Friday, November 02, 2018

Post-parmesan: 100% grated parmesan still doesn't have to be 100% grated parmesan, court reiterates

In re 100% Grated Parmesan Cheese Marketing & Sales Practices Litig., 2018 WL 5717799 No. 16 C 5802, MDL 2705 (N.D. Ill. Nov. 1, 2018)

On an amended complaint, the court again dismisses the claims that a cheese product whose label touts it as “100% Grated Parmesan Cheese” isn’t false or misleading because, on shelf-stable products, the courtis of the opinion that a reasonable consumer shouldn’t have believed that name, even though plaintiffs this time around pled a survey, conducted in connection with this litigation, purporting to find that more than 85-90% of consumers stated that they believed that the products “are 100% cheese and fully grated.” Two expert reports by linguistics professors also opined that the phrase “100% Grated Parmesan Cheese” is “linguistically subject to only one plausible interpretation … that the Product contains nothing other than grated parmesan cheese.” Plaintiffs also cited a Kraft patent stating that fully cured parmesan cheese “keeps almost indefinitely.”  But the court disagreed, because of its greater understanding of reasonable consumers and exactly what they know about shelf-stable products (and what’s in that set of products).

Argh.  These aren’t cheese crackers or other cheesy products where a reasonable consumer would immediately understand a reference to an ingredient; they’re sold as cheese with which to top something else.  Not only is a consumer who reads that label as meaning “this is 100% cheese” incredibly reasonable, the court’s willingness to dismiss specifically pled facts worsens its prior decision by not allowing the plaintiff to resolve the so-called “ambiguity” of the label with further information, even though to date the idea of “ambiguity” has allowed plaintiffs to add more facts. Heads, the defendant wins; tails, the plaintiff loses.

Anyhow, the accused products with “100% Grated Parmesan Cheese” and similar labels in fact contained cellulose and other non-cheese ingredients. With the exception of Publix, the ingredient lists say that the cellulose was added to prevent caking, when in fact it also allegedly acted as filler. Some of the filler claims got a bit further, but not far.

Because “100% Grated Parmesan Cheese” was ambiguous, the ingredient label would dispel any confusion.  How do we know that ambiguity plus a back-panel label avoids deception?  It appears to be a rule of law, not a rule of fact.  And the court reiterated its conclusion that “ ‘100% Grated Parmesan Cheese’ … also might be an assertion that 100% of the cheese is parmesan cheese, or that the parmesan cheese is 100% grated.” The linguistics experts didn’t help because a reasonable consumer “does not approach or interpret language in the manner of a linguistics professor.” Instead, she apparently approaches language as a federal judge.  More seriously, this reasoning seems to misapprehend a big chunk of the profession of linguistics—the court cites a case holding that a “reasonable consumer need not be exceptionally acute and sophisticated,” and that “the reasonable consumer test focuses on the perspective of ordinary minds,” and this is true, but descriptive linguistics studies exactly how ordinary people interpret ordinary language, and if the experts are opining about that then they are opining about precisely the relevant question.

Still, the reports didn’t specify that they examined the phrase in the context of shelf-stable, unrefrigerated containers of cheese, which makes their opinions valueless. How do we know the context is so significant?  The court does, no matter what facts are pled, because reasonable consumers are “well aware that pure dairy products spoil, grow blue, green, or black fuzz, or otherwise become inedible if left unrefrigerated for an extended period of time.”  [Consider a pleading that reasonable consumers do not have strong ideas about the boundaries of shelf-stability for cheese even if they do for milk, and that reasonable consumers take their cues from labels.  Would that be implausible under Twiqbal?  I don’t see how it could be.  Brady v. Bayer Corp. has by far the better take: consumers should be able to rely on the name of a product from a reputable company, and they are likely to presume that the company understands the relevant technologies far better than they do; if the company presents a low-moisture cheese in a can, they can presume that it knew how to do that.]

The surveys were also irrelevant because a court, on its own, may “determine as a matter of law” that “an allegedly deceptive advertisement would not have misled a reasonable consumer.” [In a Lanham Act case, this wouldn't be true for an ambiguous representation--I'm not a fan of mashing up the two kinds of law, but I would prefer the rule that survey evidence is never required but often relevant for both bodies of law.] Also, because not every single survey respondent thought the product was 100% cheese, that proved ambiguity.  [I have some bad news about surveys and, in particular, survey respondents, for the court, though perhaps surveys’ inability to get 100% correct responses to any question would be good news to the court.]

As for the patent, there was no reason it would be familiar to a reasonable consumer “with an ordinary understanding of how dairy products generally fare when unrefrigerated.” Anyway, the patent necessarily implied that pure grated parmesan will not keep indefinitely if left unrefrigerated. [By the way, canned products don’t keep indefinitely either. The court’s certainty about consumer expectations shows one of the weaknesses of Twiqbal, especially with contrary evidence pled.] Thus, the court remained convinced that a reasonable consumer would not presume that a shelf-stable dairy product was 100% cheese or would disregard the “well-known fact[ ] of life” that pure dairy products spoil if left unrefrigerated.

The filler claims: Allegedly, grated parmesan “usually available in the marketplace” is cured and dried in such a way that there is “little problem of clumping or agglomeration,” so there is little need to ensure that grated parmesan does not clump or “cake.” The anticaking statement on the ingredients list was allegedly false or misleading because the products contain more cellulose than necessary to accomplish this “anticaking” purpose, and instead serve as cheaper filler. However, the Target/ICCO defendants got out of the claim because there wasn’t any allegation of how much cellulose was in the product, and thus plaintiffs couldn’t plausibly allege it was excessive.  Other percentages alleged for other defendants were 3.8% (Kraft), 8.8% (Albertsons/SuperValu), 7.8% (Wal-Mart/ICCO).

However, though falsity was pled, causation wasn’t, because plaintiffs alleged that they bought the products believing them to be “100% Grated Parmesan Cheese,” meaning that they didn’t consult or rely on the ingredient list [because they saw no need to do so given what they thought they were buying].  Thus the state law consumer protection claims all failed as to the anticaking misrepresentation.

Express warranty: certifying multistate or nationwide classes of this type is not categorically prohibited, though Connecticut and Michigan require privity (which didn’t exist with the manufacturer). New York requires reliance, which (as above) was missing.  Some implied warranty claims also survived, as did some unjust enrichment claims, all based on the anticaking part. 

Tactical question: drop the remaining claims and appeal, or continue to fight?

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