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Unilever Drops False Advertising Lawsuit Against Vegan Just Mayo, Concerns Remain for Hampton Creek

Unilever’s lawsuit against Hampton Creek started with a bang: a motion for a preliminary injunction claiming Hampton Creek engaged in false advertising by promoting its eggless Just Mayo sandwich spread as real mayonnaise.  Last Thursday it appears to have ended with a whimper: a three-paragraph press release and a one-page dismissal of the lawsuit.

In its press release, Unilever said it “decided to withdraw its lawsuit against Hampton Creek so that Hampton Creek can address its label directly with industry groups and appropriate regulatory authorities.”  Unilever then lauded Hampton Creek’s “commitment to innovation and its inspired corporate purpose” and stated it “believe[s] Hampton Creek will take the appropriate steps in labelling its products going forward.”

Unilever's suit proved to be a public relations headache from the outset, serving as fodder for late-night comedians.  Since Unilever announced its decision to withdraw the suit, popular media is piling on.  CNNMoney reports “Unilever lays an egg.”  Meanwhile a headline on Slate blares that “The Maker of Hellmann’s Just Dropped an Absurd Lawsuit Over the Definition of Mayonnaise.”

It would be fair to say the lawsuit backfired on Unilever.  The Associated Press reported “the lawsuit has been a boon to Hampton Creek, boosting sales of Just Mayo.”  That is not a surprise.  The suit handed Hampton Creek invaluable free publicity—“the opportunity to tell our story to millions of people” as Hampton Creek CEO Josh Tetrick put it.  The result: a David-versus-Goliath narrative depicting Unilever as an out-of-touch, well-heeled bully.  An underdog story Americans could believe in and buy into at their local retailer.

Understandbly, most of the reporting on Unilever’s decision to withdraw the suit suggest this dispute is over.  However, the case could resurface.  The AmLaw Litigation Daily correctly notes “Unilever’s notice . . . was filed under a procedural rule that would allow the company to refile its claims one more time, so the lawsuit could return.”  The “procedural rule” Unilever used to dismiss its case is Federal Rule of Civil Procedure 41(a)(1)(A)(i).  A party is allowed to voluntarily dismiss its case once “without prejudice” under that rule, meaning it can refile.  

Even if Hampton Creek’s battle with Unilever is over, its labeling and advertising will continue getting legal scrutiny.  The Food and Drug Administration regulates food labeling under the Federal Food, Drug, and Cosmetic Act.  States also have their own food and drug laws.  At some level, Hampton Creek will have to comply with both.

There is also a threat from the plaintiff’s bar.  Unilever gave plaintiff’s attorneys a blueprint for a class-action lawsuit against Hampton Creek under state consumer protection laws.  With class-action litigation over "all natural" foods and "homemade" vodka, it might be a matter of time before Hampton Creek finds itself in court defending against these claims again, this time from mayonnaise purchasers allegedly duped into buying a vegan substitute.

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