Plаintiffs Kristen Mantikas, Kristin Burns, and Linda Castle ("Plaintiffs") appeal from a judgment entered on August 21, 2017 in the United States District Court for the Eastern District of New York (Sandra J. Feuerstein, J. ), granting Defendant Kellogg Company's motion to dismiss Plaintiffs' complaint for failure to state a claim, as provided in Fed. R. Civ. P. 12(b)(6). Plaintiffs are residents of New York and California who purchased Defendant's Cheez-It crackers that were labeled "whole grain" or "made with whole grain." They filed a class action complaint (the "Complaint") against Defendant alleging that the whole grain labels were false and misleading in violation of New York and California consumer protection laws. They alleged thаt such labeling would cause a reasonable consumer to believe that the grain in whole grain Cheez-Its was predominantly whole grain, when, in fact, it was not. The primary grain content was enriched white flour. The district court dismissed the Complaint pursuant to Rule 12(b)(6). It held that the whole grain labels would not mislead a reasonable consumer, and that Plaintiffs therefore failed to state a claim.
We conclude that the district court erred in dismissing Plaintiffs' complaint. Reviewed under the proper standards for a Rule 12(b)(6) motion, the Complaint plausibly alleged that a reasonable consumer would be misled by Defendant's whole grain labels to believe that the grain in whole grain Cheez-Its was predominantly whole grain. Accordingly, we vacate the judgment of the district court and remand for further proceedings.
BACKGROUND
The Complaint alleges as follows. Defendant produces Cheez-It crackers and sells the brand in a variety of flavors, including "original" and "whole grain." During the relevant time pеriod, Defendant packaged and sold the "whole grain" variety in two boxes, each with slightly different labeling. One version contained the words "WHOLE GRAIN" in large print in the center of the front panel of the box, and " MADE WITH 5G OF WHOLE GRAIN PER SERVING " in small print on the bottom. The other version contained the words " MADE WITH WHOLE GRAIN" in large print in the center of the box, with " MADE WITH 8G OF WHOLE GRAIN PER SERVING " in small print on the bottom. Both versions also contained a "Nutrition Facts" panel on the side of the box, which revealed in much smaller print that a serving size of the snack was 29 grams and that the first ingredient on the ingredients list was "enriched white flour." "Whole wheat flour"
Plaintiffs purchased one or both versions of the Cheez-Its labeled "WHOLE GRAIN," believing on the basis of that label that the grain content was predominantly whole grain. Contrаry to their belief, however, the grain content was not predominantly whole grain, but rather enriched white flour. Plaintiffs assert that they would not have purchased the crackers had they known that the grain content was not predominantly whole grain. Plaintiffs filed the Complaint in the United States District Court for the Eastern District of New York, asserting claims for false advertising and deceptive business practices in violation of New York and California consumer protection laws,
Defendant moved to dismiss the Complaint pursuant to Rule 12(b)(6). It argued that the " MADE WITH WHOLE GRAIN" version of the Cheez-Its packaging was not false and misleading, because that statement was factually accurate and, in addition, was qualified by the more detailed " MADE WITH 8G OF WHOLE GRAIN PER SERVING " lаbel. Defendant did not specifically address whether the "WHOLE GRAIN" version of the packaging was false and misleading. Defendant also argued that Plaintiffs' claims were preempted by federal law, that Plaintiffs failed to state a claim for unjust enrichment under Michigan law, and that Plaintiffs lacked standing to pursue injunctive relief because they failed to allege any likelihood of continuing or future harm.
The district court granted Defendant's motion. It held, first, that both the " MADE WITH WHOLE GRAIN" and "WHOLE GRAIN" labels would not mislead a reasonable consumer, because both statements
DISCUSSION
We review de novo the grant of a motion to dismiss pursuant to Rule 12(b)(6), accepting the factual allegations in the complaint as true and drawing all reasonable inferences in the plaintiffs' favor. Fink v. Time WarnerCable ,
To state a claim for false advertising or deceptive business practices under New York or California law, a plaintiff must plausibly allege that the deceptive conduct was "likely to mislead a reasonable consumer acting reasonably under the circumstances." Fink ,
The district court held that Plaintiffs failed to state a claim for relief because, in the context of the entire Cheez-Its packaging, a reasonable consumer would not be misled by the whole grain representations. The court relied on the fact that although the Cheez-Its boxes were conspicuously labeled "WHOLE GRAIN" and " MADE WITH WHOLE GRAIN," the boxes accurately displayed, on the front panel, the precise number of grams of whole grain per serving (" MADE WITH 5G [ OR 8G ] OF WHOLE GRAIN PER SERVING "). The court reasoned that because the crackers in fact contained whole grain, and because the front of each box clarified exactly how much whole grain was in the product, a reasonable consumer was not likely to believe that the crackers were made of predominantly whole grain. Mantikas v. Kellogg , No. 16-cv-2552,
Although the district court is correct that an allegedly misleading statement must be viewed "in light of its context on the product label or advertisement as a whole," id. at 3 (quoting
Defendant contends that a reasonable consumer still would not be deceived by the "WHOLE GRAIN" claims, because the side panel of the packaging discloses further detail about thе product's ingredients. Specifically, the Nutrition Facts panel reveals that a serving size of Cheez-Its is 29 grams and the list of ingredients names "enriched white flour" as the first (and thus predominant) ingredient. Neither of these disclosures cures the deceptive quality of the "WHOLE GRAIN" claims as alleged by Plaintiffs. First, the specification that 29 grams is the tоtal weight of a serving does not adequately dispel the inference communicated by the front of the package that the grain in "whole grain" crackers is predominantly whole grain because it does not tell what part of the 29-gram total weight is grain of any kind. Such serving size information clarifies the amount of whole grаin as a proportion of a total serving, but it does not indicate the ratio of whole grain to white flour.
Moreover, we cannot conclude that these disclosures on the side of the box render Plaintiffs' allegations of deception implausible. "[R]easonable consumers should [not] be expected to look beyond misleading representations on the front of the box to discover the truth from the ingredient list in small print on the side of the box." Williams v. Gerber Prods. Co. ,
Defendant points us to several district court decisions, each dismissing a case on the pleadings, in which consumers alleged that food product labels asserting that the food was "made with" various ingredients misled them to believe that the stated ingredient was the dominant, or at least a major, ingredient. Those cases differ materially from ours because of the form of deception alleged. In most of those cases, plaintiffs claimed that a product label was deceptive because it led consumers to believe, incorrectly, the product contained a significant quantity of a particular ingredient. See, e.g., Chuang v. Dr. Pepper Snapple Grp., Inc. , No. CV 17-01875,
In addition, in most of the cases Defendant cites, plaintiffs alleged they were misled about the quantity of an ingredient that obviously was not the products' primary ingredient. For example, in Red v. Kraft Foods, Inc. , plaintiffs claimed they were misled by the label "made with reаl vegetables" to believe that the crackers contained a larger amount of vegetables than they in fact did. No. CV 10-1028,
In our case of Cheez-Its crackers, in contrast, reаsonable consumers are likely to understand that crackers are typically made predominantly of grain. They look to the bold assertions on the packaging to discern what type of grain. The representation that a cracker is "made with whole grain" would thus plausibly lead a reasonable consumer to cоnclude that the grain ingredient was entirely, or at least predominately, whole grain. That same consumer, confronted with the claim that a cracker is "made with real vegetables," likely would not likely conclude that the cracker was made predominantly of vegetables.
Moreover, the rule that Defendant сontends emerges from these district court decisions-that, as a matter of law, it is not misleading to state that a product is made with a specified ingredient if that ingredient is in fact present-would validate highly deceptive advertising and labeling. Such a rule would permit Defendant to lead consumers to believe its Cheez-Its were made of whole grain so long as the crackers contained an iota of whole grain, along with 99.999% white flour. Such a rule would validate highly deceptive marketing.
We conclude that Plaintiffs, as required to survive a Rule 12(b)(6) motion to dismiss, "state a claim to relief that is plausible on its face." Iqbal ,
CONCLUSION
The judgment of the district court in favor of Defendant is VACATED, and the case is REMANDED for further proceedings.
Notes
In particulаr, Plaintiffs asserted claims for "deceptive acts or business practices in the conduct of any business" in violation of
Because the district court's holding that Plaintiffs were not entitled to injunctive rеlief was premised entirely on its conclusion that Plaintiffs had failed to state a claim that the packaging was deceptive, we vacate that holding. Mantikas ,