100 Percent Cheese Label Grates on Consumers

(December 11, 2020) Whether customers are deceived by a label that says the product is “100% Grated Parmesan Cheese” is a fact issue that cannot be decided on a motion to dismiss, the Seventh Circuit found.

The appellate court reversed the trial court’s dismissal of the case when the lower court ruled as a matter of law that the label was ambiguous, but not deceptive. In addition, the trial court had ruled that common sense dictates the product must contain ingredients other than cheese to make it shelf stable, so there could be no cause of action against the manufacturers and sellers.

Several cases were filed in various federal courts alleging violation of 14 different state deceptive trade practice statutes. The cases were consolidated in Illinois. The plaintiffs allege they were deceived by labels on the front of shaker cheese packages that said the packages contained “100 % Grated Parmesan Cheese” or, in some instances, other cheeses. On the back side a list of ingredients in fine print showed the packages contained cellulose powder and potassium sorbate to prevent the cheese from caking and getting moldy. The defendants were Kraft-Heinz, the ICCO-Cheese Company, Target, Wal-Mart, SuperValu, Albertson’s, and Publix Supermarkets.

Because the defendants sought to dismiss the cases, the court assumed the allegations in the complaints were true. As a result, the appellate court wrote, the claims survive “if they have plausibly alleged that the defendants’ front labels likely lead a significant portion of reasonable consumers to falsely believe something that the back labels belie.” What matters most, the appellate court said, it how real consumers react to the advertising and found that “an accurate fine-print list of ingredients does not foreclose as a matter of law a claim that an ambiguous front label deceives reasonable consumers. Many reasonable consumers do not instinctively parse every front label or read every back label before placing groceries in their carts.” In fact, the appellate court wrote, the plaintiffs alleged in their complaints that they conducted consumer surveys “showing that 85 to 95 percent of consumers understood ‘100% Grated Parmesan Cheese’ to mean that the product contains only cheese, without additives, like those defendants use in the challenged products.”

The trial court found that the language was ambiguous because it could denote the product was 100% grated, 100% Parmesan, or 100% cheese (or any combination of those), so an ambiguous front label cannot be deceptive if there is any way to read it that accurately aligns with the back label. Not so, wrote the appellate court. “Consumer protection laws do not impose on average consumers an obligation to question the labels they see and to parse them as lawyers might for ambiguities, especially in the seconds usually spent picking a low-cost product.”

The trial court had found as a matter of law that no reasonable consumer who reads the label as promising pure cheese could actually believe it because common sense says that pure cheese cannot be shelf stable without refrigeration. The appellate court noted, however, that the U.S. Department of Agriculture says pure, grated Parmesan cheese can be shelf stable for a long time without refrigeration. The opinion also noted that “for millennia, people have been making cheese to preserve milk for later consumption, all without modern refrigeration.” Furthermore, the appellate court opinion said “Reasonable consumers’ expectations about the need to use either additives or refrigeration cannot be decided as a matter of law,” noting that, since pure grated Parmesan “can be and sometimes is sold unrefrigerated, common sense is not a substitute here for evidence, and certainly not as a matter of law.”

Because the cases were combined for multidistrict litigation, motions to dismiss were heard at different times, so the cases had different deadlines for filing an appeal.

Two of the cases were appealed too late, so the cases against Publix and Target/ICCO were dismissed but the other cases remanded for hearing.

Ann Bell, et. al. v. Publix Super Markets, et. al, Seventh Cir. No. 19-2581 and 19-2741, Issued Dec. 7, 2020.