A blueberry bagel that is mostly imitation blueberry is plausibly misleading

Izquierdo v. Panera Bread Co., No. 18-CV-12127 (VSB), 2020 WL 1503557 (S.D.N.Y. Mar. 30, 2020)

Panera sold a “blueberry bagel” that allegedly wasn’t.  [My father thinks that bagels with fruit etc. in them already aren’t bagels, but the allegation here is about the blueberry.] The court dismisses plaintiff’s claim for injunctive relief because he isn’t likely to be injured again, but otherwise denies the motion to dismiss his consumer protection claims.

The ingredient list for the Bagel “is not displayed in-store,” but allegedly “contains only trace amounts of real blueberries” and a “far greater proportion of imitation blueberry ingredients.” Even inspecting the product, a reasonable consumer allegedly couldn’t identify this fact. For context, Panera also sells a Blueberry Muffin, which contains “fresh blueberries” as the second-to-last ingredient and no imitation blueberries, and allegedly “[e]ven low-cost, supermarket-shelf blueberry bagels contain only real blueberry ingredients,” so that “[a] reasonable consumer would expect a blueberry bagel sold at a bakery-café that stresses its healthfulness and authenticity to contain more real blueberries than its low-cost, supermarket-shelf counterparts.”

The Second Circuit isn’t as easy on future purchases as the Ninth, so plaintiff didn’t successfully plead likely future injury and lacked standing for injunctive relief.

However, he plausibly alleged misleadingness to a reasonable consumer. The bagel is advertised in stores with a placard reading “Blueberry” and online as a “Blueberry Bagel,” and it allegedly appears to contain discrete pieces of fruit scattered throughout the bagel. “It is plausible that a reasonable consumer would believe that these visible pieces are real blueberries, in light of the placard on the basket and their normal expectations of blueberry baked goods,” especially given that it appears under a sign advertising Defendant’s commitment to “clean food” and “menu transparency,” and is sold alongside a Blueberry Muffin that contains only real blueberries.

It was not enough that the bagel did contain some blueberries and that the ingredient list was “readily available.” It can be “materially misleading to suggest a product contains a greater proportion of a preferred ingredient than it actually does, even where there is a visible ingredients list that states the correct composition of the food.” (Citing Mantikas v. Kellogg Co., 910 F.3d 633, 639 (2d Cir. 2018) (involving “whole grain” and “made with whole grain” claims where crackers were primarily enriched white flour), and some earlier cases.)  Although this was a close case, the court noted that there were no allegations that a customer purchasing the bagel in-store would have ready access to an ingredients list prior to making a purchase, and anyway Mantikas made clear that “a reasonable consumer should not be expected to consult the Nutrition Facts panel on the side of the box to correct misleading information set forth” elsewhere on the packaging.

Similarly, plaintiff adequately, though barely, pled injury by alleging that the bagel had “significantly less value than it warranted.” A price premium theory was plausible, even though every Panera bagel sells for the same price; the appropriate comparator could be other blueberry bagels, which plaintiff alleged are “low-cost” yet contain “only real blueberry ingredients.”

Fraud was also, though just barely, alleged. The facts alleged with particularity suggested “conscious misbehavior or recklessness,” including: (1) Panera knew the bagel’s true composition, as evidenced by its publication of the ingredient list; (2) Panera produced the bagel in such a way that the imitation blueberries are indistinguishable from the real blueberries; (3) Panera purposely advertises “menu transparency” and its “clean” food; (3) Panera is aware of consumer beliefs about the healthful qualities of blueberries; and (4) Panera sought to capitalize on those beliefs and its branding to sell more bagels by calling it a Blueberry Bagel.