By Gavin Broady
Law360, New York (October 11, 2012, 1:36 PM ET) — Nestle Waters North America Inc. has been selling bottles of municipal tap water and falsely marketing it to consumers as 100 percent natural, spring-sourced water, according to a putative class action removed to Illinois federal court Wednesday.
Plaintiff Chicago Faucet Shoppe Inc. claims that Nestle — which removed the suit to federal court — has falsely represented to consumers that 5-gallon bottles of Ice Mountain water are sourced from springs and contain only naturally occurring minerals, when in fact the bottles are filled with water not from natural springs but from municipal water systems, according to the complaint.
“The Ice Mountain 5-gallon bottles would have cost less and would have been less marketable if there had been a disclosure that the 5-gallon bottles do not contain 100 percent natural spring water but instead contain resold municipal tap water,” the complaint said. “Nestle Waters’ failure to disclose this critical fact caused consumers to purchase 5-gallon jugs that they wouldn’t have otherwise purchased if that fact was known.”
Chicago Faucet is suing on behalf of all persons in Illinois, Michigan, Minnesota and Missouri who purchased the 5-gallon Ice Mountain bottles, claiming unjust enrichment and deceptive trade practices under the Illinois Fraud and Deceptive Business Practices Act and seeking actual and punitive damages, an injunction mandating disclosure and restitution.
Chicago Faucet claims that it began purchasing the 5-gallon jugs — which are sold only over the Internet or by phone, typically to offices or homes — for its Chicago office in 2008.
At an unspecified date thereafter, a Chicago Faucet employee called Nestle to order home delivery of the water and, after talking to several Nestle employees, was informed that the water was not 100 percent spring-sourced, according to the complaint.
Chicago Faucet says Nestle charges a premium for such spring-sourced water and that while bottles of water not advertised as spring-sourced — which are typically presumed to be tap water — have remained stagnant, sales of bottled water from spring sources have grown substantially.
Nestle has marketed the alleged benefits of spring water — including enhanced taste, quality and mineral composition — and has claimed that the springs themselves each have unique “taste fingerprints” in an unscrupulous and unethical manner intended to create demand for the product, according to the complaint.
Nestle Waters is the leading bottled water company in the U.S., with estimated 2010 sales exceeding $4 billion, according to the complaint.
This is not the first time Nestle has been hit with allegations over the sourcing of its bottled water. In 2003, a pair of consumers sued the company in a Connecticut class action over claims that its Poland Spring brand bottled water was falsely marketed as sourced from spring water deep in the woods of Maine when it consisted of tap water. That suit was reportedly settled later that year for a $10 million payout in the form of discounts to consumers and charitable contributions.
Representatives for the parties were not immediately for comment Thursday.
Chicago Faucet is represented by the Law Offices of Michael J. Newman and Cohen & Malad LLP.
Nestle is represented by Jeffrey M. Garrod of Orloff Lowenbach Stifelman & Siegel PA and Sarah Wolff and David Smith of Reed Smith LLP.
The case is The Chicago Faucet Shoppe Inc. v. Nestle Waters North America Inc, case number 1:12-cv-08119, in the U.S. District Court for the Northern District of Illinois.
–Editing by Lindsay Naylor.