Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.D. Cal.: Baked goods misleading labeling claims adequately pled, (Sep 27, 2013)

By Edward L. Puzzo, J.D.

Claims of misleading information in baked goods’ labeling, with reasonable reliance on the misrepresentations by consumers, were adequately pled, the federal district court in San Francisco has ruled (Ang v. Bimbo Bakeries USA, September 25, 2013, Orrick, W.).

Alex Ang, representing a class, alleged that various baked good products sold by Bimbo Bakeries, sold under the Thomas’, Sara Lee and Entenmann’s brand names, contained misleading labeling in violation of the California Unfair Competition Law and California False Advertising Law.

Rule 9(b). Bimbo moved to dismiss, claiming that plaintiffs’ pleading was inadequate under the heightened pleading requirements of Fed. R. Civ. P. 9(b) for allegation of fraud and misrepresentation. The court disagreed and refused to dismiss on that basis, stating that the plaintiffs had adequately pled the requisite ‘who, what, when, where, and how’ of the misconduct charged. They had identified with specificity the precise representations alleged to be illegal, fraudulent and misleading, as well as the specific products on which that language is found, stated the court.

Bimbo argued that some of the product labels did not always contain the allegedly misleading representations, so plaintiffs should be required to identify the exact version of the labels they relied upon. The court disagreed, stating that even if the labeling currently did not include the alleged misrepresentations, it did not undermine plaintiffs’ reliance on a label with the alleged misrepresentations. Plaintiffs identified the specific representations and their reliance upon them, which was sufficient at this point in the litigation to meet the Rule 9(b) requirements, the court ruled.

Reasonable reliance. Bimbo also argued that under the ‘reasonable consumer’ standard in the state consumer protection statutes at issue, plaintiffs must show that consumers are likely to be deceived by the representations in question. It was implausible that consumers were deceived, they argued, because, for instance, labels containing the complained-of term ‘fresh’ simultaneously revealed the use of preservatives. Bimbo’s arguments in this regard were not appropriately determined at this juncture, the court stated, and plaintiffs had adequately alleged for each representation facts as to how they relied on the statements and why they were misled by them.

The case is Civil Action No. 13-cv-01196-WHO.

Attorneys: Ananda N. Chaudhuri (Fleischman Law Firm) for Alex Ang. Mark Craig Goodman (Hogan Lovells US LLP) for Bimbo Bakeries USA, Inc.

Companies: Bimbo Bakeries USA, Inc.

Cases: StateUnfairTradePractices Advertising CaliforniaNews