"free-range" is not puffery for eggs (or chickens)

Mogull v. Pete & Gerry’s Organics, LLC, 2022 WL 602971, No. 21 CV 3521 (VB) (S.D.N.Y. Feb. 28, 2022)

Mogull alleged that eggs marketed by defendant Nellie’s as “free-range” are actually not “free-range.” The packaging describes its eggs as “free-range,” includes images of hens outdoors, and states:

Most hens don’t have it as good as Nellie’s. 9 out of 10 hens in the U.S. are kept in tiny cages at giant egg factories housing millions of birds. Sadly, even “cage-free” is now being used to describe hens that are crowded into large, stacked cages on factory farms, who never see the sun. Nellie’s small family farms are all Certified Humane Free-Range. Our hens can peck, perch, and play on plenty of green grass.

Defendant’s packaging also states its eggs come from “Outdoor Forage” hens. Its website features images of hens roaming outdoors alongside statements such as “[o]ur happy hens are free to roam and strut throughout their wide open pasture. They peck at bugs and flowers, cluck around in groups, and just live as free as a bird all day long.” It also says: “[b]eing free-range means that during most times of the day and year, our hens are free to roam outside as they please,” which is different than being “cage free, which typically does not involve any amount of outdoor access.” A YouTube ad shows hens roaming in an open meadow, with narration explaining defendant’s hens are not “cage free,” but “free-range,” and “free-range hens get to live their lives like real hens, with access to pasture everyday in good weather.”

Mogull alleged that Nellie’s hens are “crammed” into overcrowded sheds 20,000 at a time and have no or limited access to outdoor space. She cited photographs allegedly of defendants’ henhouses, which are “virtually indistinguishable ... from the example [Nellie’s] show[s on its website] as being not ‘Free Range’ where hens are essentially ‘liv[ing] inside a space much like an overcrowded warehouse.” She alleged that a reasonable consumer would understand “free-range” to mean hens are not confined and are able to move comfortably indoors and roam outdoors based on a number of sources. For example, she cited a YouTube video in which shoppers who purchased Nellie’s eggs were shown a video of the purported conditions on Nellie’s farms and responded that the video did not comport with their understanding of “free-range.” She also alleged that USDA and FDA definitions of “free-range” are more akin to those views.

She alleged reliance and a price premium.

Defendants argued that the statement was merely puffery. But plaintiff adequately alleged that “free-range” is an affirmative claim about a product’s qualities—i.e., that the eggs were produced by hens with extended access to indoor and outdoor space—and is, therefore, not “an exaggeration or overstatement expressed in broad, vague, and commendatory language.”

Nor were the challenged statements true because defendant’s farming practices meet the “Certified Humane Free-Range” qualifications. The court noted that “free-range” was displayed as a standalone phrase throughout defendant’s packaging, and only appeared once directly adjacent to “Certified Humane.” Its website is “nelliesfreerange.com,” and the phrase “free-range” was stated throughout separately from the “Certified Humane” designation. “Accordingly, it is plausible a reasonable consumer would not understand ‘free-range eggs’ to convey that Nellie’s eggs meet the ‘Certified Humane’ standard.”

At this stage, the complaint also sufficiently alleged facts giving rise to a strong inference of fraudulent intent for purposes of the fraud claim. And plaintiff alleged sufficient pre-suit notice to allow a breach of express warranty claim. The court also rejected defendant’s argument that she didn’t sufficiently allege breach because she didn’t show that the eggs she purchased came from a hen that did not have access to the outdoors. It was enough to allege that many of defendant’s hens are not able to access the outdoors.