'No Fruit In Fruit Drinks,' Coffee Giant Starbucks's Shares Fall Amid $5 Million Lawsuit

Coffee giant Starbucks' shares have been left bleeding as it has been ordered by a federal judge to face a lawsuit claiming that several of its refresher fruit beverages lacked a key ingredient: fruit.

Starbucks may have to pay a mammoth $5 million in damages if it loses the lawsuit.

What Is The Lawsuit Against Starbucks?

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U.S. District Judge John Cronan in Manhattan rejected Starbucks' request to dismiss nine of the 11 claims in the proposed class action, saying "a significant portion of reasonable consumers" would expect their drinks to contain fruit mentioned in their names.

Consumers complained that Starbucks' Mango Dragonfruit, Mango Dragonfruit Lemonade, Pineapple Passionfruit, Pineapple Passionfruit Lemonade, Strawberry A?ai, and Strawberry A?ai Lemonade Refreshers contained none of the advertised mango, passion fruit, or a?ai, as per a Reuters report.

The plaintiffs, Joan Kominis, of Astoria, New York, and Jason McAllister, of Fairfield, California, said the main ingredients were water, grape juice concentrate, and sugar, and that coffee giant Starbucks' misleading names caused them to be overcharged. They said this violated their states' consumer protection laws.

How Starbucks Is Defending Itself

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In seeking a dismissal, coffee giant Starbucks said the product names described the drinks' flavours as opposed to their ingredients, and its menu boards accurately advertised those flavours. It also said no reasonable consumer would have been confused, and its baristas could have "sufficiently dispelled" any confusion if consumers had questions.

But the judge said that unlike the term "vanilla," the subject of many lawsuits, "nothing before the court indicates that 'mango,' 'passionfruit,' and 'a?a¨ª' are terms that typically are understood to represent a flavour without also representing that ingredient."

Cronan also said confusion might be understandable because other Starbucks products contain ingredients in their names; for example, Ice Matcha Tea Latte contains matcha, and Honey Citrus Mint Tea contains honey and mint.

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Also Read: How Coffee Giant Starbucks Also Works As An 'Unregulated' Bank

How Much Will Starbucks Have To Pay In Damages?

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The judge dismissed a fraud claim, finding no proof Starbucks intended to defraud consumers, and an unjust enrichment claim. Starbucks, in a statement, called the allegations in the lawsuit "inaccurate and without merit," and said it looked forward to defending itself.

The lawsuit began in August 2022 and alleged at least $5 million in damages. Robert Abiri, the plaintiffs' lawyer, said he was pleased with the decision and looked forward to representing the proposed class. Now it remains to be seen what happens when the hearing takes place.

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