On December 11, 2018, a three-judge panel consisting of Second Circuit Court of Appeals Judges Pierre N. Leval, Robert D. Sack, and Christopher F. Droney vacated a 2017 decision dismissing a complaint alleging that the “whole grain” label on Cheez-It crackers was misleading. The suit was originally filed in 2016 as a class of all US residents who purchased “whole grain” Cheez-Its since 2010 and claimed that the labeling of Cheez-Its as “whole grain” was highly deceptive, as the crackers are primarily made from enriched wheat flour.
In dismissing the case, U.S. District Court Judge Sandra J. Feurstein had originally agreed with Cheez-It manufacturer, Kellogg Co. (“Kellogg”), that the Cheez-It packaging as a whole was not misleading, because the ingredient list conspicuously listed whole grain as only the second or third ingredient and the nutrition facts noted that only five or eight grams out of a 29-gram serving are whole grain.
The panel disagreed, determining it is immaterial that “the side panel of the packaging discloses further detail about the product’s ingredients,” because a reasonable consumer would expect side-panel ingredient lists to confirm, not contradict, bold claims on the front of the package.
The court held that “[t]hese are sufficient factual allegations to state a claim that defendant’s conduct was, plausibly, deceptive. A reasonable consumer would likely be deceived by the labeling alleged in the complaint. The district court’s conclusion to the contrary was error.”
The panel remanded the case to the district court for further proceedings, and deemed Kellogg’s argument – that a product is not misleading so long as all of the product details are enclosed somewhere on the packaging – to be wholly inadequate.
“The rule that defendant contends emerges from these district court decisions [cited in its appellate brief] – 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.”
The legal team at Shepherd, Finkelman, Miller & Shah, LLP (“SFMS”) has significant experience litigating class action and consumer protection matters. If you have any questions regarding this subject or this posting, please contact Nick Lussier or Chiharu Sekino. We can also be reached toll-free at (866) 540-5505.
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