Newman v. Bayer Corporation

Background

Tanysha Newman brought a proposed class action against Bayer Corporation and Bayer HealthCare LLC concerning Bayer’s “One A Day” gummy and chewable supplements. She alleged that the prominent “One A Day” labeling led reasonable consumers to believe that they needed to take only one chewable per day to receive the product’s full nutritional benefit. According to Newman, the chewable products instead required two or more supplements per day, meaning that the bottles lasted fewer days than the label allegedly suggested.

Newman alleged claims for breach of express warranty, violation of the Magnuson-Moss Warranty Act, violations of Sections 349 and 350 of the New York General Business Law, and common-law fraud. She alleged that she purchased two varieties of the chewable products in New York in December 2021, relied on the labeling, and would not have bought them or would have paid substantially less if she had known that more than one chewable was required.

Motion to Dismiss

Bayer moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint alleges enough facts to state a legally plausible claim. The court generally had to accept the complaint’s factual allegations as true and draw reasonable inferences for Newman. Fraud claims also had to meet Rule 9(b)’s stricter requirement that the circumstances of the alleged fraud be stated with particularity, including what was said, who said it, where and when it was said, and why it was fraudulent.

New York Consumer-Protection Claims

The court denied Bayer’s motion to dismiss Newman’s claims under New York General Business Law Sections 349 and 350. Those provisions prohibit materially deceptive consumer practices and false advertising. The court concluded that Newman plausibly alleged consumer-oriented conduct and injury under a price-premium theory because she alleged that she would not have purchased the products, or would have paid substantially less, if she had known the truth about the required serving size.

The court also held that Newman plausibly alleged materially misleading conduct. Applying the Second Circuit’s decision in Mantikas v. Kellogg Co., the court reasoned that the prominent “One A Day” statement could lead a reasonable consumer to believe that one gummy was needed each day. The court rejected Bayer’s argument that consumers should consult the Supplement Facts panel, which identified a serving size of two gummies, to correct the front-label message. At the pleading stage, the court held, consumers should not be expected to use that information to correct a potentially misleading prominent statement on the front of the package.

Warranty Claims

The court denied Bayer’s motion to dismiss the express-warranty claim. Product labels and advertisements can create express warranties, and whether a reasonable consumer would understand “One A Day” as a promise about the number of chewables required was a factual question not appropriate for resolution on a motion to dismiss. The court also found that Newman sufficiently alleged reliance by stating that she read and relied on the labeling when deciding to buy the products.

The court likewise allowed Newman’s claim under the Magnuson-Moss Warranty Act to proceed. The court explained that this federal statute generally incorporates state-law warranty standards. Because Newman adequately pleaded an express-warranty claim, the court concluded that her Magnuson-Moss claim also survived the motion.

Fraud Claim

The court dismissed Newman’s common-law fraud claim. To plead fraud under New York law and Rule 9(b), she had to allege facts supporting a strong inference that Bayer knew the representation was false and intended to deceive consumers. The court found that Newman’s allegations—including Bayer’s general profit motive, the allegedly inaccurate front label, and quotations from another court’s discussion of Bayer’s marketing history—did not sufficiently establish fraudulent intent. The court did not decide whether Newman adequately pleaded reliance for the fraud claim because it found an independent reason to dismiss the claim.

Disposition

Judge Kenneth M. Karas granted Bayer’s motion to dismiss in part and denied it in part. The fraud claim was dismissed without prejudice, and all other claims survived. Because this was the first adjudication of the claims on the merits, the court allowed Newman to file an amended complaint within 30 days if she had a good-faith basis to add facts addressing the identified deficiencies.