A federal judge won’t let Post Cereals completely end a class action lawsuit accusing it of misleading customers about the amount of breakfast cereal in boxes of Cocoa and Fruity Pebbles.
Customer Alex Landry based his complaint on cereal box labels asserting they contained of 15 one-cup servings. Landry alleged both cereals weigh more than the advertised 36 grams per serving, claiming to have tested a dozen different samples, each from its own production lot.
Post removed the complaint from St. Clair County Circuit Court to federal court, where U.S. District Judge Stephen McGlynn issued a March 24 ruling denying a motion to dismiss.
In addition to filings from both parties, McGlynn granted Post’s request to take judicial notice of a guidance document from the U.S. Food and Drug Administration, as well, was an unpublished order from St. Clair County Circuit Court.
Post raised six arguments against Landry’s Illinois Consumer Fraud and Deceptive Business Practices Act claim. McGlynn called them unpersuasive and singled out the first five as suffering “from the same fatal flaw: they are fact-intensive and would require the court to prematurely weigh the evidence.”
Among those contentions were that Landy’s method of weighing was unreliable, that consumers rarely follow the recommended serving size and that he didn’t have any factual allegations addressing how reasonable consumers might interpret product labels.
McGlynn said the U.S. Seventh Circuit Court of Appeals - which maintains jurisdiction over federal courts in Illinois - "favors a practical and fact-intensive approach to consumer behavior to assess deceptive-advertising claims.
“Often, whether a statement is deceptive is an issue of fact," McGlynn said. "Similarly, assessing likelihood of consumer confusion is a question of fact. Post’s arguments fundamentally concern factual questions, which are inappropriate at the motion to dismiss stage of the lawsuit.”
McGlynn further rejected Post’s sixth argument, a contention against an allegation of intentional misrepresentation, saying Landry clearly stated his claim and satisfied the heightened pleading standard for fraud. He also said “it is not strictly necessary for a practice to violate statutory or administrative rules to be considered unfair” and said unfair practices claims don’t have the same elevated standards as fraud allegations.
Post also said Landry shouldn’t be able to sue because the boxes contained the correct total weight of cereal. But McGlynn noted the FDA allows litigation even when net weight is accurate when a plaintiff can show misbranding or misleading conduct. Further, Landry alleged the cereal boxes were worth less than the purchase price, establishing the financial loss component needed to survive dismissal.
“Landry alleges that a serving of each cereal weighed more than was advertised, meaning that he did not receive the benefit of the bargain, and accordingly would have paid less for the cereal or would have foregone purchasing it at all,” McGlynn wrote.
Post was successful in arguing against Landry’s claim under the Illinois Uniform Deceptive Trade Practices Act. McGlynn said plaintiffs can only pursue injunctive relief under that law, and therefore must show a likelihood of future harm absent judicial intervention.
In this case, Landry could just not buy Post cereals.
Turning to warranty claims, McGlynn said Landry adequately alleged a breach of express warranty but not of the implied warrant of merchantability. The latter failed because Landry didn’t allege the cereal shouldn’t be sold. But the question of whether Post expressly promised 15 one-cup, 36-gram servings, is a factual dispute, McGlynn wrote, which can’t be resolved on a dismissal motion.
Landry’s unjust enrichment claim, because it is tied to the fraud allegation, also survived a motion to dismiss.
As to class certification, McGlynn said it was too early in the litigation to resolve Post’s argument that Landry couldn’t represent consumers in other states because he only bought cereal in Illinois. Also premature is Post’s argument that conflict among state laws would make a nationwide class unmanageable. Further discovery is required to resolve that issue, McGlynn said.
Landry is represented in the case by attorneys Robert L. King, of St. Louis; David C. Nelson, Nelson & Nelson P.C., of Belleville; Matthew H. Armstrong, of Armstrong Law Firm, of St. Louis; Stuart L. Cochran, of Condon Tobin Sladek Thornton Nerenberg, of Dallas.
Post is represented by attorneys Patrick D. Cloud, of Heyl Royster Voelker & Allen, of Edwardsville; and Angela M. Spivey, Andrew G. Phillps and Troy A. Stram, of Alston & Bird, of Atlanta.