Campobasso v. The Quaker Oats Company

• Court: District Court, N.D. Illinois
• Decided: December 2, 2024
• Docket: 1:22-cv-06043
• Status: Unknown

Opinion

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

CHRISTINE HICKEN, ANTHONY ) CIVITANO, and ALFONZO FARFAN, ) individually and on behalf of all others ) similarly situated, ) ) No. 1:22-CV-06043 Plaintiffs, ) ) v. ) Judge Edmond E. Chang ) THE QUAKER OATS COMPANY and ) DOES 1 through 50, ) ) Defendants. )

MEMORANDUM OPINION AND ORDER

Christine Hicken, Anthony Civitano, and Alfonzo Farfan bring a proposed class action against The Quaker Oats Company (and other unidentified persons), alleging that the label on Quaker granola boxes is deceptive and misleading. R. 42, Am. Compl.1 The Plaintiffs assert claims under the Illinois Consumer Fraud and Decep- tive Business Practices Act, other state consumer fraud acts, New York General Busi- ness Law Sections 349 and 350, California’s Consumers Legal Remedies Act, Califor- nia’s False Advertising Law, and California’s Unfair Competition Law, as well as breach of express warranty under New York and California law, breach of implied

1Citations to the record are “R.” followed by the docket entry number and, if needed, a page or paragraph number. The Plaintiffs filed an amended complaint to substitute a named plaintiff and the parties agreed that the already pending dismissal-motion briefing would apply to the amended complaint. See R. 41, Minute Entry 02/23/24. warranty under California law, and unjust enrichment. /d.2 Quaker moves to dismiss the claims for failure to state a claim under Civil Rule 12(b)(6). R. 13, Def.’s Mot. For the reasons below, Quaker’s motion is granted, and the Amended Complaint is dis- missed (without prejudice for now). I. Background In deciding a motion to dismiss, the Court accepts well-pleaded facts as true and draws all reasonable inferences in the plaintiff's favor. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Quaker formulated, manufactured, labeled, marketed, distributed and sold granola with the following front label:

NO ARTIFICIAL Zain SS AsO Lets | EXCELLENT SOURCE OF FIBER Q -EST? KER.

OW Sea 8) Te Boece PBs may □ 3 il oe i a “pee a i ao a aw = dp □□

; Se i TPAC LEST i) 233 2)

2The Court has jurisdiction under the Class Action Fairness Act (CAFA), 28 U.S.C. § 1332(d)(2), because the amount in controversy exceeds $5 million, Hicken is a citizen of Illinois, Civitano is a citizen of New York, Farfan is a citizen of California, and Quaker Oats is a corporation incorporated in New Jersey with its principal place of business in Ilinois. Am. Compl. 9 6-8, 10, 12.

Am. Compl. ¶ 19. Hicken, Civitano, and Farfan purchased this product from Jewel- Osco in Des Plaines, Illinois, BJ’s Wholesale Club in College Point, New York, and Albertsons in Monterey Park, California, respectively. Id. ¶¶ 6–8. The Plaintiffs al-

lege that the label is misleading because consumers expect, supposedly based on the front label’s use of the word “simply” before the word “granola,” that the product will contain only oats, honey, raisins, and almonds. Id. Had they known the granola con- tained other ingredients, the Plaintiffs allege they would not have bought the prod- uct, or would have paid less for it. Id. These allegations of misrepresentation are the basis for all of the Plaintiffs’ claims. Id. ¶¶ 40–132. II. Standard of Review

Under Federal Rule of Civil Procedure 8(a)(2), a complaint generally need only include “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). This short and plain statement must “give the de- fendant fair notice of what the claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (cleaned up).3 The Seventh Circuit has explained that this rule “reflects a liberal notice pleading regime, which is intended

to ‘focus litigation on the merits of a claim’ rather than on technicalities that might

3This Opinion uses (cleaned up) to indicate that internal quotation marks, alterations, and citations have been omitted from quotations. See Jack Metzler, Cleaning Up Quotations, 18 Journal of Appellate Practice and Process 143 (2017). keep plaintiffs out of court.” Brooks v. Ross, 578 F.3d 574, 580 (7th Cir. 2009) (quoting Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002)). Claims alleging fraud must also satisfy the heightened pleading requirement

of Federal Rule of Civil Procedure Rule 9(b), which requires that “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b) (emphasis added). And Rule 9(b)’s heightened pleading standard applies to fraud claims brought under the Illinois Consumer Fraud Act. Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v. Walgreen Co., 631 F.3d 436, 441 (7th Cir. 2011). Thus, Rule 9(b) requires that the plaintiffs’ complaint “state the identity of the person making the misrepresentation, the time, place, and

content of the misrepresentation, and the method by which the misrepresentation was communicated to the plaintiff.” Uni*Quality, Inc. v. Infotronx, Inc., 974 F.2d 918, 923 (7th Cir. 1992) (cleaned up). Put differently, the complaint “must describe the who, what, when, where, and how of the fraud.” Pirelli, 631 F.3d at 441–42 (cleaned up). “A motion under Rule 12(b)(6) challenges the sufficiency of the complaint to

state a claim upon which relief may be granted.” Hallinan v. Fraternal Ord. of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). “[A] complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft, 556 U.S. at 678 (cleaned up). These allegations “must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. The allegations that are entitled to the assumption of truth are those that are factual, rather than mere legal conclusions. Iqbal, 556 U.S. at 678–79. III. Analysis

A. Illinois Fraud Act To state a Fraud Act claim, the Plaintiffs must adequately plead “(1) a decep- tive or unfair act or promise by the defendant; (2) the defendant’s intent that the plaintiff rely on the deceptive or unfair practice; and (3) that the unfair or deceptive practice occurred during a course of conduct involving trade or commerce.” Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 739 (7th Cir. 2014) (cleaned up). In prod- uct-label cases, “plaintiffs’ claims survive if they have plausibly alleged that the de-

fendants’ front labels likely lead a significant portion of reasonable consumers to falsely believe something that the back labels belie.” Bell v. Publix Super Markets, Inc., 982 F.3d 468, 476 (7th Cir. 2020). Although “an accurate fine-print list of ingre- dients does not foreclose as a matter of law a claim that an ambiguous front label deceives reasonable consumers,” id., “where plaintiffs base deceptive advertising claims on unreasonable or fanciful interpretations of labels or other advertising, dis-

missal on the pleadings may well be justified,” id. at 477 (emphasis added). Even viewing the allegations in the Plaintiffs’ favor, their proposed interpre- tation of the product label is unreasonable and fanciful. The Plaintiffs are correct that the front label says “simply granola” and also lists “oats, honey, raisins & almonds.” Am. Compl. ¶¶ 18–19. But “granola” is not a kind of food that has a designated and agreed upon ingredient list that any reasonable customer would understand based on the phrase “simply granola.” And even assuming there were such a commonly un- derstood ingredient list (that only included oats, honey, raisins, and almonds), using the word “simply” to describe the granola does not mean, when viewed from the per-

spective of a reasonable consumer, that the ingredients would be limited to that front- of-the package list. The Plaintiffs also do not plausibly allege that the image of gran- ola, even in combination with the text, conveys that the product will only contain those four ingredients. See id. ¶¶ 6–8, 20. Images on the front of packaging would be crowded indeed if reasonable consumers interpreted images to contain every single ingredient in the product (and many ingredients are not even visible). And although the Plaintiffs allege that the granola contains other ingredients, including wheat,

sugar, inulin, and vegetable oils, they do not allege that the granola does not, in fact, contain oats, honey, raisins, and almonds. Id. ¶¶ 2, 21. So the ingredient list is con- sistent with the front label and no reasonable consumer could conclude based on the front label that the granola contained only the four highlighted ingredients. The Plaintiffs’ central argument is that the label promises that oats, honey, raisins, and almonds are the only ingredients in the granola, and is thus misleading.

See R. 17, Pls.’ Resp. at 2–7. Courts in this district have repeatedly rejected similar arguments where labels highlight an ingredient, but the product contains other in- gredients as well. See Matthews v. Polar Corp., 2023 WL 4534543, at *7 (N.D. Ill. Mar. 22, 2023) (“A statement about the presence of an ingredient is not a promise about the amount of the ingredient. … A claim cannot rest on a mere reference to an ingredient that is, in fact, an ingredient unless something else makes that statement misleading.”) (collecting cases); Gardner v. Ferrara Candy Co., 2023 WL 4535906, at *5 (N.D. Ill. Mar. 22, 2023) (“Courts widely dismiss claims that a product contained only a de minimis amount of an ingredient when the packaging itself did not promise

more.”) (collecting cases); Hamidani v. Bimbo Bakehouse LLC, 2023 WL 167513, at *3 (N.D. Ill. Jan. 12, 2023) (“Packaging that merely depicts or asserts the presence of an ingredient typically cannot lead a reasonable consumer to conclude that the prod- uct contains a certain amount of that ingredient.”); Rudy v. D.F. Stauffer Biscuit Co., Inc., 666 F. Supp. 3d 706, 719 (N.D. Ill. 2023) (“Viewing the representations on the packaging in their entirety, none of the text or images give any indication as to the amount of lemon ingredients the product will contain.”); Chiappetta v. Kellogg Sales

Co., 2022 WL 602505, at *5 (N.D. Ill. Mar. 1, 2022) (“The front of the Product pack- aging does not state or suggest anything about the amount of strawberries in the Product’s filling or guarantee that the filling contains only strawberries, and Chiappetta concedes that the filling contains some strawberries.”); Ledezma v. Up- field US Inc., 2022 WL 16553039, at *5 (N.D. Ill. Oct. 31, 2022) (holding that a spread labeled “With Olive Oil” did “not even obliquely suggest that the product contains a

particular amount of olive oil, let alone [an] unspecified greater amount of olive oil expected by [plaintiff]”); Guzman v. Walmart Inc., 2023 WL 4535903, at *3 (N.D. Ill. May 15, 2023) (“The product’s front label states that it contains ‘Mayo with Olive Oil’ …. A reasonable consumer could not interpret that representation to mean that the mayo contains a particular amount of olive oil.”); see also Weaver v. Champion Petfoods USA Inc., 3 F.4th 927, 937 (7th Cir. 2021) (rejecting the argument that a product label stating “they use fresh regional ingredients” means “they use only fresh regional ingredients,” in the context of a Wisconsin Deceptive Trade Practices Act product mislabeling claim). In contrast, when a plaintiff plausibly alleges that a label

does make a statement about exclusivity, such as “100% Grated Parmesan Cheese,” dismissal is inappropriate. Bell, 982 F.3d at 476–77. Here, the Plaintiffs have not plausibly alleged that a reasonable consumer would conclude, based on the label, that the granola contains only oats, honey, rai- sins, and almonds. The statement “simply granola” with a list of ingredients under- neath it is not like the statement “100% Grated Parmesan Cheese,” and could not plausibly be interpreted to only include those four ingredients. The plaintiffs have

not articulated any reason to deviate from the convincing precedent in this district dismissing complaints for product labels that do not plausibly guarantee the exclu- sivity or predominance of an ingredient named on the label, so Quaker’s motion to dismiss the Fraud Act claim is granted. B. Other Claims The Plaintiffs’ remaining claims for violations of other states’ consumer fraud

acts, the New York General Business Law Sections 349 and 350, California’s Con- sumers Legal Remedies Act, California’s False Advertising Law, and California’s Un- fair Competition Law, as well as their claims for breach of express warranty under New York and California law, breach of implied warranty under California law, and unjust enrichment are all premised on the same allegations of misrepresentation and deception as the Fraud Act claim. See Am. Compl. ¶ 49 (“Defendants intended that Plaintiff Hicken and each of the other members of the CFMS Class would rely upon its deceptive conduct, and a reasonable person would in fact be misled by this decep- tive conduct.”); id. ¶ 56 (“Defendants’ improper consumer-oriented conduct – includ-

ing naming and advertising the Products as ‘SIMPLY GRANOLA’ – is misleading in a material way”); id. ¶ 63 (“Defendants’ naming and advertising of the Products as ‘SIMPLY GRANOLA’ is a materially misleading representation inasmuch as the Rep- resented Ingredients are not the only ingredients used in the Products”); id. ¶ 71 (“Defendants represented on the front label of the Products that the Products are ‘SIMPLY GRANOLA’, followed by a clarifying list of the Represented Ingredients, thus warranting to consumers that the Products only contain the Represented Ingre-

dients”); id. ¶ 85 (“Defendants are aware the claim ‘SIMPLY GRANOLA,’ followed by the purported Represented Ingredients, is misleading and will mislead a reasonable consumer”); id. ¶ 92 (“Defendants violated the FAL by publicly disseminating mis- leading and false advertisements for the Products through the labeling of the Prod- ucts as ‘SIMPLY GRANOLA,’ followed by the Represented Ingredients”); id. ¶ 105 (“Defendants’ sale of the Products with the ‘SIMPLY GRANOLA’ misrepresentation

discussed herein are immoral, unethical, oppressive, and substantially injures con- sumers”); id. ¶ 114 (“Defendants has expressly warranted on the Products’ front pack- aging that the Products were ‘SIMPLY GRANOLA’, followed by a clarifying list of the Represented Ingredients”); id. ¶ 124 (“By advertising the Products’ front labeling with the ‘SIMPLY GRANOLA’ representation, followed by a clarifying list of the Rep- resented Ingredients, Defendants made an implied promise on the Products’ labeling that the Products only contain the Represented Ingredients.”); id. ¶ 128 (“Defendants misrepresented that the Products are ‘SIMPLY’ granola which commanded a price premium for the Products.”). Because the Plaintiffs have not plausibly alleged that

the product’s label is false, misleading, or deceptive as a matter of law as explained above, their remaining claims also fail for the same reasons. See, e.g., Jackson v. Kraft Heinz Foods Co., 2022 WL 4591749, at *4 (N.D. Ill. Aug. 3, 2022); Wach v. Prairie Farms Dairy, Inc., 2022 WL 1591715, at *6 (N.D. Ill. May 19, 2022). C. Preemption Quaker also moves to dismiss on preemption grounds, arguing that all of the state law claims are preempted by the federal Food, Drug & Cosmetic Act, 21 U.S.C.

§§ 343-1(a)(2), (a)(3) (commonly referred to as the FDCA). Although the Plaintiffs have failed to state any claim as a matter of law as described above, the Court will address this argument for the parties’ guidance, especially if the Plaintiffs choose to file a second amended complaint. Quaker contends that it is allowed to depict the granola’s flavors on the front label under federal law, and the Plaintiffs seek to im- pose requirements that conflict with federal law and are thus preempted. Def.’s Mot.

at 4–5 (citing 21 C.F.R. § 101.22(i); In re Quaker Oats Maple & Brown Sugar Instant Oatmeal Litig., 2017 WL 4676585, at *3–6 (C.D. Cal. Oct. 10, 2017)). The Plaintiffs respond that their claims are not about Quaker’s characterization of flavors, meaning that the federal regulations cited by Quaker do not apply. Pls.’ Resp. at 3–4 (citing Hawyuan Yu v. Dr Pepper Snapple Grp., Inc., 2019 WL 2515919, at *4 (N.D. Cal. June 18, 2019)). The FDCA bars states from “directly or indirectly establish[ing] under any au- thority … any requirement for the labeling of a food required by [the Act] that is not identical to the requirement of such section.” 21 U.S.C. § 343-1(a)(2), (a)(3). The Sev-

enth Circuit has held in the context of deceptive-product-label claims that “[t]he FDCA’s preemption provision means that, while states may not require sellers to add further labeling that is not required by federal law, they may prevent sellers from voluntarily adding deceptive content that is not required by federal law.” Bell, 982 F.3d at 483–85. So when a plaintiff seeks more detail on a label than federal law requires by invoking a state law, then such a claim is barred by federal law. Id. at 484; Turek v. General Mills, Inc. 662 F.3d 423, 426–27 (7th Cir. 2011). But the FDCA

does not completely preempt state law claims: state law claims are not preempted in a case like this one, in which the Plaintiffs allege that an affirmative statement made on a label is deceptive. See id. Although the claims fail as a matter of law under Civil Rule 12(b)(6) as explained above, they are not preempted by the FDCA. IV. Conclusion Quaker’s motion to dismiss all of the Plaintiffs’ claims is granted, and the

Amended Complaint is dismissed. Although the Court is skeptical that the Amended Complaint can be fixed, for now the dismissal is without prejudice, because the Plain- tiffs have not had a chance to substantively amend the complaint yet. See supra at 1 n.1 (explaining that the prior amendment only substituted a named plaintiff). The second amended complaint is due (if filed at all) on or before December 17, 2024. If no second amended complaint is filed, then the dismissal will automatically convert to a dismissal with prejudice. The status hearing of December 13, 2024, is reset to December 20, 2024, at 8:30 a.m., but only to track the case.

ENTERED:

s/Edmond E. Chang Honorable Edmond E. Chang United States District Judge

DATE: December 2, 2024