Health Law Daily Consumer suit alleging misleading product labeling may not proceed
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Friday, February 12, 2021

Consumer suit alleging misleading product labeling may not proceed

By Nadine E. Roddy, J.D.

An allegation that purchasers of a food product labeled "Soymilk Vanilla" would reasonably expect the product to contain flavoring derived solely or predominantly from natural vanilla was insufficient to survive the manufacturer’s motion to dismiss.

Consumers who purchased a non-dairy beverage labeled "Organic Soymilk Vanilla" failed to plausibly allege that the manufacturer’s use of the word "vanilla" was materially misleading to a reasonable consumer under New York law, a federal district court sitting in New York has held. A similar claim concerning the product’s ingredient list was also insufficiently pleaded (Twohig v. ShopRite Supermarkets, Inc., February 11, 2021, Seibel, C.).

Background. Consumers of a food product called "Organic Soymilk Vanilla" brought a putative class action against ShopRite Supermarkets, Inc., which manufactures, distributes, and sells the product under the Wholesome Pantry™ brand in its retail stores and on its website. The amended complaint alleged that the product was labeled in a way that was misleading to consumers in violation of the New York General Business Law, as well as several common law protections. The gravamen of the complaint was that the word "Vanilla" on the product’s label falsely communicated to a reasonable consumer that the beverage’s flavor was derived entirely or predominantly from real vanilla, when in fact the product included non-vanilla flavors.

The complaint also alleged that the product’s ingredient list, which included "Organic Natural Flavors" and "Organic Vanilla Extract," failed to clarify the label’s "ambiguity" because organic vanilla extract contributed less to the product’s vanilla flavor than the label and the ingredient list would have consumers believe. The presence and proportion of the non-vanilla flavors, which included vanillin, maltol, and piperonal, were detected through a process called "gas chromatography-mass spectrometry testing." The consumers also relied on a consumer survey they had commissioned to support their allegations; the survey found that over 43 percent of consumers would expect the origin of the product’s vanilla taste to be "vanilla beans from the vanilla plant." The consumers sought damages and injunctive relief. The manufacturer filed a Rule 12(b)(6) motion to dismiss, contending that neither the product’s labeling nor its ingredient listing was materially misleading to a reasonable consumer.

Deceptive acts or practices. As the court noted, the consumers’ first cause of action arose from Sections 349 and 350 of the New York General Business Law. Section 349 prohibits deceptive acts or practices in the conduct of any business, trade or commerce, whereas Section 350 prohibits false advertising in the conduct of any business, trade or commerce. To assert a claim under either section, the New York courts have held that a plaintiff must allege that a defendant has engaged in (1) consumer-oriented conduct that is (2) materially misleading and that (3) the plaintiff suffered injury as a result. Further, the allegedly deceptive acts or representations must be misleading to "a reasonable consumer." Although the question whether a business practice or advertisement is misleading to a reasonable consumer is generally a question of fact, a court may determine as a matter of law that an allegedly deceptive advertisement would not have misled a reasonable consumer.

In this case, the court held that the consumers had failed to plausibly allege that a reasonable customer would conclude that the word "vanilla" on a product’s label implied that the product’s flavoring was derived exclusively or predominantly from natural vanilla extract. The court believed that the word "vanilla" was more likely to be interpreted by a reasonable consumer as a description of the product’s flavor or taste rather than its ingredients, notwithstanding the consumers’ survey data. The survey did not demonstrate that over 43 percent of the respondents believed the product’s flavor came "predominantly or exclusively" from vanilla beans, which is what the consumers alleged.

Concerning the customers’ assertion that the ingredient list was insufficient to clarify the misleading nature of the label, the court had already concluded that the label was not misleading. As for the product allegedly containing undisclosed artificial flavors, the court noted that the ingredients maltol, piperonal, and vanillin can be either artificial or natural, depending on how they are derived. The complaint did not plausibly allege that the product’s added non-vanilla flavors were artificially derived.

Common law claims. The complaint also asserted state-law causes of action for negligent misrepresentation, breach of warranty, fraud, and unjust enrichment. These claims, which largely hinged on the same theory of misleading business practices already rejected by the court, all failed as a matter of law. The fraud claim was also insufficiently pleaded. For these reasons, the court granted the manufacturer’s motion to dismiss the complaint without leave to amend, and instructed the clerk to terminate the pending motion and close the case.

The case is No. 20-CV-763 (CS).

Attorneys: Michael R. Reese (Reese LLP) for Sean Twohig and Sandy Balbin. August T. Horvath (Foley Hoag LLP) for Shop-Rite Supermarkets, Inc.

Companies: Shop-Rite Supermarkets, Inc.

MainStory: TopStory CaseDecisions FDCActNews FoodNews FoodStandardsNews LabelingNews NewYorkNews

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