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Too Much Ice is Not Nice: Suing Starbucks for Fraudulent Under Filling?

Starbucks has recently been in hot water over under filling their hot drinks; now another class action lawsuit is looking to put them on ice. The new suit, coming only weeks after the hot drink lawsuit, alleges that Starbucks defrauds its customers by misrepresenting the actual fluid ounces of cold drink in their iced beverages. The suit says that the company intentionally fills their cups only halfway, then fill the rest to the brim with ice.

Who hasn’t known the heartbreak of ordering an iced coffee, taking a few sips, and being left with a cup full of ice? The facts put forth in the lawsuit’s complaint state that Starbucks designs their cups with a black line slightly over halfway up the cup. This line is to allow their baristas to consistently fill the iced drinks to that line with already cold liquid, then fill the rest with ice.

As an example, a Venti iced drink—advertised at 24 fluid ounces—would be filled with 14 fluid ounces of actual drink under Starbucks company policy. Amusingly, the size below Venti is measured to contain 12 fluid ounces while being advertised as 16 fluid ounces—a difference of only 4 fluid ounces compared to an advertised difference of 8.

Is this fraud? Ms. Stacy Pincus, a resident of Chicago, and her lawyers certainly think so.  They have alleged, among other things, breach of warrantee, negligent misrepresentation, and fraud.

Breach of Warrantee-Is It What You Say It Is?

Warrantees are basically guarantees a seller makes about their product.  Unlike Starbucks drinks, they come in only two flavors—express and implied.

Express warrantees are guarantees that the seller makes through their overt actions or statements. They can be created by, among other things, statements by the seller or descriptions of the product by the seller.

Implied warrantees exist regardless of statements made by the seller, and include the warranty of merchantability and the warranty of fitness for a particular use. The warranty of merchantability is that the product sold will meet the general expectations of quality in the market and be fit for their intended purpose.  Starbucks Iced Drink

The implied warrantee of fitness for a particular purpose works a bit differently. Where a shopper asks a merchant if a product will serve a particular purpose, the merchant knows they are relying on their expertise, and the shopper actually relies on that expertise—the product must actually serve the purpose the merchant said it would.

The iced drinks lawsuit alleges that by labeling their drinks as containing a certain amount of fluid ounces, Starbucks created an express warrantee that their iced drinks had that much fluid in them. Ms. Pincus alleges that filling the cup with ice not count towards fluid in the cup.  By failing to include as much fluid as advertised, Starbucks has breached their express warrantee.

Ms. Pincus’ lawsuit has a colorable case supporting a breach of express warranty. Ice isn’t fluid, as any grade schooler fresh out of science class will tell you. However, their argument for breach of implied warranty is extremely weak.  The lawsuit claims that under filling of the drinks makes them not fit for their ordinary purpose—which one would assume would be drinking. They also raise facts in support of an argument of fitness for a particular purpose—stating that customers relied on Starbucks employee’s recommendations in believing their products were properly filled.

Frankly, this seems ridiculous.  The purpose of an iced coffee is to be cold and capable of being drunk—extra ice doesn’t change that.  Also, it seems highly suspect that the plaintiff or any other customer told their barista that they specifically needed the exact fluid ounces advertised only to be assured that this was going to be the case.

Negligent Misrepresentation-You Should Have Known It Wasn’t What You Said It Was

Negligent misrepresentation is where a party makes a representation about something they have no reasonable basis for believing to be true and another party, believing the statement, relies on it in making a purchase.  However, the purchasing party’s belief must be reasonable—and that is the biggest issue in this case.

Starbucks certainly knew there wasn’t as much fluid in their cups as they said there was. At a minimum, they should have known that their policy of filling cups to a predetermined line that was less than the stated fluid ounces in the drink would—lo and behold—leave less fluid in the drink than they said was in it. This means they made a misrepresentation.

However, do people really believe that their iced drink won’t be filled with ice? Do people expect the advertised fluid ounces on a drink to represent the actual amount of fluid in the cup or the volume in fluid ounces of the cup the drink is served in?

Ms. Pincus and Starbucks will certainly have something to say about these questions—as their answers will decide the case.  If people don’t expect advertised fluid ounces to represent the actual amount of fluid in their cup, then Starbucks is off the hook because correlating advertised fluid ounces and actual ounces is not a reasonable belief.

Fraud-You Know Dang Well It Isn’t What You Say it Is!

Fraudulent misrepresentation has nearly identical elements to negligent misrepresentation—with one big difference.  In negligent misrepresentation, the party selling the product has no basis for knowing if their statement is true or false.  Fraudulent representation requires that party to act with “reckless disregard” as to the truth or falsity of their statement or actual knowledge that they are lying.

Given that under filling their drinks was company policy, it seems impossible that Starbucks did not know that their advertised fluid ounces for drinks were untrue. Exactly what sort of reliance on a statement is required varies subtly from state-to-state for both negligent and fraudulent misrepresentation. Illinois, where the lawsuit is being brought, requires reasonable belief in justifiable reliance on the statement.

Reliance is not reasonable where a statement is obviously false or a reasonable person wouldn’t take it seriously. Once again, this cause of action will hinge on what customers expect from their drinks.

The Cold Case Going Forward

This lawsuit is still in its infancy; with no response from Starbucks beyond a general statement calling the whole thing ridiculous, it is impossible to truly predict the outcome. However, the complaint is not as ridiculous as Starbucks would have the world believe.  At a minimum, some of the allegations made will likely withstand Starbucks’ inevitable motion for summary judgment—a ruling by a judge that one side of a case will win and there is no possible issue of fact that could lead to a different outcome.  No matter how the case progresses, I’ll be ordering the smallest size for my iced coffee—light ice please.

Jonathan Lurie

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