694 F.Supp.3d 408
S.D.N.Y.2023Background
- Plaintiff Joanna Reyes purchased Country Crock "Plant Butter" labeled "Made With Almond Oil" and alleges the front label (words and almond imagery) implied a significant almond-oil content though almond oil appears low in the ingredient list.
- Reyes brought a putative class action asserting New York GBL §§ 349 and 350, breach of express warranty, common-law fraud, and unjust enrichment, seeking damages and class relief.
- Defendant Upfield moved to dismiss, arguing (inter alia) that the labeling is not misleading as a matter of law, the FDCA preempts state-law claims, Plaintiff failed to plead injury or pre-suit warranty notice, and fraud lacked the required scienter.
- The Court found the GBL §§ 349/350 claims sufficiently pleaded under Mantikas (reasonable consumers could infer a predominant ingredient from a “Made with” label) and denied dismissal of those claims.
- The Court dismissed without prejudice Plaintiff’s breach of express warranty (no adequate pre-suit notice), fraud (Rule 9(b) scienter deficiency), and unjust enrichment (duplicative) claims; FDCA preemption was rejected because the almond-oil statement is a "valued ingredient" claim, not an implied nutrient-content claim.
- The Court deferred ruling on personal jurisdiction for out-of-state class claims to class-certification stage and granted leave to amend within 30 days.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether front-label "Made With Almond Oil" is materially misleading under GBL §§ 349/350 | "Made With Almond Oil" and almond imagery lead reasonable consumers to expect a non‑de minimis, predominant almond-oil content | Label does not state relative/absolute amount; ingredient panel and Nutrition Facts cure any impression; no factual basis for alleging de minimis almond oil | Denied dismissal: plausible misleadingness under Mantikas; reasonable consumer could infer almond oil is a principal plant oil |
| Whether Plaintiff alleged cognizable injury (price-premium/reliance) | Paid a premium and relied on front-label representations; would not have purchased or paid as much if truthful | Plaintiff did not plead she actually read the label before purchase or a causal link between misrepresentation and price | Denied dismissal: allegations of reliance and price premium suffice at pleading stage |
| Whether FDCA/NLEA preempts state-law claims | Label is a non-nutrient "valued ingredient" statement; not preempted | The label implicates FDA nutrient-content rules and is preempted | Denied dismissal: "Made with Almond Oil" is a valued-ingredient claim exempt from §343(r)(1) preemption framework (POM Wonderful reasoning) |
| Breach of express warranty (pre-suit notice requirement) | Plaintiff provided general notice and Complaint itself suffices | No specific pre-suit notice alleged | Dismissed without prejudice: pleadings lack the specific facts (date/method) showing timely pre-suit notice |
| Common-law fraud (Rule 9(b) scienter) | Alleged misrepresentations and motive to increase profits support scienter | Only a generic profit motive alleged; no strong inference of intent | Dismissed without prejudice: scienter not pleaded with particularity or strong inference |
| Unjust enrichment (whether duplicative) | Alternative remedy; equitable relief appropriate | Claim duplicates statutory/tort claims | Dismissed without prejudice: duplicative of other claims |
| Personal jurisdiction for out‑of‑state class claims | N/A (Plaintiff asserts class-wide relief) | No connection between out‑of‑state claims and New York forum | Denied without prejudice: issue more appropriate at class-certification stage |
Key Cases Cited
- Mantikas v. Kellogg Co., 910 F.3d 633 (2d Cir. 2018) (front-label "made with" or dominant-ingredient claims can plausibly convey that named ingredient is predominant; side-panel disclosures may not cure prominence of front-label claim)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must plausibly state a claim to relief under Rule 8)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard and that conclusory allegations are insufficient)
- POM Wonderful LLC v. Coca-Cola Co., 573 U.S. 102 (2014) (FDCA preemption principles; FDCA primarily enforced by FDA and may preempt state requirements that differ on nutrient-content claims)
- Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341 (2001) (FDCA enforcement is for federal regulators, not private litigants; preemption context)
- Loreley Fin. (Jersey) No. 3 Ltd. v. Wells Fargo Sec., LLC, 797 F.3d 160 (2d Cir. 2015) (Rule 9(b) scienter: inference must be cogent and at least as compelling as opposing inferences)
- Duran v. Henkel of Am., Inc., 450 F. Supp. 3d 337 (S.D.N.Y. 2020) (price-premium/overpayment theory of injury under GBL §§ 349/350 at pleading stage)