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Murphy v. Stonewall Kitchen, LLC

Court of Appeals of Missouri, Eastern District, Third Division

November 8, 2016

DANIEL MURPHY, individually and on Behalf of all others similarly situated in Missouri, Plaintiff/Appellant,
v.
STONEWALL KITCHEN, LLC, Defendant/Respondent.

         Appeal from the Circuit Court of the City of St. Louis Hon. Joan L. Moriarty

          OPINION

          Lisa S. Van Amburg, Judge

         Appellant Daniel Murphy appeals the trial court's order granting Respondent Stonewall Kitchen, LLC's Motion to Dismiss. We reverse the trial court and remand the matter for further proceedings consistent with this opinion.

         Background

         Daniel Murphy filed this lawsuit under the Missouri Merchandising Practices Act (MMPA) alleging Stonewall Kitchen, LLC misrepresented that its cupcake mix was "all natural" when it contained the ingredient of sodium acid pyrophosphate (SAPP), a chemical that acts as a leavening agent and is found in commercial baking powders. The petition identified the term "natural" to mean "when nothing artificial or synthetic … has been included in, or has been added to, a food that would not normally be expected to be in the food." The petition also contained allegations of unjust enrichment.

          Stonewall Kitchen filed a Motion to Dismiss for Failure to State a Claim. The trial court, relying on the federal district court for the Western District of Missouri's decision in Kelly v. Cape Cod Potato Chip Co., 81 F.Supp.3d 754 (W.D. Mo. 2015), granted the motion. It reasoned that because the ingredient label clearly disclosed the presence of SAPP, it was not plausible that a consumer would believe the "all natural" representation on the product (i.e. the "ingredient list defense"). The trial court also dismissed the unjust enrichment claim as wholly derivative of plaintiff's MMPA claim. We reverse the trial court for the reasons set forth below.

         Standard of Review

         Appellate courts review a trial court's grant of a motion to dismiss de novo. Ward v. W. Cnty. Motor Co., Inc., 403 S.W.3d 82, 84 (Mo. banc 2013). A motion to dismiss for failure to state a claim tests the adequacy of a plaintiff's petition. Nazeri v. Mo. Valley Coll., 860 S.W.2d 303, 306 (Mo. banc 1993). The petition is reviewed in an almost academic manner to determine if the plaintiff has alleged facts that meet the elements of a recognized cause of action or of a cause that might be adopted in that case. Id. The facts alleged in the petition are assumed to be true and are construed liberally in favor of the plaintiff. Ward, 403 S.W.3d at 84. If the facts pleaded and reasonable inferences to be drawn therefrom, looked at most favorably from the plaintiff's standpoint, show any ground upon which relief can be granted, the plaintiff has a right to proceed. Euge v. Golden, 551 S.W.2d 928, 931 (Mo. App. 1977). Indeed, under principles of modern pleading, a petition is not to be dismissed for failure to state a claim unless it appears that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Id.

         Discussion

         The MMPA, as first adopted by the legislature in 1967, protects consumers by expanding the common law definition of fraud "to preserve fundamental honesty, fair play and right dealings in public transactions." State ex rel. Danforth v. Independence Dodge, Inc., 494 S.W.2d 362, 368 (Mo.App.1973); see Huch v. Charter Commc'ns, Inc., 290 S.W.3d 721, 725-26 (Mo. banc 2009). To prevail on a claim under the MMPA, a plaintiff must plead and prove he or she (1) purchased merchandise (which includes services) from defendants; (2) for personal, family or household purposes; and (3) suffered an ascertainable loss of money or property; (4) as a result of an act declared unlawful under the Merchandising Practices Act. Hess v. Chase Manhattan Bank, USA, N.A., 220 S.W.3d 758, 773 (Mo. banc 2007); Edmonds v. Hough, 344 S.W.3d 219 (Mo. App. E.D. 2011). It is the defendant's conduct, not his intent, which determines whether a violation has occurred. State ex rel. Webster v. Areaco Inv. Co., 756 S.W.2d 633, 635 (Mo. App. E.D.1988) (internal quotations omitted). Moreover, "[a] consumer's reliance on an unlawful practice is not required under the MMPA." Hess, 220 S.W.3d at 774.

         The issue before us is whether Murphy pled facts and provided a definition of "all natural" sufficient to survive a motion to dismiss. Two federal district courts in Missouri reached different conclusions when they grappled with whether the use of the term "natural" or "nothing artificial" on packaging was deceptive under the MMPA. In Kelly v. Cape Cod Potato Chip Co., the plaintiff alleged potato chips labeled as "all natural" with "no preservatives" violated the MMPA. 81 F.Supp.3d at 760. The court held that "the federally-compliant ingredient label on the back of the [c]hips defeats Plaintiff's claims that the [c]hips' labeling constitutes an unlawful practice under the MMPA." It went on to find that the plaintiff's assertion that she was deceived by the chip company's labeling was contradicted by the full disclosure of the challenged ingredients and, if the plaintiff wished to avoid products containing the challenged ingredients, the chip company provided her with all the information she needed to do so. The Kelly court further held that in the absence of any plausible definition for the term "natural, " the plaintiff failed to state a claim that the use of the term "all natural" was deceptive or misleading under the MMPA. As a result, the Kelly court granted the chip company's motion to dismiss.

         The federal district court for the Eastern District of Missouri, on the other hand, denied a defendant's motion to dismiss when it faced a similar issue. See Erika Thornton v. Pinnacle Foods Group LLC, No. 4:16-CV-00158 JAR, 2016 WL 4073713 (E.D. Mo. Aug. 1, 2016). In Thornton, the plaintiff asserted claims under the MMPA and unjust enrichment. She alleged she purchased a box of muffin mix labeled as containing "nothing artificial." However, the mix allegedly contained two artificial, synthetic substances. Plaintiff alleged the representation that the mix contained "nothing artificial" was false, deceptive, and misleading. In response, the defendant filed a motion to dismiss asserting the "ingredient list" defense. The trial court denied defendant's motion because whether a reasonable consumer would be deceived by a product label was an issue of fact that could not be resolved on a motion to dismiss. The court reasoned that it was plausible a consumer might rely on the representation "nothing artificial" without looking at the ingredients or that the consumer might not know that the ingredients were artificial. It held that the mere presence of an ingredient list on the back of a product did not eliminate the possibility that reasonable consumers might be misled and that the effect of that ingredient statement on a reasonable consumer's understanding of advertising and product labels involved a factual inquiry. As a result, the court denied defendant's motion to dismiss.

         In this case, Murphy filed a lawsuit alleging that the term "all natural" present on the packaging of Stonewall Kitchen's cupcake mix was false, deceptive, and misleading under the MMPA because the mix contained the artificial ingredient SAPP. Murphy's petition also contained a count for unjust enrichment. Stonewall Kitchen filed a motion to dismiss claiming the petition failed to state a claim under the MMPA because Murphy failed to allege facts showing the cupcake mix was deceptive or that he suffered a loss as a result. Stonewall Kitchen also claimed the unjust enrichment allegations were derivative of the MMPA claim and should be dismissed. The trial court agreed. Citing the Kelly decision, the trial court concluded that Murphy failed to plead an unlawful act within the meaning of the MMPA because he did not-and could not-allege that the cupcake mix's packaging, when taken as a whole, failed to disclose that SAPP was an ingredient. In essence, the trial court accepted the "ingredient list" defense as barring Murphy's MMPA claim. It further opined that the terms "natural" or "all natural, " as used in the context of food and food labeling, were inherently ambiguous and had no clearly settled or generally understood and accepted meaning. As a result, the trial court held Murphy's petition could not survive a motion to dismiss. We disagree.

         In Point I, Murphy argues the trial court erred in granting Stonewall Kitchen's motion to dismiss because he properly pled an MMPA claim and set forth facts sufficient to survive such a motion. Stonewall Kitchen argues in response that the dismissal of Murphy's MMPA claim should be affirmed because the term "all natural" is subjective and ambiguous and the ingredient was disclosed in the ingredient label, which defeats Murphy's claim as a matter of law. We conclude that the bare assertion that "all natural" is subjective and ambiguous does not cause Murphy's entire MMPA claim to fail at this early stage of litigation because a reasonable consumer's understanding of the term "all natural" or whether a practice is unfair or deceptive are questions of fact. See, e.g. Jackson v. Hazelrigg Auto. Serv. Ctr., Inc., 417 S.W.3d 886, 895 (Mo. App. S.D. 2014); Kiechle v. Drago, 694 S.W.2d 292, 293 (Mo. App. W.D. 1985)("leaving it to the court in each particular instance to declare whether fair dealing has been violated"). For example, more discovery is required regarding whether SAPP is an artificial or natural ingredient, whether SAPP is ordinarily expected to be included in such a cupcake mix, whether an ordinary consumer would be misled by the term "all natural, " and whether labeling the mix as "all natural" was deceptive. The parties should have been allowed to proceed with discovery and allow these fact questions to be resolved by a motion for summary judgment, if appropriate, or by a jury, not by a ...


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