Cheslow v. Ghirardelli Chocolate Company

Background

Linda Cheslow and Steven Prescott sued Ghirardelli Chocolate Company after purchasing Classic White Chips. They alleged that the product’s labeling, advertising, packaging, website references, and store placement led reasonable consumers to believe the product contained white chocolate, even though it contained no chocolate. They also alleged that Ghirardelli had previously sold a similar product containing real white chocolate and later replaced it with a product made without chocolate.

The complaint asserted three California claims: violation of the Unfair Competition Law, false and misleading advertising, and violation of the Consumer Legal Remedies Act. The plaintiffs sought to represent people who purchased the product for personal consumption in the United States or, alternatively, California.

Legal standard

The court evaluated the motion under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. Because the claims were based on alleged deception, the court also applied Rule 9(b), which requires fraud allegations to describe the misconduct with particularity, including what was misleading and why.

Under California’s “reasonable consumer” test, the plaintiffs had to plausibly allege that a significant portion of reasonable consumers could be deceived. The court noted that this question is usually factual, but a court may decide at the dismissal stage that alleged deception is not plausible as a matter of law.

Court’s analysis

The court granted Ghirardelli’s request for judicial notice of a high-resolution image of the product packaging because the packaging was publicly available and not reasonably disputable.

The court concluded that the phrase “white chips” did not plausibly imply white chocolate. It read “white” as describing the color of the chips, not their quality or ingredients. The court also held that “premium” was nonactionable puffery—generalized praise that has no clear, measurable meaning and on which a reasonable consumer would not rely.

The court found that the cookie image and the recipe for “Ghirardelli Macadamia White Chip Cookies” did not communicate that the chips contained chocolate. The image could reasonably suggest that the product contained chips, but it did not support a specific conclusion about the quality or ingredients of those chips.

The court also rejected the argument that the ingredient list could be ignored. Because the court found no misleading statement or image elsewhere on the package, it held that consumers could not disregard the ingredient list, which did not list chocolate or cocoa. The court distinguished cases in which an ingredient list could not cure a misleading front-of-package representation.

The court found that the plaintiffs had not alleged that they viewed or relied on Ghirardelli’s website. Even if the website were considered, the word “chocolate” in Ghirardelli’s logo was not connected to the Classic White Chips product and did not plausibly communicate that the chips contained chocolate. The court also found no alleged reliance on the earlier white-chocolate product. Finally, the product’s placement near other Ghirardelli products did not support the claims because the complaint did not allege that Ghirardelli controlled the placement, and the placement did not create a plausible deceptive message.

Disposition

The court held that the lack of affirmative deceptive statements, together with the ingredient list, meant that the plaintiffs’ Unfair Competition Law, false-advertising, and Consumer Legal Remedies Act claims failed to state a claim as a matter of law. Judge Phyllis J. Hamilton granted the motion to dismiss the first through third causes of action and dismissed the claims without prejudice. The court allowed the plaintiffs 21 days to file an amended complaint, stating that no new parties or causes of action could be added without court permission or Ghirardelli’s agreement.