1) What are the elements of false advertising under New York law?

For a private plaintiff to "state a claim" under General Business Law § 350, the following elements must be alleged in sufficient detail: 

1. consumer-oriented conduct; 
2. materially misleading;
3. an injury caused by act or practice.”[1]

The legal elements of false advertising under GBL § 350 claims are identical to those of deceptive business practices under GBL § 349.[2] However, GBL § 350 applies only to “false advertising.”[3]

GBL § 350, often used in connection with GBL § 349, prohibits “false advertising,” including false product labels.[4]

2) Which particular statutes govern false advertising under New York law?

The two false-advertising statutes under New York Law:

General Business Law § 350: False advertising unlawful

"False advertising in the conduct of any business, trade or commerce or the furnishing of any service in this state is hereby declared unlawful."

General Business Law § 350-a: False advertising

“1. The term “false advertising” means advertising, including labeling, of a commodity or of the kind, character, terms, or conditions of any employment opportunity if such advertising is misleading in a material respect. In determining whether any advertising is misleading, there shall be taken into account (among other things) not only representations made by a statement, word, design, device, sound, or any combination thereof but also the extent to which the advertising fails to reveal facts material in the light of such representations concerning the commodity or employment to which the advertising relates under the conditions prescribed in said advertisement, or under such conditions as are customary or usual...”

3) What other statute is used in conjunction with GBL § 350?

GBL § 349 (Deceptive acts and practices), which prohibits “[d]eceptive acts or practices in the conduct of any business, trade or commerce.” While deception itself is not an element of the prima facie case, it goes to the “consumer protective purpose” of the statute, which safeguards consumers' “right to an honest marketplace where trust prevails between buyer and seller.”[5] It is also closely related to the “materially misleading” standard, which “require[es] a showing that a reasonable consumer would have been misled” by the deceptive conduct.[6]

4) Who can sue under New York’s false-advertising statute GBL § 350?

Both private plaintiffs and the Attorney General can bring a false-advertising lawsuit.[7]

5) Can I recover monetary damages for a falsely-advertised product?

Yes. Prevailing private plaintiffs (consumers or competitors) are entitled to damages or injunctive relief in successful cases.[8] The court, at its discretion, may also award reasonable attorneys' fees[9] with treble damages (three times actual or compensatory damages).[10] Treble damages require a willfulness to violate GBL § 350 and are limited to ten thousand dollars.[11]

6) How broad is New York’s false-advertising statute GBL § 350?

The scope of GBL § 350 is broad. The New York Court of Appeals in Karlin v. IVF America, Inc. stated that GBL § 350, on its face, “applies to virtually all economic activity.”[12] However, just like GBL § 349, GBL § 350 is restricted to transactions that occurred in New York state.[13]

7) Who determines whether the advertising is “sufficiently consumer-oriented”?

Courts will conduct a factual analysis to determine whether conduct is sufficiently consumer-oriented under GBL § 350.[14]

8) How is the misleadingness of an advertisement determined?

The test for misleadingness is objective: whether the advertisement will likely mislead a reasonable person acting reasonably under the circumstances.[15] However, the reasonableness standard may change depending on the facts. For example, in two similar cases involving law school graduates who sued their law schools for misrepresenting students' post-graduate career prospects, the courts analyzed the allegedly misleading statements according to how a “reasonably well-educated individual” would interpret those statistics.[16]

9) Can false advertising appear on a product’s label?

Yes, false advertising under GBL § 350 includes mislabeling. Galaxy Export, Inc. v. Bedford Textile Products, Inc. 443 N.Y.S.2d 439 (2 Dept. 1981). The definition of mislabel is “to label (something) incorrectly or falsely,” according to Merriam-Webster dictionary.

10) Can the New York Attorney General pursue damages for false advertising?

Yes. The Attorney General may elect to sue and, if successful, may cause a court to impose civil penalties of up to five thousand dollars per violation under GBL § 350-d.[17] New York Supreme Courts (trial courts in New York) have broad discretion to determine the amount of the civil penalties considering factors such as the defendant's profitability, ability to pay, and the extent of the violations.[18] But defendants enjoy a “safe harbor” defense if they comply with “rules, regulations, or statutes administered by the FTC or New York State agencies.[19] Some courts have ruled that compliance with other federal agencies constitutes a complete defense under GBL § 350-d.[20]

Worth noting is that courts have held that federal agency approval of product labels did not constitute compliance with GBL § 349c[21] or GBL § 350-d.[22] Nor did the FDA’s non-binding guidance provide a defense to a class action alleging mislabeling as “natural.”[23]

11) Must I be specific in my false-advertising lawsuit?

Yes. Although New York law is liberal in its pleading requirements under CPLR § 3013,[24] conclusory statements should not survive against a good motion to dismiss. Good practice requires pleading the “what, where, when, why, and how” of the bad advertising claim.

12) Top 16 factual issues to consider before bringing a false-advertising lawsuit.

1. Which advertising claim(s) did you find false, misleading, or deceptive?
2. Why were the claim(s) false, misleading, or deceptive?
3. Were the claim(s) measurable and ascertainable (i.e., “20% more room”)?
4. Were the advertising claim(s) manifested as statements, excerpts, images, or video?
5. Was there a disclaimer? If so, was it accurate and prominently displayed?
6. Did a human being affirm the claim(s) verbally or nonverbally?
7. Have you spoken to the seller or manufacturer since the purchase seeking clarification?
8. Did the seller make any post-sale statements or promises relevant to the advertising claim(s)?
9. Where was the product viewed or purchased?
10. When and how was the product purchased?
11. Did you rely on the advertising claim(s) when purchasing?
12. Did the advertising claims influence your decision to buy the product? How?
13. Does the business’s website or social media make or support the same problematic claim(s)?
14. Were the claim(s) on a label, and if so, have you made a Freedom of Information Act Request (FOIA) to the USD? A (meat and poultry) or FDA (other food products), if applicable?
15. What details and documentation support any damages claim based on a purchase price, invoices, receipts, or evidence of personal injury or emotional injury?
16. If you intend to sue for breach of express warranty in New York, have you sent a pre-suit letter as required under UCC § 2-607(3)(a)? [25]

13) Does a false-advertising lawsuit require “reliance” on the advertising?

No. Similar to GBL § 349, Section 350 does not require “justifiable reliance” according to the New York Court of Appeals in Koch v. Acker, Merrall & Condit Co.[26] The Koch court made class actions more accessible. Before Koch, courts declined class certification because class members could not prove reliance across the class.[27]

Still, plaintiffs must prove an injury causally related to a misrepresentation. In that sense, reliance and causation are “close cousins.” But merely “seeing the misleading statements before coming into possession of the products” was sufficient to establish that causal connection.[28]

Generally, the person “injured” is the one who should sue. Suing “derivatively” (on behalf of aggrieved consumers) appears to be disallowed. For example, in Center for Rheumatology, LLP v. Shapiro, a counterclaiming defendant in a business dispute lacked standing to pursue an unrelated consumer claim on behalf of the partnership’s patients. The court held that Defendant “failed to allege that he was deceived by this practice in any manner, and the defendant may not maintain a derivative action on behalf of [the Partnership's] patients.”[29]

14) May advocacy organizations sue on behalf of consumers?

The issue is whether an organization may sue “derivatively”—on behalf of consumers—with no injury to the organization itself.

Generally, under GBL § 349, plaintiffs may not assert “derivative” claims, or those claims alleging indirect injuries resulting from deception experienced by third parties.”[30] Therefore, to state a claim under GBL § 350, a plaintiff must allege that the defendant directed its unlawful conduct at the plaintiff.[31] But a case may be made if a plaintiff can show that, despite the acts being directed to a third party, the defendant intended harm to be caused to the plaintiff.[32]

This issue was front, and center in Voters for Animal Rights v D'Artagnan, Inc. wherein the court cited Blue Cross,[33] which held, “the Legislature did not intend to permit recovery for those suffering from “derivative” or “indirect” injuries – to wit, those occurring “solely as a result of injuries sustained by another party.”[34]

The court in Voters for Animal Rights cited the defendant’s brief:

“If an [n] advocacy organization ... were found to be ‘injured’ any time it encountered allegedly false statements made by businesses touting the virtues of their products or services – ... whether they be foie gras or fake turkey, trigger locks or guns, vaccines or even abortions – then the advocacy group could drag that business into costly litigation merely because it refuses to believe what the sellers say about their products or services.”). Plaintiff's argument, if adopted, would recognize a cognizable injury to any organization that opts to spend its resources persuading consumers to boycott a product or service."[35]

Voters for Animals Rights is essential in organizational, social-justice cases because the plaintiff expended significant resources counteracting the defendant’s advertising of foie gras (livers of force-fed ducks or geese). The organizational muscle of Voters for Animals Rights included more than 60,000 supporters in New York State. It spent “hundreds of hours” disseminating information and lobbying against selling foie gras products in New York. But that was not enough to overcome a general bar for pursuing injuries on behalf of third parties.

15) Do Plaintiffs alleging false advertising have a “heightened pleading standard”?

No. Although the New York Court of Appeals has not yet addressed the issue, the Second Department has held that the pleading-with-particularity requirement of CPLR 3016(b) generally required for claims sounding in fraud does not apply to GBL §§ 349 and 350 causes of action.[36]

16) Must I suffer an “actual injury” to sue for false advertising?

Yes, a plaintiff must allege an actual injury to state a cognizable claim.[37] The alleged injury must be actual and cannot be speculative or based on the “perceived … risk of future injury that may never occur.”[38] A fear of future garnishment based on an unlawfully procured judgment did not allege a recognizable injury—but a lowered credit score based on false reporting stated an injury.[39] The injury must be actual, identifiable, and confirmed. But the injury need not be monetary.[40]

For example, the court in Guzman v. Mel S. Harris and Associates, LLC,[41] acknowledged that “[e]motional harm … satisfies the injury requirement for a claim under … GBL § 349” and found the plaintiff's “emotional injuries” were sufficient to withstand a summary judgment motion where he claimed to be “stressed and frustrated … to the extent that he left his job as a truck driver because he feared having an accident, and experienced difficulty sleeping and concentrating.”

17) What evidence should I preserve in a false-advertising case?

Preserve any purchase receipt. Capture all communications had with the retailer or manufacturer. Locate and preserve marketing campaign material and advertisements. Think expansively about other discoverable electronic and hardcopy evidence.

Parties should consider the necessity of experts, including a consumer-perception expert who could create a consumer-perception survey about the impression of the claim on consumers. Consumer surveys can reveal consumer expectations, which can support the case. Both parties are expected to scrutinize the methodology employed in the surveys, and the expert’s qualifications will also be examined.

18) Can an omission constitute a form of deception under GBL § 349?

Yes. Deception need not be an affirmative act but can also be accomplished through omission. For example, in Miller v. Kaminer, the plaintiff sought a refund for a deposit and prepayment of childcare services paid to the defendant, who knew at the time of payment that the business owner was terminally ill.[42] The court found that “[t]he failure to inform claimant at the time his child was placed in child care that his deposit and pre-payment would not be reimbursed because of the imminent dire health circumstances is an omission which constitutes a deceptive act.”[43]

19) What is the statute of limitations (time deadline) for false-advertising claims under GBL §§ 349 and 350?

A three-year statute of limitations under CPLR 214(2) governs GBL §§ 349 and 350 claims brought by private plaintiffs.[44] The same period generally applies to claims by the Attorney General, except when the Attorney General seeks prospective injunctive relief.

The limitations period for a GBL § 349 claim begins at the time of the injury, not when the injured plaintiff learned or reasonably should have learned of the deception.[45] The time of injury depends on specific facts of the deceptive acts alleged.[46]

The date of injury determination also has important procedural implications long before the limitations period runs. The Second Department has recently reiterated that deceptive practice claims under § 349, and thus by relation, § 350, are claims sounding in tort.[47] As a result, causes of action under § 349 and § 350 are subject to the requirements of GML § 50-e.[48] Under § 50-e, plaintiffs asserting claims against a municipality or government agency must serve notice of a claim within 90 days after the claim arose. Claims arise under GBL § 349 and § 350 at the time of injury—triggering both the 90-day service period and statute of limitations.

In addition, a defendant's active concealment of the deception is sufficient to toll the limitations period [49] even though the mere failure to disclose is insufficient.[50] Under limited circumstances, the courts have also held that the “continuing wrongs” doctrine applied to toll the limitations periods to the date of the last wrongful act.[51] However, continuing effects of earlier unlawful acts cannot toll the limitations period under the doctrine.[52]

20) When was General Business Law § 350 enacted?

GBL § 350 was enacted in 1963 to address weak enforcement of false advertising. Neither common law (case law) nor New York Penal law could combat false advertising.[53] New York's Attorney General welcomed help to “cope with the numerous, ever-changing types of false and deceptive business practices which plague consumers in our State.”[54] The result was General Business Law § 350, which was designed to be “a strong deterrent against deceptive business practices,” to “supplement the activities of the Attorney General in the prosecution of consumer fraud complaints,” and to provide consumers with “an honest market place where trust prevails between buyer and seller.”[55]

GBL § 350 borrowed heavily from the Federal Trade Commission Act of 1915 (FTC Act). The phrase “deceptive acts or practices” mirrors the FTC Act to harmonize state and federal law.[56] Although politicians debated whether identical wording would create confusion and conflicting law, Governor Rockefeller honored the potential benefits of conformity between state with federal law.[57] This is why GBL § 350-c[58] recognizes a defense for FTC compliance. Before taking legal action, the Attorney General must send the business a “Notice of proposed action” by certified mail.

21) When and why was GBL § 349 enacted?

General Business Law § 349 was enacted in 1970. At that time, the Attorney General was empowered to enforce it.[59] In 1980, after it became apparent that the Attorney General could provide only minimal enforcement, the New York State Legislature amended the statute to create a private right of action.

That amendment was “intended to afford additional protection for consumers, allowing them to bring suit on their behalf without relying on the Attorney General for enforcement.[60]

22) What are some legal defenses to false advertising?

• The advertising statement is not materially misleading under the “reasonable consumer” standard.
• Express disclaimers remove the claim’s misleadingness, like an explicit admission of domestic origin if an impression is made that it’s foreign.[61]
• The misleading statement was nonactionable puffery, an exaggeration of opinion, such as the “best in town.”
• The claim is “derivative,” which means that Plaintiff is suing on behalf of an injured party.
• The statement or conduct at issue constitutes constitutionally protected free speech.[62]
• A federal law or another New York law preempts the claim. An example is an ingredient challenge on a USDA pre-approved meat or poultry product. But otherwise, courts have generally held that federal laws do not preempt GBL § 350 claims.[63]
• The statute of limitations, which is three years from the date of injury, has expired.
• The dispute is subject to binding arbitration.[64]
• Defendant already complies with FTC regulations or other federal regulations, which invoke the “safe harbor” provisions of GBL § 349(d) or GBL § 350-d.
• GBL §§ 349 or 350 does not apply to the statements or conduct of municipalities.
• The primary jurisdiction doctrine, pursuant to which proceedings are stayed pending the outcome of an agency's rulemaking process, applies.[65]

New York Cases: Deceptive Practices & False Advertising

Ambiguity in the amount of Omega-3s in Whole Foods' Fish Oil was not necessarily misleading

2023:  The below label for Whole Foods' fish oil was not misleading, held the court. The plaintiffs alleged that reasonable consumers would believe that 1000 mg was applied to each: a) Omega-3s, b) EPA, and c) DHA. The back of the label, however, clarified that only 180mg of EPA and 120mg of DHA exist for a total of 300 mg. Although the front was ambiguous, it was "readily resolved" by the back information panel. This circuit has recognized that "clarification can defeat a claim for deceptive packaging if a front label contains an ambiguous representation. See, e.g., Reyes v. Crystal Farms Refrigerated Distrib. Co., (EDNY July 26, 2019) (a statement on the front of pre-packaged mashed potatoes, "made with real butter," was merely ambiguous, and any "confusion was sufficiently dispelled by the ingredients label on the back of the package," which showed that the product was made with both real butter and butter-substitute fats). Mantikas (below) is distinguishable because "Made with Whole Grain" was unambiguously misleading on the front. Here the 1000mg ambiguity was not materially deceptive as a matter of law. Foster v. Whole Foods Mkt. Group, Inc., 22CV01240ERKRML, 2023 WL 1766167, at *3 (E.D.N.Y. Feb. 3, 2023).

Additional law cited in Foster v. Whole Foods Mkt. Group, Inc.:

• GBL § 349 prohibits "deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service."
• A "deceptive act" or practice is "likely to mislead a reasonable consumer acting reasonably under the circumstances." Maurizio v. Goldsmith, 230 F.3d 518, 521 (2d Cir. 2000).
• GBL § 350 similarly prohibits "[f]alse advertising in the conduct of any business, trade or commerce or in the furnishing of any service."
• "False advertising means advertising, including labeling ... if such advertising is misleading in a material respect."
• "The standards under GBL §§ 349 and 350 are "substantively identical." Gristede's Foods, Inc. v. Unkechauge Nation, 532 F. Supp. 2d 439, 451 (E.D.N.Y. 2007).
• To establish a prima facie case under GBL §§ 349 or 350, a plaintiff must demonstrate that (1) the defendant's deceptive acts were directed at consumers, (2) the acts are misleading in a material way, and (3) the plaintiff has been injured as a result. See Orlander v. Staples, Inc., 802 F.3d 289, 300 (2d Cir. 2015).
• "Courts view each allegedly misleading statement in light of its context on the product label or advertisement as a whole." Belfiore v. Procter & Gamble Co., 311 F.R.D. 29, 53 (E.D.N.Y. 2015). "In this analysis, font size, placement, or emphasis count." Warren v. Whole Foods Market Group, Inc., 574 F. Supp. 3d 102, 115 (EDNY 2021) (internal quotation marks omitted).
• "An unjust enrichment claim is not available where it simply duplicates, or replaces, a conventional contract or tort claim." Corsello, 944 N.Y.S.2d at 790.

"No Added MSG" is not materially misleading under New York law even if FDA declared otherwise under regulatory standards; Disclaimer cured potential misimpression

2023:   "No Added MSG" in Ramen Chow Mein noodles appeared on a package near the disclaimer in small lettering: "contains small amounts of naturally occurring glutamates," also known as "free glutamates." The plaintiff offered FDA guidance prohibiting "No added MSG" if a product contains ingredients that naturally contain MSG, known as free glutamates. The guidance does "expressly state that a "No Added MSG" label is "misleading" to consumers if placed on a product containing ingredients that are sources of free glutamates."

"Yet 'misleading' under the Federal Food, Drug, and Cosmetic Act ("FDCA") is not necessarily the same as "materially misleading" under state consumer protection statutes, such as NY GBL §§ 349 and 350," held the court. New York law has a "reasonable consumer" standard that "appears nowhere in the FDCA's definition of "misleading." Citing Warren at 113, the court acknowledged that "The FDA and New York law apply different standards."

The court acknowledged that consumers could be misled because of free glutamates in the noodles, even via natural processes. But "the presence of a disclaimer or similar clarifying language may defeat a claim of deception," and it did so here.

The package's disclaimer sufficiently cured any misunderstanding as to free glutamates. "The proximity of the disclaimer to the 'No Added MSG' label on the front of the packaging, the asterisk in the label linking to the disclaimer, and the common color typeface used in the two convince the court that the disclaimer's formatting does not render it ineffective." Elaborating on disclaimer law, "Courts in this circuit have interpreted Mantikas as drawing a distinction between false and ambiguous representations, the latter of which can be cured by an accurate, clarifying disclaimer." Here, "No Added MSG" is ambiguous, which was adequately addressed by the disclaimer. The fact that the defendant's web images lacked the disclaimer did not help the plaintiff since the complaint lacked allegations that the products could be purchased online at the point of purchase.

Additional law cited in Henry v. Nissin Foods (USA.) Co. Inc.:

• "The 'injury' component of the pleading standard includes a causation element requiring the plaintiff to show that the defendant's material deceptive act caused the injury." Grossman v. GEICO Cas. Co., No. 21-CV-2789, 2022 WL 1656593, at *3 (2d Cir. May 25, 2022). "[A] plaintiff must allege that, on account of a materially misleading practice, she purchased a product and did not receive the full value of her purchase." Orlander, 802 F.3d at 302.
• Allegations about a "reasonable consumer's interpretations of a label that are conclusory statements are not required to be accepted at a motion to dismiss." But "dismissal of a NY GBL §§ 349 or 350 claim on this basis is an "exception to the norm." Cooper v. Anheuser-Busch, LLC, 553 F. Supp. 3d 83, 95 (S.D.N.Y. 2021).

Henry v. Nissin Foods (USA.) Co. Inc., 22CV363NGGRER, 2023 WL 2562214, at *4 (E.D.N.Y. Mar. 17, 2023).

Environmental impact and animal welfare claims were deemed not materially misleading

2022:   The defendant made shoes with wool and marketed them using environmental impact and animal-welfare claims. The plaintiffs attacked the defendant’s carbon-measuring tool because it tested for singular-product impact—not for the overall environmental impact of wool production. The court held that the plaintiffs failed to show misleadingness conveyed in the defendant’s carbon footprint measuring methodology. The plaintiffs could not prove the defendant’s methodology or related disclosures were false or misleading. Reasonable consumers would “not expect a carbon footprint calculation to include non-atmospheric inputs, such as land occupation and eutrophication.” The plaintiffs failed to show that a significant number of consumers expected a different methodology. The defendant’s “reliance” on a third-party standard “to measure carbon dioxide equivalent emissions was not deceptive.” Other ad claims, such as “Our Sheep Live The Good Life” and “happy” sheep depicted in pastoral settings, were non-actionable puffery. Puffery is generalized or exaggerated opinions. Dwyer v. Allbirds, Inc., 598 F. Supp. 3d 137 (S.D.N.Y. 2022).

Whole Foods accused of "systemic" mislabeling of prepared foods for failing to disclose allergens, but Plaintiff failed to allege an injury

2022:   Class-action Plaintiff sued Whole Foods Market Group, Inc. for its "pattern" of mislabeling prepared foods by failing to identify the presence of allergens. In support of his case, the plaintiff relied on an FDA warning letter, dated December 16, 2020, sent to Whole Foods "as part of the agency's "ongoing efforts to address undeclared allergens as the leading cause of food recalls in the United States." The FDA Warning Letter asserted that Whole Foods has "engaged in a pattern of receiving and offering for sale misbranded food products," and that from October 2019 to November 2020, the company "recalled 32 food products due to undeclared allergen(s)."

Examples of mislabeled products by Whole Foods that had been recalled, according to the FDA:

• Prepared minestrone soup that failed to list milk as an ingredient;
• Raspberry cheesecake Italian gelato that failed to list eggs;
• White Parker House rolls that failed to list milk and eggs;
• Chantilly Key Lime Tartlets that failed to list almond flour; and
• Various artisan kinds of cheese that failed to list eggs.

Consistent with the FDA warning letter, the plaintiff alleged that "Whole Foods has a longstanding pattern of violating these requirements and failing to properly disclose the presence of allergens in prepared foods and certain packaged goods sold under its private label brand." Since 2017, the plaintiffs pointed to "at least 33 recalls...due to undeclared soy, egg, milk, peanuts and tree nuts, and other allergens."

Despite these sweeping allegations, the plaintiff could not prove he bought any of the mislabeled or recalled products. He was not specific enough on which purchases and which products produced any alleged injury of overpayment or allergic reaction. He, therefore, lacked an "injury in fact," which was fatal to his class action. The court ruled that "a plaintiff cannot rely solely on conclusory allegations of injury or ask the court to draw unwarranted inferences in order to find standing."

The FDA warning letter relied on by the plaintiff a) was not specific to NYC Whole Foods stores where the plaintiff shopped, and b) did not indicate what percentage of the packaged foods were mislabeled. The plaintiff's claims "therefore fail to clear the low threshold required to establish an injury in fact and do not even constitute "general factual allegations of injury." Akridge v. Whole Foods Mkt. Group, Inc., 20 CIV. 10900 (ER), 2022 WL 955945, at *1 (SDNY Mar. 30, 2022).

Additional law cited in Akridge v. Whole Foods Mkt. Group, Inc.:

• Caselaw required Plaintiff to show that he "had purchased at least one of the products challenged as falsely advertised."
• "Courts recognize that an allergic reaction to a product may constitute an injury." see Cardinale v. Quorn Foods, Inc., No. 09 Civ. 1660 (JCH), 2010 WL 1332551, at *1 (D. Conn. March 31, 2010) ("[Plaintiff] alleges that, on three separate occasions, she became violently ill as a result of consuming one of Quorn's frozen meatless food products," which did not disclose on their packaging the presence of certain allergenic fungal ingredients) and Hochendoner v. Genzyme Corp., 823 F.3d 724, 735 (1st Cir. 2016) (plaintiff's anaphylactic reaction to an improper dose of medication was an injury).

Akridge v. Whole Foods Mkt. Group, Inc., 20 CIV. 10900 (ER), 2022 WL 955945, at *1 (S.D.N.Y. Mar. 30, 2022).

Specific, actionable misrepresentations not asserted against Target's "Toddler Next Stage" drink

2022:   The plaintiff alleged that Target mislabeled its Toddler formula a) to appear more nutritious than it is, b) is necessary for development, c) is as nutritious to toddlers as Target's infant formula is to infants, d) deceptively conceals 2 grams of added sugar, and e) is less nutritious than cow’s milk. But the “plaintiff failed to identify a material misstatement” in any of these categories. The plaintiff “seemed to take issue with the Transition Formula industry as a whole—as evidenced by academic articles to which Plaintiff cites, none of which is specific to Defendant or the product.” Plaintiff lacked authority for the notion that relevant experts must recommend a food product to be merchantable.

More case holdings in Gordon v. Target Corp.:

• Each allegedly misleading statement is viewed in a broad context. The “entire mosaic” is viewed rather than each tile separately. (quoting Belfiore v. Proctor & Gamble Co., 311 F.R.D. 29, 53 (E.D.N.Y. 2015).
• An actual injury under GBL §§ 349 and 350 typically requires a plaintiff to allege that, on account of a materially misleading practice, she purchased a product and did not receive the full value of her purchase.” Duran, 450 F. Supp. 3d at 350 (alteration omitted) (quoting Daniel v. Mondelez Int'l, Inc., 287 F. Supp. 3d 177, 195 (E.D.N.Y. 2018)).
• A plaintiff can show injury by alleging an overpayment, or a price premium, whereby a plaintiff pays more than she would have but for the deceptive practice.’” Id. (quoting Izquierdo v. Mondelez Int'l Inc., No. 16-CV-4697, 2016 WL 6459832, at *7 (S.D.N.Y. Oct. 26, 2016)). However, “[t]o allege injury under a price premium theory, a plaintiff must allege not only a price premium, but also a connection between the misrepresentation and any harm from, or failure of, the product.” See also Sabatano v. Iovate Health Scis. U.S.A. Inc., No. 19-CV-8924, 2020 WL 3415252, at *3 (S.D.N.Y. June 22, 2020).
• In the Second Circuit, a plaintiff’s failure to respond to contentions raised in a motion to dismiss constitute[s] an abandonment of those claims.” Laface v. E. Suffolk BOCES, No. 18-CV-1314, 2019 WL 1959489, at *8 (E.D.N.Y. May 2, 2019).

Gordon v. Target Corp., 20-CV-9589 (KMK), 2022 WL 836773, at *9 (S.D.N.Y. Mar. 18, 2022).

FDA warning letter over unregulated Phenibut did not prove a false-advertising case

2021:   Following an FDA warning letter for misbranded sleep capsules containing Phenibut, civil plaintiffs sued Evol. Nutrition for its energy drinks that also contained Phenibut. Phenibut is a synthetic derivative of the neurotransmitter gamma-aminobutyric acid (GABA) that is commonly used as a nootropic or anti-anxiety supplement. Phenibut is not GRAS [generally recognized as safe], so for its use in public, the FDA must pre-approve it for sale in the United States.

The plaintiffs claimed to have experienced side effects including “unwell ... uneasy, nausea, and other hangover-like symptoms for up to twenty-four hours after.” The plaintiffs alleged that the defendant failed to warn of the side effects of Phenibut, including addiction. However, GBL § 349 requires an “inherently deceptive,” “free-standing claim” that would be “misleading to a reasonable consumer,” ruled the court. The plaintiffs “essentially tried to re-characterize a statutory violation for the ‘deceptive’ requirement.” The FDA’s warning letter did not alone put the defendant on notice of the addictive nature of Phenibut.

The elements to state a claim under General Business Law § 349:

1. the challenged act or practice was consumer-oriented;
2. the act was misleading in a material way; and
3. the plaintiff suffered injury as a result of the challenged act.

Womack v. EVOL Nutrition Associates, Inc., 621CV00332BKSTWD, 2021 WL 5906340, at *7 (NDNY Dec. 14, 2021).

Dove Ice Cream Bars ruled not deceptive for vanilla flavoring coming from sources other than vanilla beans

2021:   The plaintiffs alleged deception for Dove Bar's implication that its "vanilla" ice cream was flavored exclusively from vanilla beans or extract. In their view, "the label was misleading because it does not disclose the additional non-vanilla bean sources to achieve the ice cream's flavor." The court exercised its rarely used authority to find that reasonable consumers would not "care" about that distinction.

The "plaintiffs failed to plausibly allege that a reasonable consumer would be misled by the phrase "' vanilla ice cream.'" The ice cream did not "make any claims about where or in what quantity the vanilla taste comes from." It simply classifies the taste as vanilla. The plaintiffs did not allege that the ice cream did not taste like vanilla.

Moreover, the plaintiffs conceded that Dove ice cream bars did contain vanilla from vanilla beans—just not to the exclusion of all other substances like ethyl vanillin, maltol, benzaldehyde, and other compounds not present in vanilla beans.

This court distinguished Mantikas (2nd Circuit, below) since that case involved "ingredients, not flavor." Other District courts, relying on Mantikas, permitted allegations involving products that imply the presence of a particular ingredient (i.e., root beer "made with aged vanilla," "blueberry" bagels, "100% grated parmesan cheese," "natural vanilla" ice cream, "honey graham" crackers, "smokehouse" almonds). Garadi v. Mars Wrigley Confectionery US, LLC, 119CV03209RJDST, 2021 WL 2843137, at *3 (EDNY July 6, 2021).

Chapstick's directions to "reapply every 2 hours" clarified any ambiguity about the duration of sunblock protection

2021:   The Chapstick brand was in the hot seat for its claim "8 Hour Moisture," placed right above "SPF 15," which implied 8 hours of sunblock protection, alleged the plaintiffs. Chapstick's "2 in 1 Lipcare" is related to the product's two functions: moisturizing and sun protection. The plaintiff argued that he paid more because of the confusing misrepresentation that acts to "encourage less-frequent and under-application" of the product.

However, the back of the package provided directions to "reapply at least every two hours." Any ambiguity caused by "8 Hour Moisture" was dispelled by "reapply at least every two hours," ruled the court. "Context is crucial," especially when the ambiguity is not a "blatant misstatement," like in Mantikas, where "Made with Whole Grain" implied that whole grain was the dominant ingredient. The nutrition panel on the back did not cure the deception. Here, the court found the Chapstick labeling non-misleading using "common sense." The plaintiff's attempt to exclude the back directions from the court's context analysis did not work. The complaint was dismissed. Engram v. GSK Consumer Healthcare Holdings (US) Inc., 19-CV-2886(EK)(PK), 2021 WL 4502439, at *4 (E.D.N.Y. Sept. 30, 2021).

Additional law cited in Engram v. GSK Consumer Healthcare Holdings (US) Inc.:

• "The Second Circuit has observed that in deceptive marketing cases, context is crucial." See, Wurtzburger v. Ky. Fried Chicken, (S.D.N.Y. Dec. 13, 2017).
• "Some context, however, has tended to matter more than other contexts. Where the front of a package makes a bold and blatant misstatement about a key element of a product, there is little chance that clarification or context on the reverse of the package will suffice to overcome a deception claim (especially at the motion-to-dismiss stage)." But when the front of the package is better characterized as ambiguous than misleading, courts look at the alleged misrepresentations in their full context. They are more likely to grant a motion to dismiss. Engram *3 (EDNY Sept. 30, 2021).
• "In other cases, context was sufficient to overcome some identified ambiguity — as opposed to outright falsehood — on the front of the package. See, e.g., Nelson, 246 F. Supp. 3d at 675-76 (reasonable consumer would not be misled into believing beer was produced in Australia based on images of a kangaroo, the Southern Cross constellation, and the company's website (which touted its historic roots in Australia), where the packaging also contained a clear statement that the beer was made in Georgia and Texas); Davis v. Hain Celestial Grp., Inc., 297 F. Supp. 3d 327, 335 (EDNY 2018) (reasonable consumer would not be misled where the "label taken as a whole" made the contested fact clear)." Engram *4 (EDNY Sept. 30, 2021).
• A "consumer survey showing that 92% of respondents supported their interpretation of the labeling did not "salvage" previously dismissed claims because it "omitted the back panel, ... depriving respondents of relevant information". Cheslow v. Ghirardelli Chocolate Co., 472 F. Supp. 3d 686, 692-95 (N.D. Cal. 2020).

Smokehouse® almonds may misleadingly imply that they are smoked over a fire

2021:   Plaintiffs sued Blue Diamond Growers for deceptively marketing almonds as “smoked” when they were merely smoke flavored. Using a Smokehouse® trademark with a “red color scheme” may have implied to reasonable consumers that the almonds were smoked over a fire. The consumers stated a claim for false advertising and deceptive business practices under NYGBL §§ 349 and 350. The word “smokehouse” is defined in the dictionary as a “physical structure where food is prepared through the process of using actual smoke.” The plaintiffs pointed to federal regulation (21 CFR § 101.22) that allegedly prohibits the misrepresentation of the word “smoked.” To proceed with the case, the plaintiffs must also allege an injury, which in a false advertising case, usually means not receiving the full value of the purchase. Here, a price-premium theory (overpayment) was sufficient to allege an injury. All other claims were dismissed: fraud (lack of fraudulent intent), negligent misrepresentation (no special relationship), breach of express warranty (no pre-suit notice), implied warranty (lack of privity and lack of pre-suit notice), and unjust enrichment (duplicative theory). Colpitts v. Blue Diamond Growers, 527 F. Supp. 3d 562 (S.D.N.Y. 2021).

"Vanilla Soymilk" with "other natural flavors" ruled not "materially misleading" under New York General Business Law §§ 349 and 350

2021:   In another vanilla-flavoring case, the plaintiff failed to show how a soymilk label would mislead reasonable consumers. The front label of the soymilk carton bears the words "vanilla" and "soymilk." The ingredients list on the back shows "Natural Vanilla Flavor With Other Natural Flavors."

The plaintiff alleged that consumers expected flavoring from the vanilla plant, not from vanillin derived from sources other than the vanilla plant. Such a practice alleged the plaintiff, "gives consumers the impression that the vanilla flavor is contributed entirely or predominantly from natural vanilla."

But the court held that the "complaint fails to plausibly allege that the product's label would be likely to deceive or mislead a reasonable consumer."

Reasonable consumers would expect some natural vanilla flavor but not necessarily all. "The Complaint also does not allege the soymilk fails to have a vanilla taste or that the taste would be any different if it came exclusively from natural vanilla." Even if natural vanilla took a back seat to vanillin compositionally, the plaintiff failed to plausibly allege why that would be "materially deceptive or misleading to a reasonable consumer."

The plaintiff's complaint did not establish the source of the vanillin in the soymilk at issue. It did not identify any vanillin from a non-natural source. And although the plaintiff's test ("GS-MS analysis") detected maltol, the complaint "contains no finding whether the maltol was derived artificially or naturally." Barreto v. Westbrae Nat., Inc., 518 F. Supp. 3d 795, 806 (S.D.N.Y. 2021).

Labeling shortcomings did not prove consumer deception

The defendant conceded that the label did not conform precisely to the requirements 21 C.F.R. § 101.22(i) (Foods; labeling of spices, flavorings, colorings and chemical preservatives). The defendant needed an accompanying disclosure on the front label to clarify that "vanilla" was the characterizing flavor.

Nevertheless, New York General Business Law does not "fill the gap by creating a state law claim solely as a result of a violation of federal labelling regulations." Aside from a regulatory transgression, the conduct must be "inherently deceptive" and cannot be "re-characterized as 'deceptive' simply on the grounds that they violate another statute which does not allow for private enforcement." Nick's Garage, Inc. v. Progressive Casualty Ins. Co., 875 F.3d 107, 127–28 (2d Cir. 2017) (discussing Broder v. Cablevision Sys. Corp., 418 F.3d 187 (2d Cir. 2005) and Conboy v. AT&T Corp., 241 F.3d 242 (2d Cir. 2001)).

In other words, a consumer may not solely predicate a consumer-deception (GBL § 349) theory on the defendant's violation of an FDA regulation that it is not "inherently deceptive." The deception must be "free standing." Citing Sharpe at 104, the court held, "The point here is not conformity with this or that standard (which is left to the authorities to regulate) but whether the marketing presentation was deceptive."

The plaintiff could not establish a promise broken, so the court dismissed her express warranty claim. No "special relationship" was pled as would be needed for a negligent misrepresentation claim. Regarding a fraud claim, the plaintiff's conclusory allegations did not produce a "strong inference of fraudulent intent." The plaintiff's theory for unjust enrichment merely duplicated the same factions alleged under NYGBL §§ 349 and 350.

Additional law cited in Barreto v. Westbrae Nat., Inc.:

• Three courts in this district have rejected the idea that consumers expect all vanilla flavoring to come from natural vanilla. Cosgrove v. Blue Diamond Growers, 19-cv-8993, 2020 WL 7211218 (S.D.N.Y. Dec. 07, 2020) (Judge Marrero); Pichardo v. Only What You Need, Inc., 20-cv-493, 2020 WL 6323775 (S.D.N.Y. Oct. 27, 2020) (Judge Caproni); Steele v. Wegmans Food Markets, Inc., 472 F. Supp. 3d 47 (S.D.N.Y. 2020) (Judge Stanton); see also Clark v. Westbrae Nat., Inc., 20-cv-03221 (J.S.C.), 2020 WL 7043879, at *4 (N.D. Cal. Dec. 1, 2020) (dismissing the claim that a reasonable consumer would be misled by the labeling of the same Westbrae product at issue here under California's consumer protection laws). Barreto v. Westbrae Nat., Inc., 518 F. Supp. 3d 795, 806 (S.D.N.Y. 2021).
• "Like the product's labeling in Steele, Pichardo, and Cosgrove, Westbrae's product makes a representation regarding its flavor and does not imply or represent the source of that flavor comes exclusively or predominantly from natural vanilla." Barreto v. Westbrae Nat., Inc., at 806.
• “Under New York law, in order to state a claim for negligent misrepresentation, a plaintiff must allege, “’(1) the existence of a special or privity-like relationship imposing a duty on the defendant to impart correct information to the plaintiff; (2) that the information was incorrect; and (3) reasonable reliance on the information.’” Mandarin Trading Ltd. v. Wildenstein, 16 N.Y.3d 173, 180, 919 N.Y.S.2d 465, 944 N.E.2d 1104 (2011). To plead a special relationship, plaintiffs must show that they were a “known party or parties.” Sykes v. RFD Third Ave. 1 Assoc., LLC, 15 N.Y.3d 370, 373, 912 N.Y.S.2d 172, 938 N.E.2d 325 (2010). Being “one of a class of potential” recipients of a statement will not suffice. Westpac Banking Corp. v. Deschamps, 66 N.Y.2d 16, 19, 494 N.Y.S.2d 848, 484 N.E.2d 1351 (1985). Barreto v. Westbrae Nat., Inc., 518 F. Supp. 3d 795, 807 (S.D.N.Y. 2021).
• “To prevail on a claim for unjust enrichment in New York, a plaintiff must establish (1) that the defendant benefitted; (2) at the plaintiff's expense; and (3) that equity and good conscience require restitution.” Beth Israel Med. Ctr. v. Horizon Blue Cross & Blue Shield of N.J., Inc., 448 F.3d 573, 586 (2d Cir. 2006) (internal citation and quotations omitted).
• “Under New York law unjust enrichment is ‘available only in unusual situations when, though the defendant has not breached a contract nor committed a recognized tort, circumstances create an equitable obligation running from the defendant to the plaintiff.’” Corsello v. Verizon N.Y., Inc., 18 N.Y.3d 777, 790 (2012). Unjust enrichment is not a “catchall cause of action to be used when others fail.” Id. Barreto v. Westbrae Nat., Inc., 518 F. Supp. 3d 795, 808 (S.D.N.Y. 2021).

"SPARKLING MARGARITA" and "LIME-A-RITA" may deceptively imply the inclusion of alcohol 

2021:   Reasonable consumers may expect malt beverages with phrases like "SPARKLING MARGARITA," "LIME-A-RITA," and "SANGRIA SPRITZ" to contain alcohol. The court declined to dismiss Anheuser-Busch's motion to dismiss on deception grounds under NYGBL §§ 349 and 350. The fact that the ingredients did not list tequila, wine, or rum did not render the labels not misleading. The packaging, which included images of a margarita (with a salted rim), a wine glass, and a cocktail glass, suggested to reasonable consumers that the products contained alcohol. Moreover, a federal regulation "also prohibited a malt beverage label from containing a statement or representation tending to create a false or misleading impression that the beverage contained distilled spirits or was a distilled spirits product." § 7.29 Personalized labels.

To establish consumer expectation, the plaintiffs also pointed to competing products such as "SPARKLING MARGARITA" (Jose Cuervo) containing alcohol. The plaintiff pleaded enough facts about material misleadingness, which "is generally a question of fact not suited for resolution at the motion to dismiss stage." The "plaintiffs' claims do not 'border on fantasy,' and are not 'patently implausible.'" Defendants use the word "cocktail," defined by Merriam-Webster as "usually iced drink of wine or distilled liquor mixed with flavoring ingredients."

The defendant’s attempt to analogize this case to flavoring cases did not work. “Plaintiffs are not making a claim about the source or predominance of a particular ingredient; their argument is that the Products lack certain ingredients reasonably suggested by their labeling.”

Plaintiffs plausibly alleged that Anheuser uses “cocktail” language as an “artifice in a deceptive fashion.” The court refused to “make a highly subjective evaluation about how reasonable consumers would interpret the words and images.” “In this case, the knowledge and expectations of reasonable consumers purchasing alcoholic beverages in a drug or convenience store ‘cannot be resolved without surveys, expert testimony, and other evidence of what is happening in the real world.’”

The plaintiffs’ fraud claim fell short of “establishing a strong inference of fraudulent intent.” In other words, the plaintiffs failed to show that the defendant had “both motive and opportunity to commit fraud.” The defendant’s “self-interested desire to increase sales [generally] does not give rise to an inference of fraudulent intent,” held the court. “The outcome might be different, for example, if Plaintiffs had plausibly alleged that Defendant was aware of consumers’ preferences for beverages with distilled liquor or wine, and then deliberately marketed the Products as such in order to capitalize on that market.”

Additional law cited in Cooper v. Anheuser-Busch, LLC:

• "Although plaintiffs sometimes point to comparators in support of a price premium claim under New York's statutes governing deceptive trade practices and false advertising, a plaintiff is not required to do so in order to allege injury."
• Dismissing a case on a materiality analysis is "appropriate only if Plaintiffs' claims are 'patently implausible' or 'unrealistic.'" Eidelman v. Sun Prods. Corp., No. 16-CV-3914, 2017 WL 4277187, at *4 (SDNY Sept. 25, 2017) (citing Stoltz v. Fage Dairy Processing Indus., SA, No. 14-CV-3826, 2015 WL 5579872, at *20 (EDNY Sept. 22, 2015)); see also In re Frito-Lay N. Am., Inc. All Nat. Litig., No. 12-MD-2413, 2013 WL 4647512, at *16 (EDNY Aug. 29, 2013) (observing that dismissal as a matter of law is appropriate where a plaintiff's allegations regarding deceptive labeling "border on fantasy").
• "At the motion-to-dismiss stage, where a representation is capable of two possible reasonable interpretations, the Court is not free to reject the misleading one ... simply because there is an alternative, non-misleading interpretation." Fishon, 2020 WL 6564755, at *7.
• All misleadingness "determinations under the GBL are highly context-specific.”
• “A federal trial judge, with a background and experience unlike that of most consumers, is hardly in a position to declare” that, because he or she knows that wine and hard spirits may not be purchased in a drug or convenience store, “all [customers] must appreciate [that fact] as well.” See Verizon Directories Corp. v. Yellow Book USA, Inc., 309 F. Supp. 2d 401, 407 (E.D.N.Y. 2004); see also Rivera, 2020 WL 4895698, at *7 (“In determining whether an act is ‘materially misleading,’ the reasonable consumer is not held to the same standard as a lawyer trained to make fine distinctions reading a bond indenture or a regulation.”).
• In considering misleadingness, courts consider “the challenged advertisement as a whole, including disclaimers and qualifying language.” Mantikas, 910 F.3d at 636. “[U]nder certain circumstances, the presence of a disclaimer or similar clarifying language may defeat a claim of deception.” Fink, 714 F.3d at 742. “[T]he mere inclusion of an accurate disclaimer,” however, “does not necessarily cure other potentially misleading statements or representations set forth in a label or advertisement.” Stoltz, 2015 WL 5579872, at *16 (gathering cases); see also Mantikas, 910 F.3d at 637 (concluding that certain disclosures on the side panel of a Cheez-Its box did not “render [p]laintiffs’ allegations of deception implausible”). “Rather, the significance of a disclaimer depends upon factors such as the font size and placement of the disclaimer as well as the relative emphasis placed on the disclaimer and the allegedly misleading statement.” Stoltz, 2015 WL 5579872, at *16.
• “Cases such as Stoltz, Delgado, Goldemberg, Koenig, In re Frito-Lay, and Ackerman suggest, courts were hesitant to dismiss deceptive labeling claims on the basis of small-print or easy-to-miss disclosures even before Mantikas.
• “To assert a breach of warranty claim under New York law, ‘the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy.’” Tomasino v. Estee Lauder Cos., 44 F. Supp. 3d 251, 260 (E.D.N.Y. 2014) (quoting N.Y. U.C.C. § 2–607(3)(a)). To satisfy this notice requirement, a plaintiff must “alert [the] defendant that the transaction was troublesome,” but need not “include a claim for damages or threat of future litigation.” Grossman v. Simply Nourish Pet Food Co., 516 F. Supp. 3d 261, 282–83 (E.D.N.Y. Jan. 27, 2021).

Cooper v. Anheuser-Busch, LLC, 553 F. Supp. 3d 83, 95 (S.D.N.Y. 2021).

Whole Foods' "Oats & Flax" is not misleading as to whole-grain content or sugar content

2021:  The plaintiffs alleged that Whole Foods' "Oats & Flax" was packaged deceptively with the claim, "100% Whole Grain – 18g or more per serving." They argue that the claim implies that most or all of the product represents whole grain. The plaintiffs also took issue with the level of added sugar. The ingredient "dehydrated cane juice solids" implies some fruit juice—not sugar, argued plaintiffs, the second ingredient listed in the Nutrition Facts label. To support the plaintiff's argument, they introduce FDA guidance that declares misleading the use of "dehydrated cane juice solids" instead of sugar.

In short, the court ruled that the whole-grain marketing or the sugar labeling would not mislead reasonable consumers. On the front of the box, the "18g or more per serving" dispels ambiguity about the whole grain's relationship to the product whole. "That accompanying language communicates that whole grains make up a portion of each serving of oatmeal, rather than the whole thing." On the back of the box, "Sugars 11g" "was prominently displayed immediately next to the ingredient list." "Those words are hard to miss." The ingredient label would "set straight" a lack of clarity of sugar content. Nor does "Oats & Flax suggest a fruit." "' Plaintiffs offer no reason why a reasonable consumer would conclude that "cane juice" means "fruit juice,'" ruled the court.

FDA regulation does not preempt—but also does not determine—liability

The FDA opined that referring to sugar as "dehydrated cane juice solids" could be misleading. But as set forth below, that guidance alone does not prove a deception under New York GBL §§ 349 and 350.

Whole Foods may not use the FDA guidance for preemption under the Food, Drug, and Cosmetic Act. The FDCA preempts only suits that "depend entirely on an FDCA violation." Products merely regulated by the FDCA are not necessarily preempted. Here is a detailed blog about preemption. Held the court, "Plaintiffs threaded the needle and alleged conduct that violates the FDCA but sounds in traditional principles of state law and would give rise to recovery even had the FDCA never been enacted."

Whether a food label is misleading under GBL §§ 349 and 350 "depends on a context-specific inquiry into whether a reasonable consumer, viewing the representation in context, would likely be misled." Mantikas v. Kellogg Co., 910 F.3d 633, 636 (2d Cir. 2018). The court further found that "FDA guidance is 'without consequence when stating a claim under New York law." "The "complaint does not allege that reasonable consumers are aware of these complex regulations, much less that they incorporate the regulations into their day-to-day marketplace expectations." Dashnau v. Unilever Mfg. (US), Inc., 529 F. Supp. 3d 235, 242-43 (SDNY 2021). Nor did "plaintiffs supply extrinsic evidence that the perceptions of ordinary consumers align with these various labeling standards." N. Am. Olive Oil Ass'n v. Kangadis Food Inc., 962 F. Supp. 2d 514, 519 (S.D.N.Y. 2013).

Additional law about misleadingness cited in Warren v. Whole Foods Mkt. Group, Inc.:

• "The FDA has promulgated some categorical rules concerning whether food labels qualify as false or misleading under the FDCA. One such regulation requires most ingredients on food labels to be listed by their common or usual name, in descending order of predominance by weight. 21 C.F.R. § 101.4.
• "Materially misleading representations are those 'likely to mislead a reasonable consumer acting reasonably under the circumstances.'" Mantikas, 910 F.3d at 636.
• The "materially misleading" inquiry is "objective," Cohen v. JP Morgan Chase & Co., 498 F.3d 111, 126 (2d Cir. 2007), and "a court may decide whether conduct is materially misleading as a matter of law," Fink v. Time Warner Cable, 714 F.3d 739, 741 (2d Cir. 2013). "In determining whether a reasonable consumer would have been misled ... context is crucial." Mantikas, 910 F.3d at 636. The inquiry turns on "[t]he entire mosaic ... rather than each tile separately." Davis v. Hain Celestial Grp., Inc., 297 F. Supp. 3d 327, 334 (E.D.N.Y. 2018) (quoting Belfiore v. Procter & Gamble Co., 311 F.R.D. 29, 53 (E.D.N.Y. 2015).
• In analyzing a product label or advertisement as a whole, 'font size, placement, or emphasis' count." Rivera v. Navient Sols., LLC, No. 20-CV-1284 (LJL), 2020 WL 4895698, at *9 (S.D.N.Y. Aug. 19, 2020).
• "A plaintiff whose claim turns on an "unavoidable interpretation of an allegedly deceptive statement may rely upon it without further investigation." Boswell, 2021 WL 5144552, at *2 (quoting In re: 100% Grated Parmesan Cheese Marketing and Sales Practices Litigation, 275 F. Supp. 3d 910, 923 (ND Ill. 2017)). But "consumers who interpret ambiguous statements in an unnatural or debatable manner do so unreasonably if an ingredient label would set them straight." (quoting 100% Grated Parmesan, 275 F. Supp. 3d at 923); see Engram v. GSK Consumer Healthcare Holdings, 19-CV-2886 (EK) (PK), 2021 WL 4502439, at *5 (EDNY Sep. 30, 2021).
• "Even if plaintiffs allege a special relationship, the economic loss doctrine bars a claim for negligent misrepresentation. Negligent misrepresentation sounds in tort, and the economic loss doctrine "restricts the remedy of plaintiffs who have suffered economic loss, but not personal or property injury, to an action in contract." Elkind v. Revlon Consumer Prod. Corp., No. 14-CV-2484 (JS) (AKT), 2015 WL 2344134, at *12 (EDNY May 14, 2015).
• "Plaintiffs' claim for breach of implied warranty also fails. The failure to provide presuit notice that dooms plaintiffs' express warranty claim is also fatal to plaintiffs' implied warranty claim."

Warren v. Whole Foods Mkt. Group, Inc., 574 F. Supp. 3d 102, 116 (E.D.N.Y. 2021).

An incomplete legal treatise is “consumer-oriented” but not “materially misleading”

2021:  Allegations that a legal publisher misrepresented the completeness of its legal coverage was not “materially misleading” under GBL § 349, held the court. The plaintiffs, who are legal professionals, alleged that New York Landlord-Tenant Law deceptively omitted rent control and stabilization laws and regulations. But New York’s highest court ruled that reasonable consumers would not expect every section to be current and accurate, especially given a disclaimer stating otherwise. The lower court erred, however, in ruling that GBL § 349 was inapplicable because the treatise was not used for personal, family, or household use (traditional consumer standard). But the practice is “consumer-oriented” with “a broader impact on the public at large.” GBL § 349 is “focused on the seller’s deception and its subsequent impact on consumer decision-making, not on the consumer’s ultimate use of a product.” Besides, legal professionals are a subclass of consumers; The defendant’s conduct need not be “directed to all members of the public.” Himmelstein v. Mathew Bender & Company, Inc., a Member of LexisNexis Group, Inc., 150 N.Y.S. 3d 79 (Ct. App. 2021).

Reasonable consumers did not necessarily expect vanilla beans to comprise the entire flavor in vanilla ice cream

2021:   Regarding "vanilla bean ice cream," the plaintiffs argued that they expected vanilla beans to produce the vanilla flavor in ice cream—not ethyl vanillin or maltol. Reasonable consumers expect predominantly non-artificial sources of vanilla flavoring in their ice cream, argued the plaintiffs. But the court found that reasonable consumers would not conclude that vanilla bean ice cream is derived exclusively from "real vanilla." Nor have the "plaintiffs provided an empirical basis to substantiate their assertion that reasonable consumers would interpret the Product's label to imply an exclusive source of vanilla flavoring." Dashnau v. Unilever Mfg. (US), Inc., 529 F. Supp. 3d 235, 241–42 (SDNY 2021).

Additional law cited in Dashnau v. Unilever Mfg. (US), Inc.:

• "To survive a motion to dismiss, 'plaintiffs must do more than plausibly allege that a label might conceivably be misunderstood by some few consumers.'" Twohig, 519 F.Supp.3d at 160 quoting Sarr v. BEF Foods, Inc., No. 18-CV-6409, 2020 WL 729883, at *3 (EDNY Feb. 13, 2020)). Rather, they must "plausibly allege that a significant portion of the general consuming public or of targeted customers, acting reasonably in the circumstances, could be misled." Dashnau v. Unilever Mfg. (US), Inc., 529 F. Supp. 3d 235, 241 (S.D.N.Y. 2021).

Weight-loss product not “materially misleading” for not disclosing alleged cancer risk

2021:   A patient prescribed a weight-loss medication sued the manufacturer, distributor, and pharmacy for false advertising and other theories. She alleged that the defendant’s failure to disclose an elevated risk of cancer rendered it “unfit for use.” She pointed out a rat study that linked an ingredient, lorcaserin, to aggressive tumors in rats. The plaintiff alleged that the failure to disclose the risks in that study constituted a material omission that misbranded the product and elevated the price. But the court found a lack of evidence connecting the alleged omission to a traceable injury to the plaintiffs. More than a mere purchase of the product is needed to demonstrate an injury. Nor did the plaintiff’s putative class develop cancer. The plaintiff pointed to no affirmative misrepresentation and did not prove that the defendant knew of any misrepresentation, which needed to support fraud or fraudulent concealment. Evidence of reliance on any particular representation was also lacking. As to direct liability, the court found that doctors—not manufacturers or distributors— have the duty to warn patients of potential side effects and health risks. This duty arises from the intermediary doctrine that imposes a duty to warn the doctor—not the patient—of a “drug’s side effects and risks. Zottola v. Eisai Inc., 564 F. Supp. 3d 302 (S.D.N.Y. 2021).

Additional law cited in Zottola v. Eisai Inc.:

• “Materially misleading” means likely to mislead a reasonable consumer acting reasonably under the circumstances.
• Reliance is not an element of a false-advertising claim under GBL § 350, consistent with the New York Court of Appeals in Koch. With some disagreement, courts in the second circuit tend to agree. For example:
  • Neither GBL §§349 nor 350 require proof of reliance. New World Sols., Inc. v. NameMedia Inc., 150 F. Supp. 3d 287, 330 (S.D.N.Y. 2015). Also, a business may bring a claim under GBL §§349 or 350, provided the conduct is directed at consumers or causes harm to the public at large.
  • Reliance is not an element of either GBL §§349 or 350 because of the uniform nature of the tests for each, as held in Orlando. Relating to a computer protection plan bought through Staples, the plaintiffs alleged that Staples unlawfully disclaimed services in the first year of the manufacturer's warranty period. Consumers may be misled by ambiguous warranty provisions relating to the first year of coverage. Staples providing dual coverage for the first year is a reasonable interpretation. Staples’ refusal to provide service during that year was sufficiently alleged as an injury under GBL §§349 or 350.
• In a breach of implied warranty of merchantability, a plaintiff must show that the product was not reasonably fit for its intended purpose. This inquiry focuses on expectations for the product’s performance when it’s used in a customary and reasonably foreseeable way. N.Y. Uniform Commercial Code § 2-314. [Implied Warranty: Merchantability; Usage of Trade].
• There is no privity (legal connection) with the pharmacy to support a merchantability claim because the pharmacy did not market or make the product.
• A fraud claim in New York is (1) a material misrepresentation or omission of fact, (2) made with knowledge of its falsity, (3) with an intent to defraud and (4) reasonable reliance on the part of the plaintiff, (5) that causes damage to the plaintiff.
• To establish fraudulent concealment, a plaintiff must prove that the defendant had a duty to disclose material information relevant to an issue.
• “Under New York law, an unjust enrichment claim is not available where it simply duplicates, or replaces, a conventional contract or tort claim; nor is it a catchall cause of action to be used when others fail.”
• The defendants, in this case, were Eisai Inc., Arena Pharmaceuticals, Inc., and CVS Pharmacy, Inc.

"Florida Natural" orange juice is not deceptive for containing trace amounts of the weed killer glyphosate

2020:   Is "Florida Natural" orange juice deceptive if it contains trace amounts of the weed killer glyphosate? No. The court exercised its discretion to objectively find that reasonable consumers would not interpret "Florida Natural" to guarantee the absence of all "traces of glyphosate as a result of the planting and cultivation of oranges in its product." The plaintiff's offered survey was unconvincing since it lacked an important distinction: the label versus the brand name. The label did not claim "100% natural" but instead claimed "100% Orange Juice." As to injury, however, the plaintiff plausibly alleged standing. The "inflated price" was sufficient to state an injury. Not necessary at this stage is the need to "identify the prices of competing products to establish the premium paid." Axon v. Florida's Nat. Growers, Inc., 813 Fed. Appx. 701 (2d Cir. 2020) (unpublished).

Additional law cited in Axon v. Florida's Nat. Growers, Inc.:

• As for Article III standing, Axon has suffered an injury-in-fact because she purchased products bearing allegedly misleading labels and sustained a financial injury – paying a premium – as a result. See, e.g., Langan v. Johnson & Johnson Consumer Cos., Inc., 897 F.3d 88, 92 (2d Cir. 2018).
• NYGBL §§ 349 and 350 "prohibit the use of deceptive acts or practices and "false advertising in the conduct of any business, trade or commerce.
• To survive a motion to dismiss, "plaintiffs must plausibly allege 'that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled by the relevant statements." Jessani v. Monini N. Am., Inc., 744 F. App'x 18, 19 (2d Cir. 2018) (quoting Ebner v. Fresh Inc., 838 F.3d 958, 965 (9th Cir. 2016)).
• Where the allegations are "materially inconsistent" with the evidence "lack the facial plausibility necessary to survive a motion to dismiss." Fink v. Time Warner Cable, 714 F.3d 739, 742 (2d Cir. 2013).
• "Unlike 'natural,' the words 'pure' and '100% natural' indicate the absolute absence of contaminants." See, Merriam-Webster Dictionary.

Godiva Chocolate, marketed as "Belgium 1926," reasonably implied that it was made in Belgium

2020:   The phrase "Belgium 1926" on Godiva chocolate boxes, and in other media, reasonably implies that Godiva made them in Belgium versus Pennsylvania—where they were actually made. This case did not present the "rare instance" where the court should dismiss the case under the objective, reasonable-consumer standard. While it is also possible to interpret "Belgium 1926" as the place and year Godiva started as a company, it could not prove that the plaintiff's interpretation was "categorically unreasonable." In advertising, context is crucial: "Here, part of that 'mosaic' is another, crucial representation: some of Godiva's packaging and social-media advertising describes its chocolates as Belgian. The front packaging of one of its boxes, for example, contains the phrase "' ASSORTED BELGIAN CHOCOLATE CARAMELS.'" Hesse v. Godiva Chocolatier, Inc., 463 F. Supp. 3d 453, 460 (S.D.N.Y. 2020).

The court let proceed the consumer-deception claims, but it denied injunctive relief. Injunctive relief to enjoin Godiva from using "Belgium 1926" was dismissed because the hypothetical future harm of possibly buying the product was too conditional to constitute future harm. The court held, "it is difficult to fathom how they could be harmed by Godiva's continued representation if they know that the company's chocolates come from Pennsylvania."

Additional law cited in Hesse v. Godiva Chocolatier, Inc.:

• "Courts apply the "reasonable consumer" standard to determine whether a representation is false or deceptive." See Marcus v. AT & T Corp., 138 F.3d 46, 64 (2d Cir. 1998); Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008).
• "Under the reasonable-consumer standard, plaintiffs must show that consumers are likely to be deceived by a representation." See Fink v. Time Warner Cable, 714 F.3d 739, 741 (2d Cir. 2013). "In other words, while a representation need not be false to mislead a reasonable consumer, the representation must nevertheless be misleading or have the capacity, likelihood, or tendency to deceive or confuse members of public." Romero v. Flowers Bakeries, LLC, 2016 WL 469370, at *7 (N.D. Cal. Feb. 8, 2016).
• "This reasonableness inquiry is rarely resolved on a motion to dismiss. See, e.g., Quinn v. Walgreen Co., 958 F.Supp.2d 533, 543 (S.D.N.Y. 2013) ("whether a particular act or practice is deceptive is usually a question of fact" best suited for a jury.); accord Buonasera v. Honest Co., 208 F.Supp.3d 555, 566 (S.D.N.Y. 2016).
• Dismissal is warranted only in a "rare situation" where "it [is] impossible for the plaintiff to prove that a reasonable consumer was likely to be deceived." Williams, 552 F.3d at 939; Atik v. Welch Foods, Inc., No. 15-cv-5405 (MKB), 2016 WL 5678474, at *8 (E.D.N.Y. Sept. 30, 2016) (adopting the "rare situation" standard); see also In re Frito-Lay N. Am., Inc. All Nat. Litig., 2013 WL 4647512, at *16 (E.D.N.Y. Aug. 29, 2013) (for a court to grant a motion to dismiss, the label's context must meet the "heavy burden of 'extinguish[ing] the possibility' that a reasonable consumer could be misled.").

Some animal-welfare claims on egg cartons were fair game in a consumer-fraud case

2020: The below two advertising claims on egg containers were factual enough to state a claim for consumer deception and common law fraud:

• "Most hens don't have it as good as Nellie's"
• "Our hens can peck, perch, and play on plenty of green grass."

The above statements were "reinforced by references to 'OUTDOOR FORAGE' and images of hens frolicking in elysian pastures." They "provide enough specificity to elevate itself beyond puffery and into potential materiality."

But the below two advertising statements on cartons of eggs were ruled "puffery" (legal, exaggerated opinions):

• "We love our hens, you'll love our eggs"
• "Better lives for hens mean better eggs for you"

All legal theories related to the puffery on the cartons were dismissed. But the legal theories related to the factual claims would survive dismissal—except the express warranty claim, which was dismissed for lack of pre-suit notice. Lugones v. Pete and Gerry's Organic, LLC, 440 F. Supp. 3d 226 (S.D.N.Y. 2020).

Additional law cited in Lugones v. Pete and Gerry's Organic, LLC:

• "Plaintiffs must plausibly allege 'that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled."
• Under New York law, fraud and fraudulent misrepresentation claims are identical.
• In order to establish either or both claims, Plaintiffs must allege: "[i]Defendant made a material false representation; [ii] Defendant intended to defraud Plaintiffs thereby; [iii] Plaintiffs reasonably relied on the representation; and [iv] Plaintiffs suffered damage as a result of such reliance."
• "The 'reasonable reliance' element is focused on whether it was foolish or not for the plaintiff to believe the defendant's fraudulent statement. See Banque Franco-Hellenique de Commerce Int'l et Mar., S.A. v. Christophides, 106 F.3d 22, 26 (2d Cir. 1997) ("While the law does not require that a defrauded party go to the ends of the earth to discover the falsity of a statement, patent foolishness is not excused.").

Insurance coverage supplied through employer was "consumer oriented" and therefore actionable under GBL §§ 349 and 350

2020:   City employees alleged that GHI insurer misled them on coverage terms and lured them into paying premiums for worthless riders. At issue was whether GHI had engaged in consumer-oriented conduct subject to NYGBL §§ 349 and 350. The New York Court of Appeals, upon request by the Third Circuit, answered yes. These laws were enacted in 1979 and 1963, respectively, "to provide needed authority to cope with the numerous, ever-changing types of false and deceptive business practices which plague consumers in our State." These laws "apply to virtually all economic activity, and their application has been correspondingly broad." GBL §§ 349 and 350 were similarly applied in Oswego Laborers' Local 214 Pension Fund (bank misrepresented interest payouts to non-profits) and in Gaidon v. Guardian Life Ins. Co. of Am. ("vanishing premiums" were untenable). All three practices transcended a "private contract dispute" and involved an extensive marketing scheme that had a "broader impact on the public at large." If bank forms and advice are directed at the "consuming public at large," and the parties occupy "disparate bargaining positions," these laws are likely to apply. Plavin v. Group Health Inc., 146 N.E.3d 1164 (N.Y. 2020).

Wegmans did not deceptively imply the source of vanilla flavoring in its ice cream

2020: The plaintiffs could not establish that Wegmans ice cream misrepresented the source of its vanilla flavoring. The plaintiffs allegedly expected vanilla bean or vanilla extract as the source of vanilla flavor but received something else.

The plaintiffs' introduced a "mass spectrometry analysis" to allegedly show a lack of compounds inherent in a vanilla bean. But "the test may just confirm that the vanilla flavor derives solely from vanilla extract" deemed acceptable by the plaintiffs. The court ruled, "The test performed under plaintiffs' instructions is as inapplicable to this action as are the federal specifications for ice cream flavorings, which are not enforceable by private plaintiffs."

Neither federal nor State law permits private lawsuits for regulatory noncompliance with flavoring regulations. The plaintiff's "extensive discussion ... with respect to particular federal standards for ice cream flavor descriptions is without consequence." Unlike Mantikas, which involved "WHOLE GRAIN" on crackers, Wegmans ice cream "does not mention vanilla beans, or bean extract...or "natural or "artificial." Steele v. Wegmans Food Markets, Inc., 472 F. Supp. 3d 47, 48 (S.D.N.Y. 2020).

Additional law cited in Steele v. Wegmans Food Markets, Inc.:

• "The primary federal Food Drug and Cosmetic Act deals generally with food, not with flavoring, 21 U.S.C. § 343(g), and its enforcement is left to the federal and State (if the food is located within the State) authorities."
• "There is no private civil right of action for breaches of the FDCA provisions." See 21 U.S.C. § 337.
• "The New York Agriculture and Markets Law, which in its ice cream regulations, 1 NYCRR 17.19, adopted the federal ice cream regulations, is also administered by a Commissioner who investigates and may sue for penalties. N.Y. Agric. & Mkts. Law § 35."
• "No private civil actions can be inferred; the legislature created such a right of action only when it wished to (N.Y. Agric. & Mkts. Law § 378(3), dealing with tampering with animal research)."
• "Plaintiff's 'dogged insistence that P.D.K.'s products are sold without proper F.D.A. approval suggests' his goal is "to privately enforce alleged violations of the FDCA... However, no such private right of action exists." PDK Labs Inc. v. Friedlander, 103 F.3d 1105, 1113 (2d Cir. 1997). Steele v. Wegmans Food Markets, Inc., 472 F. Supp. 3d 47, 49 (S.D.N.Y. 2020).

Sidenote: What is Mass Spectrometry Analysis in food-flavoring cases?

Mass spectrometry analysis can be used in food flavoring lawsuits to identify and quantify the presence of specific flavoring compounds or contaminants in food products.

In food flavoring lawsuits, mass spectrometry analysis can be a valuable tool for identifying and quantifying the presence of specific compounds in food products. This information can help determine whether a food product complies with regulatory requirements or has been adulterated or contaminated. It can also help provide evidence in legal proceedings by identifying the source of a flavoring or contaminant and linking it to a particular manufacturer or supplier.

Whole Foods was accused of "systematically" inflating the weight of prepackaged foods, but consumer did not link it to his purchases

2019:   A consumer sued Whole Foods for allegedly inflating the weights of prepackaged cupcakes and cheeses, a practice also known as "short-weighting." As proof, the plaintiff "extrapolated" being overcharged based on a N.Y. Consumer Affairs' study finding that Whole Foods inflated the weight of certain prepackaged foods in 89% of the [limited] products studied. This action grew out of John v. Whole Foods Mkt. Group, Inc. (below, 2017), which upheld the plaintiff's initial claim on standing, holding that "it is plausible that John overpaid for at least one product."

After the reversal of Whole Foods' dismissal, it moved for summary judgment, and the court granted it, finding that the plaintiff lacked an injury-in-fact needed for Article III standing. Although the plaintiff established purchases from two Whole Foods stores, "there is no competent, non-speculative evidence that any cupcake or cheese item John bought weighed less than the weight used to price it." The plaintiff "adduced literally no evidence as to his own purchases that could substantiate a claim against Whole Foods." His bank statements showing 22 purchases from whole foods lacked identification of the purchase, let alone its labeled weight, actual weight, or price." Nor did the plaintiff "ever weigh any food he purchased at Whole Foods."

The court further held, "although John's complaint once pled facts sufficient to allege an injury-in-fact, John's inability on the now-closed record to establish injury to himself means he cannot meet the heightened standard applicable post-discovery to establish such standing."

Additional law cited in In re Whole Foods Mkt. Group, Inc. Overcharging Litig.:

• "A consumer plaintiff may sometimes, at the pleading stage, state a plausible claim of injury to himself solely by alleging that the defendant subjected a high percentage of similarly situated consumers to an unlawful practice."
• "As a general rule, statistical evidence alone is insufficient to avoid a motion for directed verdict and necessarily a motion for summary judgment." Baker v. Bridgestone/Firestone Co., 966 F. Supp. 874, 876 (W.D. Mo. 1996)
• "Under § 349, a plaintiff must allege: (1) the act or practice was consumer oriented; (2) the act or practice was misleading in a material respect; and (3) the plaintiff was injured as a result."

In re Whole Foods Mkt. Group, Inc. Overcharging Litig., 397 F. Supp. 3d 406 (S.D.N.Y. 2019), aff'd sub nom. John v. Whole Foods Mkt. Group, Inc., 823 Fed. Appx. 46 (2d Cir. 2020)(unpublished).

"Natural" cosmetics are possibly deceptive when they contain synthetic ingredients

2018:  Cosmetics marketed as "natural" were fair game for a false-advertising case under GBL §§ 349 and 350. The plaintiffs contended that 22 synthetic agreements rendered words like "natural" false and material to purchasing decisions. The issue was whether a "reasonable consumer acting reasonably" would be misled by the use of "natural"—not whether plaintiffs disproved the product's naturalness. The plaintiffs' interpretation was not unreasonable as a matter of law to support a dismissal. Listing synthetic ingredients in the ingredient list would not cure a reasonable misimpression caused elsewhere on the package. All statements are viewed in context as an "entire mosaic." Notably, the court ruled that the consumer plaintiffs had standing for injunctive relief, regardless of their intention to purchase the products in the future. Petrosino v. Stearn's Products, Inc., 16-CV-7735 (NSR), 2018 WL 1614349, at *6–7 (S.D.N.Y. Mar. 30, 2018).

Lawsuit over false "run resistant" L'eggs stockings proceeds; Similar Amazon reviews were considered

2018:   After experiencing holes and runs in their stockings after three "normal, everyday" wearings, the plaintiffs sued and used other dissatisfied customer reviews on Amazon.com to support their experience. New York courts have incorporated such reviews to "gauge the perspective of a reasonable consumer." The court cited the plaintiffs' complaint for Hanes' advertising claims:

"Now you can enjoy beautifully sheer hosiery longer—with hosiery that resists runs" and "Innovative technology makes the hosiery less prone to runs" misled the reasonable consumer into believing that Defendant's product would be more "run resistant" than any other non-run resistant hosiery." (See Am Compl. ¶¶ 20, 26; R&R at 2-3.).

The court held, "Plaintiffs adequately alleged that: (1) Defendant's marketing and labeling of run resistant hosiery was directed at consumers; (2) the marketing and labeling was misleading in a material way; and (3) Plaintiffs have been injured as a result." Rodriguez v. Hanesbrands Inc., 17CV1612DLIRLM, 2018 WL 1686105, at *1 (E.D.N.Y. Mar. 30, 2018).

Cheez-It “made with whole grain” deceptively implied that whole grain was the main ingredient, alleged plaintiffs

2018:   The claims “whole grain” and “made with whole grain” in large font on the front of Cheez-It boxes were misleading because the predominant ingredient was enriched flour—not whole grain, alleged the plaintiffs. In the eyes of reasonable consumers, “context is crucial.” The court considers the “advertisement as a whole,” disclaimers, and qualifying language in its misleadingness analysis. The defendant accurately displayed enriched flour as the first ingredient but did not “dispel the inference” to reasonable consumers that the product was predominantly whole grain. “Disclosures on the side of the box did not render the plaintiff’s allegations implausible.” The court continued, “[t]he misleading quality of the message is not effectively cured by implicitly disclosing the predominance of enriched white flour in small print on an ingredients list on the side of the package.” “Reasonable consumers should not be expected to consult the Nutrition Facts panel on the side of the box to correct misleading information set forth in large bold type on the front.” Mantikas v. Kellogg Co., 910 F.3d 633 (2d Cir. 2018).

Additional law cited in Mantikas v. Kellog Co.:

• As required by federal regulation, the defendant listed ingredients in order of their predominance, with the primary ingredient listed first. See 21 C.F.R § 101.4 (requiring ingredients to be listed “in descending order of predominance by weight”).
• “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662 (2009).

Dr. Scholl's Foot Mapping Kiosks were not misleading, held the court

​

2018: Bayer, the maker of Dr. Scholl's shoe inserts, developed "Foot Mapping Kiosks" in which consumers stand to analyze their feet and then receive custom recommendations for particular Dr. Scholl's inserts.

The putative class plaintiff alleged:

1. that it misleads consumers into believing that the Inserts are "functionally equivalent" to orthotics fitted and prescribed by a medical professional; and
2. that it misleads customers into believing that the Inserts are individualized to a consumer's "unique physical characteristics," and not simply "generic, pre-fabricated, mass-produced, over-the-counter shoe inserts." Kommer v. Bayer at 307.

Using "pseudo-technology" and phrases like "custom fit orthotics," Dr. Scholl's "suggests a level of precision and exactitude that is not present in the product," alleged the plaintiff. But the court was not moved by the alleged deception since the "plaintiff needed only to look at what he was buying to see that it was "standardized," "mass-produced," and "over-the-counter": Plaintiff was buying pre-packaged Inserts from a stack of similar Inserts over-the-counter at Walmart." The objective standard to view deception is from the "reasonable consumer"—not the "least sophisticated consumer." Furthermore, the kiosk instructions reasonably disclaimed being a substitute for a medical diagnosis or medical advice. "To the extent that a consumer may overestimate the function of the Kiosk, however, the disclaimer provides adequate clarification of its capabilities," ruled the court. The court denied the plaintiff's GBL § 349 claim and injunctive relief since the plaintiff failed to demonstrate he'd suffer future harm by this Dr. Scholl's product-delivery system. Kommer v. Bayer Consumer Health, 252 F. Supp. 3d 304 (S.D.N.Y. 2017), aff'd sub nom. Kommer v. Bayer Consumer Health, a division of Bayer AG, 710 Fed. Appx. 43 (2d Cir. 2018)(unpublished).

Sidenote: What is a "putative class plaintiff"?

A "putative class plaintiff" brings a lawsuit on behalf of a group of people with similar claims against a defendant. They file a motion for class certification to allow the lawsuit to proceed as a class action and represent the potential class. The class must meet legal requirements, and the plaintiff must adequately represent the class. If successful, damages are divided among the class. The putative plaintiff is the actual representative once the court certifies the class.

Additional law cited in Kommer v. Bayer Consumer Health:

• "It is well settled that a court may determine as a matter of law that an allegedly deceptive advertisement would not have misled a reasonable consumer." Citing Fink v. Time Warner Cable, 714 F.3d 739 (2d Cir. 2013).
• "Under certain circumstances, the presence of a disclaimer or similar clarifying language may defeat a claim of deception in a consumer-fraud case. Fink v. Time Warner Cable, 714 F.3d 739 (2d Cir. 2013).
• "Assuming that a reasonable consumer might ignore the evidence plainly before him "attributes to consumers a level of stupidity that the Court cannot countenance and that is not actionable under G.B.L. § 349." Chiste v. Hotels.com L.P., 756 F.Supp.2d 382, 404 (S.D.N.Y. 2010);
• "The applicable legal standard is whether a reasonable consumer, not the least sophisticated consumer, would be misled by Defendants' actions." Weinstein, 819 F.Supp.2d at 228.

Plaintiffs failed to prove that Dannon’s “natural” yogurt was not “natural”

2017:   Dannon Company’s “natural” yogurt stood up against attack by claims that its cows generally consumed G.M.O. feed and antibiotics. Without alleging specific facts or specific practices against Dannon to dispute the “natural” labeling, the plaintiff’s industry-based arguments were too speculative and based on “feelings.” Dannon did “not specifically represent that its products are either GMO-free or not given hormones or antibiotics. Podpeskar v. Dannon Company, Inc., 2017 WL 6001845 (S.D.N.Y. 2017).

Sapporo Beer's Japanese style labeling, qualified by a clear disclaimer, does not materially mislead consumers as to its country of origin

2017:   Sapporo Beer, originally brewed in Japan in 1977, was first imported into the U.S. in 1964. Now, its beer is brewed in Canada or the U.S.—not in Japan. Sapporo retained its "historic roots" by including some Japanese trade dress.

Sapporo's beer brewed in Canada states "imported" and uses the following disclaimer: "Brewed and canned by Sapporo Brewing Company, Guelph, Ontario, Canada." The beer brewed in the U.S. does not state "imported" on its cans, and slogans like "Original Japanese Beer" appear on all cans.

The court honored the disclosure regarding the beer imported from Canada, holding "the use of a trademarked star symbol and allusion to the company's historic roots in Japan are eclipsed by the accurate disclosure statement." "Unlike the cases cited by Plaintiff, the disclosure statement on Sapporo appears in contrasting, visible font and states in clear language where the product is produced."

Since the "defendant's conduct did not misrepresent the product origin," the plaintiff's fraud and negligent misrepresentation claims fail as a matter of law.

Additional law cited in Bowring v. Sapporo U.S.A., Inc.:

• Clear disclaimers inform the inquiry into whether the defendant's conduct would mislead a reasonable consumer. In evaluating the efficacy of such a disclaimer, courts consider factors such as font size, placement, and emphasis. Delgado v. Ocwen Loan Servicing, LLC, No. 13-CV-4427 NGG RML, 2014 WL 4773991, at *8 (E.D.N.Y. Sept. 24, 2014).
• Courts routinely conclude that the presence of a disclaimer, considered in context, precludes the finding that the defendant's conduct would deceive a reasonable consumer. See, e.g., Fermin v. Pfizer Inc., (E.D.N.Y. Oct. 18, 2016) ("excessive empty space" in Advil containers where the label clearly displayed the number of pills and 'defies logic to accept that a reasonable consumer would not rely upon the stated pill count'); Forschner Grp., Inc. v. Arrow Trading Co. Inc., 30 F.3d 348, 351–355 (2d Cir. 1994) (holding that use of the phrase "Swiss Army" to label knives manufactured in China did not violate false advertising provisions of the Lanham Act, as the phrase was not "geographically descriptive" where the knives were clearly labeled "Made in China"); Pernod Ricard U.S.A., L.L.C. v. Bacardi U.S.A., Inc., 653 F.3d 241, 252–253 (3d Cir. 2011) (explaining that even if the phrase "Havana Club" on a bottle of rum could suggest the product's origin in Cuba, "those same words cannot mislead a reasonable consumer" presented with an "accurate, unambiguous statement" on the label that the rum is "distilled and crafted in Puerto Rico"). Bowring v. Sapporo U.S.A., Inc., 234 F. Supp. 3d 386, 390 (E.D.N.Y. 2017).

Evidence of fraudulent intent against Gerber for false allergy claims

2017:   Consumers sufficiently stated claims against Gerber for fraudulently claiming that its infant formula helped reduce the risk of allergies despite evidence to the contrary. Greene v. Gerber Products Co., 262 F. Supp. 3d 38 (E.D.N.Y. 2017).

Gerber first sought FDA approval for this qualified health claim: “emerging clinical research in healthy infants with a family history of allergy shows that feeding a 100% Whey–Protein Partially Hydrolyzed formula may reduce the risk of common food allergy symptoms, particularly allergic skin rash.”

The FDA’s response to Gerber: “no credible evidence to support the qualified health claim relating to the consumption of 100 percent partially hydrolyzed whey protein in infant formula to a reduced risk of food allergy.

Four years later, Gerber again sought qualified approval for allergy claims phrased differently. But the FDA found that the “claim mischaracterized the scientific evidence and was therefore misleading.” The FDA necessitated a qualifying statement about infants with existing milk allergies to use such an allergy claim. Gerber failed to use that qualifier, “essential information necessary to ensure the safety of consumers.”

Gerber advertised infant formula with the following advertising claims:

• “the first and only formula brand made from 100% whey protein hydrolyzed, and that meets the criteria for a FDA Qualified Health Claim for atopic dermatitis.”
• “1st & only routine formula to reduce the risk of developing allergies”

The plaintiffs filed suit against Gerber for two deceptive representations: (1) that the Infant Formula reduces the risk that infants will develop allergies, and (2) that the Infant Formula meets the criteria for an FDA-qualified health claim for atopic dermatitis. Plaintiffs supported its complaint with a study concluding that “partially hydrolyzed whey protein does not lower the risk that infants will develop allergies.”

The plaintiffs adequately alleged Gerber’s lack of scientific support and FDA mischaracterization as evidence of fraudulent intent. Gerber knew that the FDA disapproved its petitioned allergy claims, and Gerber was uniquely positioned to know that at least one significant study conclusively refuted its allergy claims. These facts state a claim for negligent misrepresentation held the court.

Gerber was not entitled to a safe-harbor defense under GBL §§ 349(d) or 350-d for the FDA’s alleged endorsement of its qualified health claim. The FDAs letter did not constitute a “rule or regulation” covered under the safe-harbor provisions of GBL §§ 349(d) or 350-d. Safe-harbor protection means statutory protection from liability if certain conduct complies with federal law.

Finally, as to the plaintiff’s claim of intentional misrepresentation, the court found that they have “adequately pled facts to support an inference of “conscious misbehavior or recklessness.”

Other legal principles enunciated in Greene v. Gerber Product:

• New York’s deception statute (GBL § 349) does not impose pleading-with-particularity requirements as would a common-law fraud claim.
• False advertising (GBL § 350) requires reliance on the misrepresentation, while deception under GBL § 349 does not.
• Under GBL § 349, an injury can result from an overpayment due to a misrepresentation.
• A fraudulent concealment claim in New York imposes a duty to disclose material information in the following scenarios: a) the parties are in a fiduciary relationship under the special facts doctrine, b) one party possesses superior knowledge not readily available to the other, and knows that the other is acting based on mistaken knowledge, or c) a party has made a partial or ambiguous statement, whose whole meaning will only be made clear after complete disclosure.
• Although a duty to disclose material information arises in direct business transactions, courts may impose that duty to disclose on a manufacturer who has exclusive knowledge of a product defect or danger.
• If supported by facts giving rise to a strong inference of fraudulent intent, conclusory assertions of intent may be enough to state a claim.
• A claim of negligent misrepresentation requires the plaintiff to show (1) the existence of a special or privity-like relationship imposing a duty on the defendant to impart correct information to the plaintiff; (2) that the information was incorrect; and (3) reasonable reliance on the information.
• A claim of intentional misrepresentation requires the plaintiff to show: (1) a misrepresentation or a material omission known to be false (2) made for the purpose of inducing the other party to rely upon it (3) justifiable reliance on the other party on the misrepresentation or material omission, and (4) injury.
• A plaintiff may plausibly plead scienter (intent) through allegations of a motive to deceive and deprive access to accurate information. “An egregious refusal to see the obvious, or to investigate the doubtful, may in some cases give rise to an inference of recklessness.” Chill v. Gen. Elec. Co., 101 F.3d 263, 268 (2d Cir. 1996).

Plaintiff failed to show an injury after buying protein supplements containing ineffective ingredients

2017: Two ingredients—lactase and Aminogen— in three protein supplements produced a lawsuit claiming that the supplement labels “misrepresented the function” of aiding protein absorption. But the plaintiffs failed to produce scientific support to show that doses of Aminogen in the products were ineffective. Regarding the lactase claim, the remaining defendant argued that the label “misleadingly implies that both lactase and Aminogen aid in the absorption of protein.” Pointing to the language on the label, the court found that “a reasonable consumer could be mistakenly led to believe that Defendant’s product contains two such ingredients.” But the Plaintiff came up short of proving a pecuniary injury of overpayment based on the alleged misrepresentations. The court dismissed claims under GBL §§ 349 and 350 since the plaintiffs did not demonstrate an injury. Finally, since the remaining Plaintiff could not prove that he relied on the lactase advertising, he could not succeed under a breach-of-express warranty theory. Segovia v. Vitamin Shoppe, Inc., 14-CV-7061 (NSR), 2017 WL 6398747, at *5 (S.D.N.Y. Dec. 12, 2017).

Additional law cited in Segovia v. Vitamin Shoppe, Inc.:

• To establish a prima facie case for breach of express warranty under New York law, a plaintiff must plead and prove (1) the existence of a material statement amounting to a warranty, (2) the buyer’s reliance on this warranty as a basis for the contract with the immediate seller, (3) breach of the warranty, and (4) injury to the buyer caused by the breach. Segovia v. Vitamin Shoppe, Inc., at *5 citing Goldemberg, 8 F. Supp. 3d at 482 (citing Avola v. La.-Pac. Corp., 991 F. Supp. 2d 381, 391 (E.D.N.Y. 2013).
• While a plaintiff is not required to prove individual reliance on misleading statements to sustain a claim under GBL §§ 349 and 350, Plaintiff must prove that the defendant’s deceptive act caused some actual injury. Segovia v. Vitamin Shoppe, Inc., at *4 citing Oswego Laborers’ Local 214 Pension Fund v. Marine Midland Bank, N.A., 85 N.Y.2d 20, (1995).

Segovia v. Vitamin Shoppe, Inc., 14-CV-7061 (NSR), 2017 WL 6398747, at *5 (S.D.N.Y. Dec. 12, 2017).

Complaint against Whole Foods for systematically overcharging pre-packaged foods survives dismissal

2017: A putative class-action plaintiff sued Whole Foods for “systematically” overstating the weights of pre-packaged food products while overcharging customers. The plaintiff asserted that “the chain overcharged him at least once for pre-packaged cheese and cupcakes, and that he made monthly purchases of pre-packaged food from the chain.” A press release from the Department of Consumer Affairs revealed that the mislabeling of pre-packaged food by the chain was “systematic and routine.” The DCA alleged that Whole Foods’ New York City stores “routinely overstated the weights of its pre-packaged products—including meats, dairy and baked goods.” 89% of all products tested were mislabeled, according to the DCA.

​

The Second Circuit Court of Appeals reversed the district court that dismissed the action for the plaintiff’s failure to point to a particular purchase of an overcharged product based on weight. Given the above findings by the DCA, “drawing all reasonable inferences in his favor, it is plausible that John overpaid for at least one product,” ruled the court. John v. Whole Foods Mkt. Group, Inc., 858 F.3d 732 (2d Cir. 2017).

Unapproved allergy-reduction claims on infant formula were false and deceptive, alleged class action

2016:   Relating to allergy-reduction claims in infant formula, the plaintiffs took issue with the following advertisements:

• A statement on the seal of the Infant Formula that it is the "1st & only routine formula to reduce the risk of developing allergies."
• A statement on the label of the Infant Formula that it is "the first and only formula brand made from 100% whey protein hydrolyzed, and that meets the criteria for a FDA Qualified Health Claim for atopic dermatitis."
• A television commercial stating in relevant part: "You want your Gerber baby to have your imagination ... your smile ... your eyes ... not your allergies.... [I]f you introduce formula, choose the Gerber Good Start Comfort Proteins Advantage."
• A print advertisement stating: "The Gerber Generation says 'I love Mommy's eyes, not her allergies.'"

Gerber’s prior denials by the FDA

In 2005, the FDA denied Gerber's attempt to use the following "qualified health claim": "emerging clinical research in healthy infants with a family history of allergy shows that feeding a 100% Whey-Protein Partially Hydrolyzed formula may reduce the risk of common food allergy symptoms, particularly allergic skin rash." The FDA concluded, "no credible evidence to support the qualified health claim relating consumption of 100 percent partially hydrolyzed whey protein in infant formula to a reduced risk of food allergy." The FDA then rebuked Gerber's subsequent attempt to petition for the use of a similarly qualified health-claim. It accused Gerber of "mischaracterizing evidence." The FDA followed up with a warning letter calling out Gerber's unauthorized health-related allergy claims. In addition to FDA action, the FTC and three civil plaintiff sued Gerber for this issue. 

Based on Gerber’s history, the plaintiffs alleged two deceptive representations:

1. that the Infant Formula reduces the risk that infants will develop allergies,
2. that the Infant Formula meets the criteria for an FDA qualified health claim for atopic dermatitis.

The court held that the plaintiffs plausibly alleged consumer-deception claims under Pennsylvania and Wisconsin law. The FDA acknowledged that “Defendant's labeling and website both stated that there was “limited evidence” that partially hydrolyzed whey protein can reduce the risk of infants developing atopic dermatitis...” The “defendant's qualified health claim is misleading because it did not include the qualifying statement.”

The plaintiffs also adequately alleged that the allergy reduction claim is literally false because it "is contradicted by all of the credible scientific evidence." The court rejected Gerber’s defense of primary jurisdiction by the FDA because the “false advertising claims do not involve technical considerations within the particular expertise of either the FDA or the FTC.” The FDA’s regulatory authority over infant formula does not automatically invoke primary jurisdiction. There was no ongoing investigation by the FTC, and no potential tension between courts that would justify primary jurisdiction.

Nor did "these allegations suggest a [mere] lack-of-substantiation claim. See Horizon Organic Milk, 955 F. Supp. 2d at 1344 (because the plaintiffs alleged that "competent scientific evidence" contradicted the defendant's representations, the plaintiffs were not alleging a lack-of-substantiation claim); Toback, 2013 WL 5206103, at *3 (the plaintiff did not allege a lack-of-substantiation claim where he "alleged that scientific evidence existed to contradict the defendants' representations and demonstrate their falsity"). Hasemann v. Gerber Products Co., 15-CV-2995 (MKB), 2016 WL 5477595, at *3 (EDNY Sept. 28, 2016).

Side Note: What is a "qualified health claim"?

A "health claim" is "any claim made on the label or in labeling of a food ... that expressly or by implication ... characterizes the relationship of any substance to a disease or health-related condition." 21 C.F.R. § 101.14(a)(1). The FDA may approve a "health claim" or a "qualified health claim" about products under certain circumstances. Any health claim must be reviewed and approved by the FDA under the standard of "significant scientific agreement."

Occasionally, the FDA will permit a "qualified health claim" if it is supported by less scientific evidence. If approved, the FDA issues "a letter outlining the circumstances under which it intends to consider exercising its enforcement discretion not to challenge the qualified health claim." See generally Fleminger, Inc. v. US Dep't of Health & Human Servs., 854 F. Supp. 2d 192, 200 (D. Conn. 2012) (explaining the FDA's process for analyzing and approving qualified and unqualified health claims).

No injury was alleged by the purchase of Sour Patch candy that contained "slack-fill" (unnecessary space)

2016:   In a "slack-fill" case, the plaintiffs claimed that a box of Sour Patch Candy could hold double the pieces it contained: 50 pieces versus 28. As such, the plaintiffs paid a premium price of $4.29 at an AMC movie theater. NYGBL § 349 broadly covers misbranding and has also "been interpreted to claims for excessive slack-fill." See Mennen Co. v. Gillette Co., 565 F. Supp. 648, 655 (S.D.N.Y. 1983). New York has a misbranding statute: "Food shall be deemed to be misbranded if "its container is so made, formed, colored or filled as to be misleading." N.Y. Agric. & Markets Law § 201-a. But this case failed because the plaintiff did not allege an injury, such as paying a higher price because of the slack-fill. New York does not permit the "flawed deception as injury" theory, which requires a discrete injury aside from the purchase. The court rejected the defendant's argument that "food packaging cannot be materially misleading so long as it displays the net weight and lists the number of pieces inside of the package." But given the plaintiff's failure to plead a cognizable injury, the case was dismissed.

Izquierdo v. Mondelez Intl., Inc., 16-CV-04697 (CM), 2016 WL 6459832, at *3 (S.D.N.Y. Oct. 26, 2016).

Sidenote: What is "slack-fill"?

Slack-fill is the difference between a container's actual capacity and the product volume it contains. It refers to the space or air intentionally left in a package for various reasons, such as protecting the contents from damage during transportation, accommodating the manufacturing process, or providing space for labeling, instructions, or other required information.

While some slack-fill is necessary and unavoidable, excessive slack-fill can mislead consumers, creating the impression that the package contains more product than it actually does. Various laws and regulations have been implemented to address this issue, requiring that slack-fill be minimized or justified by a legitimate functional purpose.

More legal holdings in Izquierdo v. Mondelez Intl., Inc.:

• An unjust enrichment claim is unavailable where it simply duplicates or replaces a conventional contract or tort claim." Corsello v. Verizon New York, Inc., 18 N.Y.3d 777, (2012). However, an unjust enrichment claim cannot remedy the defects if a plaintiff's other claims are defective. Id.
• To adequately plead fraud based on misrepresentation:
  1. the defendant represented or omitted a material fact;
  2. the representation was false;
  3. the defendant knew that it was false and made it intending to deceive the plaintiff;
  4. the plaintiff believed the representation to be true and justifiably acted in reliance on it and was deceived; and
  5. the plaintiff was injured. See Kerusa Co. LLC v. W10Z/515 Real Estate Ltd. P'ship, 12 N.Y.3d 236, (2009).
• To state a claim for negligent misrepresentation:
  1. the defendant had a duty, as a result of a special relationship, to give correct information;
  2. the defendant made a false representation that they should have known was incorrect;
  3. the information supplied in the representation was known by the defendant to be desired by the plaintiff for a serious purpose;
  4. the plaintiff intended to rely and act upon it; and
  5. the plaintiff reasonably relied on it to their detriment.

A failure to disclose an inferior material in a minivan’s tire-pressure system could amount to a deceptive omission under NYGBL § 349

2016:   The plaintiff alleged that a car dealer failed to disclose a latent defect in materials used in the valve step of the tire pressure monitoring system (TPMS) on certain minivans. The TPMS measures the air pressure in the tires and reports low pressure to the driver. The plaintiff pointed to reports and the defendant’s e-mail acknowledging that “it is common for stress corrosion cracking to go undetected prior to devastating and unexpected failure because the metal appears shiny but contains microscopic cracks.” The e-mail exposed that “Defendant contemplated communication of these findings to the consumers, noting that ‘some additional unknown action by the customer might be required to reduce the likelihood of future breakage.’” These facts were enough to rebut the defendant’s general “corrosion” argument. It was conceivable that the “defendant's failure to disclose that it manufactured vehicles with inferior material causing undetectable cracks led to devastating and unexpected failure.” For summary judgment, the defendant did not establish that this material defect was “fully disclosed” or “public knowledge.” Regarding the materiality of the defect in consumer decision-making, the court looked to case law interpreting Section 5 of the Federal Trade Commission Act (FTCA). Essentially, material information affects choice or conduct related to the product. Matters “involving safety, cost, durability, performance, or quality are presumed material under the FTCA and, therefore, material here. Tomassini v. FCA US LLC, 314CV1226MADDEP, 2016 WL 11707888, at *7 (N.D.N.Y. Nov. 23, 2016).

Additional law cited in Tomassini v. FCA US LLC:

• General Business Law § 349 is a “broad, remedial statute designed to address ‘the numerous, ever-changing types of false and deceptive business practices which plague consumers.” Braynina v. TJX Cos. (S.D.N.Y. Sept. 26, 2016) (quoting Karlin v. IVF Am., Inc., 93 N.Y.2d 282, 291 (1999)) (“The statute seeks to secure an honest marketplace where trust, and not deception, prevails.”)
• Consumer-oriented conduct encompasses acts or practices that “have a broad impact on consumers at large; private contract disputes unique to the parties are not covered N.Y. Univ. v. Cont'l Ins. Co., 87 N.Y.2d 308, 320 (1995).
• Although a business is not required to cater to every consumer’s unique needs, it may not withhold material information that the company alone possesses—even without a special relationship between the parties.
• “General Business Law § 349 does not define the term material, but the statute is modeled after Sections 5 and 12 of the Federal Trade Commission Act, which also requires a materially misleading statements.” See Bildstein v. Matercard Int'l Inc., 329 F. Supp. 2d 410, 414 (S.D.N.Y. 2004); Oswego, 85 N.Y.2d at 26 (establishing an objective test to determine a materially misleading act to complement the definition applied by the Federal Trade Commission to its antifraud provision).
• A plaintiff must prove ‘actual’ injury to recover under § 349, though not necessarily financial harm. Stutman, 95 N.Y.2d at 29.
• “Although the product [at issue] itself is the best and most conclusive proof,’ ... where the product is missing or no longer exists, the manufacturer's identity may be shown by circumstantial evidence.” Paniagua v. Walter Kidde Portable Equip., Inc., (S.D.N.Y. Apr. 27, 2016) (quoting Healey v. Firestone Tire & Rubber Co., 87 N.Y.2d 596, 601 (1996)). The circumstantial evidence must establish that it is reasonably probable – not merely possible or evenly balanced – that the defendant was the manufacturer of the defective product.”

Consumers plausibly alleged that Staple's "Carry-in Protection Plan" is deceptive in scope

2015:   At issue was Staple's denial of computer services with the purchase of a manufacturer's warranty ("Carry-in Protection Plan"). The plan excluded Staple's responsibility to service the computers until the manufacturer's warranty expired, argued Staples. But reasonable consumers could interpret the plan to include Staple's promise to service the computers during the first year. The ambiguities of the plan were "numerous and complex," held the court. Consumers could reasonably believe they would not have to deal with the manufacturer. As such, the plaintiffs adequately alleged breach of contract and deceptive business practices under GBL §§349 or 350. Not having received what they thought was the "full value" of Staple's promise, the plaintiff alleged an injury. Reliance is not an element of either GBL §§349 or 350 because of the uniform nature of the tests for each held the court. Orlander v. Staples, Inc., 802 F.3d 289 (2d Cir. 2015).

"Total 0%" on Greek yogurt lacked clarification and was arguably deceptive under New York law

2015:   In 75,000 retail outlets in over thirty-five countries, Fage Dairy sells plain and fruit-flavored yogurt emblazoned with "Total 0%." The plaintiffs alleged that "Total 0%" yogurt implies that it lacks "sugar, carbohydrates, calories, or other ingredients...that consumers believe to be unhealthy." Fage Dairy allegedly copies the playbooks of "Coke Zero and Pepsi Max, which prominently feature 'Zero' or '0' on their packaging to signify that these products are sugar, calorie and carbohydrate free." The plaintiffs point out that competing yogurts that advertise "0%" marketing clarify that it refers to fat content.

The word "Total" in front of "0%" reasonably communicates the absence of other things besides fat, held the court. The Nutrition Facts label does not automatically dispel any confusion. Ackerman and Williams v. Gerber persuaded the court that the "Nutrition Facts do not, as a matter of law, foreclose the possibility that a reasonable consumer would likely be misled by Defendants' Total 0% Products." The plaintiffs' consumer-deception claims survived a dismissal motion. Stoltz v. Fage Dairy Processing Indus., S.A., 14-CV-3826 M.K.B., 2015 WL 5579872, at *22 (E.D.N.Y. Sept. 22, 2015).

Additional law cited in Stoltz v. Fage Dairy Processing Indus., S.A.:

• "The presence of a nutritional panel, though relevant, does not as a matter of law extinguish the possibility that reasonable consumers could be misled by [the defendant] 's labeling and marketing." Ackerman v. Coca–Cola Co., No. 09–CV–0395, 2010 WL 2925955, at *16 (E.D.N.Y. July 21, 2010).
• “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 v. Gerber Prods. Co., 552 F.3d 934, 937–39 (9th Cir.2008).
• “As the Honorable Jack Weinstein has recognized, ‘a federal trial judge, with a background and experience unlike that of most consumers, is hardly in a position to declare’ that reasonable consumers would not be misled.” Verizon Directories Corp. v. Yellow Book USA, Inc., 309 F.Supp.2d 401, 407 (E.D.N.Y.2004) (noting that resolution of the issue may require “surveys, expert testimony, and other evidence of what is happening in the real world”).
• To state a claim for negligent misrepresentation under New York law a plaintiff must allege that:
  • (1) the defendant had a duty, as a result of a special relationship, to give correct information;
  • (2) the defendant made a false representation that he or she should have known was incorrect;
  • (3) the information supplied in the representation was known by the defendant to be desired by the plaintiff for a serious purpose;
  • (4) the plaintiff intended to rely and act upon it; and
  • (5) the plaintiff reasonably relied on it to his or her detriment. Stoltz v. Fage Dairy Processing Indus., S.A., 14-CV-3826 MKB, 2015 WL 5579872, at *23 (E.D.N.Y. Sept. 22, 2015).
• "Unjust enrichment is available:
  • only in unusual situations when, though the defendant has not breached a contract nor committed a recognized tort, circumstances create an equitable obligation running from the defendant to the plaintiff. Typical cases are those in which the defendant, though guilty of no wrongdoing, has received money to which he or she is not entitled." Stoltz v. Fage Dairy Processing Indus., S.A., 14-CV-3826 MKB, 2015 WL 5579872, at *26–27 (E.D.N.Y. Sept. 22, 2015).

Plaintiffs must produce accurate versions of the advertisements at issue

2013:   A class of internet subscribers unsuccessfully sued Time Warner for allegedly misrepresenting the speed of its "Road Runner" internet service. The plaintiffs took issue with the "always-on connection" that operated at "faster speeds than other services." But the "sole advertisement" submitted supporting the plaintiffs' case was "materially inconsistent" with their complaint. The submitted advertisement was dated nine months after the plaintiffs filed suit and contained only one of the four misstatements alleged in the complaint. The court ruled that the plaintiffs may not "misquote or misleadingly excerpt the language of the advertisement." The court dismissed the complaint because it lacked "facial plausibility." Fink v. Time Warner Cable, 714 F.3d 739 (2d Cir. 2013).

Other holdings in Fink v. Time Warner Cable:

• The primary evidence in a false advertising case is the advertising itself, and context is crucial when determining whether a particular advertisement would have misled a reasonable consumer.
• A disclaimer or similar clarifying language may defeat a claim of deception. See, e.g., Freeman, 68 F.3d at 289–90 ("upholding the dismissal of a challenge to a sweepstakes mailer where the mailer explicitly stated that the plaintiff would win only if he had the winning number"); Broder v. MBNA Corp., 722 N.Y.S.2d 524 (1st Dep't 2001) ("There can be no section 349(a) claim when the allegedly deceptive practice was fully disclosed.").

Justifiable reliance on a false-advertising claim is not required under NY law

2012:   To successfully assert a claim under General Business Law § 349(h) or § 350, a “plaintiff must allege that a defendant has engaged in (1) consumer-oriented conduct that is (2) materially misleading and that (3) plaintiff suffered injury as a result of the allegedly deceptive act or practice.” Reversing the Appellate Division, the Court of Appeals held that “justifiable reliance was not an element of buyer’s claims for deceptive acts and practices, and false advertisement.” Furthermore, the disclaimer “as is” relating to vintage wine did not foreclose the claims. Koch v. Acker, Merrall & Condit Co., 967 N.E.2d 675, 675 (N.Y. 2012).

Hewlett-Packard's half-ink cartridges were not materially misleading

2002:   The practice of including economy-size cartridges (half-ink) with printers sold was not misleading. The plaintiffs provided no evidence that Hewlett Packard made any representation as to its cartridges’ ink volume. Nor did the plaintiffs establish that they “relied upon or were aware of the allegedly false advertisement when purchasing the printers.” The plaintiff’s lack of alleged false representation also sunk its fraud claim. The case was dismissed. Andre Strishak & Associates, P.C. v. Hewlett Packard Co., 752 N.Y.S.2d 400 (N.Y. App. Div. 2d Dept. 2002).

A bank fee for processing a mortgage refinance was not a deceptive prepayment charge

2000:   A $275.00 attorney fee for refinancing a homeowner's loan did not constitute a deceptive practice under General Business Law § 349. The plaintiffs did not prove the fee was a "prepayment charge in disguise." The note was ruled not deceptive. The plaintiffs abandoned their earlier argument that the attorney fee was unnecessary and, therefore, excessive. The complaint was dismissed.

The lower court erred, however, in imposing a "justifiable reliance" requirement present in a fraud theory. The plaintiffs were "not required to allege that they would not otherwise have entered into the transaction." The fee need not have "any effect on their decision to borrow in the first place." The $275.00 could be pled as a hidden loss, sufficient to allege an independent injury. Stutman v. Chem. Bank, 731 N.E.2d 608 (N.Y. 2000).

Additional law cited in Stutman v. Chem. Bank:

• "A deceptive practice need not reach the level of common-law fraud to be actionable under the statute."
• A plaintiff must prove an "actual injury" but not necessarily pecuniary harm.
• While "reliance" is not an element of NYGBL § 349, an injury is. The "material deceptive act" must cause an injury. Reliance and causation are twin concepts but not identical.
• In Stutman, the Court of Appeals noted, "the Appellate Division has occasionally applied the incorrect standard in GBL § 349 cases, imposing a reliance requirement when in fact there is none." In re Toyota Motor Corp., (C.D. Cal. May 4, 2012).
• In 1980, the Legislature added 349(h) to permit private citizens to sue for deceptive trade practices.

Deceptively marketed cigarettes without an independent injury other than a purchase did not state a claim under NYGBL § 349

1999:   A class of consumers sued a group of cigarette manufacturers for deceiving them about the addicting properties of cigarettes and for fraudulently inducing them to continue to smoke them. Fatal to the plaintiffs’ case was their lack of allegations about how deception affected the cost of the cigarettes or caused injury or addiction. As to pleading an injury, a plaintiff must allege more than the deprivation of “informed choices” that lead to a duped purchase. Although an injury need not be monetary under GBL § 349, some injury must flow from the materially deceptive act or omission. Small v. Lorillard Tobacco Co., Inc., 720 N.E.2d 892 (NY 1999).

Additional law cited in Small v. Lorillard Tobacco, Inc.:

• Intent to defraud and justifiable reliance are not elements of NYGBL § 349.
• Generally, claims under GBL § 349 are available to consumers who fall victim to misrepresentations made by a seller of consumer goods through false or misleading advertising. Genesco Entertainment v. Koch, 593 F.Supp. 743, 751 (SDNY 1984).
• To assert a fraud claim, a plaintiff must allege (a) a representation of material fact, (b) falsity, (c) scienter, (d) reliance, and (e) injury. See Vermeer Owners v. Guterman, 78 N.Y.2d 1114. The circumstances of the fraud must be stated in detail (CPLR 3016[b]).

False advertising claims against an In vitro fertilization company may proceed

1999:  Patients sued a marketer of in vitro fertilization (IVF) services for exaggerating success rates of pregnancies. The FTC had declared the advertisements deceptive and compelled the defendant to refrain from using them. Private plaintiffs sued for the same activity the following year. General Business Law § 349(a) and § 350 are “equally broad” to cover deceptive business practices and false advertising. These statutes are “powerful tools” to “combat fraud in health care and medical services.” The statutes apply to “virtually all economic activity.” Advertising is “false” if it “is misleading in a material respect.” The lower court erred in framing the theory solely under Public Health Law § 2805-d, which limits rights in cases claiming a lack of informed consent. But this case was about advertising. The “defendant’s mult-media dissemination of information to the public is precisely the sort of consumer-oriented conduct that is targeted by GBL§ 349(a) and § 350.” New York objectively defines deceptive acts and practices, by representation or omission, as those “likely to mislead a reasonable consumer acting reasonably under the circumstances.” Karlin v. IVF Am., Inc., 712 N.E.2d 662, 664 (N.Y. 1999).

"Vanishing premiums" in insurance contracts were possibly deceptive but not fraudulent

1999:   Insurance policyholders made viable deception claims against an insurer for deceptive "vanishing premiums" that never vanished. "Defendants made vanishing dates the centerpiece of their sales presentations." Although this practice could fall within NYGBL § 349, the defendant used disclaimers that rebutted an integral element of fraud—misrepresentation or material omission. Gaidon v. Guardian Life Ins. Co. of Am., 725 N.E.2d 598, 607 (N.Y. 1999).

Complaint over concealed defects in car brakes adequately pled deception, but not fraud, false advertising, or negligent misrepresentation

1996:   Concerning defective car brakes that were only fixed by complaining consumers, the court ruled:

1. The plaintiffs adequately pled a deceptive practice under NYGBL § 349.
2. The plaintiffs did not adequately plead false advertising under NYGBL § 350 because there was "no showing that any plaintiff relied upon or knew about defendant's allegedly false advertisements when the cars were purchased."
3. The plaintiffs did not adequately plead fraud "with respect to how any plaintiff was induced to purchase the car by representation or omission on part of defendant."
4. The plaintiffs did not adequately plead negligent misrepresentation because they did not "allege any particular contact with defendant or that defendant had any knowledge of their identities so as to create a relationship that approaches contractual privity." "Contact was made when defendant took out advertisements that allegedly were deceptive. However, this kind of mass communication cannot establish privity with unidentified members of public."
5. The plaintiffs did not adequately plead breach of express warranty because the "plaintiffs neither pleaded failure or repair within terms of relevant written warranties nor identified any affirmation, description or promise by defendant which became part of basis of bargain." McGill v. Gen. Motors Corp., 647 N.Y.S.2d 209 (N.Y. App. Div. 1st Dept. 1996).

Bank's dealings with non-profits' pension investments declared "consumer-oriented"

1995:   In a banking relationship, the issue is whether a bank's alleged deception for capping interest payments to non-profits' union representatives was "consumer-oriented" under NYGBL § 349. Yes, held the court. "Consumer-oriented conduct does not require a repetition or pattern of deceptive behavior." The court continued, "legislative history makes plain that this law was intended to "afford a practical means of halting consumer frauds at their incipiency without the necessity to wait for the development of persistent frauds" (see, Mem. of Governor Rockefeller 1970 N.Y.Legis.Ann., at 472–473). The question is whether the "acts or practices have a broader impact on consumers at large." Private contracts disputes or single-shot transactions are not covered.

In its research, the court noted that the "Governor's Memorandum approving the bill (L.1970, ch. 43) lauds its consumer-protective purpose:

"Consumers have the right to an honest market place where trust prevails between buyer and seller. The power to obtain injunctions against any and all deceptive and fraudulent practices will be an important new weapon in New York State's long standing efforts to protect people from consumer frauds" (Mem of Governor Rockefeller, 1970 N.Y.Legis.Ann., at 472).

Applying § 349 here, the court noted:

1. The bank "dealt with plaintiffs' representative as any customer entering the bank to open a savings account";
2. The bank "furnished funds with standard documents presented to customers upon the opening of accounts"; and
3. "The account openings were not unique to these two parties, nor were they private or a 'single shot transaction.'"

Other law cited in Oswego Laborers' Loc. 214 Pension Fund v. Marine Midland Bank, N.A.:

• The law prevents a "tidal wave of litigation by adopting "an objective definition of deceptive acts and practices, which would likely mislead a reasonable consumer acting reasonably under the circumstances."
• Such a test, which may be determined as a matter of law or fact (as individual cases require), complements the definition applied by the Federal Trade Commission to its antifraud provision (15 U.S.C. § 45) upon which the New York statute is modeled (Givens, Practice Commentaries, McKinney's Cons. Laws of N.Y., Book 19, General Business Law § 349, at 565; Note, op. cit., 48 Brook L.Rev. 509, 520). Oswego Laborers' Loc. 214 Pension Fund v. Marine Midland Bank, N.A., 647 N.E.2d 741 (N.Y. 1995).

Several critical points arise from this overview:

1. Scope and Breadth: GBL §§ 349 and 350 are expansive, addressing a wide range of deceptive practices. They're designed to ensure businesses operate transparently and fairly, safeguarding the trust between consumers and sellers.
2. Consumer Protection: These laws empower both the Attorney General and private plaintiffs to take action, ensuring a dual layer of oversight and accountability. This ensures that consumers have a direct means of redress while also allowing for broader state-level interventions when necessary.
3. Details Matter: From the specific requirements for stating a claim to the nuances of how and when a claim can be made, it's evident that every detail matters. This includes the preservation of evidence, understanding the statute of limitations, and being aware of potential legal defenses.

In conclusion, New York's approach to false advertising is both robust and intricate, reflecting the state's commitment to protecting its consumers. 

Contact us with any questions about false advertising.