Action-Snacked Year: Food Labeling Class Actions On The Rise
Consumer class action lawsuits targeting foods for alleged false and misleading labeling rose sharply in 2020, with new filings rising by more than 30% nationwide compared to 2019. New York federal court filings accounted for much of this increase. Although this trend may appear to threaten the food and beverage industry with the prospect of endless court entanglements and expensive nationwide discovery, in the New York federal courts these cases are increasingly being dismissed early before gaining any traction. These courts are applying the “reasonable consumer” standard with a “real world” perspective, dismissing cases at the threshold motion to dismiss phase more and more regularly notwithstanding plaintiffs’ alleged subjective confusion about the labeling at issue because the hypothetical “reasonable consumer” would not have been misled.
A number of class actions targeting “vanilla-flavored” foods, for example, have been dismissed. These lawsuits allege the “vanilla” labeling is misleading because the ingredients were not primarily derived from vanilla beans or vanilla bean extract. Courts have consistently rejected these claims where the product was simply labeled as “vanilla-flavored,” had a vanilla taste, and where the label did not affirmatively claim that the product was “made with” vanilla beans or bean extract.
Similar dismissals have extended to foods beyond those labeled “vanilla.” In Harris v. Mondelez Global LLC, the court dismissed a complaint attacking Oreo cookie labeling, which stated that the cookies are “Always Made With Real Cocoa.” The court found that the label was factually accurate because the cookies do in fact contain “Real Cocoa,” and, absent language in the label that the cookies were made “only” or “exclusively” with “Real Cocoa,” the label would not mislead a reasonable consumer as to the nature and extent of the real cocoa content.
On their face, these cases underscore that accuracy matters and that it pays to avoid any hint of overstatement in describing popular food ingredients. Labels that emphasize the defensible fact of content alone are better suited to defeat a claim of deception at the early threshold motion stage. Indeed, in Sharpe v. A&W Concentrate Co., the court denied the defendant’s motion to dismiss where the company’s vanilla-flavored soda label included the bolded statement “MADE WITH AGED VANILLA.” This label goes beyond what the other vanilla labels stated by specifically stating the type of vanilla—“Aged Vanilla.” The court interpreted “Aged Vanilla” to mean natural vanilla, and when coupled with plaintiff’s evidence indicating that the vanilla flavor came predominately from an artificial or synthetic ingredient rather than natural sources, the court held this label could mislead the reasonable consumer.
Other New York federal court decisions suggest that a disclaimer or clarifying language may be necessary in defeating a deception claim. For example, in Hesse v. Godiva Chocolatier, Inc., the court found that a reasonable consumer could be misled by the “Belgium 1926 label” on Godiva’s chocolates to believe that the chocolates were made in Belgium, when they are made in the United States—a fact Godiva failed to disclose in its labeling. Had Godiva included a reference to the chocolates being made in the United States on its product packaging, Godiva may have fared better on its motion to dismiss.
In applying the “reasonable consumer” test, New York federal courts also consider the dominant message set forth in the label at issue and how it relates to the product as a whole. This focus stems from the Second Circuit’s decision in Mantikas v. Kellogg Co., involving Cheez-Its’ “WHOLE GRAIN” crackers, labeled prominently as such combined with the statement “MADE WITH WHOLE GRAIN.” Mantikas held that the label could plausibly mislead a reasonable consumer to believe that the crackers are made predominately with whole grain, as opposed to other types of grain, despite the ingredient panel stating the actual mix of whole grain and enriched flour content. According to district courts dismissing deceptive food labeling claims, Mantikas speaks to representations regarding ingredients central to the product and its health benefits. Consequently, healthful ingredient representations, especially those that relate to the main ingredients of a product, may be held to a higher standard on a motion to dismiss.
On balance, these cases reinforce that the “reasonable consumer” inquiry is context-specific, but also that dismissal at the 12(b)(6) stage is attainable. Indeed, courts in New York are viewing “reasonable consumers” as far more savvy, and far less vulnerable, than plaintiffs’ allegations often suggest. So when companies choose to litigate, they know that New York federal courts will view claims of deceptive labeling with a refreshingly practical perspective.
A longer version of this article appeared in New York Law Journal. Reprinted with permission from the June 2, 2021, edition © 2021 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or email@example.com.
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Shanna L. Miles (LAW ’16) is an associate at Akin Gump. She represents clients in complex commercial litigation, with an emphasis on consumer class action defense, shareholder and contractual disputes, and bankruptcy litigation.
Stephanie Lindemuth is counsel at Akin Gump. Her practice concentrates on complex commercial litigation, with an emphasis on securities, shareholder, and consumer class action defense.