The Ninth Circuit’s recent Whiteside decision complicates the question of when information on the back of a product’s packaging can be used to clarify information on the front of the packaging. As a result, the bar for using back of pack information at the motion to dismiss phase seems to once again be raised.
Consumer packaged goods companies often have limited label “retail” space and therefore choose to put additional, or qualifying, product information on the back of their packaging. When they hire us to review their product labels or defend them in consumer class actions, a common question is whether that additional information on back of pack can serve as a defense to litigation. Historically, this analysis has been driven by the Ninth Circuit’s decision in Williams v. Gerber Prods. Co., 552 F.3d 923 (9th Cir. 2008), which held that class action lawsuits are subject to early dismissal if “the advertisement itself [makes] it impossible for the plaintiff to prove that a reasonable consumer [is] likely to be deceived.” Id. at 939. The Williams Court did not require consumers to read the back of pack if the front of pack contained literally false or deceptive information.
Helpfully to CPG companies, over the intervening years the Ninth Circuit has chipped away at Williams, by, for instance, requiring that a significant portion of consumers would understand a label to be misleading, and also requiring consumers to consider additional label and pricing information on specialty products. But the biggest shift came last summer when the Court issued its CPG-friendly (or friendlier) decision in McGinity v. Procter & Gamble Co., 69 F.4th 1093 (9th Cit. 2023). That case made clear that if the front of a product label was ambiguous, then consumers were expected to resolve “the ambiguity … by reference to the back label.” Id. at 1099. At long last, it seemed that the Court was holding consumers accountable for reading the back of packaging in more instances.
Unfortunately, on July 17, 2024, the Ninth Circuit softened its position in its latest CPG case, Whiteside v. Kimberly Clark Corp., --- F.4th ----, 2024 WL 3435308 (9th Cir. July 17, 2024). The Court had to decide how courts should determine if the front label is itself ambiguous. The defendant argued that under McGinity, “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 disagreed and instead ruled that even if the front label could be interpreted more than one way, the question is, for the interpretation offered by the consumer-plaintiff, would the reasonable consumer necessarily require more information about that representation. According to the Court, if the answer is yes, then the back label may be considered at the early dismissal stage.
The Court tried to provide some exemplars for district courts who must now attempt to make sense of the conflicting contours of these decisions:
- In McGinity, the Court found the challenged phrase “Nature Fusion” to be “all-but-meaningless,” and therefore consumers should read the back of pack.
- In Whiteside, the Court found that the unqualified term “plant-based” accompanied by images of leaves and trees, could unambiguously convey that the product is entirely plant-based. However, for those products where the term “plant-based” was qualified by an asterisk providing additional information, the Court found that consumers could not choose to ignore this and claims against such products could be dismissed.
In light of this shift in the law, CPG companies should review their packaging with the Ninth Circuit’s Whiteside decision in mind, as well as the likely confusion that lower courts will have trying to apply this precedent. Lower courts may now be less inclined to look at back of packaging information to grant motions to dismiss. Companies should also consider adding qualifications to claims of concern, as the Whiteside decision treated qualified claims differently than unqualified claims. If you have any questions about the impact of this decision, please feel free to reach out to us.