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March 19, 2019 Articles

Food Fights in the Big Apple: Two Significant New Food Labeling Decisions

Two recent decisions in New York have the potential to change the landscape for these types of cases.

By August T. Horvath

December 2018 was an important month in the New York federal courts for food-labeling litigation: Two significant decisions have the potential to change the landscape for these types of cases. Mantikas v. Kellogg Co. and Newton v. Kraft Heinz Foods Co. both relate to the plausibility of plaintiffs’ theories that marketing statements on food packaging imply more than they actually say.

Mantikas: Overview

In Mantikas, handed down December 11, a panel of the U.S. Court of Appeals for the Second Circuit reversed the holding of U.S. District Court for the Eastern District of New York Judge Sandra Feuerstein in a case concerning Kellogg’s popular Cheez-It crackers. No. 17-cv-2011 (2d Cir. Dec. 11, 2018), reversing Mantikas v. Kellogg Co., No. 16-cv-2552, 2017 U.S. Dist. LEXIS 83311 (E.D.N.Y. May 31, 2017). 

Cheez-Its are made with a mixture of whole grain flour and enriched white flour, with the latter present in greater quantity. The Cheez-It box proclaimed, at different times, either “Whole Grain” or “Made with Whole Grain” in large lettering in the center of the box, with the statement “Made with 5g [or 8g] of whole grain per serving” in smaller type near the bottom. It was undisputed that these claims were literally true; the stated quantity of whole grain was correct, and nothing was explicitly said about the presence or absence of white flour. However, plaintiff Mantikas alleged that these statements implied that most or all of the flour used in the crackers was whole grain flour. The other relevant fact is that the FDA-mandated ingredient statement on the Cheez-It side panel correctly lists enriched white flour as an ingredient ahead of whole wheat flour.

In New York, an element of a false advertising claim is that the challenged marketing statements must be likely to deceive a reasonable consumer acting reasonably under the circumstances. As part of the Twombly-Iqbal analysis of the sufficiency of a complaint on a motion to dismiss, federal judges can and should act as gatekeepers as to whether this element has been pleaded plausibly. Bell Atl. Co. v. Twombly, 550 U.S. 544 (2007); Ashcroft v. Iqbal, 556 U.S. 662 (2009); see Fink v. Time Warner Cable, 714 F.3d 739, 741 (2d Cir. 2013).

Judge Feuerstein held that the statements regarding whole grain did not represent that only whole grain flour was used in the product, and the ingredient statement cleared up any ambiguity by disclosing that enriched white flour was also used, so it was implausible that any reasonable consumer would likely be deceived. The Second Circuit disagreed, and in particular rejected an interpretation of the district court decision apparently advanced by Kellogg—that is, as a matter of law, an affirmative statement about the presence of one ingredient can never imply anything about the presence, absence, or amount of some other ingredient.

On its face, the Second Circuit panel did not otherwise disagree with Judge Feuerstein on legal issues, just mostly in their factual analysis. Appeals from dismissal are reviewed de novo, so the job of a false-advertising defendant on appeal is to persuade three new judges all over again that the supporting facts alleged by the plaintiff don’t add up to a plausible theory. Every such case is different; and in some other case, based on a different food package, the opposite result might occur. In the case of Cheez-Its, the Second Circuit judges may have felt that the cracker box front panel was more likely to imply a “whole grain flour only” claim than other food labels that have been challenged unsuccessfully in recent cases.

Mantikas: Front-Panel Claims and Ingredient Statements

Nonetheless, Mantikas is significant in that it addresses the relationship between front-of-panel claims and the ingredient statement, a recurring issue in the growing genre of false-advertising cases alleging that the main display panel of a product package makes implied claims about the presence, absence, or amount of various ingredients.

Until now, the favorite precedent of such plaintiffs has been the U.S. Court of Appeals for the Ninth Circuit case Williams v. Gerber Products Co. 552 F.3d 934 (9th Cir. 2008). That case concerned a fruit juice snack that Gerber marketed in a package featuring an image of various fruits but that, the plaintiff alleged, actually contained no juice from any of the depicted fruits. The Ninth Circuit’s decision contained the much-quoted line that “reasonable consumers should [not] be expected to look beyond misleading representations on the front of the box to discover the truth from the ingredient list in small print on the side of the box.” Id. at 939.

Williams is cited in almost every front-panel-versus-ingredient-statement case, but its facts have made it distinguishable by many defendants. Although the front of the Gerber product did not contain an express verbal claim that it contained the depicted fruits or their juices, the images of those fruits came about as close as one can to making an express claim with images rather than words. It was thus possible to interpret Williams as holding only that an ingredient statement cannot cure a clear, affirmative front-panel misrepresentation by contradicting it, and some courts did so. See, e.g., Ebner v. Fresh, Inc., 838 F.3d 958, 966 (9th Cir. 2016). Such an interpretation could be considered unremarkable because it still leaves open the possibility that if a front-panel statement is ambiguous as to some ingredient, a reasonable consumer will look to the side-panel ingredient statement for clarification.

In Mantikas, the Second Circuit explicitly followed Williams. But it did not seem to adopt the strong interpretation of the Williams holding put forward by some plaintiffs, i.e., that the ingredient statement is essentially inoperative and irrelevant in all cases. On the contrary, the Second Circuit conceded, “context is crucial” in evaluating the plausibility of an implied false claim; thus, the court “consider[ed] the challenged advertisement as a whole, including disclaimers and qualifying language.” Mantikas, No. 17-cv-2011 (2d Cir. Dec. 11, 2018). Presumably, this included the ingredient statement. The panel simply was not convinced, looking at the cracker box as a whole, that no reasonable consumer would come away thinking that most or all of the flour in the cracker was from whole grain.

Mantikas doesn’t lay down a hard rule as to how much weight the ingredient statement should be accorded when examining the plausibility of an implied ingredient misrepresentation claim. At the extremes, we know that an ingredient statement doesn’t cure an affirmative front-label deception, including one that is not express but at least strongly implied; and that the ingredient statement is not to be ignored entirely, as if no reasonable consumer would ever check it. Thus, courts likely will continue to assess the whole package in considering the plausibility of implied ingredient claim allegations, with the ingredient statement being one relevant element.

Newton: Overview

On December 18, Kraft Heinz and Daisy Brand were successful in moving to dismiss a purported class action before Judge Dearie in the Eastern District of New York. Newton v. Kraft Heinz Foods Co., No. 16-cv-4578 (E.D.N.Y. Dec. 18, 2018). As in the Mantikas case, the issue again was whether the plaintiff had plausibly alleged that reasonable consumers were likely to be deceived.

The case concerned Kraft’s “All Natural” sour cream and Daisy’s “Pure & Natural” sour cream. The plaintiff alleged that because the cows that produced the cream may have been fed with feed containing genetically modified organisms (GMOs) and subjected to “accelerated milk production processes,” the product cannot be all-natural. Further, in addition to arguing that the express claim of “all-natural” is tantamount to implied claims of (1) “no GMOs used in any part of the production process” and (2) “no accelerated milk production processes,” plaintiffs also argued that “all-natural” is an implied “organic” claim. Newton, No. 16-cv-4578.

Newton: Interpretation of Natural and Plausability

In the plaintiff’s imagination, the word natural was doing a lot of heavy lifting on the defendants’ labeling, which otherwise made no claim that the sour cream was organic, GMO-free, or from non-milk-accelerated cows. From the court’s perspective, it was a greater load than the word should be expected to carry. Like other courts considering challenges to “natural” claims, Judge Dearie noted that natural has no official FDA definition, but various informal comments from the Food and Drug Administration (FDA) and other agencies would not support any of the interpretations advanced by the plaintiff.

Interestingly, the court considered but rejected the defendant’s arguments for FDA primary jurisdiction and for federal preemption of the suit; then, it moved on to the plausibility question. It could have decided the case on plausibility and not bothered to reach these grounds, as was done by the district court judge in the Mantikas case.

Judge Dearie ruled, perhaps a bit circularly, that “Defendants’ labeling is not deceptive to a reasonable consumer because, fundamentally, whatever reactions consumers might have to a product’s literature, packaging, promotional jargon or imagery, there remains one insurmountable hurdle in Plaintiff’s case: there is noting deceptive about Defendants’ product labeling.” Newton, No. 16-cv-4578. By ruling that consumer reactions are not necessarily controlling, the court was able to brush aside survey research, highlighted by the plaintiff, finding that many consumers interpret the word natural as more or less equivalent to “organic.” When “Defendants’ products are exactly what they are represented to be,” the court held, “the fact that Plaintiff or any reasonable consumer or group of consumers might well assign a certain meaning to the term ‘natural’ is not determinative.” Id.

The Newton decision came out after the Second Circuit’s decision in Mantikas, and the court cited Mantikas several times in support of its ruling even though the Mantikas decision reversed a dismissal. The Newton court found plenty of language in Mantikas to cheer defendants, holding that “the Second Circuit recently acknowledged in Mantikas that in certain circumstances deceptive labeling claims must fail the reasonable consumer test as a matter of law because they are so far afield that a plaintiff’s assertions about what a reasonable consumer thinks and understands lack any foundation in reality.” Id. This at least suggests that Mantikas still leaves plenty of room to argue that a misleading labeling theory can be dismissed as implausible.

What’s Next?

The Second Circuit and the Eastern District of New York in particular are becoming more interesting places to litigate food-labeling claims. Courts in this jurisdiction are establishing guidelines on many of the contested issues that previously were more extensively elucidated elsewhere in the country, especially the Ninth Circuit. With many putative food-labeling class actions currently in their early stages, we can expect further activity in this ongoing food fight.

August T. Horvath is a partner at Foley Hoag LLP in New York, New York.

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