Prescott v. Nestle USA, Inc

Background

Steven Prescott and Linda Cheslow brought this putative class action over Nestlé’s “Nestlé Toll House Premier White Morsels.” They alleged that the product’s packaging and advertising misled consumers into believing that the product contained white chocolate, although it did not. They asserted claims under California’s Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act, and sought injunctive relief and restitution for a nationwide class or, alternatively, a California class.

The case had previously been dismissed with leave to amend. In the second amended complaint, the plaintiffs again relied on the words “Premier White,” pictures of white morsels and a cookie, the product’s placement near chocolate baking chips, an allegation that Nestlé controlled that placement, a consumer survey, and consumer complaints. The survey allegedly showed that about 95% of respondents believed the product contained white chocolate.

Motion and legal standard

Nestlé moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. The court applied California law and the reasonable-consumer test used for the UCL, FAL, and CLRA. Under that test, plaintiffs must plausibly allege that members of the public are likely to be deceived. The court noted that dismissal is proper when the alleged deception is not plausible as a matter of law.

Court’s reasoning

The court held that the plaintiffs failed to state a claim under the reasonable-consumer test. It concluded that the words “white” and “premier” do not denote chocolate. “Premier” was non-actionable puffery, meaning a general promotional statement that does not make a specific factual promise. The court also found that the ordinary meaning of “white” refers to color and does not suggest that the product is white chocolate.

The court determined that the package’s pictures of a cookie and white morsels did not identify what the morsels were made of. It also found that the product’s location in a baking aisle, its possible placement near chocolate chips, and the Nestlé brand name did not make the label misleading. The court stated that baking aisles contain various non-chocolate baking chips and that Nestlé makes products that do not contain chocolate. The plaintiffs’ allegation that Nestlé controlled store placement was considered conclusory because they did not provide a factual basis for it.

The court rejected the argument that the consumer survey could save the claims. Relying on Ninth Circuit precedent, it held that the survey could not independently establish a plausible theory of deception when the product label itself did not suggest that the morsels contained chocolate. The court therefore dismissed all claims under the UCL, FAL, and CLRA. It did not address Nestlé’s additional arguments concerning the package’s back label or alleged problems with the survey.

Injunctive relief and disposition

The court also ruled that the plaintiffs failed to allege standing to seek an injunction. To obtain injunctive relief, they had to show a likelihood that they would be misled again. Their allegation that they would buy the product in the future if it contained white chocolate was insufficient. Their alternative allegation that they might buy it if the label clarified that it lacked white chocolate, but only at a lower price, was also insufficient; they cited no authority allowing the court to require Nestlé to reduce the product’s price.

Judge Beth Labson Freeman found that further amendment was not warranted because the plaintiffs had already received guidance and still had not stated a viable claim. The court granted Nestlé’s motion to dismiss without leave to amend and dismissed the action with prejudice. The order terminated the motion identified as ECF 55.