Facts

Nestle USA, Inc. is a multi-billion-dollar company in the global chocolate market. Steven Prescott lives in Santa Cruz, California, and purchased Nestle Toll House Premium White Morsels at a Target store in December 2018, while Linda Cheslow lives in Santa Rosa, California, and purchased the same product at a Target store in late 2018. The Food and Drug Administration issues regulations defining "white chocolate" as a sold or semi plastic food prepared by intimately mixing and grinding cacao fat with one or more optional dairy ingredients and one or more optional nutritive carbohydrate sweeteners. Nestle Toll House Premium White Morsels contains sugar, palm kernel oil, milk, nonfat milk, hydrogenated palm oil, soy lecithin, and natural flavor. Prescott and Cheslow individually and on behalf of all other similarly situated purchasers of Nestle Toll House's Premier White Morsels brought a class action against Nestle USA, Inc. for violating California False Advertising and Unfair Business Laws.

PLAINTIFFS' CONTENTIONS: Plaintiffs contended that Nestle advertised the Nestle Toll House Premium White Morsels as white chocolate misleading consumers into thinking that the product contained premier ingredients while actually selling consumers fake white chocolate with inferior ingredients like hydrogenated oils. In particular, plaintiffs alleged that they relied on the labeling and advertising of the product, including the photo and wording of the package and the labeling on the official website, to imply the product contained white chocolate in making their purchases. Further, plaintiffs' reliance on the advertising prepared and approved by defendant was detrimental and reasonable considering the circumstances. Thus, plaintiffs argued that defendant affirmatively misrepresented the nature and characteristic of the product in order to convince the public to purchase it, resulting in millions of dollars of wrongfully obtained profits. In fact, plaintiff presented a widespread consumer study that showed that approximately 95% of respondents believed that the product contained white chocolate. Further, plaintiffs maintained that Nestle was aware that reasonable consumers would be misled into believing the product contained white chocolate that would melt when baking based on the consumer reviews on its website but intentionally refused to make any labeling or advertising changes to dispel consumer deception. Finally, plaintiffs alleged that defendant's practices and misrepresentations constituted unfair, unlawful, and fraudulent business practices.

DEFENDANT'S CONTENTIONS: Defendant contended that plaintiffs' complaint should be dismissed for failure to state a claim and failing to allege facts sufficient to establish standing to seek injunctive relief. Defendant also argued that plaintiffs failed to allege that the product is misleading to a reasonable consumer based on the use of the words "white" and "premier" and images of dark-colored cookies containing white morsels and a scattering of white chip-shaped morsels on the package.

Result

Defendant's motion to dismiss was granted without leave to amend.

Other Information

Plaintiffs have appealed the dismissal.