A New York federal district court has sent a clear message that "context matters" when assessing a false labeling claim.1 In dismissing another putative class asserting violations of state and federal consumer protection laws, fraud and unjust enrichment, the court addressed plaintiff's claims that an algae wafer intended for plecos (suckermouth catfish) was improperly labeled because its primary ingredients were actually fish meal and starch. Plaintiff took issue that the product description included a green "wafer shaped algae disc" combined with descriptions such as "A Perfect Balance of Vegetables & Proteins" and "Natural Green Color From Multiple Beneficial Algaes," noting that the algae ingredients promised on the front label were far less than the predominant fish meal and starch.
The threshold inquiry was whether the product's label was deceptive by overstating the presence of algae. In assessing the claims under New York General Business Law Sections 349 (deceptive acts) and 350 (false advertising), the court emphasized that a plaintiff must plausibly allege that a significant portion of consumers, acting reasonably in the circumstances, could be misled. In moving to dismiss, defendant argued that the label did not represent that the wafers contained no ingredients other than algae, contained a specific amount of algae or included only a de minimis amount of non-algae ingredients. The court agreed, relying on precedent by the U.S. Court of Appeals for the...
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