Monday, November 28, 2016

Breakfast break: energy claims not misleading by US standards

Spector v. Mondelēz International, Inc., 178 F.Supp.3d 657 (N.D. Ill. 2016)

Mondelēz makes belVita Breakfast Biscuits and Breakfast Bites. Spector allegedly bought packages of Breakfast Biscuits in reliance on the package representations of “NUTRITIOUS STEADY ENERGY ALL MORNING”:

The relevant graphic uses a clockwise arrow representing a four-hour period of time between 8 a.m. and noon:

The Breakfast Bites icon is similar, but contains the phrase “4 hours”:

The back of the Breakfast Bites box states that a single serving is “[a] nutritious start to a busy morning,” which is “a nutritious, convenient, on the go breakfast choice that contains slow-release carbs from wholesome grains to help fuel your body for 4 hours”:

Spector alleged that this was misleading, in that it portrays the products as “perfect for an ‘on-the-go’ lifestyle due to their being ‘portable.’ ” However, th products actually provide four hours of nutritious steady energy only if they are combined with a serving of low-fat milk. The disclosures on the Australian website for belVita allegedly showed that “Defendant fails to state in its United States advertising that the purported studies on which Defendant claims to rely require that the Products be consumed with at least a serving of low-fat milk in order to obtain the benefits Defendant touts.”

The back of the Breakfast Biscuits box, which repeats the claim of four hours of “nutritious steady energy all morning” while suggesting that Breakfast Biscuits be “enjoy[ed] part of a balanced breakfast with a serving of low-fat dairy and fruit,” allegedly conveyed that milk was optional.

Pleading a violation of the Illinois Consumer Fraud Act requires a plaintiff to satisfy Rule 9(b).  The fundamental defect here was that Spector pled no facts, such as personal experience or third-party studies, showing that the products don’t provide “nutritious steady energy” as promised.  Spector’s allegation of falsity was merely conclusory. 

Spector argued that the studies cited by Mondelēz on its Australian website were sufficient to form the basis of a plausible claim that the “nutritious steady energy” claim was actually false because the Australian website supposedly said that a glass of milk was required.  Under Illinois law, “[l]ack of substantiation is deceptive only when the claim at issue implies there is substantiation for that claim, i.e., if defendants had claimed something along the lines of ‘tests show that [the product in question] is [ ] effective ....” Here, though, the products’ packaging didn’t imply there was substantiation for the “nutritious steady energy” claim.  [I disagree—in the modern world, a health or nutrition claim is a scientific claim, especially when quantified for “four hours,” and necessarily implies some degree of scientific substantiation.]

Further, while the Australian website did imply the existence of substantiation for the “nutritious steady energy” claim, Spector didn’t allege she ever saw the substantiation claim on that website and thus she couldn’t have relied on it.  But she was using the Australian substantiation as evidence that the US package was false, not as something she relied on.  Mondelēz argued that, because Spector herself made the studies part of the complaint, the court could examine them, but the court found merit to Spector’s point that she was citing the description of the studies, not the studies themselves.  So the court proceeded without evaluating the study data.

The Australian website allegedly claimed that “belVita Breakfast biscuits† provide carbohydrates that are continuously and gradually absorbed and released throughout the morning,” with the † leading to the statement, “belVita Breakfast plus a glass of low-fat milk,” below this chart:

Although these disclaimers were repeated multiple times, the court found it clear that they didn’t say that “one must consume the Products with low-fat milk in order to achieve four hours of energy.” “The actual statements do no more than refer to the fact that milk was consumed with the Products in the cited studies.” Plaintiff confused correlation with causation. This was not enough to rise to the level of plausibility under Twiqbal, especially since her claims sounded in fraud.  “In the context of this case, the Court concludes that Plaintiff must do more than allege ‘the neutral facts necessary to identify the transaction.’”  This was necessary to protect Mondelēz from the stigma of fraud.  Further Illinois courts are “always watchful that the Act not be used to transform nondeceptive and nonfraudulent omissions into actionable affirmations.” An omission is actionable only “where it is employed as a device to mislead.”

Also, Spector lacked a relevant injury under ICFA.  Although she alleged a financial injury—she wouldn’t have bought the products or paid as much for them had she known the truth—that wasn’t enough under ICFA.  Illinois cases established that a plaintiff who alleges deceptive advertising about the effectiveness of a product has not suffered an injury if she “believed the [product] [was] effective and never complained to anyone that [it] did not work.” Spector never alleged that she didn’t get four hours of steady energy.

The same defects doomed her claims for breach of express warranty and unjust enrichment.

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