Food-Court Follies: Judge Grates Parmesan-Cheese Multidistrict Litigation

parma cheeseThanks to America’s regrettably litigious nature, the “Reasonable Person” is always busy. This prototypically average, ordinary human being is routinely called upon in legal disputes governed by common-law tort principles and asked: What would you think or do in this situation? One strain of litigation—consumer-fraud class actions—has kept the Reasonable Person especially occupied in recent years.

A recent court case asked the Reasonable Person to put on her “reasonable consumer” hat and determine the meaning of the term “100% Grated Parmesan Cheese” as it appears on containers of shelf-stable, processed shaky cheese.

In February 2016, inspired by overblown media stories, 15 lawsuits were filed in 6 different courts against 7 defendants (Kraft Heinz Co., Albertsons Cos., Target Corp., Wal-Mart Stores, ICCO-Cheese Co., and Publix Super Markets) alleging common-law and statutory violations for those companies’ false or misleading use of that statement.

The term is fraudulent, the suits alleged, because the container of grated or shredded cheese included an additive, cellulose, which is included to prevent caking.

On June 2, 2016, the Judicial Panel on Multidistrict Litigation centralized all the actions in one multidistrict litigation (MDL) in the Northern District of Illinois before Judge Gary Feinerman. The panel noted that Judge Feinerman was “an able and experienced jurist who has not had the opportunity to preside over an MDL. … We are confident that he will steer this litigation on a prudent course.”

Judge Feinerman did just that. He was posed with claims that the defendants violated 10 different states’ consumer-protection laws. He managed to obtain the parties’ agreement that the key applicable principle common to every statute was “to state a claim, a plaintiff must allege conduct that plausibly could deceive a reasonable consumer” (our emphasis).

The judge’s decision to utilize the reasonable-consumer standard gave rise to an even more critical determination: who would apply that standard to the plaintiffs’ allegation of deception, the court or a jury? As we’ve discussed in past Food-Court-related posts, trial judges (especially in the US Court of Appeals for the Ninth Circuit) who are hesitant to terminate consumer class actions at the motion-to-dismiss stage have held that the reasonable-consumer determination is a question of fact for the jury.

Citing to a Second Circuit opinion, Judge Feinerman concluded that in false advertising cases, it was “well settled that a court may determine as a matter of law” what misleads the reasonable consumer. If the allegedly misleading content on a product package is ambiguous, Judge Feinerman explained, then the court could do what any reasonable consumer would do—look to the context of the packaging and the product as a whole to see if that larger picture cures the ambiguity. If the misleading content is not ambiguous, i.e. if there is an “unavoidable interpretation” that lulls consumers into “a false sense of security,” then courts should allow those claims to proceed.

The term “100% Grated Parmesan Cheese” could be interpreted in a number of ways, the court reasoned. It could mean that the product did not contain any Romano or other cheese. It could mean that it was 100% grated, rather than shredded. It could also mean that the product contained no other ingredient other than Parmesan Cheese. That third possibility, Judge Feinerman said, was “the weakest of the three” when viewing the product as a whole.

The reasonable consumer, Judge Feinerman reasoned, would look at the ingredient list, and find “cellulose (added to prevent caking).” The reasonable consumer would also understand that something must be added to the product so that it could sit at room temperature on a grocery shelf. The reasonable consumer knows that “[c]heese is a dairy product,” and if left unrefrigerated, “dairy products spoil [and] grow blue, green, or black fuzz.”

The court thus found as a matter of law that the Parmesan-cheese makers did not deceive consumers and dismissed the claims without prejudice, granting them leave to cure the complaints’ defects and refile by September 14. The plaintiffs will frankly be hard pressed to overcome Judge Feinerman’s misgivings about their original complaints.

Judge Feinerman’s approach is intuitively sensible. If uncertain about verbal or visual representations on a processed food, the Reasonable Person acting as a consumer would think about the product as a whole, look at the label and the ingredients, and make an intelligent judgment. The standard arising from In re: 100% Grated Parmesan Cheese Marketing and Sales Practices Litigation views the Reasonable Person consumer as savvy consumer capable of self-protection, rather than a naif in need of protection.

We encourage other judges, especially those in the jurisdictions from which the grated cheese cases traveled to Judge Feinerman’s MDL proceeding, to embrace his approach and reasoning. Doing so could help weed out many of these unreasonable, lawyer-driven false-advertising claims that benefit only a few chosen plaintiffs and their attorneys.

Also published by Forbes.com on WLF’s contributor page.

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