Gwinn v. Laird Superfood, Inc.

Background

Lovelynn Gwinn sued Laird Superfood, Inc. on behalf of herself and proposed classes of consumers who purchased Laird’s products in New York. She alleged that labels for Laird’s powdered coffee additives stated a serving size of 2 grams and listed a household measure—usually 1 teaspoon or, for some products, 3/4 teaspoon—that was too large for the amount of powder. According to the complaint, the products were denser than the labels indicated, so the labels overstated the number of household-measure servings in each container.

Gwinn asserted claims under New York General Business Law §§ 349 and 350 for deceptive business practices and false advertising, as well as claims for breach of express warranty, breach of implied warranty, and unjust enrichment. She also sought injunctive relief. Laird moved to dismiss for lack of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) and for failure to state a claim under Rule 12(b)(6). Gwinn agreed to dismiss the implied-warranty claim and request for injunctive relief without prejudice.

Standing

Laird argued that Gwinn lacked standing to assert claims concerning products she did not purchase. The court rejected that argument at the motion-to-dismiss stage. Gwinn alleged that all the products were powdered coffee additives, used nearly identical nutrition labels, and misrepresented household-measure servings in substantially the same way. Those allegations were sufficient to establish standing for claims involving each product identified in the complaint, subject to further consideration at class certification.

The court also declined to dismiss claims involving products not identified in the complaint because there were no such claims to dismiss. The court stated that disputes about discovery or whether class members could include consumers who bought none of the identified products could be addressed later.

Federal Preemption

Laird argued that the Food, Drug, and Cosmetic Act preempted all of Gwinn’s claims. Federal law preempts state nutrition-labeling requirements that are not identical to federal requirements. The court held that preemption did not apply at this stage because Gwinn alleged that the labels themselves failed to comply with federal law.

The court explained that federal regulations require a label to use a household measure that most closely approximates the federally specified reference amount. Gwinn alleged product densities that plausibly showed the labels used household measures larger than the appropriate measures. Her claims challenged the allegedly inaccurate household measures, not the stated number of 2-gram servings. Because she plausibly alleged noncompliance with federal labeling rules, her state-law claims were not preempted.

New York False-Advertising and Consumer-Protection Claims

The court held that Gwinn plausibly stated claims under New York General Business Law §§ 349 and 350. She alleged that Laird directed the labels to consumers, that the labels could materially mislead reasonable consumers into believing that each container held more teaspoon-sized servings than it actually did, and that she paid a price premium because of the alleged deception.

The court rejected Laird’s argument that the labels were not misleading because they accurately stated the number of 2-gram servings. The alleged deception concerned the household measure, not the weight-based reference amount. The court also rejected the argument that the labels’ recommendations to use one tablespoon per eight ounces of coffee or tea, and their statement that the containers held “28 recipes per container,” eliminated the alleged deception. More accurate or inconsistent information elsewhere on the label did not defeat the claims as a matter of law.

The court further rejected Laird’s argument that New York’s statutory safe harbor protected the labels. Because Gwinn plausibly alleged that the labels did not comply with federal law, the safe harbor did not require dismissal.

Express Warranty

Laird argued that Gwinn’s express-warranty claim failed because she bought the products from CVS and therefore was not in contractual privity with Laird. The court disagreed. Applying New York law, it held that privity is not required for this type of express-warranty claim, including when the plaintiff alleges only economic loss. The court concluded that later enactment of the Uniform Commercial Code had not displaced the relevant New York precedent allowing such claims to proceed without direct contractual privity.

Unjust Enrichment

The court dismissed Gwinn’s unjust-enrichment claim. Under New York law, unjust enrichment is unavailable when it merely duplicates a conventional contract or tort claim. Gwinn based the unjust-enrichment claim on the same alleged misleading household measures that supported her New York General Business Law and warranty claims. The court concluded that the unjust-enrichment claim was duplicative and therefore had to be dismissed.

Leave to Amend and Disposition

Gwinn requested permission to amend if any claim was dismissed. The court denied that request because the unjust-enrichment claim had a fundamental defect: it duplicated the other claims, and Gwinn had not explained how amendment could cure that problem.

The court’s final disposition was to grant Laird’s June 8, 2022 motion to dismiss with respect to the unjust-enrichment claim and otherwise deny the motion. The opinion did not dismiss the New York General Business Law claims or the express-warranty claim.