Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Ill.: Class claims trimmed in Walmart fish packaging suit, (May 15, 2024)

By Donielle Tigay Stutland, J.D.

A reasonable consumer only looks at the product’s packaging.

The federal district court in Chicago has cut some of the claims brought in a consumer class action suit against retailed Walmart Inc. alleging that the retail giant’s labels on some of its frozen seafood products, which touted the company’s sustainable message, were deceptive. The consumer purchased three frozen seafood products from Walmart that were labeled with claims about sustainability and brought suit alleging that the representations were misleading and deceptive. The court dismissed claims brought under the Illinois Uniform Deceptive Trade Practices Act because the consumer failed to plead an allegation of ongoing or future harm. The court also dismissed claims brought under the Illinois Consumer Fraud and Deceptive Business Practices Act related to products marked with text and a label related to the Marine Stewardship Council, as they would not mislead a reasonable consumer, but found that claims related to the product marked with “Sustainably Sourced – 100% – Sustainability” could proceed (Sanchez v. Walmart, Inc., No. 1:23-cv-01297 (N.D. Ill. May 13, 2024)).

Great Value brand seafood product labels include a “Blue Tick” certification from the Marine Stewardship Council accompanied with the text, “Certified Sustainable Seafood MSC” and a URL to the council’s website. The front label of the Breaded Fish Sticks product contains the text in a circular arrangement, “Sustainably Sourced – 100% – Sustainability” on the upper right corner, placed separately from the Blue Tick. The Blue Tick is a certification from the Marine Stewardship Council (MSC) and Walmart has a partnership with the MSC.

The consumer alleged that Walmart knew or should have known that MSC-certified fisheries engage in unsustainable fishing practices. Further, the consumer alleged that Walmart’s sustainability representations are deceptive and misleading because the fisheries supplying Walmart with seafood use unsustainable practices and that Walmart’s suppliers lack the transparency and traceability necessary to support its claim of sustainability. The consumer filed suit for violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, eight other state consumer protection statutes, and the Illinois Uniform Deceptive Trade Practices Act.

Standing. The court began its analysis by reviewing the retail giant’s contention that the consumer lacked standing to bring her suit. Walmart argued that the consumer’s claims relate to eleven Walmart products, however, she only alleges purchasing three of them: Pink Salmon Fillets, Pacific Cod Skinless Fillets, and Breaded Fish Sticks. Walmart argued that the consumer has no injury-in-fact caused by products that she did not buy, so she lacks standing with respect to those products. The court agreed and rejected the consumer’s citing to a “growing split within this district addressing the standing of a named plaintiff in a class-action suit based on products that they did not purchase that are substantially similar to the purchased products.” See Willard v. Tropicana Mfg. Co., Inc., 577 F.Supp.3d 814, 824 (N.D. Ill. 2021) However, the court noted that it has "rejected the application of the substantial similarity test as a way for a named plaintiff to acquire standing.” The court found a lack of standing for the products which had not been purchased by the consumer.

Turning to the three items purchased, the court did determine that with respect to those products, the consumer did allege an injury in fact. The court found the consumer alleged concrete economic harm because she paid more for the products than she otherwise would have paid (a “premium” price), which is sufficient to establish financial injury.

Finally, the court determined that the customer had not established standing for injunctive relief. The court found that because her allegation of future harm is not real or immediate, the consumer lacks standing to pursue injunctive relief.

Illinois Uniform Deceptive Trade Practices Act. The court next turned to the claims brought under the Illinois Uniform Deceptive Trade Practices Act (DTPA), which “enjoin[s]… trade practices which confuse or deceive the consumer.” The court noted that the DTPA is limited to injunctive relief. And similar to the court’s analysis of whether the consumer had established standing for injunctive relief, here the court found that the consumer failed to plead an allegation of ongoing or future harm.

Wrote the court, “The problem in most consumer actions under the DTPA is the inability to allege facts indicating the likelihood of damage in the future.” Popp, 244 Ill.App.3d at 99. Here too, plaintiff does not allege likelihood to be deceived or confused in the future by defendant’s products. Because plaintiff fails to state a claim upon which relief can be granted, the UDTPA claim is dismissed.”

Illinois Consumer Fraud Act. Finally, the court looked at the consumer fraud claims under the Illinois Consumer Fraud Act (ICFA). To state a claim under a deception theory, the consumer must plausibly allege: “(1) a deceptive act or practice by the defendant; (2) the defendant’s intent that the plaintiff rely on the deception; and (3) the occurrence of the deception during a course of conduct involving trade or commerce.” The consumer’s claims brought under the ICFA and various state consumer protection statutes, will all apply a “reasonable consumer” standard to deceptive marketing claims.

The complaint references multiple marketing channels to advertise the sustainability of the products, including webpages and statements from Walmart executive regarding the companies’ commitment to sustainability. However, the consumer did not allege that she relied on these representations when purchasing defendant’s seafood products. Moreover, the court highlighted that there was not a plausible allegation that the reasonable consumer would rely on these outside statements or representations. The court determined that reasonable consumers would not rely on outside marketing channels when making a purchasing decision over which frozen fish to buy. A reasonable consumer would not be familiar with or rely upon Walmart’s press statements or interviews with company executives. A reasonable consumer could plausibly rely on in-store signage while perusing the shopping aisle and purchasing defendant’s products, but consumer had not alleged with the requisite specificity what these any representations on in store signs conveyed.

Looking specifically at the labels, the court indicated that, “the certification communicates only that the product meets MSC’s standards for sustainability.” Wrote the court, “That statement is factually true, so it is not actionable as a deceptive or misleading statement by Walmart.” Plaintiff fails to state a claim for deceptive conduct against Walmart based on the MSC certification label. Plaintiff does not sufficiently plead that the MSC Blue Tick or Walmart’s “sustainability commitment” constitute deceptive conduct.

However, the court did note that one product, the fish sticks, which contained a label that stated “Sustainably Sourced – 100% – Sustainability” was deceptive, because the Breaded Fish Sticks were sourced by methods that did not avoid long-term depletion of or harm to marine life. Walmart argued such statements were puffery, but the court rejected this argument, finding that Walmart’s “Sustainably Sourced – 100% – Sustainability” is specific and objective to the extent that it suggests some level of purity or perfection. The court concluded this statement was actionable as a deceptive statement.

The Case is No. 1:23-cv-01297.

Judge: Shah, A.

Attorneys: Harper T. Segui (Milberg Coleman Bryson Phillips Grossman, PLLC) for Marissa Sanchez. Kelly Mannion Ellis (Winston & Strawn LLP) for Walmart, Inc.

Companies: Walmart, Inc.

Cases: Advertising StateUnfairTradePractices IllinoisNews