July 09, 2020

In Search of the Elusive “Reasonable Consumer”

New York Law Journal

When plaintiffs allege deceptive advertising or labeling of a product, courts in most states must apply the “reasonable consumer” test to these claims at the pleading stage as a meaningful and objective hurdle to prevent unreasonable claims from moving forward.

In practice, however, some courts decline to decide the reasonableness of plaintiffs’ claims at the pleading stage, and courts that reach the question apply different and seemingly subjective standards. This range of decisions makes it difficult to predict the outcome of a motion to dismiss.

The California Court of Appeals’ decision in Lavie v. Procter & Gamble Co. (2003), which reviewed the outcome of a bench trial rather than a motion to dismiss, explains the reasonable consumer test. The California Attorney General had asked the court to adopt a “least sophisticated consumer” standard, but the court instead held that claims must be examined from the perspective of a reasonable member of the audience targeted by the advertising.

To plead and prove a consumer fraud claim, the Lavie court held, a plaintiff must do more than allege “a mere possibility that the advertisement might conceivably be misunderstood by some few consumers viewing it in an unreasonable manner.” Instead, plaintiffs must show “that it is probable that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled.”

“Give Me a Break”

Lavie effectively invited courts to dismiss what cynics might call “give me a break” cases. For example, the plaintiffs in Videtto v. Kellogg USA (E.D. Cal. 2009) and McKinnis v. Kellogg USA (C.D. Cal. 2007), tried to claim that the name “Froot Loops” deceived consumers into believing that the popular cereal contain large amounts of real fruit. Both judges issued acerbic decisions rejecting those claims as unreasonable.

The same befell the plaintiffs in Galanis v. Starbucks Corp. (N.D. Ill. 2016) and Forouzesh v. Starbucks Corp. (C.D. Cal. 2016), when they claimed that Starbucks misled consumers by counting the volume of ice when advertising the size of its iced drinks.

The court in Red v. Kraft Foods, Inc. (C.D. Cal. 2012), held it was unreasonable for a plaintiff to believe that snack crackers were “healthy” and contained a “significant amount” of vegetables based on the label’s description that they were “made with real vegetables.”

The U.S. Court of Appeals for the Second Circuit upheld dismissal of claims in Chen v. Dunkin’ Brands, Inc. (2020), where sandwiches were advertised as containing “steak,” the advertisements under challenge clearly depicted ground beef patties, but the plaintiff nevertheless argued that he did not expect ground beef. This case demonstrated the importance of examining alleged misrepresentations in their full context.

Ambiguous Terms

At the other end of the spectrum, however, are cases where the parties disputed how reasonable consumers might interpret ambiguous terms like “natural” on product packaging. Numerous courts have held that these disputes raised factual issues inappropriate for resolution on a motion to dismiss.

In two recent cases, Lee v. Conagra Brands, Inc. (1st Cir. 2020) and Munsell v. Colgate-Palmolive Co. (D. Mass. 2020), courts held that use of the term “natural” on a product label, where the products allegedly contained synthetic or genetically modified ingredients, were sufficiently reasonable to proceed to discovery.

Other examples include Hesse v. Godiva Chocolatier, Inc. (S.D.N.Y. 2020), where the court agreed that Godiva’s use of a “Belgium 1926” label on its boxes could have misled consumers about where the chocolates were made; Rice-Sherman v. Big Heart Pet Brands, Inc. (N.D. Cal. 2020), where the court found consumers’ interpretation of phrases like “grain free” and “no soy protein” sufficiently reasonable to survive; Takano v. Procter & Gamble Co. (E.D. Cal. 2018), finding the same with regard to the term “wild naturals” in hair care products; and Stoltz v. Fage Dairy Processing Industries, S.A. (E.D.N.Y. 2015), where the parties disputed how consumers interpreted “Total 0%” in the name of yogurt products.

Even in “natural” cases, however, courts occasionally will dismiss unreasonable claims. In Pelayo v. Nestle USA, Inc. (C.D. Cal. 2013), the court held that “the reasonable consumer is aware that Buitoni pastas are not springing fully formed from Ravioli trees and Tortellini bushes,” and therefore cannot be truly “natural.”

Appellate Courts

Appellate decisions have been difficult to predict, too. The U.S. Court of Appeals for the Ninth Circuit, in the recent Becerra v. Dr. Pepper/Seven Up, Inc. (2019), cautioned courts to apply the reasonable consumer test rigorously. In Becerra, the court held that use of the word “diet” in a soft drink could not have misled reasonable consumers into thinking that the drink will help them lose weight, rather than simply connoting a lower calorie count than regular soda.

In the more recent Orshan v. Apple Inc. (9th Cir. 2020), by contrast, the Ninth Circuit confronted claims that consumers could not use a significant portion of the advertised storage capacity in certain devices. The court held that it could not judge the reasonableness of consumers’ understanding about advertised storage capacity without discovery.

Collectively, these cases suggest that courts will dismiss readings of advertising statements that they consider to be implausible but green-light cases over advertised terms that are ambiguous and facially susceptible to the plaintiffs’ reading. They also suggest, however, that appellate courts have not provided enough guidance to allow application of a consistent standard.

The Ninth Circuit now has another case before it involving P.F. Chang China Bistro Inc.’s use of the term “krab mix” to describe imitation crab used in some of its menu offerings, after a Central District of California judge dismissed the plaintiff’s claims as unreasonable. This case may provide an opportunity for the Ninth Circuit to clarify false advertising plaintiffs’ pleading burden.

Deceptive Packaging

Another “reasonable consumer” question arises where other information on the package, such as the ingredient box, contextualizes the advertising claim challenged as deceptive.

In Williams v. Gerber Products Co. (9th Cir. 2008), the packaging for toddler-oriented fruit snacks vividly depicted oranges, peaches, strawberries, and cherries, but the only “fruit” in the product came from white grape juice concentrate. Gerber disclosed the ingredients accurately on the label, but the Ninth Circuit held 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.”

Williams contrasts with such cases as Verzani v. Costco Wholesale Corp. (S.D.N.Y. 2009). There, the defendant sold a “shrimp tray” with a fully transparent lid. The product contained a “16 oz.” label, but that weight referred to the entire product, including cocktail sauce and lemon wedges, not just the shrimp. The court held the label was not misleading because reasonable consumers would “look[] through the clear plastic top” and see what they were buying.

Close to Verzani are Fermin v. Pfizer Inc. (E.D.N.Y. 2016), Wurtzburger v. Kentucky Fried Chicken (S.D.N.Y. 2017), and Buso v. ACH Food Cos. (S.D. Cal. 2020), where courts held that package disclosures showing the item count or number of servings in a package precluded reasonable consumers from being misled about what they would receive.

As one moves away from transparent lids and clearly advertised pill or piece counts, however, toward cases where consumers cannot necessarily know the weight or size or each unit of the product, the cases get more gray and unpredictable.

In all of Ebner v. Fresh, Inc. (9th Cir. 2016), Daniel v. Tootsie Roll Indus., LLC (S.D.N.Y 2018), and Alce v. Wise Foods, Inc. (S.D.N.Y. 2018), courts dismissed claims after finding that reasonable consumers expect containers to have a certain amount of unfilled space or inaccessible product. Other courts, such as in Benson v. Fannie May Confections Brands, Inc. (7th Cir. 2019), and Izquierdo v. Mondelez Int’l, Inc. (S.D.N.Y. 2016), have held that “slack fill” claims can survive based on allegations that reasonable consumers were misled by the package size into expecting more than they received.

Conclusion

What these decisions suggest is that the more the defendant can demonstrate a reasonable consumer’s knowledge of the actual contents of a package, the more likely a court is to find the claims unreasonable and to dismiss them without discovery.

Language in some cases suggests that the reasonableness of consumer claims should await discovery, but appellate decisions like Chen, Ebner, and Becerra all show that courts can and should grant motions to dismiss where claims are objectively unreasonable. Defendants facing consumer fraud claims should be prepared to disabuse judges of the idea that they cannot scrutinize this question at the pleading stage. As appellate courts have held repeatedly, the test is objective for precisely this reason.

Defendants should be careful, however, not to characterize claims as frivolous and simply expect judges to agree with that opinion. A better course is to walk courts carefully through precedent dismissing claims at the pleading stage and demonstrating the similarity of those claims. If judges see claims as unworthy, they will say so.



Reprinted with permission from the July 9, 2020 edition of the New York Law Journal© 2020 ALM Media Properties, LLC. All rights reserved.

Further duplication without permission is prohibited. ALMReprints.com – 877-257-3382 - reprints@alm.com.

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