A federal judge won’t crack down on a class action accusing Eggland’s Best of misusing the term “cage free” on product materials.
In an opinion filed Feb. 27, U.S. District Judge Franklin Valderrama refused to dismiss a consumer protection lawsuit from Tim Janecyk, who alleged that, although Eggland packaging promotes eggs from hens “free to roam in a pleasant, natural environment,” the reality is the chickens have no outdoor access and live in windowless compounds.
Janecyk alleged he and other shoppers are willing to pay premiums to buy from companies that don’t rely on “factory farming” techniques and said Eggland seeks to cater to that market, noting “cage free” eggs tend to sell at 7% more than conventional eggs. The lawsuit noted Eggland’s large, cage free cartons can cost 25% more than its own normal product line. He further said that markup is in line with the 26% premium typical for “free range” eggs
In arguing for dismissal, Eggland said its hens are kept in a way that meets the legal definition of “cage free.” But Janecyk said the product marketing, in use since April 2020, is at odds with a reality of compounds where “hens have no access to grass, natural vegetation or sunshine, they breathe filtered air, and they live in windowless rooms made of concrete, metal and dirt,” Valderrama wrote. “Up to hundreds of thousands of hens are crammed into a single compound, which results in chronic stress for the hens. The tight space and stress results in fighting, stunted growth, lowered food intake, increased risk of health problems and pile-ups that can be deadly for the hens.”
Janecyk further alleged the hen density — as low as one square foot per bird — renders the “free to roam” statement particularly misleading insofar as it seems designed to evoke perceptions associated with “free range,” a federally regulated term only applicable to animals with outdoor access.
Valderrama said his analysis would consider cage free egg packaging and not that of Eggland’s “pasture raised” or “free range” eggs, as Janecyk didn’t incorporate them into his complaint. Further, while he did take “judicial notice of the various state regulations” applicable to the allegations, “the United Egg Producers’ and American Egg Board’s definitions of ‘cage free’ as written on their websites are not necessarily ‘common knowledge’ or free from dispute, like a state statute or court decision would be” and are therefore inapplicable.
Eggland argued Janecyk’s fraud claims lacked specificity, contended the challenged statement wasn’t misleading and maintained he failed to state an unjust enrichment claim. Janecyk countered by claiming the consumer protection laws the complaint invokes include both “fraud” and “non-fraud” prongs. Valderrama agreed court rules did not require certain class claims “to allege which particular store each plaintiff was in, or on what exact date they purchased the eggs.”
Regarding the text on Eggland egg cartons, Valderrama said the complaint doesn’t allege the eggs aren’t labeled “cage free,” but focused on additional language that would lead consumers to presume “the hens are free to roam outdoors to some extent, or at least in an environment that is pleasant and natural. At the very least, the consumer would not expect the hens to be kept in packed, metal and concrete facilities, and in unhealthy conditions,” Valderrama wrote.
“Cage free” can legally cover birds that live indoors, according to Janecyk’s allegations, which means labeling the eggs as such “does nothing to dispel the notion created by the additional statement that the hens are also free to roam in a natural environment,” according to Valderrama, who further detailed the history of judicial rulings on terms like “farm fresh,” “pasture-raised” and “free run” and agreed having “cage free” on the label, regardless of what that term means under government regulations, doesn’t correct impressions the remainder of the text engenders.
Eggland offered in the alternative the argument that the challenged product text is “mere puffery,” meaning reasonable consumers couldn’t be deceived. But Janecyk argued the living conditions of Eggland hens are verifiable facts, and Valderrama agreed the full context is not sufficiently vague or aspirational to qualify as puffery.
“It may be the case that evidence will reveal that Eggland’s statement, in light of the cage free label, is understood by consumers to mean that the hen could be roaming in a packed industrial facility,” Valderrama wrote. “But the court is not called upon to make that factual finding today.”
Valderrama likewise declined to dismiss unjust enrichment claims, again because he found the complaint “sufficiently alleged a misleading statement by Eggland.” He likewise rejected Eggland’s contention the complaint failed on standings grounds, saying there is an alleged financial injury stemming from premium prices, and agreed the challenged statements triggered a duty to accurately disclose hens’ living conditions in order to justify the increased cost.
Although Eggland said the “undercover footage” in the complaint is outdated by as much as nine years, Valderrama said that is a factual dispute unsuitable for a dismissal motion.
Finally, Valderrama did agree with Eggland that an injunction wasn’t needed because the complaint doesn’t allege “a real and immediate threat of suffering future harm from Eggland.” Whether or not customers can rely on the company’s representations, there still is no showing of likely future harm by people who would be included in the class, the judge said.
Plaintiffs are represented in the case by attorneys John J. Frawley, Maureen A. Salas and Douglas M. Werman, of the firm of Werman Salas P.C., of Chicago; and Pete Winebrake and Michelle Tolodziecki, of the firm of Winebrak & Santillo LLC, of Dresher, Pennsylvania.
Eggland’s Best is represented by attorney Richard Fama and others with the firm of Cozen O’Connor, of New York.
