Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: July 31, 2017
The Firm
201-896-4100 info@sh-law.comA New York federal judge recently dismissed a class-action suit against the Kellogg Company over its use of the term “whole grain” in marketing its Cheez-It crackers. In , the plaintiffs alleged that representing the product as whole grain is “false and misleading because the primary ingredient in Cheez-It Whole Grain crackers is enriched white flour. “ However, the court held that Kellogg could not be held liable for false advertising because it neither misrepresented that its crackers were 100 percent whole grain nor suggested that they were predominantly whole grain.
Kellogg manufactures, markets, and sells “Cheez-It Whole Grain” crackers in major retail stores nationwide. The company promotes the product as “whole grain” crackers. The packaging for the crackers specifically state that they are either “WHOLE GRAIN” or “MADE WITH WHOLE GRAIN” and either “MADE WITH 5g OF WHOLE GRAIN PER SERVING” or “MADE WITH 8g OF WHOLE GRAIN PER SERVING.
The Plaintiffs, which included consumers from both California and New York, alleged that “Kellogg’s ‘WHOLE GRAIN’ representation…is false and misleading, because the primary ingredient in Cheez-It Whole Grain crackers is enriched white flour.” According to their suit, the plaintiffs relied upon “the ‘WHOLE GRAIN’ representation in making [their] purchase decisions, and would not have purchased the products had [they] known they were not, in fact, predominantly whole grain. “The suit further contended that “Kellogg deliberately capitalizes on foreseeable consumer misconceptions about Cheez-It Whole Grain crackers in its marketing and sales scheme,” and has therefore “reaped, and continues to reap, increased sales and profits.”
The class-action suit alleged causes of action arising under the consumer protections laws of New York and California (N.Y. Gen. Bus. Law §§349 and 350 and Cal. Bus. & Pro. Code §§17200 and 17500 and Cal. Civ. Code §1750). The plaintiffs also asserted a claim for unjust enrichment under Michigan law, arguing “[a]s a result of Defendant’s deceptive, fraudulent, and misleading labeling, advertising, marketing, and sales of Cheez-It Whole Grain crackers, Defendant unjustly enriched itself at the expense of Plaintiffs and the Class members, through Plaintiffs’ and the Class members’ payment of the purchase price for the crackers.
Kellogg sought to dismiss the suit, arguing that the plaintiffs “have failed to plausibly show that a reasonable consumer would likely be deceived by the Cheez-It packaging.” The company also maintained that as residents of New York and California, the plaintiffs lacked standing to assert an unjust enrichment claim arising under Michigan law.
The district court sided with Kellogg on both issues and dismissed the suit. “Plaintiffs fail to state a claim arising under either New York’s or California’s consumer protection laws, as the phrases ‘WHOLE GRAIN’ and ‘MADE WITH WHOLE GRAIN,’ when considered in the entire context of the Crackers’ packaging would neither mislead nor deceive a reasonable consumer,” the court determined.
In her opinion, District Judge Sandra Feuerstein highlighted that New York and California’s consumer protection laws require a plaintiff to allege “that a reasonable consumer could have been misled by defendants’ conduct. “The judge also noted that in the context of false advertising claims, courts must evaluate a misleading statement “in light of its context on the product label or advertisement as a whole.”
In dismissing the false advertising litigation, the court concluded that “the packaging in this action neither contained any affirmative misrepresentations nor incorrectly suggested that the Crackers contained certain ingredients.” Judge Feuerstein further added that because “the Crackers’ packaging conspicuously states that the Crackers are made with either five (5) or eight (8) grams of whole grain per serving, Defendant neither misrepresents that its Crackers are one hundred percent (100 percent) whole grain nor suggest that they are predominantly whole grain.
The court also dismissed the unjust enrichment claim. It held that the plaintiffs lacked standing to assert claims arising under Michigan law because they neither reside nor purchased the crackers at issue in the suit in the state.
Do you have any questions regarding Kellog’s false advertising suit? Would you like to discuss the matter further? If so, please contact me, David Einhorn, at 201-806-3364.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Breach of contract disputes are the most common type of business litigation. Therefore, nearly all New York and New Jersey businesses will likely have to deal with a contract dispute at least once. Understanding when to file a breach of contract lawsuit and how long you have to sue for breach of contract is essential […]
Author: Brittany P. Tarabour
Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]
Author: Christopher D. Warren
Commercial leases can take a variety of forms, which is often confusing for both landlords and tenants. Understanding the different types, especially the gross lease structure, is important when selecting the lease that best suits your needs. One key distinction between lease types is how rent is calculated and paid. This article addresses the two […]
Author: Robert L. Baker, Jr.
Over the past year, brick-and-mortar stores have closed their doors at a record pace. Fluctuating consumer preferences, the rise of online shopping platforms, and ongoing economic uncertainty continue to put pressure on the retail industry. When a retailer seeks bankruptcy protection, a myriad of other businesses are often impacted. Whether you are a supplier, customer, […]
Author: Brian D. Spector
Since his inauguration two months ago, Donald Trump’s administration and the Congress it controls have indicated important upcoming policy changes. These changes will impact financial services policies and priorities. The changes will particularly affect cryptocurrency, as well as banking rules and regulations. Key Regulatory Changes in Cryptocurrency For example, in the burgeoning cryptocurrency business environment, […]
Author: Dan Brecher
The retail sector has experienced a wave of bankruptcy filings over the last year. Brick-and-mortar businesses in financial distress include big-name brands like Big Lots, Party City, The Container Store, and Vitamin Shoppe. When large retailers seek bankruptcy protection, they are not the only businesses impacted. Landlords can be particularly hard hit. While commercial landlords […]
Author: Brian D. Spector
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!