Campbell v. Whole Foods Mkt. Grp., Inc.
| Citation | 516 F.Supp.3d 370 |
| Decision Date | 02 February 2021 |
| Docket Number | 1:20-cv-01291-GHW |
| Parties | Chandra CAMPBELL, individually and on behalf of all others similarly situated, Plaintiff, v. WHOLE FOODS MARKET GROUP, INC., Defendant. |
| Court | U.S. District Court — Southern District of New York |
Michael Robert Reese, Reese Richman, LLP, New York, NY, Christopher Patalano, Spencer Sheehan, Sheehan & Associates, PC, Great Neck, NY, for Plaintiff.
Brian Richard Blackman, David Philip Adams, Blaxter Blackman LLP, San Francisco, CA, for Defendant.
Plaintiff Chandra Campbell bought a box of honey graham crackers at Whole Foods. Ms. Campbell knew something that some customers buying graham crackers may not—"graham" refers to a type of whole-wheat flour. So when she saw a box at Whole Foods touting "Honey Graham Crackers," she understood that the crackers were made mostly of healthy whole-wheat flour, rather than regular white or "refined" flour. And she thought that they were sweetened predominantly with wholesome natural honey, rather than sugar or some other sweetener. But they are not. Ms. Campbell alleges that she was deceived by the product's packaging (notwithstanding the fact that the ingredient label accurately described the crackers’ content). She brings this lawsuit as a result.
Because Plaintiff has plausibly alleged that the references to "honey" and "graham" on the product's packaging are likely to lead a reasonable consumer to wrongly believe that these graham crackers contain more whole-grain flour than non-whole grain flour, and that honey is their predominant sweetener, Plaintiff's consumer protection claims under Sections 349 and 350 of the New York General Business Obligation Law are adequately pleaded. However, Plaintiff's auxiliary tort and warranty claims fail. As a result, Defendant's motion to dismiss is GRANTED in part and DENIED in part.
Whole Foods "manufactures, distributes, markets, labels and sells graham crackers...." FAC ¶ 1. The packaging for the product describes the product in a number of ways that Plaintiff alleges to be deceptive. Id. "The relevant front and identical back representations include ‘Honey Graham Crackers,’ ‘Organic,’ golden brown crackers and a honey dipper resting in a bowl of honey." Id. ¶ 3. Plaintiff alleges that these representations on the packaging lead a reasonable consumer to believe that the graham crackers are "sweetened primarily with honey"—as opposed to sugar or another sweetener—and that the crackers contain predominantly whole-grain flour, as opposed to regular "white" or "refined" flour. Id. ¶¶ 1, 4.
To understand these allegations, one must examine the packaging for the product. The front of the graham cracker box is pictured below.
Id. ¶ 3. As shown here, the package contains the word "Honey" above the word "Graham." Each word is written in large orange letters in the same font type and size. The word "crackers," appears below. That word is written in a deep red, in a smaller font size, and in a very different type face than the words that precede it. Visually, the word "crackers" is treated differently from the words "Honey" and "Graham." These decisions in the graphic design of the packaging make a difference in the Court's analysis: the words "Honey" and "Graham" are graphically equivalent; the word "crackers" is visually distinct from the words preceding it, and subordinate.
The packaging depicts "golden brown crackers," situated on a white plate, tilted attractively toward the eye of the viewer. Id. Beside the crackers is a white bowl full of honey. A honey dipper rises from that bowl. Its handle extends toward the words describing the product. The comb is partly submerged; what is visible to the viewer is uniformly glossed with golden honey.
To understand the allegations, one must also understand the meaning of the words depicted on the packaging. The reader knows what "crackers" and "honey" are. But the reader may not be familiar with the meaning of the word "graham." "Graham flour" means "whole wheat flour." Merriam-Webster Online Dictionary, https://www.merriam-webster.com/dictionary/graham% 20flour (last visited February 1, 2021). "Graham" is an adjective meaning "designating or made of whole-wheat flour." Collins Dictionary, https://www.collinsdictionary.com/us/dictionary/english/ (last visited February 1, 2021); see also FAC ¶¶ 39–43.
Thus, as alleged by Plaintiff, "the ‘Graham’ in ‘Honey Graham Crackers’ refers to whole grain flour." FAC ¶ 43. Plaintiff's understanding is consistent with dictionary definitions of a "graham cracker." A "graham cracker" can be defined as "a slightly sweet cracker made of whole wheat flour" or "a semisweet cracker, usually rectangular in shape, made chiefly with whole-wheat flour." Id. ¶ 40; see also Merriam-Webster Online Dictionary, https://www.merriam-webster.com/dictionary/graham% 20cracker (last visited February 1, 2021).
So according to Plaintiff, a consumer reading the packaging for Defendant's product will understand it to describe two principal ingredients of the crackers: honey and graham (or, with the definition of graham in mind, honey and whole wheat flour). Plaintiff alleges that this is misleading because the principal wheat product in the crackers is not whole wheat flour, but rather "enriched flour," or "refined flour." FAC ¶ 43. And the principal sweetener is not honey, but instead cane sugar.
The box for the product contains an ingredient list.1 The complaint reproduces the ingredient list twice. In the first reproduction of the ingredient list, Plaintiff highlights the fact that there is more cane sugar in the crackers than honey.
INGREDIENTS: ORGANIC WHEAT FLOUR, ORGANIC CANE SUGAR, ORGANIC EXPELLER PRESSED SUNFLOWER SEED OIL, AND/OR ORGANIC EXPELLER EXPRESSED SAFFLOWER SEED OIL, AND/OR ORGANIC EXPELLER EXPRESSED CANOLA OIL, ORGANIC WHOLE WHEAT FLOUR, ORGANIC HONEY, ORGANIC MOLASSES, CONTAINS LESS THAN 2% OF EACH OF THE FOLLOWING: ORGANIC CANE SYRUP, SEA SALT, BAKING SODA (SODIUM BICARBONATE), AMMONIUM BICARBONATE, SEA SALT, CREAM OF TARTAR.
Id. ¶ 30–31. According to Plaintiff, Defendant's crackers are "sweetened primarily with sugar and contain only miniscule amounts of honey." Id. ¶ 10. "[T]he maximum amount of honey in the Products would be slightly above 2% ...." Id. ¶ 38.
The second image highlights the fact that there is more regular, "refined flour" in Defendant's crackers than whole wheat flour.
INGREDIENTS: ORGANIC WHEAT FLOUR, ORGANIC CANE SUGAR, ORGANIC EXPELLER PRESSED SUNFLOWER SEED OIL, AND/OR ORGANIC EXPELLER EXPRESSED SAFFLOWER SEED OIL, AND/OR ORGANIC EXPELLER EXPRESSED CANOLA OIL, ORGANIC WHOLE WHEAT FLOUR, ORGANIC: HONEY, ORGANIC MOLASSES, CONTAINS LESS THAN 2% OF EACH OF THE FOLLOWING: ORGANIC CANE SYRUP, SEA SALT, BAKING SODA (SODIUM BICARBONATE), AMMONIUM BICARBONATE, SEA SALT, CREAM OF TARTAR.
Id. ¶ 44. The actual amount of whole grain flour in Defendant's crackers "is no greater than five grams out of the 31 grams in a serving." Id. ¶ 45.
According to Plaintiff, consumers care if the products they buy are made from honey, as opposed to cane sugar. The complaint points to studies supporting that conclusion and a "consensus among doctors and nutritionists that ‘[e]ating too much sugar contributes to numerous health problems ....’ " Id. ¶ 13. As a result of increasing consumer awareness of such risks, "in recent years consumers have shown a distinct preference for products with little or no added sugar." Id. ¶ 16. Consumers rate honey as "better for you" than sugar. Id. ¶ 21. "Based on the common marketplace perception that honey is healthier and more natural than sugar, consumers place a greater value on products that are sweetened with honey instead of sugar and are willing to pay a higher price for such products." Id. ¶ 28.
Some consumers also seek goods made with whole wheat flour rather than refined flour. "Consumer surveys have confirmed that consumers increasingly seek products made with whole grains because they are expected to contain, and do contain, more fiber than refined white flour." Id. ¶ 50. According to Plaintiff, the United States Federal Trade Commission has "recognized that ‘[M]any reasonable consumers will likely understand ‘whole grain’ [claims] to mean that all, or virtually all, of the food product is whole grain, or that all of the grain ingredients in the product are whole grains.’ " Id. ¶ 54.
Plaintiff says that she is such a concerned consumer. She saw a box of "Honey Graham Crackers" at a Whole Foods store in Manhattan. Id. ¶ 88. She was deceived by the product's packaging. From the packaging, she expected that the crackers would "have more than 15 percent whole grain content and contain more than 3 percent honey." Id. ¶ 89. Despite the ingredient label, she believes that the packaging misrepresents the crackers to contain more honey and whole grain flour than sugar and non-whole grain flour. She would not have bought the product had she not been deceived by its labelling. She intends to buy the product again when she "can do so with the assurance that Product's label is lawful and consistent with the Product's ingredients." Id. ¶ 95.
Plaintiff initiated this action on February 13, 2020. Dkt. No. 1. She filed an amended complaint (the "First Amended Complaint" or the "FAC") on August 4, 2020. Dkt. No. 17. In the First Amended Complaint, Plaintiff asserts claims for violations of Sections 349 and 350 of the New York General Business Law ("GBL"), negligent misrepresentation, breach of express warranty, breach of the implied warranty of merchantability, violation of the Magnuson Moss Warranty Act, 15 U.S.C. § 2301, et seg. , fraud, and unjust enrichment. Plaintiff also asserts claims on behalf of a putative class of "all purchasers of the Products in New York during the applicable statutes of limitations." FAC ¶ 96. In addition to damages, she seeks injunctive relief. Id. at 20.
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