The United States Court of Appeals for the Second Circuit held that a New York district court erred in ruling that labeling Kellogg’s Cheez-It crackers as “whole grain” was not misleading, despite the fact that the snacks were primarily made from enriched white flour.  Thus, the Second Circuit vacated the decision and remanded the case for further proceedings.

In 2016, Kristen Mantikas and two co-plaintiffs filed a lawsuit against Cheez-It manufacturer Kellogg Co., alleging the “whole grain” Cheez-It labels violated New York and California’s consumer protection laws.  Plaintiffs sought declaratory and injunctive relief, as well as monetary damages, on behalf of a putative class of all persons residing in the U.S. and its territories who purchased whole grain Cheez-Its since May 19, 2010.  Plaintiffs argued they purchased the “whole grain” Cheez-Its because the “whole grain” label claims caused them to believe that the grain content of the crackers was predominantly whole grain.  However, U.S. District Judge Sandra J. Feurstein dismissed the case in 2017 and adopted Kellogg’s argument that the Cheez-It labeling was not misleading.  Judge Feurstein stated that the ingredient list clearly declared whole grain flour as the second or third ingredient, whereas enriched white flour – the most predominant ingredient in the cracker – was declared first.  Further, she stated that the Nutrition Facts Panel showed that only five or eights grams, out of a 29 gram serving size, were whole grain.

However, a three-judge panel sitting for the Second Circuit rejected that reasoning by stating it does not matter if “the side panel of the packaging discloses further detail about the product’s ingredients. […] reasonable consumers expect that the ingredient list contains more detailed information about the product that confirmsother representations of the packaging.” The Second Circuit concluded that a reasonable consumer should not be expected to consult the Nutrition Facts Panel to correct misleading information set forth in large bold type on the front of the box.

The Second Circuit went on to rebuke Kellogg for its argument that as long as all of the details of a product are disclosed somewhere on the label, the product is not misleading.  “Moreover, the rule that Defendant contends emerges from these district court decisions [cited in its appellate brief]—that, as a matter of law, it is not misleading to state that a product is made with a specified ingredient if that ingredient is in fact present—would validate highly deceptive advertising and labeling. Such a rule would permit Defendant to lead consumers to believe its Cheez‐Its were made of whole grain so long as the crackers contained an iota of whole grain, along with 99.999% white flour. Such a rule would validate highly deceptive marketing.”