Wargo v. The Hillshire Brands Company

Background

Christopher Wargo brought a proposed class action against The Hillshire Brands Company concerning the company’s Jimmy Dean Delights English Muffin product. The complaint alleged that the front of the package stated “MADE WITH WHOLE GRAIN,” but that enriched wheat flour—the first listed flour ingredient—predominated, while the product contained only 5 grams of whole grain per sandwich. Wargo alleged that the label led consumers to believe the product was predominantly whole grain or contained more than a minimal amount of whole grain. He asserted claims under New York General Business Law Sections 349 and 350, negligent misrepresentation, breach of express warranty, breach of implied warranty of merchantability, the federal Magnuson-Moss Warranty Act, fraud, and unjust enrichment. He sought damages and injunctive relief requiring changes to the product’s labeling.

Rule 12(b)(6) motion

The company moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint plausibly states a legal claim. The court treated the complaint’s factual allegations as true and drew reasonable inferences in Wargo’s favor for purposes of the motion.

New York consumer-protection claims

The court denied the motion as to Wargo’s claims under New York General Business Law Sections 349 and 350. It concluded that a reasonable consumer could understand “MADE WITH WHOLE GRAIN” to suggest that the product’s grain content was predominantly whole grain or at least more than minimal. The ingredient list and other information on the package did not, at the pleading stage, eliminate the possibility that the prominent front-label statement was misleading. The court also held that Wargo adequately alleged injury by claiming that he would not have bought the product, or would not have paid as much, had he known the true composition. The court therefore denied dismissal of those consumer-protection claims.

Negligent misrepresentation

The court granted the motion as to negligent misrepresentation. Under New York law, that claim requires a special relationship between the parties that creates a duty to provide accurate information. The court found that the alleged relationship between Wargo and the company was an ordinary buyer-seller relationship and did not approach the required level of closeness or trust. The court dismissed this claim with prejudice.

Warranty claims and Magnuson-Moss claim

The court granted the motion as to the express-warranty claim because Wargo did not adequately allege that he gave the company timely notice of the claimed warranty breach. The allegation that he “provided or will provide” notice was considered insufficiently definite. The court dismissed the implied-warranty claim on the same notice ground. Because the federal Magnuson-Moss Warranty Act claim depended on a viable state-law warranty claim, the court also granted the motion as to that claim. The court dismissed all three claims with prejudice.

Fraud and unjust enrichment

The court granted the motion as to fraud because Wargo did not plead facts supporting a strong inference that the company intended to defraud consumers. The court also granted the motion as to unjust enrichment because the claim repeated the same facts and theory as Wargo’s other claims rather than stating an independent basis for recovery. Both claims were dismissed with prejudice.

Injunctive relief

The court granted the motion as to Wargo’s request for injunctive relief. Because Wargo knew about the alleged labeling problem, the court found that he could not show a likely future injury of the same kind. His allegations that he would buy the product again only if its label were changed did not establish the required standing to seek an order changing the label. The court dismissed the request for injunctive relief with prejudice.

Other dismissed claims and case status

The court also granted the motion with respect to Wargo’s individual claims not asserted under the Class Action Fairness Act, and dismissed those claims with prejudice. It denied the motion with respect to the consumer-protection claims under New York General Business Law Sections 349 and 350. The court directed The Hillshire Brands Company to answer those remaining claims and directed the parties to submit a case-management plan and scheduling order.