KRISTEN MANTIKAS, KRISTIN BURNS, and LINDA CASTLE, individually and on behalf of all others similarly situated, Plaintiffs-Appellants, v. KELLOGG COMPANY, Defendant-Appellee.
Docket No. 17-2011
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
Decided: December 11, 2018
August Term, 2017 (Submitted: May 4, 2018)
LEVAL, SACK, and DRONEY, Circuit Judges.
Plaintiffs appeal from a judgment of the United States District Court for the Eastern District of New York (Sandra J. Feuerstein, J.) granting Defendant‘s motion to dismiss Plaintiffs’ complaint pursuant to
MICHAEL R. REESE, George V. Granade, Reese LLP, New York, N.Y., for Plaintiffs-Appellants.
KENNETH K. LEE, Christina A. Aryafar, Jenner & Block LLP, Los Angeles, CA, Dean N. Panos, Jenner & Block LLP, Chicago, IL, Kelly M. Morrison, Jenner & Block LLP, Washington D.C. for Defendant-Appellee
OPINION
Plaintiffs 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
We conclude that the district court erred in dismissing Plaintiffs’ complaint. Reviewed under the proper standards for a
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 period, 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. Contrary 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,1 as well as for unjust enrichment under Michigan law. They sought declaratory and injunctive relief, as well as monetary damages, on behalf of a putative class of all persons residing in the United States and its territories who purchased whole grain Cheez-Its since May 19, 2010.
Defendant moved to dismiss the Complaint pursuant to
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
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, 714 F.3d at 741 (citing Freeman v. Time, Inc., 68 F.3d 285, 289 (9th Cir. 1995); Oswego Laborers’ Local 214 Pension Fund v. Marine Midland Bank, N.A., 85 N.Y.2d 20, 26 (1995). “[I]n determining whether a reasonable consumer would have been misled by a particular advertisement, context is crucial.” Id. at 742. We therefore consider the challenged advertisement as a whole, including disclaimers and qualifying language. See Fink, 714 F.3d at 742 (“[U]nder certain circumstances, the presence of a disclaimer or similar clarifying language may defeat a claim of deception.“); Freeman, 68 F.3d at 289-90.
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, 2017 WL 2371183, at *4-5 (E.D.N.Y. May 31, 2017). After all, the court emphasized, “a reasonable consumer would not be misled by a product‘s packaging that states the exact amount of the ingredient in question.” Id. at 4.
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 Belfiore v. Proctor & Gamble Co., 311 F.R.D. 29, 53 (E.D.N.Y. 2015)), the court misapplied that principle to Plaintiffs’ claims in this case. Plaintiffs’ core allegation is that the statements “WHOLE GRAIN” and “MADE WITH WHOLE GRAIN” are misleading because they communicate to the reasonable consumer that the grain in the product is predominantly, if not entirely, whole grain. Contrary to the reasonable expectations communicated by the large, bold-faced claims of “WHOLE GRAIN,” however, the grain in the product is predominantly enriched white flour. While the disclosures on the front of the box relied on by the district court (“MADE WITH 5G [OR 8G] OF WHOLE GRAIN PER SERVING“) do set forth accurately the amount of whole grain in the crackers per serving, they are nonetheless misleading because they falsely imply that the grain content is entirely or at least predominantly whole grain, whereas in fact, the grain component consisting of enriched white flour substantially exceeds the whole grain portion.
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 the 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 total 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 grain 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., 552 F.3d 934, 939 (9th Cir. 2008). “Instead, reasonable consumers expect that the ingredient list contains more detailed information about the product that confirms other representations on the packaging.” Id. at 939-40 (emphasis added). We conclude that a reasonable consumer should not be expected to consult the Nutrition Facts panel on the side of the box to correct misleading information set forth in large bold type on the front of the box. Plaintiffs plausibly allege that the Nutrition Facts panel and ingredients list on whole grain Cheez-Its—which reveals that enriched white flour is the predominant ingredient—contradict, rather than confirm, Defendant‘s “whole grain” representations on the front of the box.
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, 2017 WL 4286577, at *2 (C.D. Cal. Sept. 20, 2017)
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 real vegetables” to believe that the crackers contained a larger amount of vegetables than they in fact did. No. CV 10-1028, 2012 WL 5504011, at *2 (C.D. Cal. Oct. 25, 2012). The court observed that a reasonable consumer would not be misled by the representation, because such a consumer would “be familiar with the fact of life that a cracker is not composed of primarily fresh vegetables.” Id. at *2-3; see also Manchouck v. Mondelez Int‘l Inc., No. CV 13-02148, 2013 WL 5400285, at *2 (N.D. Cal. Sept. 26, 2013) (dealing with a similar claim involving labeling of cookies asserting that they were made with “real fruit“); Henderson v. Gruma Corp., No. CV 10-04173, 2011 WL 1362188, at *12 (C.D. Cal. Apr. 11, 2011) (involving a packaging claim that a vegetable dip was made “With Garden Vegetables“).
In our case of Cheez-Its crackers, in contrast, reasonable 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 conclude 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 contends 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
CONCLUSION
The judgment of the district court in favor of Defendant is VACATED, and the case is REMANDED for further proceedings.