Antitrust Law Daily Wrap Up, ADVERTISING—E.D. Cal.: Claims that Conagra misled consumers in reducing quality of Smart Balance spread dismissed, (Apr 1, 2025)

By Patricia K. Ruiz, J.D.

The court found that the labeling explicitly listed the product’s ratio of vegetable oil to water.

The U.S. District Court for the Eastern District of California dismissed the claims of a consumer alleging that a butter substitute product was mislabeled in violation of California’s Consumer Legal Remedies Act, the Unfair Competition Law, and the False Advertising Law. The court found the consumer failed to correct deficiencies in her complaint in a previous dismissal (Elliot v. Conagra Brands, Inc., No. 2:23-cv-01417-DJC-AC (E.D. Cal. Mar. 28, 2025)).

Allegations. A consumer regularly used Conagra Brands, Inc.’s butter substitute sold under the brand name Smart Balance. The consumer alleged Conagra altered the ingredient ratios of its product Smart Balance Original spread, reducing its quality without adequately notifying consumers. Previously, the consumer’s original complaint was dismissed with leave to amend, and the consumer refiled a first amended complaint that advanced similar arguments.

Historically, Conagra manufactured Smart Balance Original with a composition of 65% vegetable oil and 32% water. During a two-month period in 2022, Conagra altered the composition to be approximately 39% oil and 57% water. A consumer purchased the product before and during the period when the composition changed to include more water and less oil. Consumers reported that the composition with added water was more difficult to spread on toast, could not be used effectively for frying or sautéing, and ruined baked goods when used as a butter substitute.

Despite the change in ingredients, the product was sold at the same price as the original recipe. The packaging of the product was changed to identify the adjusted ratios of oil and water; however, the text was small, difficult to read, and could be obstructed by stacking the spread containers on top of each other, the consumer alleged. The consumer further alleged the spread, which was marketed as containing 320 or 400 mg of Omega-3 per serving, only provided 45 to 60 mg of Omega-3 that is physiologically available for absorption into the body, as the type of Omega-3 used by Conagra is less absorbable than other forms of Omega-3.

Motion to dismiss. The consumer brought claims for violation of the Consumer Legal Remedies Act, the Unfair Competition Law, and the False Advertising Law, and for breach of express warranties, breach of implied warranties, negligent misrepresentation, breach of contract, breach of duty of good faith and fair dealing, fraudulent inducement, and negligence. On Conagra’s motion to dismiss, the court dismissed the consumer’s case, finding that the consumer did not adequately overcome the concerns originally identified by the courts and that the newly raised allegations are unpersuasive or that the consumer lacks standing to bring them.

The court found a reasonable consumer would not be misled by the product packaging because the packaging explicitly lists the quantity of oil, water, and Omega-3 in the product. Further, Conagra’s marketing of Smart Balance Original spread as “great” for cooking or baking was nonactionable puffery, the court held, dismissing the claim.

The court determined that the consumer’s claim that altering the product’s formula to contain more water and less oil amounted to economic adulteration was previously deemed nonviable, as the previous court found the claim to be improperly pleaded given that Supreme Court precedent precludes accurately labeled products from being considered economically adulterated. Finally, the court found Smart Balance Original’s classification as “buttery spread” did not indicate a flavor and thus did not require a front-label disclosure that the product contains artificial flavors.

The Case is No. 2:23-cv-01417-DJC-AC.

Judge: Calabretta, D.

Attorneys: Alexis Marie Wood (Law Office of Ronald A. Marron) for Lillian Elliott. Alan F. Pryor (Alston & Bird LLP) for Conagra Brands, Inc.

Companies: Conagra Brands, Inc.

Cases: Advertising StateUnfairTradePractices CaliforniaNews