State Consumer Protection Laws
The U.S. District Court for the District of Massachusetts grants the defendants’ motion to dismiss deceptive trade practices and false advertising claims asserting that the defendants falsely portrayed their “Lactaid” product as a drug rather than a dietary supplement. The court concluded that the plaintiff failed to allege an injury-in-fact sufficient to confer Article III standing. Plaintiff asserted that, “[h]ad the Lactaid Supplements been labeled in compliance with applicable state and federal law,” she “would not have been misled,” and “this would have affected her purchasing decisions.” She did not allege that the product was defective or failed to work as promised, or that she would not have purchased the supplement but for the allegedly misleading advertising. Her vague claim of an “effect” on her “purchasing decisions” was insufficient to support a finding of injury-in-fact. (DiCroce v. McNeil Nutritionals, LLC, 2022 WL 1064063 (D. Mass. April 8, 2022)).
The U.S. District Court for the Northern District of Illinois grants defendant Whole Foods Market Group, Inc.’s (“Whole Foods”) motion to dismiss claims for, among other things, statutory and common-law fraud, and negligent misrepresentation (although the plaintiff was given leave to amend her complaint for all claims except negligent misrepresentation). Plaintiff alleged that Whole Foods deceived her because the chocolate coating on its organic chocolate ice cream bars contained more non-chocolate ingredients than actual chocolate. Rejecting the plaintiff’s claim, the court held that her interpretation of the packaging was unreasonable because a reasonable consumer would not assume that the ice cream bars were comprised of 100% pure chocolate or even mostly chocolate. Specifically, the court found that there was no viable claim because (1) the bars contained some chocolate; (2) Whole Foods never advertised that the bars were exclusively chocolate; (3) all representations on the packaging, such as “smooth” or “decadent,” described the qualities of the bars, rather than the ingredients; and (4) the ingredient list was accurate. The court also rejected the plaintiff’s argument that “chocolate” is typically defined in the dictionary and federal regulations as containing “only (or mostly) cacao ingredients,” reasoning that a reasonable consumer would either be unaware of these definitions or not expect a chocolate coating on ice cream to conform precisely. Turning to Plaintiff’s claims of negligent misrepresentation, the court found that, for the same aforementioned reasons, Whole Foods did not make a false statement and, thus, one of the elements of the claim was not met. Further, even if Whole Foods had made a false statement of material fact, the plaintiff was unable to recover against the company in tort and there was no extracontractual duty under Illinois law. (Cerretti v. Whole Foods Mkt. Grp., Inc., 2022 WL 1062793 (N.D. Ill. Apr. 8, 2022)).
The U.S. District Court for the Northern District of California grants defendant Lenovo (United States) Inc.’s motion to dismiss the plaintiffs’ claims for equitable relief in a reference pricing lawsuit. More specifically, the plaintiffs sought restitution, disgorgement, and injunctive relief based on allegations that Lenovo engages in “false reference pricing” when advertising computers on its website, by displaying false regular prices and false discounts based on those regular prices. The Court held that the plaintiffs’ allegations failed to show why their legal remedies were inadequate. First, the plaintiffs failed to differentiate the facts underlying their claims for equitable relief under California’s Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act from those underlying their damages claims. Second, the “conditional allegation” that Plaintiffs may lack an adequate remedy to the extent or if legal remedies are inadequate was insufficient to establish the inadequacy of legal remedies, which, instead, requires facts demonstrating that the damages sought are necessarily inadequate or incomplete. Finally, the plaintiffs’ allegation that “they [had] not yet retained an expert to determine whether an award of damages can or will adequately remedy their monetary losses” merely amounted to speculation that restitution and damages could be different. Such speculation was insufficient to allege inadequacy of legal remedies. (Axelrod v. Lenovo (United States) Inc., 2022 WL 976971 (N.D. Cal. March 31, 2022)).
Consumer Class Actions
The U.S. District Court for the Southern District of Ohio grants the defendant’s motion to dismiss or, in the alternative, to strike class allegations in a putative class action alleging that the defendant misrepresented the efficacy of its shingles vaccine called “Zostavax.” The complaint asserted that the defendant’s alleged misrepresentations violated the Ohio Consumer Sales Practices Act (“OCSPA”) and Deceptive Trade Practices Act (“ODTPA”), and constituted fraud and negligent misrepresentation. The court dismissed the OCSPA claim on grounds that it was not brought by a “consumer” under the statute. More specifically, the OCSPA defines a “consumer as “a person who engages in a consumer transaction with a supplier.” (emphasis in original). Plaintiff made no allegation that she nor the class members engaged with the defendant, the purported supplier, to purchase the Zostavax vaccines. The court, next, dismissed the ODTPA claim because the ODTPA does not provide consumers standing. The court noted the disagreement among judges in the Southern District of Ohio as to who has standing to bring an ODTPA claim, with the majority position being that standing is limited to commercial entities. It agreed with the majority analysis. The court dismissed the fraud claim, finding that the plaintiff did not plausibly plead a special or confidential relationship with the defendant. Plaintiff alleged that she relied on the defendant’s widespread advertisements. But, according to the court, the defendant could not be said to have created a special confidential or fiduciary relationship with every individual who saw one or more of its advertisements. The court also dismissed the plaintiff’s negligent misrepresentation claim because negligent misrepresentation does not apply to consumer transactions under Ohio law. (Gentile v. Merck & Co., Inc., 2022 WL 1084883 (S.D. Ohio Apr. 11, 2022)).
The U.S. District Court for the Northern District of California grants Nestlé USA, Inc.’s motion to dismiss a second amended consumer class action complaint challenging the defendant’s “Toll House Premier White Morsels” product, without leave to amend and with prejudice. Plaintiffs, on behalf of a putative nationwide consumer class, alleged that the Toll House logo, the words “white” and “premier” on the label and associated with “morsels,” a picture of a chocolate cookie with white chips on the label, a scattering of white chip images elsewhere on the label, the product’s placement in grocery stores next to baking chocolate products, the defendant’s historic role in chocolate, including inventing white chocolate, consumer website complaints that the morsels are not white chocolate, and a consumer survey allegedly demonstrating that 95% of consumers believe the product was white chocolate, violated California consumer protection law as falsely advertising the white baking chips as containing white chocolate. Defendant argued that the complaint failed to allege a plausible theory of deception as a matter of law and that the plaintiffs did not have Article III standing to seek injunctive relief. The court agreed with the defendant on plausibility, recognizing that a “a plaintiff’s unreasonable assumption about a product’s label will not suffice.” The adjectives “white” and “premier” have no specific relationship to chocolate. Product placement and Nestlé’s general association with chocolate did not mean that the product was chocolate. Nothing about a picture of a white baking chip represented the product as white chocolate. And there were many non-chocolate products in the baking aisle, so product placement did not support plaintiffs’ claims. Ultimately, the “Court applie[d] common sense to conclude that Nestlé’s labeling and advertising would not mislead a reasonable consumer to believe that the Product contains white chocolate.” The court rejected the plaintiffs’ survey because a survey cannot covert a non-plausible theory into an actionable claim. The court also agreed with the defendant that the plaintiffs lacked standing to seek injunctive relief. The court ruled that it was unable to order the defendant to make a white chip that contains white chocolate or to sell a non-chocolate white chip for a cheaper price. (Prescott v. Nestlé USA, Inc., -- F.Supp.3d --, 2022 WL 1062050 (N.D. Cal. Apr. 8, 2022)).
The U.S. District Court for the Northern District of New York grants the defendants’ motion for summary judgment, grants in part and denies the defendants’ motions to exclude the plaintiff’s experts, and denies as moot the plaintiff’s motion for class certification and motion to exclude the defendant’s expert, in a putative class action against manufacturers of a brand of dry kibble dog food that has adopted a “Biologically Appropriate” nutritional philosophy, asserting a variety of claims based on the defendants’ labeling and advertising of its products. Following a motion to dismiss, which was granted as to several claims but allowed, among other things, the plaintiff’s claims for violations of New York General Business Law (“GBL”) §§ 349 and 350, fraudulent misrepresentation, and fraud by omission to proceed, the parties stipulated to the plaintiff filing a second amended complaint, dismissal of another named plaintiff, and limiting the product lines at issue by dismissing claims based on all but two dog food diets sold under one of the defendants’ brands and manufactured at a single facility. The court granted the defendant’s motion for summary judgment, noting that, while the plaintiff presented compelling evidence of flaws in the defendants’ products and processes, and that the at-issue brand was among the most expensive dog foods on the market, selling a non-premium product at premium prices is not, by itself, grounds for liability. Liability attaches only where the product is either represented as possessing premium attributes that it in fact lacks or is labeled in a way that omits information that New York law requires to be disclosed. Specifically, the court held that, while the phrase “Biologically Appropriate” was not puffery, there was not sufficient evidence to support a jury finding that a reasonable consumer would interpret that phrase as meaning that the products contained no heavy metals or BPA. As to the argument that the defendants’ use of the word “Fresh” on the labels of their products was misleading, the court found that (1) use of frozen ingredients was not misleading because the products were labeled in several places as “fresh or raw,” with “raw” not reasonably interpreted to apply only to “fresh” ingredients, and (2) the “large, brightly colored” panel on the back of the products disclosing that half of the ingredients were dried or oils provided sufficient notice to consumers that not all ingredients were fresh. As to the plaintiff’s claim that the use of “Regional” labeling was misleading because some ingredients are sourced outside of the manufacturing facility’s region or even North America, the court found that the defendants may have led consumers to believe their ingredients were primarily (though not exclusively) regional, but the plaintiff failed to allege that the ingredients were not “primarily” regional and pointed only to minor ingredients with nonregional origins. As to the plaintiff’s argument that the claim “delivering nutrients naturally” was false and misleading because the products contained heavy metals and BPA, the court concluded that, in context, the most intuitive interpretation was that the nutrients in the products come from natural sources; the only contrary evidence presented by the plaintiff was her own unexplained, interpretation. Thus, the court granted summary judgment on the plaintiff’s fraudulent misrepresentation and GBL claims as to the product labeling. Further, as to the plaintiff’s claim for fraud by omission, which was based on the defendants’ alleged failure to disclose that the products contained “heavy metals, BPA, non-fresh ingredients, non-regional ingredients, and/or unnatural or other ingredients that do not conform to the products’ labels, packaging, advertising, and statements,” the court found that, (1) with regard to heavy metals, the plaintiff should have known by ordinary diligence and attention that anything containing fish (like the products do) might also contain high concentrations of heavy metals, (2) with regard to non-fresh ingredients, it was implausible that the plaintiff could not have discovered this through exercise of ordinary intelligence because it was disclosed on the packaging, (3) with regard to non-regional ingredients, the plaintiff did not plausibly allege that the defendants knew she was relying on her own impression that 100% of the ingredients were regional and there was no evidence that the defendants knew the plaintiff was acting on mistaken knowledge, and (4) the same applied with regard to the risk that the defendants’ products contained BPA. Finally, as to the plaintiff’s claim under GBL § 349 for these alleged omissions, the court found that, (a) with regard to fresh, regional ingredients, and BPA, the plaintiff’s omissions theories were deficient for the same reasons as her misrepresentations claims, and (b) the plaintiff’s omissions claim under the GBL based on heavy metals failed for the same reason as her fraud by omissions claim. On these grounds, the Court granted summary judgment in favor of the defendants as to all of the plaintiff’s claims. (Colangelo v. Champion Petfoods USA, Inc., 2022 WL 991518 (N.D.N.Y. Mar. 31, 2022)).
The U.S. District Court for the District of Massachusetts grants defendant Vitamin Shoppe, Inc.’s motion for summary judgment on the plaintiffs’ Massachusetts and Illinois state law claims for false advertising and deceptive practices, as well as other causes of action. The putative class action plaintiffs alleged that certain of the defendant’s dietary supplement products’ labeling statements about glutamine (e.g., “helps support muscle growth”) induced them to buy products containing that ingredient, and that the supplements did not yield the promised results. Defendant moved for summary judgment, arguing that the labeling statements’ “structure/function claims” on glutamine are permitted by the federal Food, Drug, and Cosmetic Act (“FDCA”), as amended by the Nutrition Labeling and Education Act and the Dietary Supplement Health and Education Act of 1994, and, in turn, that these federal laws preempted the plaintiffs’ state law claims. The court found that the labeling statements at issue constituted “structure/function claims” because they were “narrowly focused” in referring to only the ingredient glutamine and not the whole of each product, the plaintiffs failed to show that the statements were unsubstantiated, and the plaintiffs did not contest the facts that the products’ disclaimers mentioned the lack of an FDA evaluation and gave no disease claim: “These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease.” The court held that, under the FDCA, the challenged statements were permitted structure/function claims, and that the state laws that prohibit these same statements are preempted by the FDCA. Thus, the court granted the defendant’s motion for summary judgment. (Ferrari v. Vitamin Shoppe, Inc., 2022 WL 974048 (D. Mass. Mar. 31, 2022)).
The U.S. District Court for the Northern District of Illinois grants in part and denies in part the defendant’s motion for summary judgment. Plaintiffs brought a putative class action alleging that labeling on the defendant’s dog food was misleading and omitted the presence or potential presence of heavy metals, BPA, and/or pentobarbital. Specifically, the defendant marketed its dog food as “Biologically Appropriate” and “Delivering Nutrients Naturally.” Additionally, the defendant’s packaging for the defendant’s dog foods contained a variety of statements pertaining to containing “fresh” and “regional” ingredients. Defendant did not state on its packaging that all or 100% of the ingredients in the dog foods were fresh or that the foods contained no frozen ingredients, or that all of the ingredients were regional. Defendant also did not advertise that its foods contained no heavy metals, were free of heavy metals, or were BPA-free. Further, the defendant did not add heavy metals or BPA to its products. The court noted that both heavy metals and BPA can be ubiquitous to the environment. As to the presence of pentobarbital, the defendant learned that one of its ingredients sourced from a certain supplier tested positive for small amounts of pentobarbital and discontinued purchasing the ingredient from that supplier. Plaintiffs retained a survey expert and a marketing expert. The survey showed that reasonable consumers would interpret “Biologically Appropriate” to mean that heavy metals and non-fresh ingredients were not used in the products, and that they would expect no risk of BPA or pentobarbital. The survey also concluded that reasonable consumers would not expect non-fresh or non-regional ingredients based on the “Fresh” and “Regional” statements. Additionally, each plaintiff testified that the labeling statements meant the same things to them. The marketing expert, for his part, opined that “[h]ad Champion’s packaging disclosed that its products contained and/or had a risk of containing heavy metals, BPA, pentobarbital, a material amount of ingredients that were not fresh, and/or a material amount of ingredients that were not local or regional, such disclosures would have adversely affected consumers’ willingness to purchase the Champion Products.” Defendant’s expert, a veterinary toxicologist, opined that nearly all foods contain some levels of heavy metals and the level of heavy metals in the products were below tolerable limits. Defendant argued that nowhere on the product labeling nor on its packaging were representations that all or 100% of the ingredients in the dog food are regional and fresh. The court found that, together with the plaintiffs’ testimony, the expert reports were sufficient to raise a dispute of fact about whether the phrases “biologically appropriate,” “delivering nutrients naturally,” “regional,” and “fresh” were, in fact, false and misleading to a reasonable consumer. The court rejected the defendant’s argument that the phrase “biologically appropriate” is non-actionable puffery because it “is not the type of superlative that would put the reasonable consumer on notice that the comment was ‘meaningless sales patter,’” and because the plaintiffs alleged that the phrase conveys to consumers that their food does not contain or have the risk of containing heavy metals, BPA, or pentobarbital. The court dismissed the plaintiffs’ claims based on the existence or risk of existence of pentobarbital in the products because the plaintiffs either had stopped purchasing the products by the time the contaminated shipments were found or did not have evidence that they have bought specific brands of the defendant’s dog food that might have been affected. The court also refused to dismiss an omission claim under the Illinois Consumer Fraud and Deceptive Practices Act (“ICFA”). An ICFA omission claim requires the “omission of any material fact with intent that others rely upon [its] concealment,” as well as proof of proximate causation. Defendant claimed that there was no omission pertaining to whether its dog food formulations used “non-fresh” or non-regional ingredients, or had a risk of containing BPA or heavy metals. Plaintiffs asserted that the issue of whether the defendant made material omissions was a jury question. The court agreed with the plaintiffs for the same reasons as discussed above and concluded that the evidence, when viewed in a light most favorable to the plaintiffs, was not a sufficient basis to dismiss the claim on summary judgment. (Zarinebaf v. Champion Petfoods USA Inc., 2022 WL 980832 (N.D. Ill. Mar. 31, 2022)).
The U.S. District Court for the Southern District of New York grants defendant Kellogg Sales Co.’s (“Kellogg’s”) motion to dismiss a putative class action, which asserted claims of deceptive business practices and false advertising. Plaintiff alleged that Kellogg’s over-stated the amount of strawberries in its “Frosted Strawberry Pop-Tarts” by featuring a strawberry on its label, but omitting pears and apples, which were also present in the pastry. Additionally, the plaintiff alleged that the presence of “red 40,” which gives the filling its dark red color, misled consumers into assuming strawberry is a more prominent ingredient, and that the product has taste and health benefits inherent to strawberries. The court found that the plaintiff failed to state a claim because “the misrepresentations are simply not deceptive.” Specifically, nothing on the front packaging would suggest, to a reasonable consumer, that strawberries were the sole ingredient in Frosted Strawberry Pop-Tarts. For example, the package did not contain language that the pastry includes “only” or “exclusively” strawberries. The photo of the strawberry did nothing to alter this conclusion, as it was required to be viewed in context alongside the word “Frosted.” The court further held that a reasonable consumer would not purchase a “pre-packaged, processed sugary treat” that is “coated in frosting” and expect the health benefits of fresh strawberries. Plaintiff’s argument that red food dye created the impression that the pastries contained more strawberries was deemed abandoned due to the plaintiff’s failure to reply to Kellogg’s argument in his opposition brief. Finally, the Court found that even if the packaging was ambiguous, the ambiguity was cured by the list of ingredients and the Nutrition Facts panel on the packaging. Under New York law, a manufacturer may clarify an ambiguous interpretation of a label with disclaimers and disclosures on the side or back of product packaging. This ensures that a reasonable consumer can “overcome any confusion.” (Brown v. Kellogg Sales Co., 2022 WL 992627 (S.D.N.Y. Mar. 31, 2022)).
The U.S. District Court for the Southern District of New York grants defendant Mondelēz Global LLC’s motion to dismiss in a putative class action alleging that the packaging for the defendant’s product, “Stoned Wheat Thins” snack crackers, was false and deceptive in violation of New York General Business Law §§ 349 and 350. More specifically, the plaintiff claimed that the packaging misled consumers into believing that the product was made predominantly with “stoneground whole wheat” when, in reality, it was not. The court noted, in considering the plaintiff’s claims, that the consumer protection statute applies an objective test for deception, and the plaintiff’s claims did not require reliance as an element; therefore, the plaintiff’s “personal expectations” were not enough to establish that a reasonable consumer, acting reasonably, would be misled. The court also found that the product’s name and packaging were not, in and of themselves, deceptive, nor did the plaintiff successfully explain why consumers might interpret such to mean the product was made of “stoneground whole wheat” rather than simply “stoned wheat,” as the name indicates. The court granted the defendant’s motion to dismiss without prejudice. (Randolph v. Mondelēz Glob. LLC, 2022 WL 953301 (S.D.N.Y. Mar. 30, 2022)).
The U.S. District Court for the Southern District of New York grants defendant Whole Foods’ motion to dismiss the plaintiff’s first amended putative class action complaint (“FAC”) for lack of Article III standing. Plaintiff sought injunctive relief and monetary damages for, among other things, violations of New York General Business Law §§ 349 and 350 (GBL”), negligent misrepresentation, and fraud, alleging that Whole Foods engaged in a pattern of mislabeling certain prepared foods and failed to identify the presence of allergens. Plaintiff specifically alleged that, between October 2018 and November 2020, he purchased Whole Foods products of the type which had been identified in an FDA warning letter to the company warning it of its alleged pattern of selling misbranded food products. Plaintiff further alleged that, during that timeframe, he purchased products of the type which had been recalled for failing to label the presence of allergens. The FAC did not contain specific allegations that the plaintiff purchased mislabeled food products, and the plaintiff conceded that it was merely “likely” that he purchased any of the purportedly mislabeled products. Further, the FAC did not allege which specific allergens the plaintiff was allergic to or otherwise sought to avoid; rather, it alleged only that the plaintiff was allergic to foods containing the major allergens. Plaintiff claimed that, had he known of Whole Foods’ purported practices, he would not have bought these products. The court, however, found the allegations insufficient to establish Article III standing because they failed to establish an injury in fact. In reaching that conclusion, the court agreed with Whole Foods in finding that the “FAC does not allege facts plausibly demonstrating that [Plaintiff] actually purchased any of the products that were the subject of the FDA Warning Letter or that allegedly failed to disclose allergens.” The court also found a recent Northern District of Illinois case to be persuasive, in which there was no standing where those plaintiffs did not allege that they were allergic to a chemical preservative in a hair product or that they had suffered any adverse reaction—only that they would have would have paid less had they known the preservative was present in the product. See Castillo v. Unilever United States, Inc., 2022 WL 7048090 (N.D. Ill. Mar. 9, 2022). The court noted that, unlike the Unilever plaintiffs, the plaintiff here did not specifically allege that he actually purchased products containing unidentified allergens. The court also conducted an analysis of class action decisions involving consumer products in which plaintiffs purchased some, but not all, of the products being challenged. The court found these cases to be instructive despite the decisions turning on class standing rather than Article III standing. The court observed that “[f]undamental to all those decisions was that the plaintiff seeking to bring a class action had actually alleged that they had purchased at least one of the products challenged as falsely advertised.” Plainly, the court explained, the plaintiff had not met that threshold. The court focused on two points: (1) that the plaintiff alleged only that he was either allergic or sought to avoid certain unspecified allergens, that he purchased some prepared food products of the type that were recalled, and, therefore, he might have paid more than he otherwise would have for foods that did not disclose the presence of allergens; and (2) the plaintiff did not plead that he actually purchased any of the foods that had been mislabeled or recalled, nor did he plead that he ever suffered an allergic reaction due to Whole Foods’ mislabeled products. For these reasons, the court held that the plaintiff lacked Article III standing and dismissed the FAC. (Akridge v. Whole Foods Mkt. Grp., 2022 WL 955945 (S.D.N.Y. Mar. 30, 2022)).
The U.S. District Court for the Southern District of California denies a motion to dismiss the second amended consumer class action complaint filed against Nestlé USA, Inc., which alleged violation of California consumer protection laws as to a putative nationwide consumer class based on statements on the labels of the defendant’s products containing chocolate, which purportedly misled consumers to believe that the products were produced in accordance with environmentally and socially responsible standards. The challenged label statements included references to the “Nestlé Cocoa Plan,” UTZ certification, sustainable sourcing, and representations that the defendant supports cocoa farmers or helps improve their lives. Plaintiff asserted that these representations were false because the cocoa was sourced from West Africa where cocoa plantations rely on child and forced labor, contribute to deforestation, and use other practices harmful to the environment. Plaintiff also alleged that the child labor conditions have worsened rather than improved since inception of the Nestlé Cocoa Plan. Defendant argued that its labeling was not deceptive as a matter of law and, alternatively, that the plaintiff did not have Article III standing to challenge the products identified in the complaint that he did not purchase. As to plausibility, the defendant pointed out that the Nestlé Cocoa Plan—which was referenced in the complaint—made clear that the defendant’s initiatives are aspirational, recognized the significant and on-going problems with the West Africa cocoa market, and recognized that a solution will require many entities working together. The court ruled, however, that, whether a business practice is deceptive is usually a question of fact not appropriate for a pleading attack, and here the plaintiff had plausibly alleged deception based on the challenged label statements and the fact that the child labor problem has grown worse since defendant launched its Nestlé Cocoa Plan. The court also rejected the defendant’s standing argument, ruling that the plaintiff alleged a sufficient personal stake in the outcome, purchased some of the challenged products in the past based on the challenged label statements, and would like to purchase them again if and when they are produced as advertised. That was enough for Article III standing, and the issue of whether the class definition was too broad because it included products not purchased was best left for the class certification stage. On April 25, 2022, the defendant filed a motion for reconsideration or, in the alternative, certification for interlocutory appeal. (Walker v. Nestlé USA, Inc., 2022 WL 901553 (S.D. Cal. Mar. 28, 2022)).
The U.S. District Court for the Northern District of California denies defendant Kroger Co’s motion to dismiss. Plaintiff alleged that the defendant’s sunscreen products were misleadingly labeled as being “reef friendly” when, in fact, they contained ingredients with the potential to damage reefs. Based on those allegations, the plaintiff brought a consumer class action complaint alleging, among other things, violations of California’s Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act. Kroger, first, argued that the challenged representation was “mere puffery,” which was a question of law that could be determined at the pleadings stage. The court disagreed, relying on FTC guidance and a California statute, both of which “undermine any argument that ‘reef friendly’ can be dismissed as mere puffery.” Next, the court rejected Kroger’s primary jurisdiction argument, as the pending Congressional legislation Kroger pointed to was too “remote” of a possibility to warrant a stay or dismissal. Additionally, the court determined that Fed. R. Civ. P. 9(b)’s heightened pleading standard was satisfied, because the complaint made clear which representation was allegedly misleading, where and how the defendant made that representation, and why the plaintiffs contended it was misleading. The court also determined that Kroger’s challenges to the plaintiff’s ability to pursue claims based on products he did not purchase or to represent a nationwide class were matters “better addressed at the class certification stage.” (White v. Kroger Co., 2022 WL 888657 (N.D. Cal. Mar. 25, 2022)).
The U.S. District Court for the Southern District of New York grants defendant Procter & Gamble Company’s motion to dismiss in a putative class action alleging violations of various states’ consumer protection statutes based on purportedly false or deceptive advertising claims regarding particular varieties of the defendant’s “Crest” toothpastes made with charcoal. The toothpastes made certain claims regarding “enamel safe whitening,” and the ability to “strengthen[ ] tooth enamel.” After a year of use, plaintiff learned through the news that toothpastes using charcoal may “actually abrade [ ] enamel” and “[were] not safe for use.” In support of dismissal, the defendant argued that the plaintiff “cannot be injured by relying on statements she never saw.” The court agreed and disregarded the claims that were based on statements the plaintiff neither saw nor relied upon in her purchasing decisions. The court also noted that the plaintiff did not “plausibly plead that charcoal is an unsafe ingredient to use in toothpastes or that its presence . . . makes the toothpaste unable to provide the advertised benefits,” and that defendant’s product claims did not rely on the presence of charcoal. Further, the court found that the articles on which the plaintiff relied to support her claims did not, in fact, prove relevant to the issues at hand, and the plaintiff had “failed to allege that defendant has made a false or deceptive statement.” On the question of evidence, the court ultimately found that “plaintiff has not submitted any evidence that the [ ] toothpastes are harmful or demonstrated that the studies are even applicable to the type or form of charcoal present in the challenged toothpastes.” Finally, the court found that the plaintiff insufficiently pled any personal injury, as she made no plausible claim of an actual injury, and that she had not, in fact, paid a price premium for the product. In fact, the court stated that there is no price premium for the product in question, and that “[p]laintiff cannot compare the toothpaste at issue to a completely different product in order to manufacture a price premium.” (Housey v. Procter & Gamble Co., 2022 WL 874731 (S.D.N.Y. Mar. 24, 2022)).
The U.S. District Court for the Northern District of California denies defendant StriVectin Operating Company Inc.’s motion to dismiss. Plaintiff alleged that the defendant’s sunscreen products were misleadingly labeled as being “Reef Safe Sunscreen” when, in fact, they contained ingredients with the potential to damage reefs, even though, on the back of the product, it clarified in fine print that the product did not contain two particular ingredients that are widely thought to harm coral reefs. Based on those allegations, the plaintiff brought a consumer class action complaint, alleging, among other things, violations of California’s Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act. The court, first, determined that the plaintiff stated a claim under California’s consumer protection statutes, as the sunscreen stated that it was “reef safe” when, in fact, it allegedly contained chemicals that actively harm coral reefs, and consumers were purportedly misled into paying an inflated price for a product they think will keep reefs safe. The court called the defendant’s argument that the asterisk and fine print shielded it from liability “absurd,” because a “company can’t say something misleading on the front of a label and escape liability by stating ‘that’s not actually what we mean’ in fine print on the back.” The court analogized that a product labeled “vegan” on the front that contained chicken meat would not be shielded from liability even if, on the back the product, there was an explanation that “vegan” meant “no beef.” The court further reasoned that the plaintiff’s citation to four studies stating that the ingredients in the sunscreen harm reefs was sufficient, at this stage of the litigation, to survive a motion to dismiss. Finally, the Court determined that the plaintiff had standing to pursue injunctive relief, because he alleged that he would purchase the sunscreen again if the reef safe claim was true. (Locklin v. StriVectin Operating Co., Inc., 2022 WL 867248 (N.D. Cal. Mar. 23, 2022)).
The U.S. District Court for the Eastern District of New York grants defendant Pure Fishing’s motion to dismiss a putative class action complaint, alleging, among other things, that Pure Fishing’s conduct of selling fishing bait was fraudulent, that the defendant made negligent misrepresentations, and that the defendant violated New York’s General Business Law (“GBL”) by failing to disclose the leakage problem. First, the court quickly dismissed the state law consumer protection claims, finding that the plaintiff failed to allege a violation that caused him injury within the applicable three-year statute of limitations. Plaintiff first learned of the leakage problem in 2015, but continued purchasing the bait until August 2020 when he filed the complaint. The court reasoned that, because the plaintiff had knowledge of the product’s propensity to leak during the limitations window—August 2017 to August 2020—he did not suffer an injury as a result of Pure Fishing’s alleged deceptive practices and the plaintiff’s GBL claims, therefore, should be dismissed. The court also dismissed the fraud claim for due to the plaintiff’s failure to plead with particularity pursuant to the heightened pleading requirements of Fed. R. Civ. Pro. 9(b). Specifically, the court held that the plaintiff’s “vague descriptions of the asserted omission do not satisfy Rule 9(b).” As the fraud claim was based on an omission (i.e., Pure Fishing’s alleged failure to disclose the alleged leakage problem), the court also found that the plaintiff failed to demonstrate a duty to disclose because he did not establish there was a fiduciary relationship between the parties, or that Pure Fishing possessed superior knowledge not readily available to him. Finally, the court held that the plaintiff failed to state a claim for negligent misrepresentation, holding that he had not set out facts establishing “the existence of a special or privity-like relationship imposing a duty on the defendant to impart correct information on the plaintiff” as required to state such a claim under New York law. In its conclusion, the court also held that the plaintiff lacked standing to bring consumer protection claims under other states’ consumer protection laws and, therefore, may not bring such claims to the extent he sought to do so. (Chung v. Pure Fishing, Inc., 2022 WL 866769 (E.D.N.Y. Mar. 23, 2022)).
Federal Trade Commission (FTC) Litigation Decisions
The U.S. District Court for the Northern District of Texas grants in part and denies in part defendant Match Group, Inc.’s motion to dismiss the FTC’s claims that, among other things, its dating services facilitated fraud against nonsubscribers who would receive communications from third-party fraudulent or flagged accounts, exposed customers to fraud by failing to investigate these accounts before sending notifications on the suspect communications, and, although offering a “money back guarantee,” had a complicated subscription cancellation process. Defendant argued that, under Section 13(b) the FTC Act, the FTC could not show a reasonable belief that the company “is violating, or is about to violate” the law when the complained-of activity has already stopped; that the FTC could no longer seek equitable monetary relief under Section 13(b) after the Supreme Court’s holding in AMG Cap. Mgmt., LLC v. FTC; that, under Section 230 of the Communications Decency Act (“Section 230”), the company was immune from liability for third-party content; and that, under the Restore Online Shoppers’ Confidence Act (“ROSCA”), the FTC only alleged that defendant’s online method for subscription cancellation was not simple, but alleged no similar claims for the other five methods of cancellation. The FTC disagreed on each point, contending that under Section 13(b), the Fifth Circuit both applies a “likelihood to recur” standard for plausibility and entitles the FTC to seek equitable monetary relief; that the defendant is liable for its own conduct—not third-party conduct—thus, Section 230 does not bar certain claims; and that, at the pleadings stage, the other cancellation methods are irrelevant for the ROSCA claim. The court held that, under Section 13(b), the “likelihood to recur” standard continues to apply in the Fifth Circuit, so those respective claims survived dismissal. The court also denied the defendant’s motion to dismiss with respect to the ROSCA claim, which the FTC sufficiently pled. On the other hand, the court granted the motion to dismiss to the extent that the FTC could not seek equitable monetary relief post-AMG, and that Section 230 shielded the defendant as a publisher of third-party content. (FTC v. Match Grp., Inc., 2022 WL 877107 (N.D. Tex. Mar. 24, 2022)).
Recent Filings
Putative California class action and multi-state class action filed in the U.S. District Court for the Southern District of New York against Ashley Furniture, claiming that the company violated various California consumer protection statutes. According to the complaint, the defendant misleadingly advertised fictitious “original” prices and “corresponding phantom discounts” for its online products. (Aberl et. al v. Ashley Furniture Indus., LLC (S.D. Cal. filed Apr. 13, 2022)).
Putative nationwide class action filed in the U.S. District Court for the Eastern District of California against NatureStar LLC and Target Co., alleging violations of California’s False Advertising Law, Unfair Competition Law, and Consumers Legal Remedies Act. According to the complaint, the defendants’ labeling of some of its trail mix products under the “Nature’s Garden” brand as “heart healthy” was misleading because the products contained excessive amounts of sugar that lead to health complications. Plaintiff claimed that, absent the misleading label, she would not have paid the premium price for the products or would not have purchased the products. (Butts v. CiboVita Inc., No. 22-cv-644 (E.D. Cal. filed Apr. 11, 2022)).
Putative California class action filed in the U.S. District Court for the Northern District of California against Birch Benders, LLC, claiming that the company violated various California consumer protection statutes. Plaintiff claims that the company marketed its pancake and waffle mix to contain “10g PROTEIN” despite containing allegedly as little as 5 grams of protein. (Pino v. Birch Benders, LLC (N.D. Cal. filed April 7, 2022)).
Putative nationwide class action filed in the U.S. District Court for the Northern District of Illinois against Trader Joe’s Company, alleging violations of Illinois Consumer Fraud and Deceptive Business Practices Act, Magnuson Moss Warranty Act, and common law claims. According to the complaint, the defendant sells juice that is labeled “cold pressed,” giving consumers the impression that it’s freshly made and not processed, but, in reality, the juice is applied with “high pressure processing” after being extracted. Plaintiff alleges that consumers understand “cold pressed” juice as being juice that was extracted from fruits and vegetables, and not processed or subjected to any form of preservation. Plaintiff argues that the defendant sold the product at an inflated price because of the “cold pressed” claim. (Cristia v. Trader Joe’s Co., No. 1:22-cv-01788 (N.D. Ill. filed Apr. 7, 2022)).
Putative nationwide class action filed in the U.S. District Court for the Southern District of California against Optavia, LLC and Medifast, Inc., alleging violations of California False Advertising Law, Unfair Competition Law, Consumers Legal Remedies Act, Weight Loss Contract Law, and common law claims. According to the complaint, the defendants operate a multi-level marketing company called “Optavia” that sells weight loss products and services to consumers online. Defendants, according to plaintiff, deceptively utilized dark patterns to automatically enroll consumers, after purchasing a product, in a rewards program called “Optima Premier,” where consumers, then, were automatically shipped products and charged hundreds of dollars each month. Plaintiff alleges that the defendants failed to provide disclosures required by law to obtain sufficient consent to enroll consumers in the Optima Premier program. (Zeller v. Optavia, LLC, No. 3:22-cv-00434 (S.D. Cal. filed Apr. 1, 2022)).
Putative nationwide class action filed in the U.S. District Court for the Northern District of California against NatureStar LLC and Target Co. alleging violations of California’s False Advertising Law, Unfair Competition Law, and Consumers Legal Remedies Act. According to the complaint, the defendants’ labeling of “Protein Packed Trail Mix” products as “PROTEIN PACKED” was misleading because the products were not high in protein. Additionally, the plaintiff claims that the labeling is misleading because the defendants prominently displayed protein claims while omitting the “Percent Daily Value” for protein in the Nutrition Facts panel on the products’ labels. Plaintiff further alleges that, but-for the misleading label, he would not have purchased the products or would have purchased them on different terms. (Forrett v. Gourmet Nut Inc., No. 22-cv-2045 (N.D. Cal. filed on Mar. 30, 2022)).
