Opinion
23-CV-8866 (VEC)
07-30-2024
YONNETTE DAVIS, individually and on behalf of all others similarly situated, Plaintiff, v. SCHWAN'S CONSUMER BRANDS, INC., Defendant.
OPINION & ORDER
VALERIE CAPRONI, UNITED STATES DISTRICT JUDGE:
Plaintiff, Yonnette Davis, brings this putative class action against Schwan's Consumer Brands, Inc. for alleged violations of New York General Business Law (“NYGBL”) §§ 349 and 350 and common law fraud. See Compl., Dkt. 1. Plaintiff alleges that Defendant misled her and other consumers into believing that the predominant or exclusive shortening in the crust of “Mrs. Smith's® Original Flaky Crust Dutch Apple Pie” (the “Product”) is butter as opposed to palm oil. See id. ¶¶ 88-89. Defendant moved to dismiss Plaintiff's claims. See Mot., Dkt. 11. For the following reasons, Defendant's motion is GRANTED.
BACKGROUND
Plaintiff purchased the Product multiple times between November 2019 and October 2023. Compl. ¶ 84. Labels on the box in which the Product is sold include the phrases “Flaky Crust” and “Made with Real Butter,” next to an image of “two pats of butter”:
(Image Omitted) Id. ¶ 1. The ingredients listed on the side of the box reveal that the crust does, in fact, contain butter:
(Image Omitted) Id. ¶ 39. Butter is listed as part of a “Shortening Butter Blend.” Id. That blend contains more palm oil than butter. See id. (listing palm oil before butter); see also id. ¶ 27 (alleging that ingredients are required to be listed in order of predominance by weight).
Plaintiff alleges that the representations on the box deceived her into believing that butter was the predominant or exclusive shortening in the pie crusts. See id. ¶¶ 40-42. Plaintiff further contends that, had she known butter was not the predominant shortening, she would have paid less because crusts using vegetable oil are lower quality, less flaky, and provide less nutritional value. Id. ¶¶ 60, 107.
On October 9, 2023, Plaintiff filed a Class Action Complaint against Defendant. See Id. As is now relevant, she sued Defendant for deceptive representations under NYGBL §§ 349 and 350 and fraud. See id. On February 6, 2024, Defendant moved to dismiss the Complaint, arguing that Plaintiff's claims are preempted by federal law or, alternatively, that she has failed to state a claim. See Def. Mem., Dkt. 12.
The Complaint includes claims for false and misleading labeling under the Agriculture and Markets Law §§ 201(1) and 199-a and unjust enrichment. Plaintiff has withdrawn those claims. See Opp., Dkt. 14 n.1; see also Def. Reply, Dkt. 15 at 1. The Court will dismiss those claims without prejudice.
DISCUSSION
I. Legal Standard
To survive a motion to dismiss under Rule 12(b)(6), “a complaint must allege sufficient facts, taken as true, to state a plausible claim for relief.” Johnson v. Priceline.com, Inc., 711 F.3d 271, 275 (2d Cir. 2013) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007)). “Although for the purposes of a motion to dismiss we must take all of the factual allegations in the complaint as true, we ‘are not bound to accept as true a legal conclusion couched as a factual allegation.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555).
“[A] complaint does not need to contain detailed or elaborate factual allegations, but only allegations sufficient to raise an entitlement to relief above the speculative level.” Keiler v. Harlequin Enters., Ltd., 751 F.3d 64, 70 (2d Cir. 2014).
II. Plaintiff's Claims Are Not Preempted.
Defendant argues Plaintiff's claims about the “Made with Real Butter” label are expressly preempted by the preemption clause of the Federal Food, Drug, and Cosmetic Act (“FDCA”). Def. Mem. at 5. It further argues that any claims relating to Defendant's use of the ingredient “Shortening Butter Blend” are preempted by federal law. Id. at 8. Although the party asserting that preemption applies bears the burden of establishing such preemption, see Reyes v. Upfield, 694 F.Supp.3d 408, 426 (S.D.N.Y. 2023), Defendant does not identify either the type of preemption that purportedly bars these claims nor the specific federal provision that it contends governs, Def. Mem. at 8.
There are three types of preemption: express, field, and conflict preemption. See N.Y. State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 654 (1995) (“Our past cases have recognized that the Supremacy Clause, U.S. Const., Art. VI, may entail pre-emption of state law either by express provision, by implication, or by a conflict between federal and state law.” (citation omitted)). Express preemption applies when Congress uses explicit language to demonstrate its intent to preempt state law. Koenig v. Boulder Brands, Inc., 995 F.Supp.2d 274, 282-83 (S.D.N.Y. 2014). Field preemption applies to state law claims that regulate a field Congress intended to be occupied exclusively by federal law. Id. Finally, conflict preemption applies when a state law “directly conflicts” with a specific federal law. Id. Courts presume state law claims relating to states' historic police powers are not preempted by federal law unless that is the “clear and manifest purpose of congress.” Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996) (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947)).
The FDCA, as amended by the Nutrition Labeling and Education Act, Pub. L. No. 101535, 104 Stat. 2353 (1990) (the “NLEA”), contains an express preemption clause:
[N]o State or political subdivision of a State may directly or indirectly establish under any authority or continue in effect as to any food in interstate commerce . . . any requirement respecting any claim of the type described in section 343(r)(1) of this title made in the label or labeling of food that is not identical to the requirement of section 343(r) of this title, except a requirement respecting a claim made in the label or labeling of food which is exempt under section 343(r)(5)(B) of this title.21 U.S.C. § 343-1(a)(5). In short, state laws regarding nutrient content claims - the type of claim described in section 343(r)(1) - are preempted if they impose labeling requirements different from those in the federal law. Clemmons v. Upfield US, Inc., 667 F.Supp.3d 5, 14 (S.D.N.Y. 2023).
The FDCA's express preemption clause does not apply to Plaintiff's challenge to the statement “Made with Real Butter” because the statement is not a “nutrient content claim.” See id. at 13 (“[T]he [c]omplaint does not allege that the label makes an implied nutrient content claim, and [the FDCA] accordingly does not preempt the state law claims.”); Reyes, 694 F.Supp.3d at 427-28 (holding that because the contested label made no nutrient claim, plaintiff's state law claim was not preempted); 21 C.F.R. § 101.65 (defining nutrient content claim). Food and Drug Administration (“FDA”) regulations explicitly state that the phrase “made with real butter” is “generally not [an] implied nutrient content claim[].” 21 C.F.R. § 101.65(b)(3). Because the challenged statement is not a nutrient content claim, Plaintiff's claims are not covered by section 343(r)(1) of the FDCA and, therefore, are not expressly preempted.
Separately, Defendant argues that any challenge to its use of the compound ingredient “Shortening Butter Blend” is preempted, but Defendant has not specified which section of the FDCA or the FDA's implementing regulations is inconsistent with state law. See Def. Mem. at 8. To establish express preemption under the FDCA, a defendant must explain how the state law claim is different from or imposes additional obligations to a specific FDCA provision. See, e.g., In re PepsiCo, Inc., Bottled Water Mktg. & Sales Pracs. Litig., 588 F.Supp.2d 527, 537 (S.D.N.Y. 2008) (preemption barred plaintiff's claims because they specifically conflicted with section 343(g)); Ackerman v. Coca-Cola Co., No. 09-CV-0395 (JG), 2010 WL 2925955, at *8 (E.D.N.Y. July 21, 2010) (preemption barred plaintiff's claim because they specifically conflicted with section 343(r)(1)). To show conflict preemption, state law must “directly conflict[] with federal law.” Koenig, 995 F.Supp.2d at 283. Defendant has not identified an inconsistent obligation or conflict imposed by Plaintiff's claim. Def. Mem. at 8. That leaves only field preemption. For field preemption to apply, Defendant would need to show that the FDCA is a field “Congress intended the federal government to occupy exclusively.” Koenig, 995 F.Supp.2d at 283. Because “[t]he FDCA's stated purpose of promoting public policy by retaining parallel avenues for private and public enforcement actions against false or misleading statements, suggests that its preemptive power should be construed narrowly,” see Jackson-Mau v. Walgreen Co., 652 F.Supp.3d 349, 356 (E.D.N.Y. 2023) (quotation omitted), it is unlikely Congress intended to exclusively occupy this field.
In short, Defendant has failed to meet its burden of establishing that Plaintiff's claims are preempted.
III. The Complaint Fails to State a Claim For Deceptive Practices and False Advertising Under NYGBL §§ 349 and 350.
To state a claim under NYGBL §§ 349 and 350, Plaintiff must show that “(1) the challenged transaction was ‘consumer-oriented'; (2) defendant engaged in deceptive or materially misleading acts or practices; and (3) plaintiff was injured by reason of defendant's deceptive or misleading conduct.” Myers v. Wakefern Food Corp., No. 20-CV-8470 (NSR), 2022 WL 603000, at *3 (S.D.N.Y. Mar. 1, 2022) (citation omitted).
A. NYGBL §§ 349 and 350 Require Plaintiff to Allege Conduct Likely to Mislead Reasonable Consumers.
A deceptive or materially misleading act is one that is “likely to mislead a reasonable consumer acting reasonably under the circumstances.” Id. at *3 (citation omitted). Courts may determine as a matter of law that the alleged deception does not meet this standard. Fink v. Time Warner Cable, 714 F.3d 739, 741 (2d Cir. 2013) (“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.”). Courts must “consider the challenged advertisement as a whole, including disclaimers and qualifying language.” Mantikas v. Kellogg Co., 910 F.3d 633, 636 (2d Cir. 2018). In other words, “context is crucial.” Id. (citation omitted).
When a product's packaging highlights the presence of a primary ingredient, it may be misleading for the product to contain less of that primary ingredient than alternatives. See id. at 638. In Mantikas, for example, the Second Circuit reviewed claims that the “Made with Whole Grain” label on Cheez-Its packaging was deceptive because it misled consumers to believe that whole grain made up most or all of the crackers' grain content; instead, the grain was predominantly enriched white flour. Id. at 635. Because grain was the “primary” ingredient in the Cheez-Its, the label was misleading because the product contained more white enriched flour than whole grain. See id. at 638-39; see also Venticinque v. Back to Nature Foods Co., LLC, No. 23-1236-CV, 2024 WL 3385136, at *2 (2d Cir. July 12, 2024) (where the “prominently-mentioned ingredient” is “obviously . . . the product['s] primary ingredient,” it is reasonable for consumers to believe that the ingredient predominates).
Mantikas has been distinguished frequently by District Courts in this Circuit. See Pichardo v. Only What You Need, Inc., No. 20-CV-493 (VEC), 2020 WL 6323775, at *4 (S.D.N.Y. Oct. 27, 2020) (distinguishing Mantikas because the featured ingredient, vanilla, is both a flavor and ingredient and the type of vanilla used is not healthier than alternative sources, unlike the whole grain at issue in Mantikas which contains more nutrients than alternatives); Harris v. Mondelez Glob. LLC, No. 19-CV-2249 (ERK), 2020 WL 4336390, at *3 (E.D.N.Y. July 28, 2020) (distinguishing Mantikas because “[t]he crux of Plaintiffs' claim [was] not that the label misrepresent[ed] the quantity or proportion of cocoa”); Beers v. Mars Wrigley Confectionery US, LLC, No. 21-CV-2 (CS), 2022 WL 493555, at *5 (S.D.N.Y. Feb. 17, 2022) (distinguishing Mantikas because the plaintiff did not allege that he expected the featured ingredient to be the product's predominant ingredient; instead, he alleged that he expected it to be the exclusive ingredient); Kennedy v. Mondelez Glob. LLC, No. 19-CV-302 (ENV) (SJB), 2020 WL 4006197, at *11 (E.D.N.Y. July 10, 2020) (noting that the product labels “fall a step short of those at issue in Mantikas” because the product did not state that it was “made with” the relevant ingredient), R. & R. adopted by text only entry Sept. 17, 2020.
The Mantikas rule does not apply to statements about ingredients that are not primary. See 910 F.3d at 638 (explicitly distinguishing cases where “plaintiffs alleged they were misled about the quantity of an ingredient that obviously was not the products' primary ingredient.”). When the statement features a secondary ingredient, it is not reasonable for consumers to expect the ingredient is present in any specific amount or in larger quantities than other ingredients. See id. (“That same consumer, confronted with the claim that a cracker is ‘made with real vegetables,' likely would not likely conclude that the cracker was made predominantly of vegetables.”); Kennedy v. Mondelez Global LLC, No. 19-CV-302 (ENV) (SJB), 2020 WL 4006197, at *13 (E.D.N.Y. July 10, 2020) (holding that the graham cracker label “Made with Real Honey” did not mislead consumers to expect more honey than sugar because honey is not a primary ingredient in graham crackers), R. & R. adopted by text only entry Sept. 17, 2020. But see, e.g., Campbell v. Whole Foods Mkt. Grp., Inc., 516 F.Supp.3d 370, 386-87 (S.D.N.Y. 2021) (calling for Mantikas to apply to non-primary ingredients).
B. Plaintiff Failed to Allege Adequately that a Reasonable Consumer Would Be Misled.
It was unreasonable for Plaintiff to interpret the statements on the box about butter, which is not the primary ingredient in either apple pie or pie crust, to mean that there was more butter in the crust than any other shortening. Plaintiff urges the Court to apply Mantikas to hold that she has adequately alleged a misrepresentation. See Opp., Dkt. 14 at 6. The Court is unpersuaded by Plaintiff's argument because the label in Mantikas featured a primary ingredient, whereas the label here does not. Mantikas, 910 F.3d at 638. The primary ingredient in a fruit pie filling is the fruit; the primary ingredient in a traditional pie crust is flour (or, if a graham cracker crust, the primary ingredient is graham cracker crumbs). Here, the Product's packaging might have been misleading if it stated “Made with Real Apples” but contained a de minimis amount of apples relative to artificial apple flavoring or some other fruit alternative. But the same reasoning does not extend to a secondary ingredient like butter as an ingredient of pie crust.
Defendant's use of “Shortening Butter Blend” on the ingredients list does not alter the analysis. “Shortening Butter Blend” in an ingredient list would not lead a reasonable consumer to believe that there is more butter in the pie crust than other shortening. This is particularly so because the contents of the blend are listed immediately following the ingredient name, and the list shows that the blend contains more palm oil than butter. See Compl. ¶ 39.
In short, Plaintiff has failed to allege adequately that a reasonable customer would be misled by the Product's labels. The fact that the label points to butter being an ingredient in the pie does not mean that butter is the primary ingredient of the pie. Further, the label does not state that butter is the predominant shortening ingredient in the pie crust, and the statement “Made with Real Butter” does not foreclose the use of other shortening ingredients in greater amounts. “Made with Real Butter” is a factually true and not misleading statement about Defendant's pies. Defendant's Motion to Dismiss the NYGBL claims is, therefore, GRANTED.
IV. Plaintiff Failed to State a Claim For Fraud.
“Where a consumer protection claim fails on [misrepresentation], so must a fraud claim.” Kennedy, 2020 WL 4006197, at *14 (citing Brumfield v. Trader Joe's Co., No. 17-CV-3239 (LGS), 2018 WL 4168956, at *5 (S.D.N.Y. Aug. 30, 2018)). Because Plaintiff's NYGBL claim fails on misrepresentation, her fraud claim is dismissed on the same grounds. See id.
Even if Plaintiff's NYGBL claims succeeded, her fraud claim would separately fail because she has not met Rule 9(b)'s heightened pleading standard. See Fed.R.Civ.P. 9(b); Dorris v. Danone Waters of Am., No. 22-CV-8717 (NSR), 2024 WL 112843, at *12 (S.D.N.Y. Jan. 10, 2024) (providing that the moving party must “plead the factual basis which give rise to a strong inference of fraudulent intent” (quoting Myers, 2022 WL 603000, at *7)). Judge Karas recently dismissed a fraud claim with nearly identical facts for failure to plead facts adequate to give rise to the requisite inference of fraudulent intent. See Reyes, 694 F.Supp.3d at 430 (“Plaintiff's sole allegation as to scienter is that [d]efendant ‘sold more of the [p]roduct and at higher prices than it would have in the absence of this misconduct, resulting in additional profits at the expense of consumers.'”). Fraudulent intent is not adequately alleged when the complaint alleges only a “failure to accurately identify the [p]roduct on the front label, when it knew its statements to be not true nor accurate”; such allegations are regularly found to be “conclusory” and “fall short of the Rule 9(b) standard.” Reyes, 694 F.Supp.3d at 430 (quoting Colpitts v. Blue Diamond Growers, 527 F.Supp.3d 562, 585 (S.D.N.Y. 2021)); see also Hesse v. Godiva Chocolatier, Inc., 463 F.Supp.3d 453, 472-73 (S.D.N.Y. 2020). Plaintiff's allegations here are similarly conclusory and insufficient to state a claim for fraud.
The plaintiff in that case brought a fraud claim based on the label on Country Crock's Plant Butter, which stated either “made with almond oil” or “with almond oil” next to pictures of almonds. Reyes, 694 F.Supp.3d at 415. Plaintiff alleged the label was misleading because there was only a negligible amount of almond oil in the butter. Id. at 416.
Plaintiff notes that Rule 9(b) allows scienter to be alleged generally, but this is of no moment. See Opp. at 14; Reyes, 694 F.Supp.3d at 418 (“[C]ourts ‘must not mistake the relaxation of Rule 9(b)'s specificity requirement regarding condition of mind for a license to base claims of fraud on speculation and conclusory allegations.'” (quoting Lerner v. Fleet Bank, N.A., 459 F.3d 273, 290 (2d Cir. 2006))).
V. Plaintiff Is Denied Leave to Amend.
Leave to amend a complaint should be “freely give[n] . . . when justice so requires.” Fed.R.Civ.P. 15(a). Courts may, however, deny leave to amend when amendment would be futile. See Martin v. Dickson, 100 Fed.Appx. 14, 16 (2d Cir. 2004). When, as a matter of law, a product's packaging is not misleading, amendment is futile. See, e.g., Kennedy, 2020 WL 4006197, at *15 (“Having failed to identify any misleading or deceptive statements, any amendment to [p]laintiffs' consumer protection claims would be futile.”). That is the case here. Any changes Plaintiff might make to her complaint will not alter the statements on the Product's packaging from 2019 through 2023 - the years during which Plaintiff allegedly purchased the Product. Because Plaintiff's NYGBL and fraud claims are both premised on a misleading statement or misrepresentation and the Product's packaging was not misleading at the time Plaintiff purchased it, Plaintiff is denied leave to amend.
CONCLUSION
Defendant's motion to dismiss is GRANTED. Plaintiff's claims under the NYGBL and for common law fraud are DISMISSED with prejudice. Plaintiff's claims under the Agriculture and Markets Law and for unjust enrichment are DISMISSED without prejudice.
The Clerk of Court is respectfully directed to terminate the open motion at Dkt. 11 and to close the case.
SO ORDERED.