Dough you know? Unpacking recent claims of false advertising against Kroger's Carbmaster bread

If it sounds too good to be true, it probably is.

This is the message of a recent lawsuit filed by the district attorneys of Santa Barbara and Ventura counties against Kroger, the parent company of such popular supermarket chains as Ralphs and Food 4 Less, alleging claims of false advertising and violations of California’s unfair competition laws. At the heart of the lawsuit lies Kroger’s “Carbmaster” line of bread items, marketed as “a healthy alternative to other brands of milks, yogurts, breads, and related food products.” And to an extent, this may have been true. Only not quite as healthy as Kroger led consumers to believe.

As alleged by prosecutors, in or around November 2018, Kroger began falsely representing the caloric content of its Carbmaster products—claiming, for example, that its Carbmaster white bread contained only 30 calories per slice, when in reality, it was nearly double.

Initially, Kroger included the allegedly falsified calorie count in “bright, colorful, and large-print” on the front label of the products, as well as the nutrition label on the back. Later, however, it changed the nutritional labeling to reflect the accurate value, while nevertheless leaving the conspicuous contradiction on the front label intact. In what prosecutors describe as “a particularly egregious instance,” Kroger marketed its Carbmaster Hamburger Buns as having only 50 calories per bun—at least according to the consumer-facing packaging—when in fact the calorie count was 100 per bun, as evidenced by the nutritional label on the back.

It is well-established in California that the touchstone for any claim of false advertising is that the allegedly misleading statements must be “likely to deceive a reasonable consumer.” Consumer Advocates v. Echostar Sat. Corp., 113 Cal.App.4th 1351, 1362 (2003). The California Supreme Court has recognized that “these laws prohibit not only advertising which is false, but also advertising which, although true, is either actually misleading or which has a capacity, likelihood or tendency to deceive or confuse the public.” Kasky v. Nike, Inc., 27 Cal.4th 939, 951 (2002).

Of course, there can generally be no deception where a marketing statement is literally true, so the first issue prosecutors will need to grapple with is the true caloric content of the Carbmaster products. Assuming that value was understated as alleged, the question of liability for the original packaging before the nutritional label was changed is seemingly straightforward. Certainly, a reasonable consumer who picked up a loaf of Carbmaster bread proudly boasting 30 calories per slice could be excused for believing it to contain, well, 30 calories per slice.

Where things get more complicated is with regard to liability after the packaging switch. Here, Kroger may try and invoke a line of cases holding that no reasonable consumer can be misled by a label where a review of the packaging in its totality makes the product’s composition clear. As one court put it, “qualifiers in the packaging can ameliorate any tendency of the label to mislead.” Brady v. Bayer Corp., 26 Cal.App.5th 1156, 1167 (2018).

This rule of reason, however, has its limits, as aptly illustrated by the Ninth Circuit’s decision in Williams v. Gerber Prods. Co., 552 F.3d 934 (9th Cir. 2008). Williams involved a product marketed by Gerber for toddlers, packaged as “Fruit Juice Snacks Naturally Flavored Rich in Vitamin C” and which included a picture of a variety of fruits. Yet, one only had to turn to the back side to discover that the only “fruit juice” in those “snacks” was “white grape juice from concentrate” and the two most prominent ingredients were “corn syrup and sugar.”

Applying California consumer law, the Williams court held that just because the back side of the package disclosed the product’s true nature, this did not necessarily cure the misleading nature of the front side. In the court’s words: “We do not think that the FDA requires an ingredient list so that manufacturers can mislead consumers and then rely on the ingredient list to correct those misinterpretations and provide a shield for liability for the deception. Instead, reasonable consumers expect that the ingredient list contains more detailed information about the product that confirms other representations on the packaging.” Williams, 552 F.3d at 939-940. Thus, the court held, where the product’s back label conflicted with the front, the defendant could not prevail on a pleading stage challenge to the plaintiff’s false advertising claims.

Another front-back case with the same approach as Williams involved a marketer’s effort to call a product “organic” on the front while qualifying the word on the back: Brown v. Hain Celestial Group, Inc. 913 F.Supp.2d 881 (N.D. Cal. 2012). Again, the back qualifier didn’t work.

Specifically, in Brown a brand of cosmetic products used the word “organic” in the brand name “Jason and Avalon Organics.” However, the products were not even “predominately” made from organic ingredients. Brown, 913 F.Supp.2d at 885. Though the “entire label” was not before the court on the defendant’s motion to dismiss (presumably the “entire label” would have revealed the relatively low organic content of the products) the court was clear that the use of the word “organic” combined with the “pure, natural and organic” tagline did not allow a conclusion that no reasonable consumer could be deceived as a matter of law. Id. at 898. So again, a back-label ingredients list that conflicted with, rather than confirmed, a front-label claim could not defeat the action.

Although the case against Kroger is still in its infancy, the prosecutors’ complaint certainly lays out a compelling case for false advertising under California’s consumer protection laws. And while Kroger may attempt to rely on the caloric count disclosed on the Carbmaster nutritional labels, Williams and its progeny will present a sizable hurdle to this line of argument. If ultimately found liable, Kroger faces considerable liability: up to $2,500 for each violation. Which, considering the ubiquitous reach of the Kroger brand throughout California, could easily number in the millions.

Whichever way it turns out, the legal battle against Kroger serves as a poignant reminder of the critical role played by regulators and consumers in holding corporations accountable for their advertising claims. Moving forward, heightened scrutiny of product packaging and a commitment to transparency will be essential in fostering trust and integrity in the marketplace, ensuring that consumers can confidently navigate their purchasing decisions without falling prey to deceptive marketing tactics.