Category: Reasonable Consumer

A common maxim in the service industry is that the customer always knows best. But a recent decision from the Tenth Circuit suggests that the maxim has its limits when it comes to interpreting ambiguous marketing claims.  In Bimbo Bakeries USA, Inc. v. Sycamore, the court held that the advertiser’s use of the word “local” in promoting its bread was not actionable under the Lanham Act, even though both a consumer survey and a jury of consumers had found the term to be misleading.  The decision reflects courts’ growing comfort in rejecting proffered interpretations of labeling claims as objectively unreasonable, notwithstanding evidence that certain consumers may in fact subscribe to that unreasonable interpretation.

In the recent case Renfro v. Champion Petfoods, the Tenth Circuit affirmed a district court’s dismissal of a putative class action alleging that Champion Petfoods had deceptively marketed its Orijen-brand dog food.  The plaintiffs’ claim centered around an incident in 2018, when Champion Petfoods learned that some ingredients it had sourced for Orijen had been contaminated.  According to the plaintiffs, this incident—as well as other aspects of Champion’s sourcing and manufacturing process—rendered false Champion’s marketing claims that the products’ ingredients were generally high-quality.  In rejecting this contention, the Tenth Circuit reaffirmed a core principle of false advertising law: that false advertising claims must be based on alleged false assertions of fact, not vague or unprovable marketing statements.  The Tenth Circuit also reaffirmed the important principle that only plaintiffs who have been directly and personally harmed by a purportedly misleading practice have Article III standing to bring suit regarding that practice.

Hold onto your chips. 

This blog has covered an array of dubious mislabeling theories, but a recent complaint filed in Illinois federal court may take the guac: a proposed class-action complaint against Frito-Lay North America, Inc. (“Frito Lay”) alleges that Frito-Lay’s “Hint of Lime” Tostitos are misleadingly packaged because the chips—which prominently display the phrase “HINT OF LIME” on the front of the bag—contain only a “negligible amount” of lime.  As the complaint itself recognizes, consumers understand the word “‘hint’ the same way as its dictionary definition—a slight but appreciable amount.”  Compl. ¶ 13. But rather than deliver a hint of lime, the complaint alleges, the chips contain only lime flavoring—or a de minimis amount of lime.  In other words, the hint of lime label is misleading because…the chips only contain a hint of lime.  You read that right.

On September 17, the Seventh Circuit heard argument in Ann Bell v. Albertson Companies Inc.  The case hinges on whether a reasonable consumer would understand the phrase “100% Grated Parmesan cheese” on a Parmesan cheese canister to mean that the canister contains literally nothing but cheese.  The plaintiffs argued that they believed just that, when in fact the cheese product in question contained cellulose, which the defendants claimed was used as an anti-caking agent and the plaintiffs claimed was used as “filler".

Increasingly, consumers base their purchase decisions on facts about a company or its product that have nothing to do with the performance or quality of the product itself.  For example, does the manufacturer treat its workforce fairly?  Is it a responsible steward of the environment?  What are its stances on social issues like abortion or LGBTQ rights?  To which parties or candidates does it (or its officers) donate?  All of these facts—and countless others—are “material” to many consumers in the sense that they affect (or even dictate) purchase decisions.  Indeed, in recent years, ethical, moral, and political concerns like these have led to countless instances of boycotts and other forms of consumer speech—a welcome sign of a healthy body politic and liberal democracy.

The Food, Drug, and Cosmetic Act (FDCA) promotes nationwide uniformity in food labeling by establishing a comprehensive federal labeling scheme and preempting state law that imposes different requirements.  21 U.S.C. § 343-1(a).  Over the years, the FDA has issued regulations directed to specific labeling issues, including representations of a food product’s “primary recognizable flavor.”  21 C.F.R. §§ 101.22(a)(3), 170.3(o)(12).  So long as a label’s representation of a “primary recognizable flavor” complies with the FDA’s flavoring regulation, the label is not misleading, and any state law that supposedly says otherwise is preempted.

This blog has previously examined the recent spate of so-called “slack-fill” lawsuits, in which consumers claim that a food (or other) product is misleadingly packaged because it contains excess air.  We noted that the growing trend is for courts to reject such suits at the motion-to-dismiss stage, for a variety of reasons.  For example, courts have found slack-fill complaints deficient for failing to allege, beyond conclusory platitudes, that the package’s empty space serves no legitimate function, or for failing to allege with plausibility that a reasonable consumer would actually be deceived.  Late last year, in Benson v. Fannie May Confections Brands, Inc., the U.S. Court of Appeals for the Seventh Circuit issued an important decision affirming the pleadings-stage dismissal of a slack-fill suit, but based on a distinct justification: the failure to plausibly allege any cognizable damages associated with slack-filled packaging.

Many companies take pride in the geographic origin of their products (e.g., cars that are “Made in the USA”), or in their products’ capacity to evoke a certain region (e.g., “Hawaiian style” pizza).  Claims about the origin or provenance of products seem to pose a relatively low risk of consumer deception:  these typically do not implicate health or safety, nor do they convey anything concrete about the products’ qualities.  Nevertheless, these “origin” and “provenance” claims have drawn scrutiny from the Federal Trade Commission, state regulators, and – most recently – class action plaintiffs’ lawyers.   Below, we’ve highlighted some guidance from regulators and the courts that may be helpful to manufacturers when they consider highlighting their geographic origins in their product branding. 

A frequent target of consumer class actions are “structure/function” claims made in connection with dietary supplements.  These claims describe a nutrient or dietary ingredient and its role in the body’s structure or function: for example, “glucosamine promotes healthy joints.”  Plaintiffs may allege that a product’s labeling is misleading because the typical consumer already receives enough of the nutrient or ingredient from her diet.  At the same time, those plaintiffs will seek a refund on behalf of everyone who bought the product—even if many in the class have received a benefit.  A recent decision out of the Southern District of California, Alvarez v. NBTY, Inc., 2019 U.S. Dist. LEXIS 87420 (May 22, 2019), suggests that this disconnect between the proposed class and the plaintiffs’ theory of liability and damages may no longer be tolerated at the class-certification stage.

Speak of the Devil and he doth appear. Today, it’s just a figure of speech.  In medieval England, by contrast, people meant it literally—as a warning that uttering the Prince of Darkness’s name would conjure his evil presence.  Maybe those Anglo-Saxons had a point.  A few weeks ago, we wrote a post about a remarkable string of defense victories in “slack-fill” cases—i.e., lawsuits complaining of too much empty space in product packaging.  In particular, we noted that “every slack-fill case to reach the class-certification stage ha[d] flunked Rule 23’s rigorous test for certification,” and we wondered aloud “how a slack-fill class could ever be certified.”  Well, speak of the Devil: just four days later, a California court certified a class in a slack-fill case for the first time ever.  We apologize for any causal role we may have had in this truly diabolical development.  The good news is that the decision may not stick—and even if it does, it’s likely to remain an outlier.

By law, packaged foods and beverages must bear an accurate list of their ingredients “in descending order of predominance by weight.”  21 C.F.R. § 101.4.  Consumers routinely sue food and beverage companies alleging that they were misled about the presence or absence of particular ingredients—even though a mere glance at the ingredient list would have averted any confusion.  Do such plaintiffs have a plausible claim for relief under false advertising laws, or should these claims be dismissed at the threshold?