Court Opinion

ID: 9396394
Source: CourtListenerOpinion
Date Created: 2023-05-22 15:00:41.229273+00
Date Added: 2024-06-11T17:19:16.557275
License: Public Domain

22-1805
    Hardy v. Olé Mexican Foods, Inc.

                              UNITED STATES COURT OF APPEALS
                                  FOR THE SECOND CIRCUIT

                                           SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY
OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

          At a stated term of the United States Court of Appeals for the Second Circuit,
    held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the
    City of New York, on the 22nd day of May, two thousand twenty-three.

    PRESENT:

               SUSAN L. CARNEY,
               RICHARD J. SULLIVAN,
               WILLIAM J. NARDINI,
                     Circuit Judges.
    _____________________________________

    RYAN HARDY, individually and on behalf
    of all others similarly situated,

                             Plaintiff-Appellant,

                      v.                                                           No. 22-1805

    OLÉ MEXICAN FOODS, INC.,

                     Defendant-Appellee. *
    _____________________________________

    *   The Clerk of Court is respectfully directed to amend the official case caption as set forth above.
For Plaintiff-Appellant                       Timothy J. Peter, Faruqi & Faruqi,
                                              LLP, Philadelphia, PA; Nina M.
                                              Varindani, Innessa M. Huot, Faruqi
                                              & Faruqi, LLP, New York, NY.

For Defendant-Appellee:                       Nancy    L. Stagg,  Kilpatrick
                                              Townsend & Stockton LLP, San
                                              Diego, CA.

      Appeal from a judgment of the United States District Court for the Western

District of New York (John L. Sinatra, Jr., Judge).

      UPON      DUE      CONSIDERATION,           IT   IS   HEREBY    ORDERED,

ADJUDGED, AND DECREED that the judgment of the district court is

AFFIRMED.

      Ryan Hardy appeals from the district court’s judgment dismissing his

claims, brought on behalf of himself and other similarly situated consumers,

against Olé Mexican Foods, Inc. (“Olé”) for violations of New York General

Business Law sections 349 and 350. Hardy alleged that the packaging of four “La

Banderita” tortilla products (the “La Banderita Products”) misled consumers into

believing that the products originated from Mexico, when in fact they were made

in the United States. We assume the parties’ familiarity with the underlying facts,

procedural history, and issues on appeal.

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      We review the grant of a motion to dismiss de novo, accepting as true all

factual claims in the complaint and drawing all reasonable inferences in the

plaintiff’s favor. Cap. Mgmt. Select Fund Ltd. v. Bennett, 680 F.3d 214, 219 (2d Cir.

2012). “To survive a motion to dismiss, a complaint must contain sufficient factual

matter, accepted as true, to state a claim to relief that is plausible on its face.”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted).

      As an initial matter, we must determine whether Hardy has both Article III

standing and class-action standing. To demonstrate Article III standing, a plaintiff

must allege (1) an injury in fact that is (2) fairly traceable to the defendant’s actions

and that is (3) redressable by the requested relief. Lujan v. Defenders of Wildlife, 504

U.S. 555, 560–61 (1992). Meanwhile, “a plaintiff has class standing if he plausibly

alleges (1) that he personally has suffered some actual injury as a result of the

putatively illegal conduct of the defendant” and “(2) that such conduct implicates

the same set of concerns as the conduct alleged to have caused injury to other

members of the putative class by the same defendant[].” NECA-IBEW Health &

Welfare Fund v. Goldman Sachs & Co., 693 F.3d 145, 162 (2d Cir. 2012) (alteration and

internal quotation marks omitted).

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      Here, Hardy has Article III standing for the one product he purchased, La

Banderita Taco Size Flour Tortillas, and class standing for the other three La

Banderita Products that he did not purchase – La Banderita Burrito Grande, La

Banderita Sabrosísimas Corn, and La Banderita Whole Wheat Fajita. According to

his complaint, Hardy suffered a cognizable injury when he paid a price premium

for a La Banderita product that he otherwise would not have purchased had he

known it was not made in Mexico. The complaint also makes clear that the injury

is fairly traceable to the packaging of Olé’s products, and that it is redressable by

damages against Olé.

      Hardy also has class standing because all four La Banderita Products

implicate “the same set of concerns” relating to whether the packaging

misrepresented where the products were made. NECA-IBEW, 693 F.3d at 162.

Variations in size and formulations notwithstanding, the products were

advertised in packaging that displayed almost-identical statements, color

schemes, and designs. As such, we find that the present dispute involves “claims

brought by a purchaser of one product [that] would raise a set of concerns nearly

identical to that of a purchaser of another . . . product.” See DiMuro v. Clinique

Lab’ys, LLC, 572 F. App’x 27, 29 (2d Cir. 2014) (internal quotation marks omitted);

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see also id. (finding that “Plaintiffs lack[ed] class standing to bring claims for the

four [out of seven] products that they did not purchase,” because “[e]ntirely

unique evidence [was] required to prove” the falsity of approximately thirty-five

different advertising statements on each of the seven different products).

      Satisfied that Hardy has both Article III and class standing, we now turn to

the merits of Hardy’s deceptive-practices and false-advertising claims. New York

General Business Law section 349 prohibits “[d]eceptive acts or practices in the

conduct of any business, trade or commerce,” N.Y. Gen. Bus. Law § 349, and

section 350 prohibits “[f]alse advertising in the conduct of any business, trade or

commerce,” id. § 350. To state a claim under either section, “a plaintiff must allege

that a defendant has engaged in (1) consumer-oriented conduct that is

(2) materially misleading and that (3) plaintiff suffered injury as a result of the

allegedly deceptive act or practice.” Orlander v. Staples, Inc., 802 F.3d 289, 300 (2d

Cir. 2015) (internal quotation marks omitted). “[A] plaintiff must plausibly allege

that the deceptive conduct was likely to mislead a reasonable consumer acting

reasonably under the circumstances.” Mantikas v. Kellogg Co., 910 F.3d 633, 636 (2d

Cir. 2018) (internal quotation marks omitted).

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       “The primary evidence in a consumer-fraud case arising out of allegedly

false advertising is, of course, the advertising itself,” Fink v. Time Warner Cable, 714

F.3d 739, 742 (2d Cir. 2013), which “[w]e . . . consider . . . as a whole, including

disclaimers and qualifying language,” Mantikas, 910 F.3d at 636. On the La

Banderita Products, a graphic resembling the Mexican flag (but with corn stalks

instead of the coat of arms of Mexico) figures prominently in the center of the

packaging and sets the green-white-red color scheme of the packaging. 1 J. App’x

at 52, 54, 56, 59, 62. 2 The “La Banderita” brand is printed in a circle surrounding

the flag, along with a descriptor of the tortilla product (e.g., “Flour Tortillas,”

“Burrito Grande,” “Sabrosísimas,” or “Fajita”). Id. Depending on the product,

these words may be repeated at the edges of the packaging, which may also

display a smaller version of the flag graphic – this time with a white bull replacing

the white segment of the flag – and the phrase “A Taste of Mexico!” Id. at 52, 54,

56. The remainder of the packaging describes in English the number of tortillas

1 The description above generally applies to the packaging used for Olé’s Sabrosísimas corn
tortilla product. See J. App’x at 59. Although there are slight variations in the packaging used for
the four La Banderita Products, we find that these differences do not meaningfully impact the
analysis or outcome of this case.

2
 The district court took judicial notice of the packaging images that Olé submitted in connection
with its motion to dismiss. See Hardy v. Olé Mexican Foods, Inc., 616 F. Supp. 3d 247, 249 n.1
(W.D.N.Y. 2022). Hardy does not challenge this ruling on appeal.
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included, the size of the tortillas, featured ingredients, and the product’s net

weight. Id. at 52, 54, 56, 59, 62. On the back of the packaging there is a La Banderita

logo and the flag graphic, followed by a “Nutrition Facts” table, heating

instructions, and barcodes. J. App’x at 39, 52, 54, 57, 60, 63. Notably, in the bottom-

left corner, the packaging includes graphics stating that the products are

“MANUFACTURED BY: OLÉ MEXICAN FOODS, INC. NORCROSS, GA 30071”

and “MADE IN U.S.A.” Id.

      After considering the “advertisement as a whole,” we agree with the district

court that Hardy has not “plausibly allege[d] that the deceptive conduct was likely

to mislead a reasonable consumer acting reasonably under the circumstances.”

Mantikas, 910 F.3d at 636 (internal quotation marks omitted). Glaringly absent

from the packaging is any statement that the La Banderita Products are made in

Mexico. To be sure, the front of the packaging displays green, white, and red

graphics resembling the Mexican flag and incorporates the phrase “A Taste of

Mexico” as well as the Spanish word “La Banderita.” J. App’x at 52, 54, 56, 59, 62.

But while these features may encourage consumers to draw associations with

Mexico and promote the belief that the products contain Mexican-style flavors and

ingredients, no reasonable consumer would construe these elements to be an

                                          7
affirmative representation that the La Banderita Products were in fact manufactured

in Mexico.    This is especially true given that the back of the packaging

conspicuously states that the products are “MADE IN U.S.A.” and

“MANUFACTURED [IN] NORCROSS, GA.” J. App’x at 39, 52, 54, 57, 60, 63. The

La Banderita Products’ packaging is thus distinguishable from that before the

court in Mantikas, in which the front of the product’s packaging contained

“misleading information set forth in large bold type on the front of the box” that

could not be “clarified” or cured by reverse-side disclosures that were nestled in a

“Nutrition Facts panel and ingredients list.” See Mantikas, 910 F.3d at 636–37.

      Hardy’s position seems to be that Mantikas established a rule that

information on the back of a product’s packaging is always irrelevant to a

deceptive-marketing claim; he argues that a front-label representation about any

aspect of a product can never be clarified by a representation made elsewhere on

a product’s packaging to avoid a claim under either section 349 or 350. This is not

what Mantikas holds. To the contrary, Mantikas reaffirmed that we will “consider

the challenged advertisement as a whole, including disclaimers and qualifying

language” and that “context is crucial” in evaluating deceptive-marketing claims.

Id. at 636 (citing Fink, 714 F.3d at 742). Mantikas instructs that in considering

                                         8
advertisements regarding a product’s nutritional content, a small-print ingredient

list cannot “cure” front-label representations that are otherwise highly deceptive

because “reasonable consumers expect that the ingredient list contains more

detailed information about the product that confirms other representations on the

packaging.” Id. at 637 (internal quotation marks omitted). Mantikas does not

suggest that its reasoning necessarily applies outside the context of nutritional

labels.

       Even if Mantikas’s reasoning applied to some place-of-origin advertising,

however, its “front-of-the-package” rule does not apply here, where the front-side

packaging makes no express representations as to the origin of the La Banderita

Products, while the back of the packaging unambiguously notes where the

products were “made” and “manufactured.” J. App’x at 39, 52, 54, 57, 60, 63. For

these reasons, the district court did not err in concluding that Hardy failed to

“plausibly allege” that a “reasonable consumer acting reasonably under the

circumstances” would likely believe that the La Banderita Products were made in

Mexico. Mantikas, 910 F.3d at 636 (internal quotation marks omitted). 3

3Hardy makes much of the fact that, in interpreting similar claims brought under provisions of
California state laws that resemble New York General Business Law sections 349 and 350, a
California district court reached the opposite conclusion concerning whether the La Banderita
Products’ packaging was misleading. See de Dios Rodriguez v. Olé Mexican Foods Inc., No.
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        We have considered Hardy’s remaining arguments and find them to be

without merit. For these reasons, we AFFIRM the judgment of the district court.

                                                FOR THE COURT:
                                                Catherine O=Hagan Wolfe, Clerk of Court

EDCV202324JGBSPX, 2021 WL 1731604, at *3–5 (C.D. Cal. Apr. 22, 2021). This is of no moment,
since the California district court’s decision dealt with a different state’s statutes and, in any event,
has no binding effect on this Court. See Glover v. Bausch & Lomb Inc., 6 F.4th 229, 240 (2d Cir. 2021),
certified question answered, 343 Conn. 513 (2022).

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