Chipotle Sued Over GMO-Free Menu Claims

Chipotle Mexican Grill Inc's new GMO-free menu claims have lured diners and boosted the burrito chain's stock price, but it has some consumers crying foul.

A California woman has accused the popular chain in a lawsuit of false advertising after it trumpeted on April 27 that it was the first national restaurant company to use only ingredients that are free of controversial genetically modified organisms, or GMOs.

In her lawsuit filed Friday in federal court in San Francisco, the plaintiff Colleen Gallagher also alleged that Chipotle violated the Federal Food, Drug and Cosmetic Act because its food labeling is false and misleading, and deceived diners into paying more for their food.

"As Chipotle told consumers it was 'G-M-Over it,' the opposite was true," the Piedmont, California resident said. "In fact, Chipotle's menu as never been at any time free of GMOs."

Chipotle spokesman Chris Arnold declined to discuss the allegations, but said "we do plan to contest this."

Many U.S. diners have in surveys expressed a willingness to pay a premium price for food they perceive to be less processed and more natural or organic, and retail data back that up.

Chipotle's website carries disclaimers about the GMO content in its food.

Those disclaimers say that "most animal feed in the U.S. is genetically modified, which means that the meat and dairy served at Chipotle are likely to come from animals given at least some GMO feed." They add that "many of the beverages sold in our restaurants contain genetically modified ingredients."

Gallagher contended that most Chipotle diners are unlikely to see these disclaimers, and will rely instead on the company's advertising.

Her lawsuit seeks class action status and unspecified damages.

A woman named Colleen Gallagher, represented by the same law firm, is also a plaintiff in a 2014 lawsuit in the same court alleging that Bayer AG's claims about the health benefits of its One A Day multivitamins misled consumers. On Aug. 18, U.S. District Judge William Orrick denied Bayer's motion to dismiss that lawsuit.

Lawyers for Gallagher did not immediately respond on Monday to calls and emails seeking comment.

The case is Gallagher v Chipotle Mexican Grill Inc, U.S. District Court, Northern District of California, No. 15-03952.

By Reuters Staff