October 28, 2013
Practice Groups:
Commercial Disputes
Toxic Tort
Product Liability
Food, Drugs, Medical
Devices and
Cosmetics (FDA)
She Can’t Believe It’s Not Butter: Recent California
Decision Reinforces the “Reasonable Consumer
Standard” in Consumer Class Actions
By Brendan M. Ford and Cassandra S. Jones
In recent years, California retailers and product manufacturers have been inundated with
consumer class action lawsuits. Because the question of whether a given product’s label
and related representations are false or misleading is often fact-intensive, many cases
survive a challenge at the pleading stage. As a result, some companies have opted for early
settlement rather than risk lengthy (and expensive) litigation. However, the California Court
of Appeals recently issued a decision that may provide defendants with another argument for
dismissal at the pleading stage.
In Simpson v. Kroger 1, plaintiff alleged that the defendant’s butter was mislabeled because it
included canola oil and/or olive oil among its ingredients, and therefore was not “butter.”
Plaintiff asserted claims for unfair competition in violation of California Business and
Professions Code Section 17200 (“UCL”), false advertising in violation of California Business
and Professions Code Section 17500 (“FAL”), and violation of the California Consumer Legal
Remedies Act (“CLRA”). The trial court dismissed the case, and the California Court of
Appeal affirmed.
On appeal, plaintiff offered two arguments: (1) defendant’s “spreadable butter” products —
which contained canola and/or olive oil — were falsely marketed and mislabeled as “butter,”
in violation of federal and state law; and (2) defendant was liable under state and federal law
because the oils in defendant’s spreadable butter were not identified with requisite
prominence on the labels. According to plaintiff, the over-prominence and conspicuousness
of the word “butter” on the label was misleading because it would lead consumers to believe
that defendant’s product was actually standard butter.
The appellate court rejected both contentions.
First, addressing preemption, the appellate court affirmed that the federal Food, Drug and
Cosmetic Act preempts plaintiff’s claims that defendant’s spreadable butter was misleadingly
labeled under California’s Milk and Milk Products Act. The court also held, however, that
plaintiff’s mislabeling claims under the California Sherman Food, Drug, and Cosmetic Law
were not preempted by federal law.
Second, the appellate court held that, notwithstanding the preemption analysis, plaintiff’s
UCL, FAL, and CLRA claims still failed. The Court of Appeal held that (a) a plaintiff must
establish that consumers were likely to be deceived by the product; (b) in certain
circumstances, a court can say, as a matter of law, that “contrary to the complaint’s
allegations, members of the public were not likely to be deceived or misled by…packaging
1
__ Cal.App.4th ___ (Sept. 25, 2013), available at http://www.courts.ca.gov/opinions/documents/B242405.PDF
She Can’t Believe It’s Not Butter: Recent California
Decision Reinforces the “Reasonable Consumer Standard”
in Consumer Class Actions
materials; ” 2 and (c) that “plaintiff has not, and as a matter of law cannot, allege that a
reasonable consumer would have been mislead by the labels here.” 3
More specifically:
The labels on the products here clearly informed any reasonable consumer that the
products contain both butter and canola or olive oil. This was plain on both the top
and side panels of the tubs in which the products are sold. No reasonable person
could purchase these products believing that they had purchased a product
containing only butter. 4
While Simpson does not foreclose plaintiffs from bringing false advertising claims, the
potential for dismissing UCL, FAL, and CLRA claims at the pleading stage has been
enhanced and is indeed a positive development for consumer class action defendants. It
remains to be seen how often, and in what circumstances, other courts are willing to follow
Simpson.
Authors:
Brendan M. Ford
brendan.ford@klgates.com
+1. 949.623.3573
Cassandra S. Jones
cassandra.jones@klgates.com
+1. 949.623.3585
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Slip op. at 18 (citing Day v. AT&T Corp. 63 Cal.App.4th 325, 333 (1998)).
Id. at 17.
4
Id. at 19.
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2