Randolph v. Mondelez International, Inc.

Background

William Randolph filed a proposed class action against MONDELĒZ GLOBAL LLC concerning three varieties of Stoned Wheat Thins crackers. The complaint asserted claims under New York General Business Law §§ 349 and 350, which address deceptive business practices and false advertising, and a New York unjust-enrichment claim.

Randolph alleged that the product’s name, the image of a wheat field, and other packaging features led consumers to believe that stoneground whole-wheat flour was the predominant ingredient. The ingredients list identified “unbleached enriched flour” as the first ingredient and “cracked wheat” as the second. Randolph alleged that he purchased the crackers believing that stoneground whole-wheat flour was the main ingredient and that the product was worth less than he had been led to believe.

Deceptive-practices and false-advertising claims

To state claims under New York General Business Law §§ 349 and 350, a plaintiff must plausibly allege consumer-oriented conduct that materially misled a reasonable consumer and caused injury. Judge Rakoff explained that the court evaluates this question objectively rather than relying on the individual plaintiff’s expectations.

The court distinguished this case from Mantikas v. Kellogg Co. and similar snack-cracker cases. Those cases involved prominent packaging statements such as “whole grain” or “graham,” which could communicate that whole-grain flour was the predominant ingredient. The Stoned Wheat Thins packaging did not say “whole wheat,” “stoneground,” or “stoneground whole wheat.”

The court concluded that the complaint did not provide factual support for the necessary inferences that “stoned” means “stoneground” and that “stoneground wheat” means or implies “whole wheat.” The court also found that the complaint’s reference to a wheat-field image and a “wholesome, natural product” was conclusory. Although the complaint described a consumer survey, plaintiffs’ opposition brief stated that they were not relying on the survey to defeat the motion, so the court did not consider it for that purpose.

The court therefore concluded that plaintiffs failed to state claims under both sections 349 and 350. It granted MONDELĒZ GLOBAL LLC’s motion to dismiss those claims, without prejudice to amendment.

Unjust-enrichment claim

Under New York law, unjust enrichment requires an enrichment at the plaintiff’s expense that it would be inequitable for the defendant to retain. But unjust enrichment cannot simply duplicate another legal claim. The court held that plaintiffs had not explained how their unjust-enrichment claim differed from their deceptive-practices and false-advertising claims, which were based on the same conduct. The court granted the motion to dismiss the unjust-enrichment claim.

Disposition

Judge Rakoff concluded that the amended complaint failed to state a claim for relief. Because the court could not conclude that amendment would be futile, and found no undue delay or prejudice to MONDELĒZ GLOBAL LLC, it granted plaintiffs leave to file an amended complaint within 30 days of entry of the order.