Antitrust Law Daily Wrap Up, ADVERTISING—D.N.J.: Half-baked bread misrepresentation claims tossed, (Aug 27, 2015)

By Greg Hammond, J.D.

Bread and bakery product consumers failed to state false advertising claims against grocery store chains Wegmans Food Markets, Inc., Whole Foods Market Group, Inc., and ACME Markets, Inc., stemming from alleged signs or advertisements stating the products were “made in house” or “store baked.” The federal district court in Camden, New Jersey, consequently dismissed the New Jersey Consumer Fraud Act (CFA) and Truth-In-Consumer Contract Warranty and Notice Act (TCCWNA) claims (Mladenov v. Wegmans Food Markets, Inc., August 26, 2015, Irenas, J.).

Consumers Martchela Popova Mladenov, Mladen Mladenov, and Chan Mao filed suit against the three grocery store chains, alleging that the companies misrepresented that various bread and bakery products were baked fresh in store, when they were actually frozen, processed, or baked in another location by a different entity. The consumers assert that the grocery chains violated the CFA, the TCCWNA, and New Jersey law concerning express warranties. The grocery chains moved to dismiss.

Class claims. The court first struck the class claims, finding that the consumers failed to meet the certification requirements under Federal Rule of Civil Procedure 12(b)(2) or (3). Specifically, the court found that the instant class action was brought primarily for money damages, not injunctive relief, demonstrating that the plaintiffs could not obtain class certification under Rule 23(b)(2). In addition, the court found the class would not be ascertainable based on the grocery chains’ records, because: (1) the store records would not reflect that the purchased products were specifically advertised as baked in store or baked fresh at the time they were purchased and (2) store records would not identify cash purchasers of the products at issue.

CFA claims. The CFA claims also were dismissed for failure to allege unlawful conduct, an ascertainable loss, and causal relationship between the alleged unlawful conduct and loss. Specifically, the complaint failed to allege that the plaintiffs actually saw any particular sign containing the supposed misrepresentations, in which store the consumer saw the advertisements, or when plaintiffs saw an advertisement. The court could therefore not infer unlawful conduct. Second, the court could not quantify the plaintiffs’ alleged losses because the complaint lacked allegations concerning which products the plaintiffs purchased or the prices they paid for such products. Lastly, without factual allegations concerning which specific products plaintiffs purchased, whether the products were linked to specific signs or advertisements, and what those signs or advertisements stated, the court could not infer a link between an affirmative misrepresentation and an ascertainable loss.

The breach of express warranty, injunctive relief, and declaratory judgment claims were dismissed for similar reasons.

TCCWNA claims. The court granted the motion to dismiss the TCCWNA claims, which were brought under two theories: (1) an alleged violation of the plaintiffs’ rights under New Jersey’s CFA; and (2) an alleged violation of the plaintiffs’ rights under 21 C.F.R. § 101.95, a federal regulation issued pursuant to the Food, Drug and Cosmetics Act (FDCA). The court determined the motion to dismiss should be granted because the CFA claim failed and because the FDCA creates no private right of action.

The case is No. 15-00373-JEI-AMD, 15-00382-JEI-AMD, and 15-00618-JEI-AMD.

Attorneys: Aneliya M. Angelova (Angelova Law Firm, LLC) for Martchela Popova Mladenov. Angelo A. Stio, III (Pepper Hamilton LLP) for Wegmans Food Markets, Inc. David E. Sellinger (Greenberg Traurig, LLP) for Whole Foods Market Group, Inc. Christopher J. Dalton (Buchanon Ingersoll & Rooney PC) for ACME Markets, Inc.

Companies: Wegmans Food Markets, Inc.; Whole Foods Market Group, Inc.; ACME Markets, Inc.

Cases: Advertising NewJerseyNews