Health Law Daily Wrap Up, LABELING AND PACKAGING (FOOD, DRUGS & MEDICAL DEVICES)—N.D. Ill.: Consumer’s deceptive labeling claims about Brach’s caramel candy failed to stick to labeling details, (Mar 23, 2023)

By Justin Marcus Smith, J.D.

The consumer complained that the statement “Made With Real Milk” was deceptive, but the court essentially agreed with the manufacturer that milk was listed among the ingredients without any misrepresentations about milk fat content or source.

A consumer could not proceed beyond the pleading stage with a putative class action about allegedly deceptive caramel candy labeling, ruled the federal district court in Chicago. The court found that the labeling in question was not plausibly deceptive about the product’s milk fat content, nor the amount of fat derived specifically from milk ingredients, especially given that the candies probably did contain some milk fat derived from true milk ingredients, as indicated on the product label. The court determined that the consumer’s claims were based only on the consumer’s own subjective interpretations of the labeling, hence they did not satisfy the reasonable consumer standard required under the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA). The other state law consumer fraud claims, warranty claims, and negligent misrepresentation claims, all failed for basically the same reason. The court dismissed the negligent misrepresentation claim with prejudice given that consumer could not proceed based solely on economic loss, and amendment would be futile. The court otherwise granted the consumer 30 days leave to amend the other claims (Biczo v. Ferrara Candy Company, March 20, 2023, Johnson Coleman, S.).

Background. A consumer resident of Illinois brought a putative class action complaint alleging that defendant Ferrara Candy Company (Ferrara), owner of Brach’s Candy Company, falsely labeled its Brach’s Milk Maid caramel products. The consumer alleged that the product labeling, which included phrases like “Rich and Creamy” and “Made With Real Milk,” juxtaposed with a picture of a milk pitcher, misled consumers into believing the product contained true milk fat ingredients, whereas the fat content consisted mainly of vegetable oils. The consumer asserted causes of action for violation of ICFA; other state consumer fraud acts; the Magnuson Moss Warranty Act (MMWA); breach of express and implied warranties; negligent misrepresentation; fraud; and unjust enrichment. The court granted Ferrara’s Fed. R. Civ. P. 12(b)(6) motion to dismiss in its entirety.

No deception. The court determined that the consumer failed to show that the product labeling would have misled the reasonable consumer. The parties focused on the first prong of an ICFA claim, whether the product packaging would have deceived a consumer. The reasonable consumer standard applied to ICFA claims. The consumer acknowledged that the product did contain some true milk fat given the butter oil, buttermilk, skim milk, and whey ingredients, but the consumer insisted that this was insufficient, and misleading given the labeling.

The court observed, contrary to the consumer’s arguments, that the product labeling did not make any representation about the type of milk content. The labeling simply stated the product was made with real milk. Moreover, nothing on the labeling indicated that milk ingredients were the exclusive source of the product’s fat content. The court concluded that the “analytical jump” equating “made with milk” to mean “made with milk fat” was the consumer’s own subjective interpretation.

Although some courts have found, as the consumer urged, that it may be misleading for a product to suggest it is made with an ingredient if that ingredient is not predominant, the consumer did not plead this. The consumer pleaded that vegetable oils provided the “exclusive fat content.” The consumer did not plead that milk was not a predominant ingredient. The court reasoned further that, even if the consumer had described that as the problem, it would not have mattered because labeling that merely depicts an ingredient typically cannot lead a reasonable consumer to conclude anything about the amount of that ingredient. The court also did not credit the consumer’s reliance on dictionary definitions given that the product labeling listed “milk” as an ingredient. Similarly, the court did not credit the consumer’s reasoning about the term “Rich and Creamy” because it was just puffery, and puffery was not actionable under ICFA. The court resolved that the consumer did not identify any plausible deceptive labeling about milk and dismissed the consumer’s ICFA claim accordingly.

Remaining claims. The court held that the consumer’s failure to plausibly allege any form of misrepresentation supported the dismissal of the consumer’s other state law consumer fraud act and common law deception claims.

The court decided the negligent misrepresentation claim also failed because, ordinarily, such a claim could not rest solely on economic loss. Here, the court did not credit the consumer’s argument that the manufacturer had breached a duty to provide consumers with accurate information. Although one Illinois opinion had found that breach of an extracontractual duty, like breach of “professional competence,” might support a negligent misrepresentation claim, another held that this concept did not apply in the context of tangible goods. The court accordingly dismissed the consumer’s negligent misrepresentation claim because the consumer only alleged economic losses. With respect to the negligent misrepresentation claim, only, the court dismissed with prejudice on the basis that amendment would be futile.

The court decided the consumer’s warranty claims failed because the suit, itself, did not suffice as pre-suit notice of the consumer’s claims. The unjust enrichment claim necessarily fell with all of the related claims.

The court agreed with the manufacturer that the consumer could not pursue injunctive relief given that the consumer was unlikely to purchase the product again given her alleged belief that it was deficient. The court did not consider class standing questions given that such were best left to the class certification stage and were inappropriate on a motion to dismiss.

With the exception of the negligent misrepresentation claim, which the court dismissed with prejudice, the court granted the consumer 30 days of leave to amend the complaint.

The case is No. 1:22-cv-01967.

Attorneys: Spencer Sheehan (Sheehan & Associates, P.C.) for Jessica Biczo. Matthew Orr (Amin Talati Wasserman LLP) for Ferrara Candy Co.

Companies: Ferrara Candy Co.

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