Leonard v. Mondelez Global LLC

Background

Christopher Leonard brought a proposed class action against Mondelēz Global LLC concerning Fudge Covered Mint Crème OREO cookies. He alleged that the product’s “Fudge Covered” label was misleading because the coating used palm and palm kernel oil and nonfat milk rather than dairy ingredients containing milkfat. He claimed that consumers would expect fudge to contain ingredients such as milk or butter, and alleged that he paid approximately $3.99 for the product and would not have bought it, or would have paid less, had he known the facts he alleged.

Leonard asserted claims under New York General Business Law §§ 349 and 350; consumer-fraud laws of North Dakota, Kansas, and Wyoming; breach of express warranty; breach of implied warranty of merchantability; fraud; and unjust enrichment. He had also pleaded claims under the Magnuson-Moss Warranty Act, negligent misrepresentation, and a request for injunctive relief, but the opinion states that he later withdrew those claims and the request for injunctive relief.

Mondelēz moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim.

Court’s Analysis

New York consumer-fraud claims. The court held that Leonard did not plausibly allege that “Fudge Covered,” considered in the context of the entire label, would mislead a reasonable consumer into believing that the product necessarily contained milkfat or butter. The court rejected reliance on recipes, dictionary definitions, and other sources because they did not show that a significant portion of reasonable consumers would share Leonard’s interpretation. The court also noted that the complaint itself alleged that vegetable oils are often used as alternatives to milk fat in fudge.

Other state consumer-fraud claims. The court applied the same reasoning to the claims under North Dakota, Kansas, and Wyoming law. It concluded that Leonard had not plausibly alleged that a reasonable consumer would understand “Fudge Covered” to necessarily mean that the product contained milk or butter.

Express warranty. The court held that Leonard did not adequately allege that he gave Mondelēz the required notice of the claimed warranty breach before filing suit. The court rejected his argument that filing the complaint itself supplied proper notice. The claim also failed because the alleged labeling did not plausibly amount to a warranty that the product contained milkfat.

Implied warranty. The court dismissed this claim for the same lack of pre-suit notice. It further held that, even assuming proper notice, the complaint did not suggest that the cookies were unfit for consumption.

Fraud. The court held that Leonard did not plausibly allege fraudulent intent. Alleging that Mondelēz knew what the product contained, or that the labeling helped it sell more products at higher prices, was not enough to create a strong inference that Mondelēz acted with fraudulent intent.

Unjust enrichment. The court dismissed this claim because it was based on the same facts as Leonard’s other contract and tort claims and therefore duplicated those claims.

Disposition

Judge Paul A. Crotty granted Mondelēz’s motion to dismiss the complaint with prejudice. The opinion states that the complaint was dismissed in its entirety with prejudice, and the clerk was directed to close the motion at ECF No. 13.