Levit v. Nature's Bakery, LLC

Background

Nature’s Bakery manufactures and sells fig bars. The product packaging includes statements such as “Wholesome Baked In,” “equal parts wholesome and delicious,” “what we bake in is as important as what we leave out,” “simple snacks made with real ingredients,” and “the best fuel for active . . . lives.” The packaging also includes a heart image next to fruit and a Whole Grains Council stamp.

Andrew Levit alleged that these statements and images conveyed that the products were healthy, although the products allegedly contained 19 grams of total sugar per serving, including 14 grams of added sugar. He asserted claims under California’s Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act, along with claims for breach of warranty, negligent and intentional misrepresentation, and unjust enrichment. The complaint sought relief for Levit and a proposed class.

Nature’s Bakery moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. The court incorporated the entire product label into the case record because the label formed the basis of Levit’s claims.

Consumer-Protection Claims

The court analyzed the claims under California’s “reasonable consumer” test, which asks whether the challenged advertising was likely to mislead a reasonable consumer. It held that “what we bake in is as important as what we leave out” was an unmeasurable opinion. It also held that the statements about “simple snacks made with real ingredients” and “the best fuel for active, joyful lives,” considered in their full context, were subjective advertising opinions. The court likewise held that the heart image was puffery, meaning exaggerated advertising on which a reasonable buyer would not rely. It found that Levit had not alleged that the Whole Grains Council stamp was false and held that the stamp was not actionable.

The court reached a different conclusion about “Wholesome Baked In” and “equal parts wholesome and delicious.” Relying in part on prior food-labeling decisions, it held that “wholesome” could cause a reasonable consumer to think that a product was healthy and could not be treated as puffery at the motion-to-dismiss stage. The court found that Levit plausibly alleged that the products’ added-sugar content, together with the packaging’s health-related message, could deceive reasonable consumers.

The court rejected Nature’s Bakery’s argument that the Nutrition Facts panel and ingredient list prevented deception as a matter of law. It explained that accurate information elsewhere on a package does not necessarily eliminate the possibility that prominent statements on the front of the package mislead consumers.

Fraudulent-Omission Claims

Levit also alleged that Nature’s Bakery failed to disclose the health consequences of consuming the products. The court dismissed those omission claims. It held that the alleged health risks were not contrary to a representation actually made by Nature’s Bakery and that Levit had not plausibly alleged a legal duty requiring Nature’s Bakery to disclose the information.

Warranty and Misrepresentation Claims

The court denied dismissal of Levit’s implied-warranty claim on the ground that he failed to identify the label terms forming the basis of the warranty. The court found that he had identified the relevant representations, including that the products were wholesome and healthy.

The court also denied dismissal of the negligent-misrepresentation claim. It held that the heightened fraud-pleading rule in Federal Rule of Civil Procedure 9(b) does not apply to a California negligent-misrepresentation claim under the court’s view of the law. The court further found that Levit had plausibly alleged intentional misrepresentation, including that Nature’s Bakery knew or recklessly disregarded whether its representations were misleading and intended consumers to rely on them.

The court rejected Nature’s Bakery’s argument that unjust enrichment had to be dismissed solely because it is not a recognized cause of action under California law. The court stated that Ninth Circuit precedent allows an unjust-enrichment claim through a quasi-contract theory.

Standing

Nature’s Bakery argued that Levit lacked Article III standing because he had not alleged economic injury. The court rejected that argument, finding sufficient Levit’s allegation that he would not have purchased the products if he had known the labeling claims were false and misleading.

The court also found that Levit had standing to seek injunctive relief. It held that his allegation that he would buy the products in the future if they were truthfully labeled, but could not rely on the health claims without an injunction, was sufficient at this stage.

Disposition

The court granted in part and denied in part Nature’s Bakery’s motion to dismiss. It granted leave to amend, allowing Levit 21 days to file an amended complaint solely to cure the deficiencies identified in the order. If Levit did not amend, the court stated that the case would proceed only on the remaining causes of action.