reasonable consumers of manuka honey know its price and grading scheme

Moore v. Trader Joe’s Co., 4 F.4th 874 (9th Cir.

Trader Joe’s markets its store brand Manuka honey as “100%
New Zealand Manuka Honey” or “New Zealand Manuka Honey,” but Moore alleged that
because Trader Joe’s Manuka Honey actually consists of only between 57.3% and
62.6% honey derived from Manuka flower nectar, Trader Joe’s engaged in “false,
misleading, and deceptive marketing” of its Manuka honey. FDA guidelines permit
labeling honey by its “chief floral source,” given that busy bees cannot be
prevented from foraging on different types of flowers, despite their keepers’
best efforts, and plaintiffs’ own tests indicated that Manuka was the chief
floral source. The court concluded that the 100% claim wouldn’t deceive a
reasonable consumer, with some plausible arguments and one really bad argument
(it was so cheap that no reasonable consumer would believe it was Manuka honey,
which assumes a lot of highly calibrated knowledge among consumers that seems a bit inconsistent with a motion to dismiss).

100% New Zealand Manuka Honey and New Zealand Manuka Honey jars

Identical nutrition panel on both showing the only ingredient as manuka honey

Manuka honey supposedly has antibacterial properties and health
benefits; this, plus geographic barriers to widespread production, result in
high demand and low supply and “a price far in excess of other honeys.” Manuka
honey producers grade the purity of Manuka honey on the Unique Manuka Factor (UMF)
grading system, from 5+ to 26+ based on the concentration of honey derived from
Manuka flower nectar. A bottle of Manuka honey 92% derived from Manuka flower
nectar costs approximately $266, or $21.55 per ounce.

TJ’s Manuka Honey is labeled with a UMF grade of 10+, “a
relatively low grade, and sells for the comparatively low price of $13.99 per
jar, or $1.59 per ounce.”  The ingredient
statement lists Manuka honey as the sole ingredient.

Plaintiffs brought the usual California claims. I think that
the court wouldn’t have to rest on factual claims about the details of what
consumers understand about Manuka honey if it had admitted that what is really
going on here is balancing: given the unique production/collection of honey
products, there’s no simple way to explain to consumers what’s going on, so requiring
a more complicated explanation would obscure more than it prevented deception.
(Though a 5 to 26 scale is pretty weird, LSAT-level weird, and perhaps it really
would be more helpful if they indicated that 10+ wasn’t all that Manuka-y.)

Anyway, TJ’s Manuka Honey met the FDA standard, being derived
from between 57.3–62.6% Manuka flower nectar (as estimated by pollen count). Taking
into account “all the information available to consumers and the context in
which that information is provided and used,” “other available information
about Trader Joe’s Manuka Honey would quickly dissuade a reasonable consumer
from the belief that Trader Joe’s Manuka Honey was derived from 100% Manuka
flower nectar.”

Specifically, “information available to a consumer is not
limited to the physical label and may involve contextual inferences regarding
the product itself and its packaging.” Though, as the Seventh Circuit has held,
“[d]eceptive advertisements often intentionally use ambiguity to mislead
consumers while maintaining some level of deniability about the intended
meaning[,]” as with the “100% Grated Parmesan” full of non-cheese, there was nothing
like such conduct here. “Bees make the Manuka honey, without input from Trader
Joe’s or any other manufacturer. Trader Joe’s does not insert any additional
ingredients to produce the product or mix Manuka honey with other, non-Manuka
honeys to dilute it.” And a consumer wouldn’t make an unreasonable or fanciful
interpretation of “100% New Zealand Manuka Honey” because of: (1) the
impossibility of making a honey that is 100% derived from one floral source,
(2) the low price of Trader Joe’s Manuka Honey, and (3) the presence of the
“10+” on the label, all of which is readily available to anyone browsing the
aisles of Trader Joe’s.

“Although a reasonable consumer might not be an expert in
honey production or beekeeping, consumers would generally know that it is
impossible to exercise complete control over where bees forage down to each
specific flower or plant.” Of course, consumers are unlikely to think of (1)
when they browse the aisles. They may very well assume to the contrary even if
they’d see the unlikelihood—surely not the impossibility; are there not
greenhouses and fields of monocultures around the world?—if forced to work the
problem through. (1) is really a cost-benefit analysis: consumers may assume
the wrong thing, but correcting that assumption isn’t worth the information costs
especially given that there are no single-source honeys.

(2) assumes a really high degree of calibration of
understanding, beyond “it is expensive” to “I know the right retail price for
high grade honey and I understand that this goes beyond what TJ, a savvy buyer
known for its good deals on house brands, could do.” I think that’s a bad idea
on a motion to dismiss; it, as with the truffle oil case that invented this consideration,
authorizes sellers to deceive bargain-hunters because they aren’t as
sophisticated about pricing as the court thinks (without actual evidence) they should
be. But plaintiffs didn’t help themselves by alleging that manuka honey
consumers “know[s] that the concentration of manuka [nectar, as measured by
pollen,] as opposed to other honey pollens can vary significantly from brand to
brand depending on what measures have been taken to maximize manuka purity” and
“attach importance to representations that communicate a higher purity level.”

The court here thought that consumers of Manuka honey, “a
niche, specialty product, are undoubtedly more likely to exhibit a higher
standard of care than ‘a parent walking down the dairy aisle in a grocery
store, possibly with a child or two in tow,’ who is ‘not likely to study with
great diligence the contents of a complicated product package.’ … Rather, an
average consumer of Manuka honey would likely know more than most about the
production of the product and the impossibility of a honey that is 100% derived
from Manuka flower nectar.” In a footnote, the court pointed to Broad City’s
parody of the “perceived high-brow nature of the product,” where a main
character under the influence of heavy medication buys it at Whole Foods in a grocery
trip costing $1,487.50; it’s sarcastically described as “so reasonably priced.”
Yeah, that’s real motion-to-dismiss-worthy evidence, speaking of sarcasm.
Anyway, the $1.59 per ounce cost of the honey should have signaled relatively low
pollen count.

(3) assumes that consumers know the rating scheme, and don’t
think it’s 1-10, which is possible though not necessary given the allegations
of the complaint. I myself had certainly heard of manuka honey and its purported
special properties, but I had no idea of a 5-26 rating scale. The court:

While there are no other details on
the jar about what “10+” means, the presence of this rating on the label puts a
reasonable consumer on notice that it must represent something about the
product. Reasonable consumers of Manuka honey would routinely encounter such
ratings and would likely have some knowledge about them. … Thus, even a
consumer with cursory knowledge of the UMF scale would know Trader Joe’s Manuka
Honey was decidedly on the lower end of the “purity” scale.

Why is a reasonable consumer of Manuka honey someone used to
encountering the expensive stuff, rather than someone who’s read about it and
happy to find an affordable version in the local TJ’s?

Anyway, the name was ok, and so was the use of “Manuka
Honey” as the sole ingredient on the ingredient statement, as provided for by
the FDA’s Honey Guidelines.

from Blogger

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