NY Judge Denies Dismissal of Free-Range Egg Suit
A federal judge in New York denied a motion to dismiss a proposed class action complaint which alleged that the producer of Nellie’s Free Range Eggs, Pete and Gerry’s Organics LLC, deceived customers by selling eggs that were not actually “free-range". According to the opinion, plaintiff Constance Mogull alleges that Nellie’s, which is one of the nation’s largest sellers of eggs, sold eggs in packaging that described them as “free-range,” with images of hens outdoors, and stated “[m]ost hens don’t have it as good as Nellie’s. 9 out of 10 hens in the U.S. are kept in tiny cages at giant egg factories housing millions of birds. Sadly, even “cage-free” is now being used to describe hens that are crowded into large, stacked cages on factory farms, who never see the sun. Nellie’s small family farms are all Certified Humane Free-Range. Our hens can peck, perch, and play on plenty of green grass.”
The plaintiff alleges that a reasonable consumer would understand “free-range” to mean hens are not confined and are able to move around comfortably both indoors and outdoors. She argues that Nellie’s eggs are not actually “free-range” because the hens are “crammed” into overcrowded sheds and have no or limited access to outdoor space. In their motion to dismiss, Pete and Gerry’s argued that the representations challenged by the plaintiff are true when read in context, or in the alternative, are non-actionable puffery because a reasonable consumer would not assume that the packaging language were factual claims about the lives of their hens.
Judge Vincent L. Briccetti disagreed and found that plaintiff adequately alleged Pete and Gerry’s made materially misleading statements that are not puffery: “Because a reasonable consumer could interpret the disputed product descriptions as factual claims on which he or she could rely, the Court denies defendant’s request for dismissal on the ground that defendant’s alleged misrepresentations are non-actionable puffery.” Judge Briccetti also declined to dismiss plaintiff’s fraud claim because she plausibly alleged that Pete and Gerry’s falsely described their eggs as “free-range” despite being a top producer of eggs in the US that is aware of its farmers’ practices and how the term “free-range” is perceived by consumers.