667 F.Supp.3d 5
S.D.N.Y.2023Background:
- Plaintiff bought "Country Crock Plant Butter Made With Olive Oil" in New York and alleges front-label olive imagery and the phrase Made With Olive Oil conveyed that olive oil was the predominant oil.
- Ingredient listing (as pleaded) shows a blend of plant-based oils (palm fruit, palm kernel, canola, and olive) with olive oil the smallest constituent.
- Plaintiff filed a putative class action asserting GBL §§ 349 and 350 claims (plus parallel state consumer-protection claims), breach of contract, express and implied warranty claims, Magnuson-Moss Warranty Act, negligent misrepresentation, fraud, and unjust enrichment.
- Defendant moved to dismiss under Rule 12(b)(6); plaintiff withdrew injunctive-relief request.
- Court held state-law claims are not preempted by the FDCA/NLEA and denied dismissal of the GBL §§ 349 and 350 consumer-protection claims, but granted dismissal with prejudice for contract, warranty (express and implied) and MMWA, negligent misrepresentation, fraud, and unjust enrichment claims.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Preemption under FDCA/NLEA | Labeling is a deceptive ingredient claim not tied to nutrient content, so state claims stand | Label statement "Made With Olive Oil" is an implied nutrient-content claim preempted by FDCA/NLEA | Not preempted (statement is a valued-ingredient claim, not a nutrient-content claim) |
| GBL §§ 349/350 deceptive-practices | "Made With Olive Oil" reasonably reads to mean olive oil is the predominant oil; packaging imagery reinforces that impression | Front- and side-label disclosures (ingredient list, 79% vegetable oil spread) cure any impression as a matter of law | Plaintiff plausibly alleged a materially misleading representation; GBL claims survive dismissal |
| Breach of contract | Label statements formed part of the bargain such that Upfield breached a contract with the buyer | No privity between plaintiff (retail purchaser) and Upfield; plaintiff fails to identify contract terms | Dismissed (no privity; pleadings insufficient) |
| Express warranty / Notice requirement / MMWA | Front-label statements constitute express warranties; complaint suffices as notice | Plaintiff failed to plead timely pre-suit notice to seller; MMWA depends on viable warranty claim | Dismissed with prejudice (insufficient notice; MMWA fails because warranty claims fail) |
| Implied warranties (merchantability, fitness) | Product not as represented so implied warranties breached | No privity between remote purchaser and manufacturer for purely economic loss | Dismissed with prejudice (privity requirement not met) |
| Negligent misrepresentation | Upfield had special knowledge and duty as a market leader to label accurately | No special/privity-like relationship with ordinary consumer; mere buyer-seller interaction insufficient | Dismissed with prejudice (no special relationship pleaded) |
| Fraud (common-law) | Upfield knowingly misrepresented composition to induce purchases | Ingredient list and lack of particularized factual allegations of intent; Rule 9(b) not satisfied | Dismissed with prejudice (fraud not pleaded with particularity or strong intent inference) |
| Unjust enrichment | Upfield was unjustly enriched by selling a misdescribed product | Claim duplicates other legal remedies and lacks equitable basis | Dismissed with prejudice (duplicative, not an independent equitable claim) |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard for plausibility)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard at motion to dismiss)
- Mantikas v. Kellogg Co., 910 F.3d 633 (2d Cir. 2018) (treated "made with" as potentially conveying predominance of an ingredient)
- Chufen Chen v. Dunkin Brands, Inc., 954 F.3d 492 (2d Cir. 2020) (reasonable consumer standard for GBL §§ 349/350)
- Fink v. Time Warner Cable, 714 F.3d 739 (2d Cir. 2013) (courts may decide deceptive-practices claims as a matter of law only rarely)
- Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 85 N.Y.2d 20 (N.Y. 1995) (elements of a GBL § 349 claim)
- Kimmell v. Schaefer, 89 N.Y.2d 257 (N.Y. 1996) (scope of special relationship for negligent misrepresentation)
- Cooper v. Anheuser-Busch, LLC, 553 F. Supp. 3d 83 (S.D.N.Y. 2021) (caution in resolving reasonable-consumer issues at pleading stage)