On Wednesday, Judge Jed Rakoff of the Southern District of New York granted Mondelez Global LLC’s motion to dismiss the first amended complaint filed in an action filed by William Randolph. As reported in December 2021, the plaintiff has brought a putative class action alleging false advertising in connection with Mondelez’s packaging of its “Stoned Wheat Thins” snacks.
Judge Rakoff’s decision summarizes the first amended complaint, recounting that the plaintiff alleges violations of New York General Business Law Sections 349 and 350. The former provision pertains to deceptive business acts or practices and the latter to false advertising. The Plaintiff also alleges a cause action for unjust enrichment.
Among other precedents, Judge Rakoff quotes from the 2018 Second Circuit decision in Mantikas v. Kellogg Co.to articulate the pleading standard for violations of the New York statutory provisions at issue: “ To state a claim for false advertising or deceptive business practices under New York … law, a plaintiff must plausibly allege that the deceptive conduct was ‘likely to mislead a reasonable consumer acting reasonably under the circumstances.’ ”
Judge Rakoff decides as a matter of law that the defendant’s packaging of its Stoned Wheat Thin snacks is not misleading, distinguishing the Mantikas case. According to Judge Rakoff, the plaintiff contends that the packaging “misleadingly suggests to consumers that the crackers are made with ‘stoneground whole wheat,’ for which consumers are willing to pay a premium, when in fact unbleached enriched white flour milled on steel rollers is the predominant ingredient.” However, Judge Rakoff rejects the argument and dismisses the New York statutory claims. He also dismisses the unjust enrichment claim as being duplicative of the statutory claims, thereby dismissing the first amended complaint in its entirety, albeit with leave to file an amended complaint.
It is noteworthy that this decision is based on the sufficiency of the pleadings alone and that as Judge Rakoff notes, “… the Court must of course treat all well-pleaded factual allegations as true and draw all reasonable inferences in the plaintiff’s favor…”
Judge Rakoff points out that issues regarding reasonableness of the consumer or the consumer’s actions are ordinarily questions of fact not to be determined at the pleading stage.