Pete and Gerry's Organics markets its Nellie's brand of eggs as "free range." At least according to the allegations in the false advertising lawsuit against the company, Nellie's hens are actually crammed into overcrowded sheds and have little or no access to outdoor space. Nellie's moved to dismiss, arguing that the claim is either not misleading or is non-actionable puffery. Does Nellie's have any hope of getting out of this case early -- or are the company's arguments simply not what they're cracked up to be?
Under New York law, in order to state a claim for false advertising, the plaintiff must sufficiently allege that the advertiser engaged in consumer-oriented conduct, that is materially misleading, and that caused injury to the plaintiff. In order for an advertising claim to be misleading, it must be "likely to mislead a reasonable consumer acting reasonably under the circumstances." This means that a "significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled." And, in making the determination of whether a claim is misleading, "context is critical."
Statements that are mere puffery are not actionable, however. Puffery is an "exaggeration or overstatement expressed in broad, vague, and commendatory language." In other words, puffery is generally a statement of opinion, that is neither provable nor disprovable, that consumers would not reasonably rely on when making a purchasing decision.
How does Nellie's advertise its "free range" eggs? According to the plaintiff, Nellie's claims that its hens "can peck, perch, and play on plenty of green grass." Its website features images of hens roaming outdoors alongside statements such as, "Our happy hens are free to roam and strut throughout their wide open pasture." Nellie's also claims on its website that "Being free-range means that during most times of the day and year, our hens are free to roam outside as they please." In one YouTube video, Nellie's shows its hens roaming in an open meadow, with narration explaining that "free-range hens get to live their lives like real hens, with access to pasture every day in good weather."
What does the plaintiff allege is really happening? She says that the hens are "crammed" into overcrowded sheds 20,000 at a time -- "like an overcrowded warehouse" -- with little or no access to outdoor space. She argued that, notwithstanding Nellie's representations, the hens are not generally able to roam outdoors.
In support of its motion to dismiss, Nellie's argued that its advertising claims are truthful because its farming practices meet the "Certified Humane Free Range" qualifications. The court rejected this argument, however, saying that "free range" is not just used as part of a claim about a certification, but is used as a standalone phrase. The court held, "it is plausible a reasonable consumer would not understand 'free-range eggs' to convey that Nellie's eggs meet the 'Certified Humane' standard."
The court also didn't buy Nellie's argument that the phrase "free range" is non-actionable puffery. At least for purposes of the motion to dismiss, not surprisingly, the court accepted the plaintiff's argument that the "free range" is "an affirmative claim about a product's qualities -- i.e., that the eggs were produced by hens with extended access to indoor and outdoor space." Therefore, it's not an exaggerated or hyperbolic statement which consumers would not rely on when making a purchasing decision.
But what about the Certified Humane certification? Why wasn't that enough? If an independent third party has certified the company's eggs as being "free range," isn't that all the substantiation that the company needs for its "free range" claim? Not necessarily. Ultimately, the advertiser is responsible for the claims that consumers reasonably understand to be conveyed by the advertising. If consumers' understanding of the meaning of "free range" is different from what the certification standards require, then having that certification isn't likely going to provide sufficient substantiation for the claim. As the FTC states in its Green Guides, "Third-party certification does not eliminate a marketer's obligation to ensure that it has substantiation for all claims reasonably communicated by the certification."
Mogull v. Pete and Gerry's Organics, 2022 WL 602971 (S.D.N.Y. 2022).
"exaggeration or overstatement expressed in broad, vague, and commendatory language"