Wednesday, August 30, 2017

"100% grated parmesan cheese" doesn't have to be all cheese, court rules

In re: 100% Grated Parmesan Cheese Marketing & Sales Practices Litig., 2017 WL 3642076, No. 16 C 5802, MDL 2705 (N.D. Ill. Aug. 24, 2017)

Ah, implicature, how I wish judges understood you.  A product labeled “100% Grated Parmesan Cheese” is, apparently, ambiguous—it could mean the product has a bunch of different ingredients, but the parmesan component is 100% grated, rather than only partially grated.  This is nonsense for a product that purports to be cheese, though it would make sense for a non-cheese-only product with a “made with 100% grated parmesan cheese” label.  In fact, the common-sense comparison is the challenged phrase with or without “made with”—on its own, the “100%” naturally applies to all the words following it.

Anyway, plaintiffs alleged that they were misled by the labels because the products contained a nontrivial amount of cellulose.  Each product’s ingredient list disclosed the non-cheese ingredients, in smaller, less conspicuous print. Each ingredient list states that the cellulose is added “to prevent caking.”

The court agreed that plaintiffs had Article III standing, having purchased a product allegedly worth less than what they paid and what they were promised. 

Synthesizing consumer protection precedents from multiple jurisdictions, the court concluded that “[w]here a plaintiff contends that certain aspects of a product’s packaging are misleading in isolation, but an ingredient label or other disclaimer would dispel any confusion, the crucial issue is whether the misleading content is ambiguous; if so, context can cure the ambiguity and defeat the claim, but if not, then context will not cure the deception and the claim may proceed.”  This isn’t entirely consistent with the cases the court quotes, such as the 9th Circuit’s Williams—here’s the quote the court pulls from Williams: deceptive marketing claims survived a motion to dismiss where there were “a number of features of the [front of the packaging] … which could likely deceive a reasonable consumer,” and a consumer thus “should [not] be expected to look beyond misleading representations on the front of the box to discover the truth from the ingredient list” (emphasis added).  The question is whether a consumer might rely on the product name without checking the ingredient list, and ambiguity can certainly play a role there, but a consumer might make inferences even from a theoretically “ambiguous” claim and not check the label.  Of course, the larger problem here is that there’s nothing ambiguous about “100% Grated Parmesan Cheese” in context.

The court continued: “consumers who interpret ambiguous statements in an unnatural or debatable manner do so unreasonably if an ingredient label would set them straight.”  The court conflates “unnatural” with “debatable” here, I think—if a substantial portion of consumers are confused by a claim, the fact that others aren’t, and that the question in general is “debatable,” shouldn’t matter (absent some cost-benefit analysis, at least—so if there’s a good way of communicating the truth to avoid deceiving the relevant subset of consumers, that should be used). 

The court analogized people who thought that “100% Grated Parmesan Cheese” meant that the product was 100% parmesan cheese to people who thought that Froot Loops were made with fruit.  The phrase was ambiguous because “it also might be an assertion that 100% of the cheese is parmesan cheese, or that the parmesan cheese is 100% grated. Reasonable consumers would thus need more information before concluding that the labels promised only cheese and nothing more, and they would know exactly where to look to investigate—the ingredient list.” Thus, the labels weren’t deceptive. 

Comment: that statement might avoid perjury because of this equivocation, but that’s not the standard for consumer protection cases.  A reasonable consumer shouldn’t have to ask follow-up questions when the product says on the front that it’s 100% one thing.

The court thought that the nothing-but-cheese reading was the least plausible of its three possible interpretations, because it thought that consumers should know that a product that was packaged and shelf-stable at room temperature could not be pure cheese. Really?  Because I buy parmesan in unrefrigerated-but-sealed chunks, and I’ve also been known to buy Parmalat, a shelf-stable unrefrigerated milk.  We live in an age of miracles and wonders; I’m not saying I’d expect cheese to last centuries, but leaving a dry cheese like parmesan sealed but unrefrigerated seems plausible to me. Still, I’m apparently unreasonable, because reasonable consumers “would still suspect that something other than cheese might be in the container [of unrefrigerated, shelf-stable cheese], and so would turn it around, enabling them to learn the truth from a quick skim of the ingredient label.”

Anyway, warranty and unjust enrichment claims failed for the same reason.

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