The Second Circuit has reversed a lower court’s dismissal of a lawsuit alleging that Kellogg Co. misleads consumers by marketing its Cheez-Its as “made with whole grain.” Mantikas v. Kellogg Co., No. 17-2011 (2nd Cir., entered December 11, 2018). The lower court had agreed with Kellogg that the “made with whole grain” label was factually accurate and would not mislead reasonable consumers, and it dismissed the complaint for failure to state a claim.

“Although the district court is correct that an allegedly misleading statement must be viewed ‘in light of its context on the product label or advertisement as a whole,’ [] the court misapplied that principle to Plaintiffs’ claims in this case,” the court held. “Plaintiffs’ core allegation is that the statements ‘Whole Grain’ and ‘Made With Whole Grain’ are misleading because they communicate to the reasonable consumer that the grain in the product is predominantly, if not entirely, whole grain.” The primary ingredient of Whole Grain Cheez-Its, the court noted, was enriched white flour, with whole grain flour appearing as second or third on the ingredients list.

Although the Nutrition Facts panel clarified that a serving was 29 grams and the whole grain content was between five and eight grams per serving, “we cannot conclude that these disclosures on the side of the box render Plaintiffs’ allegations of deception implausible,” the court stated. “[A] reasonable consumer should not be expected to consult the Nutrition Facts panel on the side of the box to correct misleading information set forth in large bold type on the front of the box. Plaintiffs plausibly allege that the Nutrition Facts panel and ingredients list on whole grain Cheez-Its—which reveals that enriched white flour is the predominant ingredient—contradict, rather than confirm, Defendant’s ‘whole grain’ representations on the front of the box.” Accordingly, the court vacated the district court’s dismissal and remanded the case for further proceedings.

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