Searching for the Reasonable Consumer

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Every state prohibits the use of false or misleading advertising on food labeling.i In many food false advertising cases, the battleground is whether the “reasonable consumer” would be deceived by the challenged label statement, omission or packaging. The “reasonable consumer standard” requires more than a mere possibility that the challenged advertising might conceivably be misunderstood by some few consumers viewing it in an unreasonable manner.ii Rather, the plaintiff must establish the probability that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled.iii

That, in turn, raises the following question: What knowledge and understanding of the product and challenged advertising will courts impute to the reasonable consumer? Two recent published decisions in the U.S. Courts of Appeals for the Ninth and Seventh Circuits address this analysis on a motion to dismiss and provide divergent ways to answer the question.

In Moore v. Trader Joe’s Co., 4 F.4th 874 (9th Cir. 2021), the Ninth Circuit, in affirming dismissal of the complaint, answered the question in a manner that fully accounts for and credits the context surrounding the reasonable consumer’s knowledge about and interactions with food products and food labels. Moore is especially helpful for food company defendants in that regard and it provides a terrific response to another recent food labeling decision in the Seventh Circuit, Bell v. Publix Super Markets, Inc., 982 F.3d 468 (2020), which constrains how courts may consider the full context of the reasonable consumer’s purchasing experience.

MOORE V. TRADER JOE’S (NINTH CIRCUIT)

In Moore v. Trader Joe’s Co., 4 F.4th 874 (9th Cir. 2021), the Ninth Circuit affirmed the appropriateness of a district court at the pleading stage recognizing that the reasonable consumer is a sophisticated shopper with a clear understanding of the products they purchase and who considers not only all parts of a label but also information not on the label that is brought to the purchasing decision. There, a plaintiff claimed that a label offering “100% New Zealand Manuka Honey” misled consumers because the product at issue consisted of “only between 57.3% and 62.6% honey derived from Manuka flower nectar.”iv The district court dismissed this claim on a motion to dismiss, and the Ninth Circuit affirmed, concluding that the defendant’s label would leave the reasonable consumer “only with the conclusion that ‘100% New Zealand Manuka Honey’ means that it is 100% honey whose chief floral source is the Manuka plant.”v

Reasoning that the “information available to a consumer is not limited to the physical label and may involve contextual inferences regarding the product itself and its packaging,” the Ninth Circuit reached four critical conclusions as to the context for purchases of Manuka honey by a “reasonable honey consumer.”vi First, the relevant reasonable consumer in the case is one who purchases and is knowledgeable about Manuka honey. Second, “given the foraging nature of bees, a reasonable honey consumer would know that it is impossible to produce honey that is derived exclusively from a single floral source.”vii Third, “the inexpensive cost” of the honey “would signal to a reasonable consumer that the product has a relatively lower concentration of honey derived from Manuka flower nectar,” as Trader Joe’s Manuka Honey costs about 5 percent of the market rate for “92% honey derived from Manuka flower nectar.”viii And fourth, the label’s 10+ rating on the Unique Manuka Factor (UMF) scale — a metric for the purity of honey that ranges from 5+ to 26+ — would have conveyed to the reasonable honey consumer that the honey fell “decidedly on the lower end of the ‘purity’ scale.”ix

The Ninth Circuit’s recognition that the reasonable honey consumer knows this non-label information about Manuka honey — including how bees forage, the market price of honey and how the UMF scale functions — is significant.x And that view (i.e., that “an average consumer of Manuka honey would likely know more than most” people about the product) is reasonable given that Manuka honey is a “niche, specialty product.”xi In other words, the reasonable consumer’s knowledge may be greater based on the product being purchased. Consumers choosing to purchase specialty products 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.’”xii

In the short period following Moore, other courts have examined just how much the reasonable consumer should be expected to know. Two cases from the Northern District of California are illustrative. In Puri v. Costco Wholesale Corp., for example, the court dismissed a claim that a dessert bar’s labeling — which references chocolate and features images of cacao beans — was deceptive because the product contained more vegetable oils than cacao bean ingredients.xiii In doing so, the court found that a reasonable consumer “would know that chocolate must be mixed with some significant amount of fat or oil to create a coating that would solidify around an ice cream bar,” citing “various comments from individuals in the chocolate confectionery industry.”xiv The reasonable chocolate-coated ice cream bar consumer, therefore, would come to the purchasing decision with enough knowledge not to be deceived by the challenged labeling.

Likewise, in Horti v. Nestle HealthCare Nutrition, Inc., the court dismissed a claim that certain health drinks’ labels misled consumers “into believing that the [drinks] can prevent and treat diabetes” by claiming, among other things, that the drinks were “[d]esigned for people with diabetes” and “[h]elp[] manage blood sugar.”xv The Horti court specifically concluded that “[r]easonable consumers, particularly reasonable consumers who monitor their blood sugar,” would not understand the labels as promising to treat a medical condition and instead merely “understand that consuming food, including nutritional drinks like Boost, impacts blood sugar levels.”xvi

Thus, Moore and subsequent cases demonstrate the willingness of some courts to conclude that reasonable consumers make purchasing decisions with relevant, preexisting knowledge about the products they decide to buy. Courts that employ this approach are more likely to grant motions to dismiss food labeling claims.

BELL V. PUBLIX SUPER MARKETS, INC. (SEVENTH CIRCUIT)

In contrast to Moore, the Seventh Circuit’s decision in Bell v. Publix Super Markets, Inc., 982 F.3d 468 (2020), provides a much narrower approach to the reasonable consumer standard. Ultimately reversing dismissal of a food labeling claim, Bell treats the reasonable consumer as a less-sophisticated shopper, unlikely to have relevant, pre-purchase knowledge about the products at issue.xvii

In Bell, a plaintiff claimed that a Parmesan cheese label falsely advertised the product as “100% Grated Parmesan Cheese” when, in fact, between 4 percent and 9 percent of that product included “cellulose powder and potassium sorbate.”xviii The district court imputed certain knowledge about cheese to the reasonable Parmesan cheese consumer: “[P]roducts are packaged and shelf-stable at room temperature, a quality that reasonable consumers know is not enjoyed by pure cheese,” and that “reasonable consumers are well aware that pure dairy products [including cheese] spoil, grow blue, green[] or black fuzz, or otherwise become inedible if left unrefrigerated for an extended period of time.”xix Relying on this observation and the inference that a reasonable consumer will review a label’s ingredient list (which included cellulose powder and potassium sorbate) to become more knowledgeable about the product before making a purchasing decision, the district court held that a reasonable consumer could not be misled into thinking the defendant’s product included nothing but cheese.xx

On appeal, the Seventh Circuit took a much narrower view of the reasonable consumer.xxi Concerned that another court following the District Court’s reasoning below might deem an ambiguous label not to be deceptive, even if in fact it “actually deceived most consumers,” the Seventh Circuit reasoned that a label’s ambiguity should not be resolved with reference to a reasonable consumer’s pre-purchase knowledge — including any ingredient list on the back of the package.xxii Applying that reasoning and in contrast to the District Court, the Seventh Circuit then observed that “Parmesan cheese can be shelf-stable for a long time without refrigeration” and “sometimes is sold unrefrigerated,” such that “common sense” at the motion to dismiss stage could not “substitute” evidence to be submitted after discovery.xxiii As a result, the Seventh Circuit reversed the district court’s decision, concluding, “How reasonable consumers actually understand defendants’ ‘100% Grated Parmesan Cheese’ labels is a question of fact that cannot be resolved on the pleadings.”xxiv Bell thus seemingly permits class actions to proceed to discovery in light of any ambiguity on the label, even as the concurrence recognizes that counsel can readily find such ambiguity in “just about” any context.xxv

In sum, the Bell reasonable consumer is less knowledgeable, less sophisticated and less careful than the Moore reasonable consumer. In Bell, the Seventh Circuit identified the relevant reasonable consumers as purchasers of “low-priced, everyday items” who “are likely to exhibit a low degree of care” when making purchasing decisions.xxvi And so, for that reason, the Seventh Circuit concluded the reasonable consumer would not necessarily know the cheese-specific information relied upon by the district court.

The approach to the reasonable consumer analysis in Bell has been followed by some district courts, including two cases from the Northern District of Illinois. In Rudy v. Fam. Dollar Stores, Inc., the court denied a motion to dismiss a plaintiff’s claim that a smoked almonds label deceived consumers into thinking the almonds were smoked over an open fire, when they were merely flavored using natural smoke flavor.xxvii The Rudy court’s decision declined to presume the reasonable smoked almonds consumer would know that (1) “smoked” almonds would be flavored to taste as if they had been smoked and (2) the relative costs of smoking the almonds and the pricing implications of those costs.xxviii The court also presumed that reasonable consumers “do not read every back label before placing groceries in their carts” and thus do not consider the ingredients list prior to making a purchasing decision.xxix As in Bell, the Rudy court limited the scope of pre-purchase knowledge available to the reasonable consumer in assessing the smoked almonds label.

Kinman v. Kroger Co. offers another, similar example. Addressing another label for smoked foods, the Kinman court denied a motion to dismiss a plaintiff’s claim that a smoked Gouda label was deceptive because the defendant failed to disclose the cheese “was not smoked.”xxx As with Rudy, the Kinman court refused to assume the consumer would know that the term smoked referred to the flavor of the cheese, as opposed to the process for making it.xxxi The court did so despite recognizing that the label concurrently stated that the cheese had a “distinctive, smoky flavor,” reasoning that even this phrase “could be interpreted in more than one way.”xxxii Thus, the Kinman court treated the scope of a reasonable consumer’s knowledge narrowly, as in Bell.

Courts employing the Bell approach are less likely to dismiss food labeling claims. Instead, they may require the parties to engage in costly discovery so that each party can “present evidence on how consumers actually understand the labels” in dispute.xxxiii

IMPLICATIONS FOR MOTIONS TO DISMISS FALSE LABELING CLAIMS

Many motions to dismiss false advertising claims turn on whether the court finds that the reasonable consumer would be deceived by the challenged statement. The likelihood of such a finding can change significantly based on the court’s belief as to what pre-purchase knowledge and information the reasonable consumer possesses. Defendants in such cases, therefore, should pay close attention to how they define the reasonable consumer and what knowledge beyond the product label should be imputed to the reasonable consumer.

Moore and its progeny offer important guidance in this respect. For example, the reasonable consumer’s knowledge may be greater based on the product being purchased.xxxiv A court may also be able to impute greater pre-purchase knowledge to a reasonable consumer who is specifically targeted by the product.xxxv And courts may infer greater pre-purchase knowledge from allegations in the complaint regarding the product, the consumer and the market.xxxvi Defendants facing claims regarding false or misleading food labels would do well to heed this guidance in presenting motions to dismiss such claims.

At the same time, such defendants should also be prepared for plaintiffs to try to narrow the reasonable consumer standard as discussed in Bell and its progeny. Whether that means refusing to credit pre-purchase knowledge of the product, ignoring commonsense inferences from a shopper’s context or even dismissing other, relevant portions of the label, this narrower approach may stymie a motion to dismiss in favor of fact discovery. Moore can assist food company defendants with properly defining the reasonable consumer and securing dismissal.

i Bell v. Publix Super Markets, Inc., 982 F.3d 468, 474-75 (7th Cir. 2020) (concluding that statutes from 10 different states all require plaintiffs to prove that the relevant labels are likely to deceive reasonable consumers).

ii See Moore v. Trader Joe’s Co., 4 F.4th 874, 882 (9th Cir. 2021).

iii Id.

iv Id. at 876.

v Id. at 885.

vi Id. at 881-85.

vii Id. at 883-84.

viii Id. at 884.

ix Id. at 884-85.

x Id. at 883-85.

xi Id. at 884.

xii Id. (quoting Danone, US, LLC v. Chobani, LLC, 362 F. Supp. 3d 109, 123 (S.D.N.Y. 2019)). In explaining what constitutes Manuka honey, the Ninth Circuit offered the following: “Manuka [h]oney is a subset of honey whose chief floral source is the flowers of the Manuka bush, a plant native to Australia and New Zealand. Scientific researchers have found that Manuka honey contains an organic compound, methylglyoxal, which is believed to have antibacterial properties and significant health benefits, particularly when applied topically. Specifically, Manuka honey’s antibacterial potency gives it significant efficacy as dressing for wounds, burns [and] skin ulcers and in reducing inflammation. As a result of Manuka honey’s beneficial qualities and the geographic barriers to its widespread production, the product is in high demand and low supply, resulting in a price far in excess of other honeys.” Id. at 877 (citations and quotation marks omitted).

xiii Puri v. Costco Wholesale Corp., No. 5:21-CV-01202-EJD, 2021 WL 6000078, at *1-2 (N.D. Cal. Dec. 20, 2021).

xiv Id. at *7 n.3.

xv Horti v. Nestle HealthCare Nutrition, Inc., No. 21-CV-09812-PJH, 2022 WL 2441560, at *1 (N.D. Cal. July 5, 2022).

xvi Id. at *7.

xviii See Bell v. Publix Super Markets, Inc., 982 F.3d 468, 473 (7th Cir. 2020).

xix In re 100% Grated Parmesan Cheese Mktg. & Sales Pracs. Litig., 275 F. Supp. 3d 910, 923 (N.D. Ill. 2017).

xx Id. at 923-24.

xxi Bell, 982 F.3d at 476-83.

xxii See id. at 476-78 (rejecting the District Court’s “ambiguity rule”).

xxiii Id. at 482.

xxiv Id. at 482-83.

xxv Id. at 493 (Kanne, J., concurring).

xxvi Id. at 489.

xxvii Rudy v. Fam. Dollar Stores, Inc., No. 21-CV-3575, 2022 WL 345081, at *2, 4 (N.D. Ill. Feb. 4, 2022).

xxviii Id. at *4.

xxix Id. at *3-4.

xxx Kinman v. Kroger Co., No. 21 C 1154, 2022 WL 1720589, at *5 (N.D. Ill. May 27, 2022).

xxxi Id. at *5-6.

xxxii Id. at *6.

xxxiii Id. at *6 (quoting Bell, 982 F.3d at 480).

xxxiv Moore, 4 F.4th at 884.

xxxv Horti, 2022 WL 2441560, at *7.

xxxvi Puri, 2021 WL 6000078, at *7 n.3

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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