Kennard v. Kellogg Sales Company

Background

Angela Kennard filed a putative class action alleging that Kellogg misleadingly labeled several MorningStar Farms meat-substitute products with terms including “VEGGIE BURGERS,” “VEGGIE DOGS,” “VEGGIE CHIK’N,” “VEGGIE MEAL STARTERS,” “VEGGITIZERS,” and “VEGGIE BREAKFAST.” She alleged that reasonable consumers understood “VEGGIE” to mean that the products were made primarily of vegetables, even though the products allegedly contained mainly non-vegetable ingredients such as wheat gluten, oil, and corn syrup solids.

Kennard asserted claims under California’s Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law, as well as claims for breach of express and implied warranties. After the court dismissed her original complaint with leave to amend, she filed a First Amended Complaint. The amended pleading added allegations about consumer surveys, Kellogg’s trademark registrations, earlier website language, an advertisement, and descriptions used by retailers and a restaurant chain.

Court’s analysis

The court applied the rule governing dismissal for failure to state a legally sufficient claim. At that stage, a complaint must contain enough facts to make liability plausible, not merely possible. For consumer-deception claims, the plaintiff must plausibly show that a significant portion of reasonable consumers could be misled.

The court held that Kennard’s central theory was implausible as a matter of law. In the court’s view, “VEGGIE” in the context of these products referred to vegetarian or meat-substitute foods, rather than promising that vegetables were the primary ingredients. The packaging showed products that mimicked meat substitutes, did not identify a particular vegetable or amount of vegetables, and included ingredient lists that consumers could review.

The court also held that the consumer surveys could not save the claims. It concluded that the surveys asked what types of plant-based ingredients respondents expected, rather than whether the term “VEGGIE,” considered in the context of the products and packaging, communicated that vegetables were the primary ingredients. The court likewise found that the trademark registrations and descriptions by retailers not controlled by Kellogg did not change its analysis.

For the statutory food-labeling theories, the court ruled that Kellogg’s use of “VEGGIE” was not plausibly false or misleading under federal food-labeling law or California’s Sherman Law. It further held that the term did not plausibly identify a particular ingredient for purposes of 21 C.F.R. § 101.18(b), and that Kennard’s claim under 21 C.F.R. § 102.5(b) failed because it depended on the rejected premise that “VEGGIE” represented that the products contained a particular amount of vegetables.

The express-warranty claim also failed because an ambiguous use of “VEGGIE” was not a specific and unequivocal affirmation or description. The implied-warranty claim failed as well. The court found no allegation that the products were unfit for consumption or for their ordinary purpose as vegetarian meat substitutes, and it ruled that the label-based implied-warranty theory rose and fell with the unsuccessful express-warranty claim.

Kellogg separately argued that Kennard could not obtain restitution or an injunction because she had not shown that damages were inadequate. The court did not reach that argument because it had already found that the misrepresentation and illegality theories failed as a matter of law, leaving no basis for a Unfair Competition Law claim.

Disposition

The court granted Kellogg’s motion to dismiss the First Amended Complaint. It dismissed the First Amended Complaint with prejudice, stating that Kennard had been given ample opportunity to allege additional supporting facts and that her theories were implausible and otherwise not actionable. Judge William H. Orrick signed the order.