Thursday, September 10, 2020

"made with aged vanilla" can be misleading even if not the main ingredient

Sharpe v. A&W Concentrate Co., --- F.Supp.3d ----, 2020 WL 4931045, No. 19-cv-768 (BMC) (E.D.N.Y. Aug. 24, 2020)

Plaintiffs alleged that defendants violated NY GBL §349 by misleadingly labeling their root beer and cream soda beverages as “MADE WITH AGED VANILLA,” even though the vanilla flavor comes predominantly – if not exclusively – from an artificial, synthetic ingredient called ethyl vanillin. Although the court found that plaintiffs lacked standing for injunctive relief because they knew the truth now, it rejected defendants’ argument that a reasonable consumer couldn’t be misled because the products contain real vanilla and were conspicuously labeled as “Natural and Artificially Flavored.”

The complaint alleged that, even if the products contain any aged vanilla, “it is in trace or de minimis amounts not detectable by advanced scientific means.” Therefore, defendants’ misleading message that the drink contains “aged vanilla” wasn’t dispelled by the information that the beverages are “Natural and Artificially Flavored,” “which fails to communicate that the quantity of the artificial flavoring far exceeds the quantity of natural vanilla.” Plaintiffs alleged that they relied on the label, believing flavor of the product was vanilla and that any flavor came from macerating the bean and infusing/extracting the flavor. They also alleged that, in a March 2020 survey of 411 consumers, around 89% of the consumers stated this representation led them to believe that the product was vanilla flavored:

These consumers also interpreted the representation to mean that the vanilla flavor came exclusively (if not predominantly) from the natural vanilla – not artificial sources. Specifically, around 68% of surveyed consumers believed that the statement meant that the vanilla flavor “comes from a vanilla plant, such as a vanilla extract, which is made from vanilla beans from the vanilla plant.”

Scientific testing by an independent laboratory allegedly revealed that the vanilla flavoring of the products does not come from the vanilla plant. Instead, testing allegedly disclosed that the predominant, if not exclusive, source of the vanilla flavor derives from an artificial, synthetic ingredient – ethyl vanillin. This is allegedly a cheap and inferior substitute for real vanilla, and plaintiffs alleged that they wouldn’t have paid a premium price for the beverages if they’d known the truth, though they also alleged that they’d buy the drinks again in the future if they were reformulated with real vanilla or no longer deceptively labeled.

The parties used competing images of the products; the images plaintiffs used show the products prominently displaying the “MADE WITH AGED VANILLA” label and from an angle from which the “Natural and Artificially Flavored” disclosure defendants relied upon is not visible, while plaintiffs shot the product from a different angle, in which the “MADE WITH AGED VANILLA” statement was masked and unintelligible, while the statement “Natural and Artificially Flavored” was clearly visible. The court considered both images, while drawing all reasonable inferences in plaintiffs’ favor.

plaintiffs' image
defendants' image

Even if plaintiffs conceded that the products contained aged vanilla (which they did not), that was not enough to conclude that reasonable consumers wouldn’t be misled. The key case is Mantikas v. Kellogg Co., 910 F.3d 633 (2d Cir. 2018), which held that prominent “WHOLE GRAIN” and “MADE WITH WHOLE GRAIN” labeling could mislead a reasonable consumer on a product that was predominantly enriched white flour, even when the ingredients list accurately disclosed “enriched white flour” as the first ingredient and disclosed the number of grams of whole grain per serving.  The Second Circuit held 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 in large bold type on the front of the box.”

So too here. The court emphasized that “the use of the word ‘aged’ suggests to consumers that the vanilla content is naturally derived and has acquired a desirable quality upon the passage of time.” In Mantikas, whole grain was “at least present in a discernable quantity,” while plaintiffs alleged that vanilla wasn’t, making this a stronger case. And the Nutrition Facts panel in Mantikas was undisputedly accurate, while here “the existence of ethyl vanillin, the substance plaintiffs allege is exponentially present compared to natural vanilla, is never explicitly disclosed to consumers.” Advanced scientific testing was required to reveal its presence.

Plaintiffs plausibly alleged that the “MADE WITH AGED VANILLA” representation – “prominently displayed underneath the A&W logo and on front of the bottle or box, bolded and in all capital letters” – falsely implied that any vanilla content derives “predominantly” from the vanilla plant. The court said that “the persuasive extrinsic evidence that the overwhelming percentage of consumers share this misconception” bolstered this conclusion.

True, the labels disclose that the beverages are “Natural and Artificially Flavored.” “A consumer, however, does not know if this is referring to vanilla or to the host of other ingredients present in the drinks, including the root beer or cream soda flavoring.” And more importantly, Mantikas says that consumers don’t have to rotate the package to correct misleading information in large bold type on the front.

Nor was Mantikas distinguishable on the basis that the case involved a misrepresentation as to the cracker’s primary or main ingredient. The Second Circuit did mention this fact, but the court found that Mantikas actually rejected the argument that only primary ingredients count:

[T]he rule that [d]efendant contends emerges from these district court decisions – that, as a matter of law, it is not misleading to state that a product is made with a specified ingredient if that ingredient is in fact present – would validate highly deceptive advertising and labeling. Such a rule would permit [d]efendant to lead consumers to believe its Cheez-Its were made of whole grain so long as the crackers contained an iota of whole grain, along with 99.999% white flour. Such a rule would validate highly deceptive marketing.

This principle is equally true when dealing with a “preferred, non-primary ingredient”:

A chocolate chip cookie may not necessarily be comprised predominantly of chocolate (one can only dream), but it would still likely be misleading to label it as “Made With Natural Chocolate” if the cookie’s chocolate’s content is 99.999% artificial and synthetic. Likewise, a frozen pizza manufacturer that labels its products as “Made with Real Pepperoni” likely cannot prevail at the motion to dismiss stage under Mantikas by unabashedly using 99.999% artificial or synthetic meat fillers and simply arguing a pizza’s main ingredient is dough.

No comments: