Chapter #05

Starbucks Scenario
Facts, law, case law & legal Issues

A. Facts:
There is a Starbucks franchise in Dallas, Texas, that uses only organically grown
coffee beans. A local consumer advocacy group, “Consumers for Safe Products
(CSP),” recently published its monthly newsletter, indicating that your client’s
coffee beans are grown using pesticides. Starbucks’ sales have dropped, and the
owner is furious.
B. Legislation

Section 96.2 of a Texas statute prohibits making false statement about food
products that cause harm to retailer if the person disseminates in any manner
information relating to a perishable food product to the public; the person
knows the information is false; and

Section 96.1 defines “Perishable food product” to include: (a) a food product
(b) of agriculture or aquaculture that is (c) sold or distributed in a form that will
perish or decay beyond marketability within a limited period of time;

In order to succeed in a claim for false statement against CSP, Starbucks have to
prove following elements of the offence under Texas statute.

C. Legal issues

1) Did CSP disseminate information about a perishable food product to the public?
Sub issue (i): Did CSP disseminate to public?
Sub issue (ii) Are Starbucks coffee drinks food product?
Sub issue (iii): Are Starbucks coffee drinks products of agriculture?
Sub issue (iv): Do Starbucks coffee drinks perish or decay within a limited time
period?
2) Did CSP knew its statement was false?

3) The false information implies that perishable food product is not safe for
consumption by the public.
D. Case laws:
 “Disseminates to public”— must be large enough audience to constitute
‘public’. (Green’s Grocer v Jenus (2007)

 Food Product: Plaintiff sued an environmental group for claiming plaintiff‘s

beverages contained harmful chemicals. The court held that Gatorade has
calories and may be a food product. Gatorade 0. Citizens for Health (2006)

 “Sole Product/produce of Agriculture” ---The plaintiff, the owner of a pet food

store, sued a disgruntled employee who suggested the store’s most popular
product was unsafe. The product was baked from all natural ingredients including
flour, chicken stock, and salt. Even though the ingredients were harvested from
the ground or derived from livestock, the court held the product at issue was not
a food product of agriculture or aquaculture. The court stated, “The product sold
is a combination of products of agriculture, not a sole product of agriculture, as
the statute contemplates.” The Pet Barn Inc. (Tex. 2004).

 Perish within limited time: Plaintiff sued an environmental group for claiming
plaintiff‘s beverages contained harmful chemicals. The court held that even
though Gatorade has calories and may be a food product as such, it does not
perish within a limited period of time. For that reason, the court found for the
defendant. Gatorade 0. Citizens for Health (2006)

 “Knows information is false”--- The plaintiff meat distributor sued Defendant

Safeway for posting a sign in its window. The Sign stated that the ground beef
Safeway purchased from the plaintiff the week before was unsafe and advised
customers to throw it away. Safeway had heard rumors that the beef was tainted
but did not investigate them before posting the sign in its window. The court
stated that although Safeway employees did not have actual knowledge that the
statements were false, their “reckless indifference to the truth was tantamount to
knowledge of falsity” and held for the plaintiff. reckless indifference to the truth=
knowledge ( Thomas Meats v Safeway (2008)

 Unsafe for public consumption: The plaintiff, a farm stand owner, sued a local
newscaster who stated during one of his broadcasts that his wife choked on an
apple he bought at the farm stand. The court held that the statement made on
television reached “a large enough audience” to constitute “dissemination to the
public.” However, even if the defendant’s statement was false, he did not state or
imply that the product itself was unsafe. The court said, “The statute intends to
protect producers from false accusations that the produce is tainted in some
way. People choke on all sorts of foods. We have no authority to interpret the
statute so broadly.” Green Grocer 2007