Court Dismisses Kellogg's False Advertising Suit

Court Dismisses False Advertising Suit Over Kellogg’s Cheez-It Whole Grain Crackers

A 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.

Allegations of False Advertising

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.

Federal Court Dismisses All Claims 

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.