A commentary published here last December criticized a Second Circuit decision, Mantikas v. Kellogg Company, for looking upon The Reasonable Consumer as myopic, naive, and in need of government protection. We opined that the decision’s easing of plaintiffs’ burden for proving deception would inspire more food-labeling consumer litigation in New York and other states in the circuit.
We were quite pleasantly surprised, then, by a July 28, 2019 Eastern District of New York memorandum and order in Reyes v. Crystal Farms Refrigerated Distribution Co. The ruling, which dismissed consumer-deception claims aimed at a ready-to-eat mashed-potato maker, offers some hope to consumer-product companies sued in Mantikas‘ wake.
The Mantikas plaintiffs had alleged that the terms “Whole Grain” and “Made with Whole Grain” misled them into thinking that the Cheez-It Crackers they purchased contained 100%, or nearly 100%, whole grain. The Second Circuit noted that judges should take into consideration a product’s packaging as a whole when undertaking the reasonable-consumer analysis. It ended up deciding, however, that a reasonable Cheez-It consumer would view the product with blinders on, ignoring all the other relevant labeling information, including “Made with 5g of whole grain per serving” and the Nutrition Facts panel.
With Reyes, we move from cheese snacks to mashed potatoes. Ms. Reyes alleges that the terms “Made with Real Butter” and “Made with Fresh Whole Potatoes” tricked her into paying a premium price for the defendant’s $3.99 “Diner’s Choice” brand. Ms Reyes argued that the presence of margarine in the product rendered the first statement deceptive, and that the unexpected presence of artificial ingredients meant that the potatoes weren’t “fresh.”
Those two statements, viewed in isolation from the rest of the labeling, could arguably be considered vague and, under the rationale of Mantikas, plausibly misleading. Yet the district court, per Judge Nicholas Garaufis, declined to take that approach. And rather than leave the fact-based reasonable-consumer determination to a jury, he decided deception as a matter of law.
Under New York consumer-protection principles, Judge Garaufis wrote, reasonable consumers understand that the “devil’s in the details” when it comes to vague product labeling. A contextual look at the package, including any verbal clarifications, the court explains, was in order.
On the first claim, the court reasons, it’s clear that the mashed potatoes did in fact contain real butter. The presence of margarine did not change that fact. And besides, the court adds, a reasonable consumer concerned with margarine could look on the back of the product, where margarine was mentioned twice.
The court found Reyes’ second deception claim equally implausible. FDA regulations define “fresh” as food in its “raw state” that has “not been frozen.” So Crystal Farms’ statement is truthful: it incorporates raw, unfrozen potatoes into its product. The court further explains that no reasonable consumer would interpret “made with fresh whole potatoes” to mean that the mashed potatoes are “fresh” as the term is generally understood. That’s because “potatoes must be cooked before they are mashed.” And for that reason, “a reasonable consumer would [not] be misled into believing Defendant’s mashed potatoes lacked artificial ingredients.”
As noted above, Judge Garaufis could have easily taken one of the “outs” that consumer class-action precedents provided to him. Instead, he undertook a completely defensible and, well, reasonable, reasonable-consumer analysis and rejected Reyes’ implausible deception claims. And although he referenced Mantikas, he deftly distinguished it.
Federal district court judges with post-Mantikas food-labeling class actions on their docket would do themselves, and consumer-product makers and consumers, a lot of good by following Judge Garaufis’s lead when the opportunities arise.
Also published by Forbes.com on WLF’s contributor page.