Can a Consumer Plausibly Allege Your Product Labeling is False or Misleading Under California Law?

California’s consumer protection laws prohibit false advertising, as well as advertising that is “‘either actually misleading or which has a capacity, likelihood, or tendency to deceive or confuse the public.’”[1] These claims are governed by the “reasonable consumer standard,” which requires a plaintiff to show that the labeling at issue is likely to deceive many consumers.[2] Over the last year and a half, the Ninth Circuit has issued several impactful rulings regarding the dismissal of class action lawsuits asserting that the labeling of consumer products is false or misleading, at the pleading stage. These decisions provide useful guidance for crafting product labeling that is resilient to legal challenges brought under California’s consumer protection laws.

1. If a Front Label Is Ambiguous, the Court Must Assess the Product’s Entire Packaging

Last year, the Ninth Circuit held in McGinity[3] that when a front label is ambiguous, even at the pleading stage, the ambiguity can be resolved by reference to the back label. Specifically, the Court found that the claim at issue –“Nature Fusion”– was ambiguous because while the front label represented that something about the product bears a relationship to nature, it did not make any affirmative promises about what proportion of the ingredients are natural. “Nature Fusion” could instead mean any number of things. Moreover, the product’s back label listed several synthetic ingredients and contained the phrases “Smoothness Inspired by Nature” and “NatureFusion® Smoothing System With Avocado Oil.” The Court concluded that upon seeing the back label of this product, it would be clear to a reasonable consumer that avocado oil is the natural ingredient emphasized in the labeling and affirmed the decision of the district court dismissing the false advertising case.

Following McGinity, the Ninth Circuit rejected that the use of the phrases “Icelandic Provisions” and “Traditional Icelandic Skyr” on a front label were misleading because any ambiguity about whether the product was manufactured in Iceland could be resolved by reference to the back label, “which accurately states that the product is manufactured in New York.”[4] Similarly, the Court rejected that front labeling on Arrowhead Brand’s water bottles misled reasonable consumers to believe the water was sourced exclusively from Arrowhead Mountain where the term “Arrowhead” was followed by the registration symbol “®” and the word “Brand,” which was not misleading.[5]  In concluding that a reasonable consumer would not be deceived, the Court also relied on the back label which “conspicuously list[ed] the sources of the spring water in large capital letters.” 

2. If a Product’s Front Label Is Plausibly Misleading, the Court Will Not Consider the Back Label at the Pleading Stage

The Ninth Circuit recently held that to preclude consideration of a back label at the pleading stage, “a plaintiff must plausibly allege that the front label would be unambiguously deceptive to an ordinary consumer, such that the consumer would feel no need to look at the back label.”[6]

What is “unambiguously deceptive” under the law remains, well, ambiguous. According to the Ninth Circuit, absolute claims such as those declaring a product is “100% natural,” “all natural,” “natural care” or “plant-based”, without any qualification, are likely unambiguously deceptive. And if a consumer does not require further information before they could make a reasonable conclusion that the front label made a specific representation, the back label cannot be considered at the dismissal stage. 

3. An Asterisk Puts Consumers on Notice that There Are Qualifications and Caveats

In Whiteside v. Kimberly Clark Corp., a consumer challenged the words “plant-based” and “natural care” on the front packaging of baby wipes that also included nature-themed imagery. For some of the products, the front label included an asterisk after “plant-based” with a corresponding qualifying statement “70%+ by weight.”[7] Other versions of the products did not contain an asterisk or any qualifying statements on the front label. Both versions contained a list of ingredients on the back label, along with the statement “NATURAL AND SYNTHETIC INGREDIENTS.” The Court concluded that the plaintiff had plausibly alleged that a reasonable consumer could interpret the front label for the un-asterisked products as unambiguously representing that the products did not contain synthetic ingredients. In contrast, as to the products with the asterisk and qualifying statement on the front label, the Court found that those qualifications, paired with the back label ingredient list, made it impossible for the plaintiff to prove that a reasonable consumer was likely to be deceived. The asterisk alone, the Court reasoned, put consumers on notice that there were qualifications or caveats, making it unreasonable to assume that the products were “100% plant-based.” Further, to the extent the qualification “70%+ by weight” was ambiguous, a reasonable consumer could review the back label which clarified that the products contain both natural and synthetic ingredients.   

Relying on Whiteside, the Ninth Circuit also recently held that the claim “KILLS 99.99% OF GERMS*” on the front label of hand sanitizer products did not mislead consumers to believe the product killed 99.99% of all germ species because the claim was followed by an asterisk and qualifying language on the back label narrowing the products’ claims to “many common harmful germs.”[8] The Court, however, allowed the case to proceed beyond the pleading stage on an alternative theory of deceptiveness. This underscores the risk that although asterisks and qualifying language are powerful tools to protect against false advertising claims, they are insufficient if they do not resolve the specific alleged theory of deceptiveness.

General Recommendations for Companies Selling Consumer Products in California

Companies selling consumer products in California should consider the following strategies to help mitigate the risk of costly consumer false advertising class action claims:

1. Avoid concrete and unqualified objective claims on the front label unless they are entirely true and sufficient reliable data exists to substantiate them;
2. Assess whether marketing claims on the product’s labeling are open to interpretation or ambiguous to a customer who may not know anything about the product; 
3. Consider using asterisks and qualifying language to reduce and eliminate ambiguity; and
4. Position qualifying and clarifying language in close proximity to the claim.