Survey and consumers are wrong, court says: "white chips" doesn't mean "white chocolate"

Prescott v. Nestlé USA, Inc., 2022 WL 1062050, -- F. Supp. 3d – , No. 19-cv-07471-BLF (N.D. Cal. Apr. 8, 2022)

The court dismissed claims that “Nestlé Toll House Premier White Morsels” misleads consumers to believe that it contains white chocolate. [When I teach that the reasonable consumer is a normative construct, the white chocolate cases are front and center. The survey evidence is clear—and for what it’s worth, the students generally strongly agree—that average consumers would expect “white chips” in a form familiar to chocolate lovers from a company known for chocolate to be made with white chocolate. But courts don’t like that; they prioritize Nestlé’s freedom to enter related business lines over actual consumer deception and just expect consumers to smarten up, or else too bad for them. Indeed, the court deems irrelevant the facts alleged in the complaint about Nestlé’s long history with actual white chocolate.]

Grouping the allegations: (1) “White” has been historically used to describe a distinct and real type of chocolate, and plaintiffs so understood; (2) the product label has pictures of what look to reasonable consumers like white chocolate chips and white chocolate chip cookies, and plaintiffs relied on that; (3) the product was placed among other chocolate products, which reinforced plaintiffs’ belief; plaintiffs further alleged that Nestlé maintains control over the placement of these products in retail stores. Plaintiffs also alleged that the use of “Premier White” contributed to the false impression. They alleged a consumer study showing that approximately 95% of respondents believed the product contains white chocolate. Numerous consumer complaints that were sent to plaintiffs’ counsel and/or posted on Nestlé’s website repeat common complaints that the consumers thought the product contains white chocolate and the product does not melt like chocolate during baking.

But it’s the consumers who are wrong. The reasonable consumer would not be fooled. If “Diet” on soda can’t mislead reasonable consumers about whether the soda would assist with weight loss, then “white” on baking chips can’t mislead reasonable consumers about whether it means white chocolate. You know, because context matters.

“White” and “premier” simply do not “denote” “chocolate,” and “premier” was just non-actionable puffery. White is just a color. [While we're talking context, I strongly suggest the judge order a flat white at Starbucks and see whether the counterperson concludes that the order is meaningless.] Still, the court says, “[n]othing about the ordinary and common meanings of the adjectives ‘white’ and ‘premier’ would suggest to a reasonable consumer that the Product is white chocolate. Similarly, images of a cookie and white morsels do not provide any information as to the substance of the morsels.” As plaintiffs pointed out, the relevant context includes the Nestlé brand name and the placement of the product next to chocolate chips in grocery store baking aisles. But no, it doesn’t, and anyway alleging on information and belief that Nestlé controlled placement in grocery stores didn’t make it so, and I guess if Nestlé didn’t control the placement then that’s not relevant context? Argh. Anyway, “baking aisles contain a wide variety of non-chocolate baking chips. Similarly, Nestlé makes a wide variety of non-chocolate products.”

While the name “Prescription Diet” could plausibly mislead about whether a prescription was required, the dictionary definitions of the words used in the Product name “Nestlé Toll House Premier White Morsels” didn’t support a reasonable belief that the Product contains chocolate. In any other context Nestlé would hate to hear that its name wasn’t synonymous with chocolate, but here it’s pleased. It was just common sense that the product wasn’t misleading, despite the survey evidence and consumer complaints.

The court didn’t like that plaintiffs seemed to be arguing that “Nestlé cannot sell white baking morsels without affirmatively clarifying that they are not chocolate.” I don’t know why: if something is misleading without a disclosure, but the disclosure can correct the problem, that’s a classic case for finding the former actionable and the latter a good preventative going forward.

And the survey? If a survey showing that consumers think that “diet” means “help you lose or not gain weight” isn’t enough to make “Diet Coke” plausibly deceptive, then a survey won’t work here either.

Look, there's a case to be made for a normative concept of the reasonable consumer. But what there isn't, is a good reason for switching back and forth between normative and empirical the way courts do in these cases without explaining when to do which type of analysis. If actual deception and reliance matters, then the empirical consumer matters. Right now the treatment is so flexible as to be both unpredictable and demeaning to large numbers of consumers deemed unreasonable as a matter of law.