Plaintiffs’ “Misleading Marketing and Labeling” Claims Thrown Out in N.D. Ill. Popcorn Case
Today’s case is not about drugs or medical devices. It is about popcorn, a perfect prompt (or as good as ours ever get) for a rant about movies. We are working our way through the Oscar nominees, in anticipation of the upcoming Academy Awards. (Pre-apocalypse, we hosted an annual Oscar party, featuring good food, good wine, and just enough wagering – and cheating – for a bit of hostility.) As we watch this year’s slate, we long for the days when movies provided an escape from reality. The lights went down, the credits rolled, and we met characters we loved and whose fate mattered to us. We laughed and we cried. At the end, we felt attachment and emotion. Sometimes we even felt happy. Now, we confess to a bit of exhilaration while watching the new Top Gun. We liked the music in the overlong Elvis movie. And we enjoyed The Fabelmans. But these are offset by films so dark (literally and figuratively — several look like their lighting budgets ran out early in filming) that it has taken us two or three rentals to grind through them, and we end up feeling like we need a shower, a nap, or a drink – or all three – when we finally make it to the end. We wax nostalgic about Love, Actually, The American President, Steel Magnolias. Something’s Gotta Give. It’s Complicated. (Yes, we know we are showing our age.) Instead, we are treated to severed fingers, sheltered women being brutalized, sadistic conductors casually ruining lives. All are brilliant movies, qua filmmaking. But we feel cheated.
Back to popcorn. In Richburg v. Conagra Brands, Inc., 2023 U.S. Dist. LEXIS 21137 (N.D. Ill. Feb. 8, 2023), the district court dismissed a putative class action brought by consumers of the defendant’s microwave popcorn, alleging that the popcorn was misleadingly marketed and labeled. The popcorn claimed that it contained “only real ingredients” and “100% ingredients from natural sources.” But the plaintiffs alleged that the popcorn created a “unique risk” of exposure to allegedly hazardous substances called “PFAS” (per-and polyfluoroalkyl substances) used to increase the water- and grease-resistance of the popcorn’s microwaveable bags and to enhance their non-stick properties. They cited studies “confirm[ing] that PFAS [in food contact materials] migrates to food where it is then ingested by consumers.” Richburg, 2023 U.S. Dist. LEXIS 21137 at *4-5. They alleged that the defendant had “falsely and misleadingly marketed and labeled” the popcorn because it had not listed the PFAS among the popcorn’s ingredients. The defendant moved to dismiss all counts of the complaint, arguing that: 1) the plaintiffs lacked standing; 2) the plaintiffs had not plausibly alleged the presence of PFAS in the popcorn itself; 3) the challenged statements and omissions could not mislead a reasonable consumer; and 4) the claims were expressly preempted.
At the defendant’s request, the court took judicial notice of an FDA document authorizing the use of PFAS in food contact applications.
Standing
The defendant argued that the plaintiffs lacked standing because they had not alleged “concrete or particularized economic harms” under either the benefit-of-the-bargain or price-premium theories of their claims. Specifically, the plaintiffs did not “allege[] that they purchased products that were actually worth less than what they paid for them.” Id. at *11 – 12. With respect to the benefit-of-the-bargain theory, the court agreed, holding, “As defendant argues, plaintiffs purchased popcorn and they received popcorn; they have offered only conclusory allegations to suggest that the products have diminished value. Thus, the court does not need to evaluate whether plaintiffs have plausibly pled that the products contained PFAS” Id. at *13.
But the questions of standing under the price-premium theory was a different story. The defendant argued that there was no evidence that the plaintiffs paid more for the popcorn because it contained only “real and natural ingredients,” but the court disagreed. The court held, “Taking the facts in the light most favorable to plaintiffs, plaintiffs allege that they relied on certain representations on defendants’ packaging and paid more than they otherwise would have for a product that contained a risk of PFAS contamination.” Id. at *14. In other words, the court held, the plaintiffs had alleged injuries based on the price they paid for products they believed to contain only natural ingredients and the price for products with alleged PFAS contamination. And the court agreed with the plaintiffs that they had alleged “particularized and non-speculative injuries based on economic harm, holding that it was sufficient, at this stage, for the plaintiffs to “plausibly allege” that they paid an “elevated price” for the products based on the defendant’s representations – it was irrelevant whether they could prove that the popcorn actually contained elevated levels of PFAS. So, the court held, the plaintiffs had standing for their money damage s claims under the premium-price theory, but not for injunctive relief. With respect to the class action allegations, the court held that the plaintiffs had “sufficiently established standing on behalf of the putative classes for money damages, but not injunctive relief,” id. at *17-18, but they had not established standing for putative class members in states in which they did not reside or buy the defendant’s product.
Failure to State a Claim
Next, the court considered the defendant’s 12(b)(6) arguments. The court rejected the defendant’s argument that the claims should be dismissed because the plaintiffs had not plausibly alleged the presence of PFAS in the popcorn. The defendant argued that the allegations of third-party testing of the products bags were conclusory and insufficiently detailed, and attacked certain “contextual details” of the testing allegations. The court held that all of this was for another day, agreeing with the plaintiffs that the allegations about the testing were proper subjects for discovery and that the defendant’s arguments required the court to “inappropriately delve into the merits of [the] action.” Id. at *20. But it agreed with the defendant that the challenged statements and omissions on the defendant’s packaging would not mislead a reasonable consumer – that consumers understood “ingredients” to be “those items listed in the ingredient list that is mandated by the FDA” pursuant to the FDCA. As the court explained, the FDA “exempts substances migrating to food from equipment or packaging;” those “do not need to be included in the ingredients list.” Id. at *22 (citations omitted). The defendant argued that reasonable consumers would not consider PFAS to be an “ingredient” under this regime. In other words, whether or not PFAS migrated into the popcorn, the representations that the popcorn contained “only real ingredients” and “100% ingredients from natural sources” were “correct as a matter of law.” Id. at *22. The court dismissed all of the claims on this basis and did not have to reach the defendant’s preemption argument.
Richburg is a lot more palatable and satisfying than our last few Oscar movies. Next, we tackle a film about a catastrophic cruise ship accident. Just for giggles. Happy viewing, and stay safe out there.