The Southern District of New York dismissed a putative class action against Bimbo Bakeries (the parent company of Entenmann’s) that alleged the packaging on Entenmann’s “All Butter Loaf Cake” was misleading because the product contained soybean oil and artificial flavors, not only butter.
Plaintiff brought claims under New York’s consumer protection laws, which require that a plaintiff “plausibly allege that the deceptive conduct” be “likely to mislead a reasonable consumer acting reasonably under the circumstances.” In this analysis, a court considers the challenged advertisement as a whole, which includes disclaimers and qualifying language. In making a determination whether a reasonable consumer would be misled by an advertisement, “context is crucial”.
New York precedent applies these advertising standards to food and drink packaging that is allegedly false or misleading with respect to a product’s ingredients. Packaging is viewed as either ambiguous or unambiguous. A packaging label may be unambiguous and misleading or a packaging label may be ambiguous, but the ambiguity can be cured by looking at the list of ingredients or Nutrition Facts panel. Here, the court found that the “All Butter” claim was ambiguous, but the ambiguity could be resolved by the ingredient list. The court noted that a reasonable consumer would know that, even with the “All Butter” label, the product would likely have other ingredients that are in cakes, such as flour, sugar, milk and eggs.
Further, due to the possibility of more than one interpretation of “All Butter”, a reasonable consumer would need additional information to understand “All Butter” and would know in order to get that information, the consumer would need to look at the ingredient list. There, the consumer would see that the product contains soybean oil and artificial flavors. Therefore, when looking at Bimbo Bakeries’ labeling and marketing as a whole, it was not deceptive.
Interestingly, the court pointed out that this class action was one of many brought by the same plaintiff’s counsel and included a footnote listing numerous cases brought by plaintiff’s counsel.
Takeaway: Companies should be conscious of how their package claims may be interpreted. A label’s ambiguity could determine the trajectory of a lawsuit. As the court said, “when a product’s descriptions is merely vague or suggestive, every reasonable shopper knows the devil is in the details.” This means a reasonable consumer will be expected to look at other information on the label to dispel any confusion.