Lederman v. The Hershey Co., 21-cv-4528

CourtUnited States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
Writing for the CourtRobert M. Dow, Jr., United States District Judge
PartiesSANDRA LEDERMAN, individually and on behalf of all others similarly situated, Plaintiff, v. THE HERSHEY COMPANY, Defendant.
Docket Number21-cv-4528
Decision Date19 August 2022

SANDRA LEDERMAN, individually and on behalf of all others similarly situated, Plaintiff,
v.

THE HERSHEY COMPANY, Defendant.

No. 21-cv-4528

United States District Court, N.D. Illinois, Eastern Division

August 19, 2022


MEMORANDUM OPINION AND ORDER

Robert M. Dow, Jr., United States District Judge

Plaintiff Sandra Lederman initiated this putative class action against Defendant Hershey Company on August 24, 2021, after its “Hot Fudge Topping” (the “Product”) failed to meet her expectations. Plaintiff believes that the Product's label is misleading because it is not real fudge; rather, in her view, it is simply “chocolate sauce.” Plaintiff alleges the Product “lacks ingredients essential to hot fudge,” and thus is deceptively labeled. She asserts that this misnomer gives rise to several claims: violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”); violation of consumer-protection laws in Iowa and Arkansas; state-law claims for breach of express and implied warranties and under the Magnuson Moss Warranty Act (“MMWA”); negligent misrepresentation; fraud; and unjust enrichment. Plaintiff asserts federal court jurisdiction on the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1332(d)(2). Before the Court is Defendant's motion to dismiss [15] pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. For the reasons stated below, Defendant's motion [15] is granted. Plaintiff is given leave to replead no later than September 19, 2022. If Plaintiff does not file an amended complaint by that date (or any extension granted by the Court), the case will be dismissed with prejudice and a final judgment will be entered. If Plaintiff files an amended

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complaint, Defendant's responsive pleading will be due by October 17, 2022, and the Court will set a status hearing shortly thereafter.

I. Background[1]

Defendant manufactures, labels, markets, and sells “Hot Fudge Topping” under the Hershey's brand. [1 at ¶ 1.] As shown in the image below, the product is sold in a jar with a front label that says, “Hershey's Hot Fudge Topping,” “120 calories per 2 TBSP,” and indicates that the jar has a net weight of 12.8 oz.:

(Image Omitted)

[Id.] The back of the label lists the ingredients:

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(Image Omitted)

[Id. at ¶ 43.] As the label indicates, the product contains several dairy ingredients, including “sweetened condensed skim milk (skim milk; sugar),” skim milk, and “whey (milk).” [Id. at ¶ 44.]

Plaintiff alleges that she purchased the Product on one or more occasions between May and June 2021. [1 at ¶ 83.] She claims that she bought Hershey's Hot Fudge Topping because “she expected it would contain ingredients essential to (hot) fudge,” but instead had purchased a product that “get[s] its consistency and texture from vegetable fats and use[s] dairy ingredients with their valuable fat content removed.” [Id. at ¶¶ 84-87.] Because the topping “lacks ingredients essential to hot fudge - cream and whole milk - and substitutes lower quality and lower priced vegetable oil, skim milk, and whey,” the resulting confection “provides less satiety, a waxy and oily mouthfeel, and leaves an after taste.” [Id. at ¶¶ 43, 51.] Plaintiff believes that these “misleading representations and omissions” allow Defendant to sell the Product at “a higher price than it would otherwise be sold for,” and as a result, she suffered damage when she paid more for the Product than its worth. [Id. at ¶¶ 65-66.]

II. Legal Standard

To survive a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted, the complaint first must comply with Rule 8(a) by providing “a short and plain statement of the claim showing that the pleader is entitled to relief,” Fed.R.Civ.P. 8(a)(2), such that the defendant is given “fair notice of what the * * * claim is and the grounds upon which it

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rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)) (alteration in original). Second, the factual allegations in the complaint must be sufficient to raise the possibility of relief above the “speculative level.” E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773, 776 (7th Cir. 2007) (quoting Twombly, 550 U.S. at 555). “A pleading that offers ‘labels and conclusions' or a ‘formulaic recitation of the elements of a cause of action will not do.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555).

Dismissal for failure to state a claim under Rule 12(b)(6) is proper “when the allegations in a complaint, however true, could not raise a claim of entitlement to relief.” Twombly, 550 U.S. at 558. In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court accepts as true all of Plaintiffs well-pleaded factual allegations and draws all reasonable inferences in Plaintiffs favor. Killingsworth v. HSBC Bank Nevada, N.A., 507 F.3d 614, 618 (7th Cir. 2007). However, “[t]o survive a motion to dismiss, the well-pleaded facts of the complaint must allow the court to infer more than the mere possibility of misconduct.” Langworthy v. Honeywell Life & Acc. Ins. Plan, 2009 WL 3464131, at *2 (N.D. Ill. Oct. 22, 2009) (citing McCauley v. City of Chicago, 671 F.3d 611,616 (7th Cir. 2011)). Additionally, the Court “need not accept as true legal conclusions, or threadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009) (quoting Iqbal, 556 U.S. at 678). Evaluating whether a “claim is sufficiently plausible to survive a motion to dismiss is ‘a context specific task that requires the reviewing court to draw on its judicial experience and common sense.'” Id. (quoting McCauley, 671 F.3d at 616).

Claims alleging fraud, including those asserted under the ICFA, are subject to the heightened pleading standard of Federal Rule of Civil Procedure 9(b),

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see Haywood v. Massage Envy Franchising, LLC, 887 F.3d 329, 333 (7th Cir. 2018), which means that Plaintiff must “state with particularity the circumstances constituting fraud.” Fed.R.Civ.P. 9(b). “This ordinarily requires describing the ‘who, what, when, where, and how' of the fraud, although the exact level of particularity that is required will necessarily differ based on the facts of the case.” Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732,736 (7th Cir. 2014) (quoting AnchorBank, FSB v. Hofer, 649 F.3d 610, 615 (7th Cir. 2011)).

III. Analysis

Plaintiff defines fudge as a “soft candy” made from sugar, butter, and milk or cream (and “sometimes nuts”). [1 at ¶¶ 16-20.] According to Plaintiff, the value of fudge turns on its dairy content. She maintains that “[t]he quality of fudge depends on the amount and type of fat-contributing ingredients” [1 at ¶ 21], and those “fat ingredients are typically from dairy or vegetable oils.” [1 at ¶ 24.] “If the fat content is too high, it can lead to oil separation and a greasy texture” [1 at ¶ 23], but if the fat content is too low, the resulting fudge “provides less satiety, a waxy and oily mouthfeel, and leaves an aftertaste” [1 at ¶ 51]. In Plaintiff's view, Hershey's Hot Fudge Topping falls into the latter category-its fat content is too low to call it fudge.

A. ICFA

The “ICFA ‘is a regulatory and remedial statute intended to protect consumers, borrowers, and business persons against fraud, unfair methods of competition, and other unfair and deceptive business practices.'” Siegel v. Shell Oil Co., 612 F.3d 932, 934 (7th Cir. 2010) (quoting Robinson v. Toyota Motor Credit Corp., 775 N.E.2d 951, 960 (Ill. 2002)). “To prevail on a claim under the ICFA, ‘a plaintiff must plead and prove that the defendant committed a deceptive or unfair act with the intent that others rely on the deception, that the act occurred in the course of trade or commerce, and that it caused actual damages.'” Benson v. Fannie May Confections Brands, Inc., 944 F.3d 639, 646 (7th Cir. 2019)

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(quoting Vanzant v. Hill's Pet Nutrition, Inc., 934 F.3d 730, 736 (7th Cir. 2019)).

Plaintiff asserts pursuant to the ICFA that Defendant used “false and deceptive representations” to sell its Hot Fudge Topping product. [1 at ¶ 104.] Plaintiff maintains that she purchased the product believing that it “contained components essential to fudge, such as dairy ingredients without their fat content removed, instead of getting its texture and fat content from vegetable oil.” [Id. at ¶ 103.] Had she known that the product lacked those “essential” ingredients, Plaintiff “would not have purchased the Product or paid as much.” [Id. at ¶ 107.] Defendant challenges Plaintiff's narrow definition of “fudge.” It maintains that the product's label-Hot Fudge Topping-“perfectly describes the thick chocolate sauce contained therein” [16 at 5], and thus is not misleading. Defendant seeks dismissal on Plaintiffs ICFA claim on grounds that she has not sufficiently alleged a deceptive act or practice.

“[A] practice is deceptive ‘if it creates a likelihood of deception or has the capacity to deceive.'” Benson, 944 F.3d at 646 (quoting Bober v. Glaxo Wellcome PLC, 246 F.3d 934, 938 (7th Cir. 2001)). Courts analyze the likelihood of deception by applying a “reasonable consumer” standard, see id., which requires considering whether there is “‘a probability that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled.'” Weaver v. Champion Pet Foods USA Inc., 3 F.4th 927, 937 (7th Cir. 2021) (quoting Beardsail v. CVS Pharm., Inc., 953 F.3d 969, 973 (7th Cir. 2020)). Where, as here, the claim is about the accuracy of the Product's labeling, “[w]hat matters most is how real consumers understand and react to the advertising.” Bell v. Publix Super Markets, Inc., 982 F.3d 468,476 (7th Cir. 2020). “And where plaintiffs base deceptive advertising claims on...

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