By: Derek Siegal

Belgium is widely known for its outstanding chocolate production.[1] Godiva, founded in Brussels, Belgium in 1926, is a prominent chocolate manufacturer that does substantial business across the world.[2] The phrase “Belgium 1926” is featured on the front of all of Godiva’s chocolate products’ packaging, and featured throughout Godiva’s many marketing campaigns across several different mediums.[3]

In 2019, two Godiva consumers brought a class-action suit on behalf of U.S. Godiva consumers against the chocolatier, alleging that U.S. consumers were deceived into purchasing products that they thought were made in Belgium, a country known for its outstanding chocolate production.[4] The Godiva products in question had not been manufactured in Belgium, but rather in Reading, Pennsylvania at the company’s U.S.-based factory.[5]

The class of consumers brought claims under the New York General Business Law and California’s Legal Remedies Act, Unfair Competition Law, and False Advertising Law, each of which applies a reasonable consumer standard “to determine whether a representation is false or deceptive.”[6] This standard asks “whether a reasonable consumer is likely to be deceived by [an] alleged misrepresentation.”[7] Although Godiva claimed that “no reasonable consumer could be deceived . . . to believe that Godiva’s chocolates are manufactured in Belgium” based on the presence of the phrase “Belgium 1926” on Godiva’s chocolate products’ packaging, the court found that a reasonable consumer could plausibly be deceived and that the question of reasonableness should be decided by a jury.[8] However, the reasonableness question never reached a jury, and, in 2021, Godiva consumers proposed a twenty million dollar settlement between Godiva and a class of consumers that could potentially be in the millions, with each individual consumer having the opportunity to receive up to twenty-five dollars compensation from the chocolatier if the consumer has proof of purchase during the relevant period and up to fifteen dollars compensation if the consumer does not have proof of purchase.[9]

Class action litigation can be expensive and taxing for companies.[10] Additionally, class action litigation has risen in number.[11] Specifically, food and beverage companies have seen an increase in class action litigation filed against them by the companies’ consumers with claims ranging from all aspects of the food and beverage business, including the source of ingredients and the origin of products.[12]

A Godiva representative stated that Godiva believes a settlement is “in the best interest” of the company so that it can focus on its business and continue to use the phrase “Belgium 1926” to advertise its product.[13] Godiva may feel that pursuing litigation is not worth the investment and that it is better off paying the settlement and continuing the use of the same marketing techniques it has always implemented.[14] While it is undetermined how a jury would answer the question of whether a reasonable consumer would believe that all of Godiva’s chocolate products are manufactured in Belgium, there is evidence that shows that consumer class action suits are increasing in number, leading to the possibility of more juries hearing reasonable consumer questions.[15]

A prominent large chocolate manufacturing company, like Godiva, may have the ability to pay the price of a twenty million dollar settlement in order to continue implementing the marketing techniques that have brought it success in the past.[16] However, as class action suits increase, a small business or a company that does not have the resources to pay a large settlement and move forward may have to rearrange its entire marketing plan in response to a “reasonable consumer” false advertising question.[17]

In the class-action suit brought against Godiva, the court found the reasonable consumer question to be a close one, reasoning that it is plausible that the phrase “Belgium 1926” represented on the front of Godiva’s packaging could cause confusion among consumers as to whether the phrase was referring to the location that the product was manufactured or the location that Godiva was founded.[18] The potential of litigating a reasonable consumer question in a false advertising class action suit, combined with the potentially large cost of settlement, such as Godiva’s consumers’ proposed twenty million dollar settlement, may cause concern for smaller businesses in the food and beverage industry.[19] In conclusion, as evidenced by Godiva’s recent class action, the rising number of class actions regarding consumer deception in the food and beverage industry can lead to larger businesses having the option to settle and cause smaller businesses to choose between risking litigation or completely altering future marketing plans to lessen the risk of a class-action suit.[20]

[1] See Tea Gudek Šnajdar, Belgian Chocolate – the best chocolate shops in Bruges, Culture Tourist (Sept. 20, 2016), https://culturetourist.com/destinations/belgium/belgian-chocolate-the-best-chocolate-shops-in-bruges/ (noting that Belgium has “more than 2000 chocolatiers” operating in the country); Leading cocoa bean importers worldwide in 2020, Statista (June, 2021), https://www.statista.com/statistics/1112363/global-leading-importers-of-cocoa-beans/ (indicating that Belgium was among the top importers of cocoa beans in 2020).

[2] See Unparalleled Belgium Heritage Since 1926, GODIVA https://www.godiva.com/chocolate-belgium-heritage-1 (explaining Godiva’s company history on the chocolatier’s website, and noting that as of 2021, Godiva’s products are available in over 100 countries) (last visited Oct. 24, 2021).

[3] See Hesse v. Godiva Chocolatier, Inc., 463 F. Supp. 3d 453, 460 (S.D.N.Y. 2020) (citing Am. Compl., Dkt. No. 12, ¶¶ 2–3) (noting that the Belgium 1926 representation is featured prominently on Godiva’s chocolate products packaging and that the chocolatier “extensively utilizes the [Belgium 1926] representation” on its “storefronts, supermarket display stands, and print and social media advertising”).

[4] See id. at 461 (noting that the customers alleged in the complaint that “they would not have purchased the products, or would not have paid as high a price, had they known the products were made in the United States [and not in Belgium],” as “Belgium is widely understood and recognized” for producing high quality chocolate products).

[5] See id. at 461, 467.

[6] See id. at 466 (noting that the consumers’ claims under the “New York General Business Law and California’s Legal Remedies Act, Unfair Competition Law, and False Advertising Law” all “boil down to the same inquiry [(the reasonable consumer standard)]”).

[7] See id.

[8] See id. at 467 (citing Quinn v. Walgreen Co., 958 F. Supp. 3d 533, 543 (S.D.N.Y. 2013) (noting that the question of “‘whether a particular act or practice is deceptive is usually a question of fact’ best suited for a jury”)); id. (explaining that the type of reasonableness inquiry involved in this litigation “is rarely resolved on a motion to dismiss”); Craig Clough, Godiva Can’t Slip Suit Over Using ‘Belgium 1926’ On Labels, Law360 (May 29, 2020, 6:16 PM), https://www-law360-com.proxywcl.wrlc.org/articles/1278158?scroll=1&related=1 (noting that the “customers also claimed Godiva does make chocolate in Belgium, but those products are sold outside of the United States, while the products sold within the U.S. are made in Pennsylvania”).

[9] See Mem. Of L. in Supp. of Pls.’ Mot. Prelim. Apprv. Of Class Action Settl. 4, No. 1:19-cv-0972-AJN (Oct. 12, 2021) (establishing the requirements for the proposed settlement class); Melissa Angell, Godiva Inks $20M Deal To Settle ‘Belgium 1926’ Label Suit, Law360 (2021), https://www-law360-com.proxywcl.wrlc.org/articles/1430423/godiva-inks-20m-deal-to-settle-belgium-1926-label-suit (noting that the “proposed class [contains] millions” of Godiva consumers).

[10] See Mitchell Morris, Defending Against ‘Entrepreneurial Model’ Class Actions, Law360 (Apr. 14, 2021, 5:26 PM), https://www-law360-com.proxywcl.wrlc.org/articles/1374911/defending-against-entrepreneurial-model-class-actions-  (citing Diana Novak Jones, Companies’ Class Action Costs Hit 10-Year High, Survey Says, Law360 (Apr. 16, 2019, 9:21 PM), https://www-law360-com.proxywcl.wrlc.org/productliability/articles/1150432?utm_source=shared-articles&utm_medium=email&utm_campaign=shared-articles) (explaining that in 2018, companies were spending up to $2.46 billion to defend themselves against class action lawsuits).

[11] See Andrew Jacobs, Lawsuits over ‘Misleading’ Food Labels Surge as Groups Cite Lax U.S. Oversight, N.Y. Times (Sept. 7, 2021), https://www.nytimes.com/2021/09/07/science/food-labels-lawsuits.html (noting that in 2020, “[c]lass-action litigation against food and beverage companies hit a record high . . . according to a tally by the law firm Perkins Coie”).

[12] See Cary Silverman et al., The Food Court: Developments in Litigation Targeting Food and Beverage Marketing, U.S. Chamber Inst. for Legal Reform 5-6 (Aug. 2021), https://instituteforlegalreform.com/wp-content/uploads/2021/07/Food-Litigation-Update_web.pdf (explaining that “new trends [in class action litigation against food and beverage companies] include . . . claims targeting flavoring and ingredients,” noting that there have been “over 100 lawsuits in New York’s federal courts” about consumer deception regarding vanilla flavored products since 2019); Sascha Henry & Robert Guite, What’s Trending in Food and Beverage Class Actions?, Food Manufacturing (Jan. 23, 2020), https://www.foodmanufacturing.com/consumer-trends/article/21111858/whats-trending-in-food-and-beverage-class-actions (noting that “claims based on origin of products” and  “claims based on representations regarding ingredients” are among emerging trends in “class actions filed against food and beverage companies”).

[13] See Melissa Angell, Godiva Inks $20M Deal To Settle ‘Belgium 1926’ Label Suit, Law360 (Oct. 13, 2021, 5:36 PM), https://www-law360-com.proxywcl.wrlc.org/articles/1430423/godiva-inks-20m-deal-to-settle-belgium-1926-label-suit (explaining that a Godiva spokesperson informed Law360 that Godiva believes that the proposed settlement “is in the best interest of Godiva consumers and Godiva so that we can continue to focus on our commitment to bringing our premium chocolates to a wider base of consumers” and that “[i]t is important to emphasize that ‘Belgium 1926’ signifies the place and year of the company’s founding”).

[14] See id.; Silverman et al., supra note 12, at 5 (explaining that companies facing class action litigation will sometimes opt for a settlement “to avoid the cost and intrusiveness of litigation and potential harm to their brands”).

[15] See Jacobs, supra note 11; Silverman et al., supra note 12; Henry & Guite, supra note 12.

[16] See Silverman et al., supra note 12, at 5; Unparalleled Belgium Heritage Since 1926, GODIVA https://www.godiva.com/chocolate-belgium-heritage-1 (noting that Godiva is in its 95th year of chocolate production and that the chocolatier’s chocolate products are available “in more than 100 countries around the world”) (last accessed Oct. 24, 2021).

[17] See Silverman et al., supra note 12, at 5; Cary Silverman, In Search Of The Reasonable Consumer: When Courts Find Food Class Action Litigation Goes Too Far, 86 U. Cin. L. Rev. 1, 4 (2018) (explaining that “large food companies viewed as having ‘deep pockets’” are not the only type of food and beverage manufacturer facing class action lawsuits, but smaller “[family-owned business[es] and startup companies” are “increasingly named in [class action] lawsuits alleging trivial infractions”).

[18] See Hesse v. Godiva Chocolatier, Inc., 463 F. Supp. 3d 453, 467 (S.D.N.Y. 2020) (explaining that there is a “plausible inference . . . that . . . [“Belgium 1926”] represents both the provenance of the company–Belgium, in 1926–and a representation that its chocolates continue to be manufactured there”).

[19] See id.; Mem. Of L. in Supp. of Pls.’ Mot. Prelim. Apprv. Of Class Action Settl., No. 1:19-cv-0972-AJN (Oct. 12, 2021).

[20] See Hesse, 463 F. Supp. 3d at 467-69 (finding that it is plausible that a reasonable consumer may believe that the use of “Belgium 1926” on Godiva’s chocolate products’ packaging indicates that the company was both founded in Belgium and continues to manufacture its chocolate products in Belgium); Silverman et al., supra note 12, at 5; Jacobs, supra note 11 (quoting corporate food lawyer Pooja S. Nair, who, in discussing class action litigation against food and beverage companies, stated that “[t]he landscape for businesses has become increasingly hostile” and “[i]t’s forcing companies to be more creative, and careful, in how they advertise their products”).