Cheezit, the food cops! 2d Circuit reinstates claim over “made with whole grain” where most grain content is white

Mantikas v. Kellogg Co., No. 17-2011 (2d Cir. Dec. 11, 2018)
Plaintiffs bought Cheez-It crackers that were labeled “whole
grain” or “made with whole grain.” They alleged violation of New York and
California consumer protection laws because 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 primarily enriched white
flour. The district court held that the whole grain labels would not mislead a
reasonable consumer, and the court of appeals (in some tension with its recentholding on Trader Joe’s truffle-flavored oil) reversed.

The challenged packages used “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 or “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 packages also contained a “Nutrition Facts”
panel on the side of the box, which stated in much smaller print that a serving
size of the snack was 29 grams and that the first ingredient on the ingredients
list (in order of predominance, as required by federal law) was “enriched white
flour.” “Whole wheat flour” was either the second or third ingredient.
The district court held that both the “MADE WITH WHOLE
GRAIN” and “WHOLE GRAIN” labels would not mislead a reasonable consumer,
because both statements were true and were “qualified by further accurate
language detailing the number of grams of whole grain per serving.”
False advertising or deceptive business practices under New
York or California law requires that the deceptive conduct was “likely to
mislead a reasonable consumer acting reasonably under the circumstances.” Context
is crucial, including disclaimers and qualifying language. The district court
reasoned that “a reasonable consumer would not be misled by a product’s
packaging that states the exact amount of the ingredient in question.” But the
packaging here allegedly implied that the product was “predominantly, if not
entirely, whole grain,” and it wasn’t. This was plausibly misleading because
they falsely imply that the grain content was entirely or at least
predominantly whole grain.
The ingredient list didn’t help, even though it indicated that
a serving size of Cheez-Its was 29 grams and the list of ingredients names
“enriched white flour” as the first (and thus predominant) ingredient. The
serving size didn’t “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.” Plus, adopting the Ninth Circuit’s Williams rule, the court of appeals agreed that “reasonable
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.” The Nutrition Facts panel and ingredients list plausibly
contradicted, rather than confirmed, the “whole grain” representations on the
front of the box.
Other cases dismissed on the pleadings involved plaintiffs
who alleged deception because a product label misled consumers to believe, falsely,
that the product contained a significant quantity of a particular ingredient. Here,
however, the deceptiveness was the implication that, of the grain content in
the product, most or all of it is whole grain, as opposed to less nutritious
white flour. In addition, in most of the other cases, “plaintiffs alleged they
were misled about the quantity of an ingredient that obviously was not the
products’ primary ingredient.” No reasonable consumer would think that crackers
“made with real vegetables” were made primarily with fresh vegetables.  Here, “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.” Thus, the front of
the package could have misled them. The court declined to adopt a rule that
would allow any “made with X” advertising when the ingredient X was in fact
present, no matter how deceptive (e.g., if the crackers here were 99.999% white

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