Feldman v. Wakefern Food Corp.

Background

Sara Feldman brought a proposed class action against Wakefern Food Corporation concerning its Bowl & Basket “Graham Crackers.” The front label included “Graham Crackers,” “Sugar Honey,” “No High Fructose Corn Syrup,” a honey-dipper image, and a statement that the product contained “Whole Grain — 8g or more per serving.” The ingredient list placed enriched flour before graham flour, which the opinion says lists ingredients in descending order by weight.

Feldman alleged that the label led consumers to believe the crackers contained more whole-grain graham flour, compared with non-whole-grain flour, than they actually did. She also alleged that the product’s honey and darker color contributed to that impression. She claimed that she paid a premium price and would not have bought the product, or would have paid less, if she had known the true facts.

The complaint asserted New York deceptive-practices and false-advertising claims; consumer-fraud claims under the laws of several states; express- and implied-warranty claims, including a claim under the Magnuson-Moss Warranty Act; fraud; and unjust enrichment. Wakefern moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal for failure to state a legally sufficient claim.

Claims Allowed to Proceed

The court denied the motion as to Feldman’s claims under New York General Business Law §§ 349 and 350. Applying the reasonable-consumer standard, the court held at the pleading stage that Feldman plausibly alleged that the label, considered as a whole, could mislead reasonable consumers about the predominance of whole-grain flour. The court also held that her allegations of paying a price premium sufficiently pleaded injury.

The court rejected Wakefern’s argument that federal food-labeling law preempted those New York claims. The court concluded that deciding the “common or usual name” of the product, including whether “Graham Crackers” has a particular commonly understood meaning, would require going beyond the complaint at this stage.

The court also denied the motion as to Feldman’s consumer-fraud claims under Pennsylvania and New Hampshire law. The opinion states that these claims would proceed because the court had found the related New York deceptive-practices allegations adequately pleaded.

Claims Dismissed

The court dismissed Feldman’s consumer-fraud claims under Connecticut, New Jersey, and Delaware law. Feldman did not dispute that she failed to meet statutory requirements under those laws, and the court treated those claims as abandoned.

The court granted the motion as to the express-warranty claim because Feldman did not allege timely notice of the alleged breach before filing suit. It also dismissed the implied-warranty claims because she did not allege that the crackers were unfit for ordinary human consumption or adequately allege the elements of a warranty for a particular purpose. Because the state-law warranty claims failed, the court dismissed the Magnuson-Moss Warranty Act claim as well.

The court dismissed the fraud claim because Feldman’s allegation concerning Wakefern’s fraudulent intent was conclusory and did not provide facts creating a strong inference of intent to defraud. The court also dismissed the unjust-enrichment claim because Feldman acknowledged that it duplicated her other claims.

Disposition

The court concluded that Wakefern’s motion to dismiss was granted in part and denied in part. It granted the motion as to the Connecticut, New Jersey, and Delaware consumer-fraud claims; the express- and implied-warranty claims and the Magnuson-Moss Warranty Act claim; the fraud claim; and the unjust-enrichment claim. It denied the motion as to the New York General Business Law claims and the Pennsylvania and New Hampshire consumer-fraud claims.

Judge Philip M. Halpern directed Wakefern to file an answer within 14 days. The opinion does not state that the dismissed claims were dismissed with prejudice or without prejudice.