Four Federal Court Rulings Reflect Courts’ Varied Approach To Consumer-Product Deception Suits

Class-action lawsuits claiming that deceptive labeling duped consumers into purchasing certain products have been increasingly piling up on courts’ dockets for well over a decade. Some, such as the claim a Buffalo Wild Wings customer filed in March that he purchased their boneless wings thinking they were “wings,” as in a part of the chicken with bones, are so ludicrous that they make national news. Most product-labeling claims fly well under the radar, and fewer still actually succeed. But because defending these claims cost businesses hundreds of thousands of dollars in fees and threatened to set regulatory standards through judicial fiat, they merit greater attention and scrutiny. This post addresses four recent decisions, each coming from federal trial courts in New York, and offers some observations on what makes these cases especially interesting.

The Cases

No MSG Added – Henry v. Campbell Soup Company

The plaintiff claimed she purchased a carton of Swanson Chicken Broth because of the “No MSG Added” statement. She acknowledged in her complaint that she didn’t notice the nearby clarifying statement “SMALL AMOUNT OF GLUTAMATE OCCURS NATURALLY IN YEAST EXTRACT” and argued no reasonable consumer would notice it.

Eastern District of NY Judge LaShann DeArcy Hall concluded that the way Campbell labeled its broth would not deceive a reasonable consumer. The presence of a disclaimer such as the statement on the broth label, Judge Hall explained, can defeat a claim of deception, though courts must consider such factors as placement and font size. She reasoned that the disclaimer effectively and narrowly clarified the “No MSG Added” statement and was placed near the clarified statement, printed in contrasting color and bolded font. Judge Hall also cited several recent Eastern District court decisions that supported Campbell’s position, pointedly noting that Ms. Henry didn’t bother to mention and refute those precedents.

Judge Hall threw the plaintiffs’ bar a bone in a footnote concluding her deception analysis. The court stated that because Ms. Henry did not claim to have purchased canned Swanson Chicken Broth, she lacked standing to sue for the can’s alleged labeling deception. However, Judge Hall took it upon herself to opine that the court’s “analysis of the can may differ from its analysis of the carton because the Clarifying Language on the can appears to be obscured by a photograph of a roasted chicken.”

No Preservatives – Simeone v. T. Marzetti Company

Ms. Simeone purchased the defendant’s frozen Texas Toast allegedly in reliance on the “No Preservatives” labeling on the box. She argues that the citric acid listed in the ingredients acts as a preservative. Thus, the no-preservatives claim is unlawfully deceptive.

Southern District of NY Judge Kenneth M. Karas rejected Marzetti’s arguments that the plaintiff failed to sufficiently allege that citric acid acts as a preservative and that no reasonable consumer would believe citric acid is a preservative. Judge Karas reminded Marzetti that he must accept Ms. Simeone’s allegations as true and reasoned that she met the minimum pleading standard in claiming citric acid is a preservative in Marzetti’s product. Judge Karas also reasoned that because those allegations were not “patently implausible or unrealistic,” he could not as a matter of law at this stage determine whether the plaintiff was reasonably deceived.

Marzetti also argued that the federal Food, Drug, and Cosmetic Act (FDCA) preempted the plaintiff’s state-law claims. The court concluded that because Ms. Simeone was claiming not that the defendant’s labeling was insufficient (and thus a different or additional label was needed), but was misleading because of the citric acid’s preservative effect, her lawsuit does not conflict with the FDCA. Judge Karas also concluded that though the plaintiff points to FDA regulations and warning letters in her complaint, the claim is not dependent on a violation of the FDCA and is thus not preempted.

This decision could prove rather costly to Marzetti. Just eight days after Judge Karas’ ruling, a different Southern District judge approved a $7.8 million settlement of a lawsuit against Celsius Holdings, Inc. that are nearly identical to the claims in Simone.

(Not) Made in Paris – Eshelby v. L’Oréal USA

Plaintiffs’ lawyers have filed numerous class actions in recent years alleging that the use of certain words and/or images on a label mislead consumers about the product’s manufacturing location. Some have succeeded. For instance, after Kona beer purchasers alleged that the brewer misled them into thinking product was brewed in Hawaii, the defendants settled in 2019 for over $5 million.

In Eshelby, the plaintiff purchased several different L’Oréal products because she believed the company manufactured them in France. The word “Paris” appeared on each product, though the plaintiff acknowledged in her complaint the word is part of the company’s name (“L’Oréal Paris”) and Paris is the company’s headquarters. The products also included French-language text. The complaint also admits that the labels also specify the place of manufacture as either the U.S. or Canada.

Judge Analisa Torres of the Southern District of NY held that Ms. Eshelby could not make out a plausible case. The court cited several federal court decisions holding that reference to a place alone is “as a matter of law . . . insufficient to deceive a reasonable consumer.” Judge Torres also reasoned that L’Oréal made no representations as to the manufacturing location and a reasonable consumer that cared about the location would have further investigated the label and found the “made in U.S. (or Canada)” statement. She further explained that the mere presence of words in French would not reasonably lead consumers to conclude a French manufacturing location.

Finally, Ms. Eshelby argued that consumer-survey results supported her deception claims. Judge Torres held that because Ms. Eshelby didn’t mention these results in her complaint, she could not rely in the survey to stave off L’Oréal’s motion to dismiss. The results were useless in any event, Judge Torres noted, because survey participants never saw the products’ back labels, which include the manufacturing-location disclaimer. Judge Torres dismissed the complaint and ordered the case closed.

Naturally Flavored/Vanilla – Santiful v. Wegmans Food Markets

Santiful is yet another case involving a vanilla-flavored or vanilla-containing product brought by Spencer Sheehan & Associates. The claims are quite similar to those in Hawkins v. The Coca-Cola Co., another Sheehan lawsuit discussed in a March 22 WLF Legal Pulse post. The offending product in Santiful was a Wegmans-brand vanilla cake mix labelled “Naturally Flavored.” A laboratory analysis Mr. Sheehan ordered of the mix identified an artificial ingredient that could function as a flavoring, ethyl vanillin.

Ms. Santiful’s complaint, however, failed to substantiate the presence of ethyl vanillin. Southern District of NY Judge Nelson S. Román emphasized that lab results “were interpreted solely by [Ms. Santiful’s] attorneys,” and the complaint contained no information about who conducted the test, the methodology, the date, etc. The plaintiff’s failure to include that information (which was also missing from Ms. Santiful’s original complaint) proved fatal, as Judge Román refused to accept an unsubstantiated assertion and dismissed the complaint with prejudice.

The Check Out

Of the four cases discussed, the defendant in Simeone arguably had the most difficult road to victory at the motion-to-dismiss stage. In the precedents the plaintiff relied upon, and Judge Karas cited, other district courts did not question the plaintiffs’ assertions that citric acid was a preservative in the product at issue. Contrast that willingness to accept such information as true with the court’s refusal in Santiful to accept the plaintiff’s test results as revealing the presence of artificial vanilla without further substantiation of the testing. Wegmans has Santiful behind it while T. Marzetti Co. could be contemplating settlement.

Also notable is the Henry and Eshelby courts’ common-sense consideration of the context within which the manufacturers made the allegedly deceptive label statements. In Henry, the “No MSG Added” statement is literally true even if the broth contained some glutamate, but Campbell made that clear to consumers by including the naturally occurring glutamate disclaimer. And in Eshelby, the court reasoned that consumers were not so suggestible that a mention of “Paris” and words in French would have them thinking L’Oréal exported the products from France, and if consumers had any doubts, they could easily locate the on-label place-of-manufacture statement.

Finally, while we understand that when granting leave to amend, courts often tell plaintiffs how they can cure their complaint’s shortcomings, the Henry court’s invitation-by-dicta for others to sue Campbell Soup over its canned chicken broth was a bridge too far. Judges should leave the cause-of-action concocting to the lawyers. As the decisions discussed here demonstrate, lawyers are certainly not short of ideas.