Ward v. Pepperidge Farm, Inc.

Background

Veronika Ward brought a proposed class action against Pepperidge Farm, Inc. concerning Goldfish Flavor Blasted Baked Snack Crackers. The product packaging states, “No Artificial Flavors or Preservatives,” and lists citric acid as an ingredient. Ward alleges that citric acid is an artificial preservative and that the label therefore misleads reasonable consumers. She alleges that she bought the product in New York, would not have bought it—or would have paid less—if she had known of the alleged misrepresentation, and seeks class certification, injunctive relief, damages, and attorneys’ fees.

The complaint asserts claims under sections 349 and 350 of the New York General Business Law, for deceptive business practices and false advertising; breach of express warranty; and unjust enrichment. Pepperidge Farm moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint plausibly states a legal claim based on its allegations.

Deceptive-practices and false-advertising claims

The court held that Ward plausibly alleged the elements of her New York General Business Law claims: consumer-oriented conduct, a materially misleading statement, and injury caused by the alleged deception. Pepperidge Farm did not dispute that Ward adequately alleged consumer-oriented conduct and injury; it challenged whether she adequately alleged that citric acid was an artificial preservative.

The court found Ward’s allegations sufficient at the pleading stage to show that citric acid functions as a preservative in the product. Ward relied on Food and Drug Administration descriptions, warning letters, and allegations that citric acid stabilizes and preserves food products.

The court also found sufficient allegations that the citric acid was artificial. Ward alleged that more than 90 percent of commercially produced citric acid, including the citric acid in the product, is manufactured through a process using a derivative of black mold, while natural citric acid comes from certain citrus fruits. She also alleged negative health effects associated with manufactured citric acid. The court concluded that the alleged production process, industry practices, and chemical differences plausibly supported treating the product’s citric acid as artificial.

The court rejected Pepperidge Farm’s argument that the ingredient list and Nutrition Facts panel made it unreasonable for consumers to be misled. It explained that consumers are not necessarily expected to use detailed information elsewhere on the package to correct a potentially misleading statement, particularly when consumers may not know whether an ingredient listed on the package is synthetic. The court therefore held that Ward adequately alleged that the packaging was materially misleading.

Federal preemption

Pepperidge Farm argued that federal food-labeling law preempted Ward’s New York claims. The court disagreed. It reasoned that Ward was challenging the truthfulness of the “No Artificial Flavors or Preservatives” statement rather than seeking to impose labeling requirements that differed from federal requirements. The court also stated that federal law regulates what must be identified on a label but does not necessarily prevent a state-law challenge to a deceptive statement about what a product does not contain.

Express-warranty claim

The court held that Ward also adequately stated a claim for breach of express warranty. It rejected Pepperidge Farm’s argument that the claim failed for lack of contractual privity, meaning a direct contractual relationship between Ward and the manufacturer. The court applied an exception for misrepresentations made in public advertising or sales literature and concluded that the exception could apply to the representation on the product packaging.

Disposition

The court denied Pepperidge Farm’s motion to dismiss the complaint. The opinion does not separately explain its analysis of the unjust-enrichment claim. The case was referred to Magistrate Judge Robyn F. Tarnofsky for general pretrial matters in a separate order.