Today is Friday, December 20, 2019, the last day on which many of our readers will be in the office before settling their brains for a long winter’s nap. We wish you all the very best, and our holiday gift to you today is a case about candy. Not just any candy. Today we bring you Fannie May Pixies, those wonderfully decadent morsels of caramel, pecans, and chocolate that we purchase every time we go to Chicago. They are our mother-in-law’s favorite food, and when we used to live in Chicago, our carry-on luggage always carried a pound or two when traveling to visit.
What could be legally controversial about Pixies? Well, two fellow fans of Fannie May purchased boxes of candy, but allegedly did not get what they expected. The labels correctly described the weight and number of chewy treats inside the boxes, but the boxes also had empty space—known as “slack fill” in the food industry. (You can read our prior posts on “slack fill” here and here.) Reasonable people would enjoy their candy and maybe share it with their friends and family (such as our aforementioned mother-in-law). But not our plaintiffs. They filed a class action in federal court alleging that they has been duped and subjected to unfair practices under Illinois’ consumer fraud statute. Benson v. Fannie May Confections Brands, Inc., No. 19-1032, 2019 WL 6698082 (7th Cir. Dec. 9, 2019).
They lost, and because the Seventh Circuit set it up better than we ever could, here is the beginning of its opinion:
Proving that almost anything can give rise to litigation, this case concerns chocolates that [Plaintiffs] purchased at their local Fannie May stores in Chicago. Upon opening their boxes of candy, [they] were dismayed to find that the boxes were not brimming with goodies. Far from it: the boxes appeared to be only about half full.
Id. at *1. There are many reasons why food packaging sometimes leaves empty space, for example to protect the contents, to make the packaging reusable, to account for settling during shipping, among other reasons. Id. at *2. Here, the plaintiffs lost their lawsuit because they suffered no actual damages. They did not allege that the candy in the boxes was defective or worth less than the price they paid. Id. at *4. Instead, the plaintiffs alleged that they would not have purchased the candy if they had known about the slack fill.
But that is not an injury. Having paid a fair price for perfectly good candy, they got what they paid for. As the Seventh Circuit held, the plaintiffs “never said that the chocolates they received were worth less than the $9.99 they paid for them, or that they could have obtained a better price elsewhere. That is fatal to their effort to show pecuniary loss.” Id.
No harm, no foul. Referring back to the title of this post, that is the “Sweet” part. The “Low” part refers to a couple of noteworthy turns the Seventh Circuit took in coming to the correct result. First, the court held that the defendant could not raise federal preemption in a Rule 12(b)(6) motion to dismiss because preemption is an affirmative defense. Id. at *2. Relying in part on the terrible Bausch v. Stryker opinion, the Seventh Circuit faulted the district court for granting a 12(b)(6) motion on federal preemption because it purportedly “penalized” the plaintiffs for “failing to anticipate an affirmative defense” in their complaint. Id. This of course is wrong. Defendants can and do properly raise federal preemption in Rule 12(b)(6) motions. There is no “penalty” associated with dismissing a case that pleads facts showing that the plaintiff has failed to state a claim under the law, and that is true whether the law is couched as a claim or a defense. Recall also that in the event of any perceived “penalty,” the district court has the authority to grant leave to amend.
Second, before affirming the dismissal on the basis that the plaintiffs had no actual damages, the Seventh Circuit ruled that the plaintiffs had sufficiently pleaded deception and unfair practices. The pleading standards upon which the Seventh Circuit relied are low: A practice is deceptive under Illinois’ statute “if it creates a likelihood of deception or has the capacity to deceive” a reasonable consumer. Id. at *3 (citing Bober v. Glaxo Wellcome PLC, 246 F.3d 934, 938 (7th Cir. 2001); Mullins v. Direct Digital, LLC, 795 F.3d 654, 673 (7th Cir. 2015)). There are three considerations to determine whether conduct is “unfair”: “(1) whether the practice offends public policy; (2) whether it is immoral, unethical, oppressive, or unscrupulous; [and] (3) whether it causes substantial injury to consumers.” Id. at *4 (citing Robinson v. Toyota Motor Credit Corp., 775 N.E.2d 951 (Ill. 2002)).
The defendant justifiably argued that it could not have deceived anyone, nor could it have acted unfairly, when the packaging and the plaintiffs’ receipts accurately disclosed exactly what they were purchasing. The Seventh Circuit again expressed skepticism about 12(b)(6) motions and held that “at this stage in the litigation” it could not conclude that “information on the boxes is enough as a matter of law to avoid a finding of deception.” Id. at *3. Fortunately, there will not be a later “stage” for this “we want something for nothing” lawsuit. Sweet.