Court Rejects False Advertising Lawsuit For “All Butter” Loaf Cake
Posted in Legal Bites
Court Rejects False Advertising Lawsuit For “All Butter” Loaf Cake

A federal judge in the Southern District of New York dismissed a fraud and misrepresentation action against Bimbo Bakeries USA, Inc., a food company whose brands include Sara Lee, Brownberry, and Entenmann's. Plaintiff Monica Boswell brought an action against Bimbo, alleging that the company violated several New York consumer protection statutes by fraudulently advertising one of its products as an “All Butter Loaf Cake” when, in reality, the cake includes other ingredients in addition to butter, such as soybean oil and artificial flavors. 

Bimbo filed a motion to dismiss Plaintiff’s First Amended Complaint earlier this year, arguing that “All Butter Loaf Cake” is a fair representation of the product. The District Court agreed with Bimbo, determining that a reasonable consumer would not be misled by the phrase “All Butter” in the label.  As part of its analysis, the Court recognized that the question of whether a reasonable consumer would be misled by a label depends in part upon whether the label itself is ambiguous or unambiguous.  As the Court notes, when a label is unambiguous, a reasonable consumer is typically able to rely on the representations made by the label without looking at additional details provided on the packaging as any additional, less prominent, details would not cure any deception created by the primary label. When the meaning of a label is ambiguous, though, a reasonable consumer is expected to do a bit more investigating to resolve the ambiguity, namely reading through the additional information provided on the packaging, including the ingredient panel. 

Here, the court determined that the label at issue, “All Butter Loaf Cake,” was itself ambiguous for a few reasons. First, a reasonable consumer would know that the phrase’s literal meaning-that the loaf cake is in fact “all butter”- would in all likelihood be impossible as most know that loaf cakes tend to include ingredients other than just butter. Similarly, the Court found that the label is susceptible to more than one interpretation, another indication that it is ambiguous. Because the label itself is ambiguous, the Court reasoned that a reasonable consumer would investigate the other information provided on the packaging, including the ingredient panel, where the reasonable consumer would necessarily see that the product included other ingredients in addition to butter. As a result, the Court determined the phrase “All Butter” was not misleading in this context and granted Motion to Dismiss. Further, as the Court determined that the issue with the complaint was substantive, the Court dismissed the complaint with prejudice, denying Plaintiff a third chance at curing the defects of the Complaint. 

This ruling is another indication of courts’ growing fatigue and waning patience with the plethora of misrepresentation cases currently clogging the judicial system. The ruling is further encouraging for companies as it seems to endorse the idea that consumers will often not be able to rely upon just the front of a product’s packaging when any ambiguity exists.


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