Reconsideration of Honey Bunches of Oats false advertising claims denied

A court found that consumers failed to show why a reasonable consumer would believe Honey Bunches of Oats was sweetened primarily by honey.

In a memorandum opinion and order, a court denied consumers’ motion for reconsideration of their claims that Post Consumer Brands, LLC used deceptive packaging and advertising that led consumers to believe that Honey Bunches of Oats was sweetened primarily by honey. The court found that emphasizing the imagery of bees and honey on a product that contained honey and tasted like honey, was not deceptive (Lima v. Post Consumer Brands, LLC, October 2, 2019, Burroughs, A.).

Labeling. Two consumers purchased Honey Bunches of Oats with Almonds under the belief that the cereal was sweetened exclusively or primarily with honey. The consumers relied on television commercials and the product branding and packaging that emphasized the presence of honey. The consumers claimed that the packaging and marketing led them to expect that honey was a prominent ingredient. The consumers did not look at the ingredient list, which disclosed that honey is the cereal’s fifth most prominent sweetener. The consumers filed a putative class action against Post, alleging that the advertising and packaging of Honey Bunches of Oats was deceptive. Post filed a motion to dismiss and the court granted the motion (see Health Law Daily, Aug. 16, 2019). The consumers then filed a motion for reconsideration.

Consumer protection claims. The consumers argued that whether Post’s packaging was ambiguous was a determination of law that should not have been made at the motion to dismiss stage. They further argued that the issue of whether the consumers were reasonable to think that honey was the predominant sweetener should have been left to the jury. The court noted that it did not consider the factual matter of whether the consumers were misled by the packaging, but instead considered whether the allegations made it plausible that on a full factual record, a factfinder could reasonably regard the label as having the capacity to mislead.

The consumers further argued that they should not have had the burden of pleading why they concluded that honey was a sweetener, as opposed to a flavor. The court held that it was permissible for Post to use the images of honey and bees because honey was a characterizing flavor and the cereal included honey as an ingredient. Had the cereal not contained honey, then Post would have been required to include sufficient cautionary language explaining that it was naturally or artificially flavored. Because the cereal did contain honey, the burden shifted to the consumers to plead why the packaging and marketing would lead a consumer to believe that the cereal was not only honey flavored and contained honey, but also that honey was the primary sweetener. The consumers failed to plead why they believed honey was a sweetener and not only a flavor.

Express warranty claims. The consumers argued that the court failed to consider that an express warranty can be created through the packaging’s words and images. The court noted that it was explicit in its analysis of the use of the Honey Bunches of Oats brand name and the imagery on the packaging to determine whether Post made an express warranty. The court held that the consumer failed to demonstrate that the court’s analysis depended on a misinterpretation of law.

Request for leave to replead. The consumers asked the court to give them leave to amend to include a survey the consumers conducted relating to consumer impression of the packaging at issue. The consumer pointed to their opposition to the motion to dismiss, which contained a request that “if the Court believes any aspect of Post’s motion should be granted for a reason that has not previously been subject of amendment, Plaintiffs request leave to amend.” The court cited the circuit court in finding that “a passing request for contingent leave to file an amended complaint, made in opposition to a motion to dismiss, is insufficient, in and of itself, to bring a post-judgement motion for reconsideration within the orbit” of the requirement that courts freely give leave to amend.

$9.8M in refunds for consumers purchasing ‘fat burning’ health products

Almost a quarter of a million refund checks totaling more than $9.8 million will be issued to consumers who purchased “fat burning” and “weight loss” products and other dietary supplements, DVDs, or skin creams, including Pure Green Coffee Bean Plus and RKG Extreme, from Health Formulas LLC and related companies. The Federal Trade Commission (FTC) noted that the average refund per consumer will be $43.

According to the FTC’s original complaint, Health Formulas LLC, its owners, and its related companies, including Simple Pure Nutrition, advertised their products using fake “free trials,” tricked people into disclosing credit and debit card information, and then enrolled them without their permission in a costly negative-option membership program that charged them monthly for new shipments.

A subsequent court order in 2016 settled the FTC’s charges by permanently banning Health Formulas and the other 41 related companies from advertising or selling weight-loss supplements and negative option sales plans, and prohibited them from making unsupported health claims for other products, debiting people’s bank accounts without their consent, and calling consumers who asked not to be called again. It also required them to turn over approximately $10 million in assets.

FTC reports pull back smoke on 2014 tobacco product advertising

While the amount spent on cigarette advertising and promotion decreased from $8.95 billion in 2013 to $8.49 billion in 2014, spending on advertising and promotion of smokeless tobacco products in the U.S. increased from $503.2 million in 2013 to $600.8 million in 2014, according to reports released by the Federal Trade Commission (FTC) on cigarette and smokeless tobacco marketing expenditures for 2014. The FTC reports also indicated a drop in the number of cigarettes sold by large cigarette companies to wholesalers and retailers—256.7 billion in 2013 to 253.8 billion in 2014.

Cigarettes

The data on cigarette manufacturers’ expenditures comes from special reports submitted to the FTC by the largest cigarette manufacturers through a compulsory process. Those manufacturers include: Altria Group, Inc.; Commonwealth Brands, Inc.; Lorillard, Inc.; Reynolds American, Inc.; and Vector Group Ltd.The largest portion of the $8.49 billion spent on advertising and promotion of cigarettes was “price discounts” paid by manufacturers to retailers in order to reduce the “consumer price” of cigarettes. Those price discounts represented $5.56 billion or 65 percent of advertising and promotional spending for cigarettes in 2014. The FTC requires the manufacturers to report the expenditures on advertisements directed towards youth which are intended to reduce youth smoking. In 2014 the manufacturers spent $1.7 million on such advertisements.

Smokeless tobacco

The smokeless tobacco report is, like the cigarette report, comprised of data submitted to the FTC by the largest smokeless tobacco product manufacturers through a compulsory process. Those manufacturers include: Altria Group, Inc.; North Atlantic Trading Company, Inc.; Reynolds American, Inc.; Swedish Match North America, Inc.; and Swisher International Group, Inc. The total amount of smokeless tobacco sold by the manufacturers to wholesalers and retailers dropped slightly from 128.04 million pounds in 2013 to 127.81 million pounds in 2014. Over the same period, sales revenues for those manufacturers increased from $3.26 billion to $3.42 billion. According to the FTC report, the largest smokeless tobacco companies reported spending $852,000 in 2014 on advertisements intended to reduce youth use of smokeless tobacco products.