GRIDLEY, CA (MPG) - Avatar Foods Inc., which operates a food production facility on the north end of Gridley, has filed a lawsuit against Newman’s Own Inc., alleging contract violations tied to the production of Newman O’s cookies.

Court documents filed Jan. 26, in Connecticut name Avatar Foods and its subsidiary, Tuscany Cookies LLC, as plaintiffs. Newman’s Own is listed as the defendant.

Avatar Foods operates out of the former Rio Pluma plant along Highway 99, which it purchased with plans to manufacture its organic Tuscany Cookie product line. City officials said the facility underwent upgrades before production began.

“Avatar Foods was given a temporary certificate of occupancy last June 2025 to allow them to continue preparing the operation while working on building code compliance,” said Gridley City Planner Christopher Smith.

Smith said compliance issues were resolved by late summer or early fall, with production believed to have started in fall 2025.

According to the lawsuit’s summary of action, Avatar Foods and Newman’s Own entered into an amended and restated co-packer agreement on Nov. 1, 2024. Under the agreement, Avatar Foods was to manufacture organic cream-filled sandwich cookies sold under the Newman’s Own brand as Newman O’s.

The complaint alleges that the product specifications provided by Newman’s Own were not suitable for commercial manufacturing. The filing claims the specifications were “not machinable,” resulting in what the plaintiffs describe as large-scale production failures.

Avatar Foods alleges it is owed $1,187,035.10 in unpaid invoices. The lawsuit also seeks delivery of 19,954 additional cases of product that Avatar Foods claims it cannot resell under the terms of the agreement. The plaintiffs are seeking damages of no less than $2 million, as well as attorney fees and costs, with final amounts to be determined at trial.

“Nearly three decades of satisfied customers and consistent product quality contradict Avatar’s claims,” a spokesperson for Newman’s Own Inc. said in a statement to The Gridley Herald.

The spokesperson said Newman’s Own produced Newman O’s from 1997 through 2024 with a longtime co-packer and ended that relationship only when the co-packer exited the sandwich cookie business.

“We selected Avatar based on its representations of its capabilities, which proved inaccurate,” the spokesperson said.

According to Newman’s Own, the production issues cited in the lawsuit stemmed from Avatar’s operational challenges, not from the product specifications. The company said formulation changes proposed by Avatar led to customer dissatisfaction.

“Consistent with our longstanding commitment to quality, and in light of Avatar’s breach of our contractual obligations, we ended our business relationship in November 2025,” the spokesperson said.

Newman’s Own said it plans to contest the lawsuit.

“We stand by our position and are prepared to address this meritless lawsuit in court,” the spokesperson said.