that the wines were not fit for human consumption not meet the ordinary buyer’s standards)
  • Negligent misrepresentation or omission (that the defendants should have been aware of contamination but were not due to their own negligence)

Note that actual physical injury (i.e., cancer or other illness) is not necessary in order for the plaintiffs to prevail on any of these claims. Indeed, the plaintiffs have not alleged any physical harm. They have not developed cancer or any other illness. Their claims are based on financial harm—they would not have spent money on the defendants’ products had the defendants disclosed the presence of an ingredient that put the plaintiffs at risk of physical harm. Together, these claims present questions of law and fact, including whether the defendants’ wines contain unacceptably high levels of inorganic arsenic, and whether the defendants were required to disclose this to the plaintiffs. Note also that the plaintiffs do not indicate how many bottles (or glasses) of the allegedly toxic wines they purchased.

Possible Implications and Outcomes

It is important to note that Section 25249.5 of the Health and Safety Code does not create a private right of action, meaning that a private citizen cannot sue on her own behalf for damages under this statute. This is why the plaintiffs invoke Section 25249.5 only in the context of unfair business practices. The law does, however, permit lawsuits by private citizens in the public interest, which the plaintiffs have chosen not to pursue. The law also provides for civil penalties of up to $2,500 per day for each violation. The plaintiffs’ allegation of a Section 25249.5 violation triggers an obligation to provide certain information to the state Attorney General.

I mentioned above that the plaintiffs seek to represent a class with respect to their private claims. They have identified “[a]ll persons residing in California who purchased any of the [w]ines [l]isted on Exhibit A of any Vintage from January 1, 2011[,] through the present”as the class.

At the federal level, while TTB has not established a limit for arsenic in wine or other alcoholic beverages (and neither has the FDA, which determines which ingredients are prohibited from use in beverage products), the agency does accept and investigate consumer complaints regarding alcoholic beverages. Samples are sent to the Beverage Alcohol Laboratory for analysis and report the results of their investigations to the Consumer Complaint Coordinator at TTB Headquarters. When criminal activity is suspected, TTB forwards the samples to the FDA for testing and criminal investigation. In addition to consumer-initiated testing, TTB engages in testing of beverage samples on an annual basis under its Alcohol Beverage Sampling Program (ABSP). In theory, at least, the discovery of high levels of arsenic in a sample could lead to a civil or criminal penalty.

The plaintiffs demand a jury trial, which would result in significant expense for both parties. Assuming that the complaint is even sufficient (and I have no opinion on this given my ignorance of California civil procedure), a trial is unlikely. A settlement would more quickly and quietly resolve the dispute between the plaintiffs and the defendants. State and federal enforcement action may occur if the wines at issue do in fact contain dangerously high levels of arsenic.

Even if the complaint is dismissed on procedural grounds or the wine companies prevail on the merits, however, there is no denying that this lawsuit has instilled fear in many consumers, and the defendants will have to contend with this fear, whether justified or not, for quite some time. This could raise issues of trade libel if the plaintiffs' allegations are intentionally false. As you can see, this suit is a fine mess that could give new meaning to the phrase "pick your poison."

[1] The 28 named defendants (some of which may be duplicates) are listed below. The plaintiffs also allege that additional companies may be producing toxic wines. These unidentified companies are represented as Does 1 through 200.

  1. The Wine Group, Inc.
  2. The Wine Group, LLC (together with The Wine Group, Inc., “Franzia”)
  3. Sutter Home Winery, Inc., d/b/a Trinchero Family Estates
  4. Folie à Deux Winery
  5. California Natural Products
  6. Rebel Wine Co., LLC
  7. Golden State Vintners
  8. Varni Brothers Corp.
  9. Treasury Wines Estates Americas Co.
  10. Treasury Wines Estates Holding, Inc.
  11. Beringer Vineyards
  12. Seaglass Wine Co.
  13. Constellation Wines, US
  14. Smith & Hook Winery Corporation, d/b/a Hahn Family Wines
  15. Raymond Vineyard and Cellar/Raymond Vineyard and Cellar, Inc.
  16. Jean-Claude Boisset Wines, USA, Inc.
  17. Fetzer Vineyards
  18. F. Korbel & Bros., Inc.
  19. Megan Mason and Randy Mason, d/b/a Mason Cellars
  20. Oakville Winery Management Corp., GP
  21. Woodbridge Winery, Inc.
  22. Simply Naked Winery
  23. Winery Exchange, Inc.
  24. Sonoma Wine Co., LLC
  25. Don Sebastiani & Sons International Wine Négociants Corp.
  26. Don Sebastiani & Sons International Wine Négociants
  27. Bronco Wine Company
  28. Trader Joe’s Company

[2] One such laboratory, according to the lawsuit website, is BeverageGrades. “BeverageGrades” is a trade name of Denver-based SmartPour, LLC. The other two laboratories are not named in the complaint.