By Jonathan Stempel
(Reuters) – A federal judge said Kraft Heinz (NASDAQ:KHC) must face a proposed nationwide class action alleging that it defrauded consumers by claiming its Kraft macaroni and cheese, one of its best-known products, contains no artificial preservatives.
In a decision on Wednesday, U.S. District Judge Mary Rowland said the Illinois, California and New York consumers leading the lawsuit plausibly alleged that Kraft Mac & Cheese contained a synthetic form of citric acid that differed from the natural variety, and also contained sodium phosphates.
The Chicago-based judge said the plaintiffs specifically alleged that the ingredients functioned as preservatives, making Kraft Heinz's claim of "No Artificial Flavors, Preservatives or Dyes" on labels false, and cited academic studies and U.S. Food and Drug Administration guidance to support their case.
"These allegations are enough to withstand a motion to dismiss," she wrote.
Rowland agreed with Kraft Heinz that the plaintiffs lacked standing to demand new labels because they are now aware of its alleged deceptive practices and face no risk of future harm.
In seeking a dismissal, Kraft Heinz said there were no factual allegations that it used artificial preservatives in its "iconic" Mac & Cheese, or that reasonable consumers would view its ingredients as artificial.
Kraft Heinz and its lawyers did not immediately respond to requests for comment on Thursday. Lawyers for the plaintiffs did not immediately respond to similar requests.
The plaintiffs are seeking damages for fraud, unjust enrichment, and violations of state consumer protection laws.
Their lawsuit is one of many challenging the accuracy or precision of food labels.
In July 2023, a Miami federal judge dismissed a lawsuit accusing Kraft Heinz of understating how long it took to prepare microwaveable Velveeta macaroni and cheese.
Kraft Heinz is based in Chicago and Pittsburgh. Berkshire Hathaway (NYSE:BRKa) owns 26.9% of its stock.
The case is Hayes et al v. Kraft Heinz Co, U.S. District Court, Northern District of Illinois, No. 23-16596.
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