On June 9, 2023, the Ninth Circuit in McGinity v. The Procter & Gamble Company, No. 22-15080 (9th Cir. 2023) held that a food manufacturer could rely on an ingredients list panel located on the back of the challenged product packaging to determine whether an "ambiguous" phrase on the front label was misleading or deceptive. In doing so, the court provided further guidance on the application of the well-established "reasonable consumer" standard used in the Ninth Circuit and other jurisdictions for false advertising consumer cases.
In McGinity, the plaintiff, on behalf of a putative consumer class, brought state law consumer protection claims against Procter & Gamble (P&G) for violations under California's Unfair Competition Law (UCL), False Advertising Law (FAL), and Consumers Legal Remedies Act (CLRA). He alleged that P&G fraudulently represented that the ingredients in its "PANTENE PRO-V NATURE FUSION" shampoos and conditioners were from nature or otherwise natural by making the label claim "Nature Fusion" in bold, capital letters and having an accompanying image of an avocado on a green leaf on the product front label, when the products actually contained synthetic ingredients. According to the plaintiff, had he known that the products were not "from nature or otherwise natural," he would not have purchased the products, nor would he have paid a premium. After the district court granted the defendant's motion to dismiss, the plaintiff appealed.
In applying the reasonable consumer standard, the Ninth Circuit first determined that there was some ambiguity as to what the phrase "Nature Fusion" meant in the context of the product packaging. The court noted that the phrase was subject to multiple interpretations, including that the products contained a mix of only natural ingredients, as the plaintiff argued, or both natural and synthetic ingredients, as the defendant argued. The court explained that, as opposed to a label declaring the product "100% natural" or "all natural," the front labels did not make any promise that the Pantene Pro-V products contained only natural ingredients.
Relying on prior Ninth Circuit precedent in Moore v. Trader Joe's Co., 4 F.4th 874 (9th Cir. 2021), the court reasoned that, because the challenged phrase "Nature Fusion" was ambiguous, reasonable consumers would necessarily require more information before concluding what it meant or represented about the product. Notably, this additional information could be from sources like something on the rest of the packaging (e.g., the ingredient list), the relative price of the product, or general knowledge about how the product was made. The court found that the Pantene Pro-V products' labels located on the back of the packaging — and therefore available for consumers to view — resolved any ambiguity on the face of the front product label about what the phrase "Nature Fusion" meant.
The court held that the challenged phrase "Nature Fusion" was not misleading or deceptive because a review of the back labels would make clear to a reasonable consumer that avocado oil is the natural ingredient emphasized in the products' front labeling, and the ingredients list clarifies that other ingredients are artificial, thus the products contain both natural and synthetic ingredients, consistent with what the representations on the front label suggested. In conducting the analysis, the Ninth Circuit instructed that the front label must be unambiguously deceptive for a defendant to be precluded from insisting that the back label be considered together with the front label. The court pointed out, however, that whether a back label ingredient list "'can ameliorate any tendency of [a] label to mislead'" depends on whether it conflicts or confirms a front label claim. Because the Pantene Pro-V back labels confirmed the challenged front label representations, the court concluded that no reasonable consumer could be misled or deceived into believing that the products contained only natural ingredients.
The court also notably distinguished its holding in Williams v. Gerber Products, 552 F.3d 934 (9th Cir. 2008), that a defendant cannot rely on a truthful ingredient list on the back of the product packaging to support or cure an otherwise false or misleading front label claim. The court noted that the challenged label claims on the Gerber "Fruit Juice Snacks" in Williams affirmatively represented that the snacks were made "with real fruit juice and other all natural ingredients" and depicted images of fruit when the ingredients list showed that no juice came from any of the depicted fruit and that the product prominently contained artificial ingredients. The court in Williams rejected the defendant's argument that a reasonable consumer would not be deceived by the product's front label based on a review of the ingredients list on the back of the product packaging because, in that case, the ingredients list could not confirm the challenged representations on the front label.
The Ninth Circuit's ruling has meaningful implications for manufacturers' class action litigation strategies when defending against any type of false advertising claim that challenges a product's label. The court's further clarification of the reasonable consumer standard where the challenged label claim is ambiguous provides helpful guidance in considering whether to seek dismissal at the pleading stage. In particular, defendants should consider whether a challenged product label phrase or statement is open to interpretation or ambiguous and whether the meaning of the phrase or statement can be favorably resolved by considering other consistent information on the product packaging or other sources reasonably available to consumers.
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