Past presentations and posts have addressed the defense of consumer class action cases via motions to dismiss for lack of subject matter jurisdiction. Briefly, most consumer class action cases are brought in (or removable to) federal court under the Class Action Fairness Act of 2005, Public Law 109-2, which grants jurisdiction to the federal district courts to hear class action cases in which the amount in controversy exceeds $5 million, the class comprises at least 100 members and at least one class member is diverse from at least one defendant. Despite the jurisdictional grant, no case may proceed in federal court absent satisfaction of the constitutional requirement that the plaintiffs allege a legally cognizable injury. When plaintiffs claim to have suffered personal injury or property damage, the injury is apparent. (Whether the claimed injury actually occurred and, if so, whether the defendant is legally responsible, are questions that go to the merits, not to jurisdiction.) But when the alleged injury is purely economic, the defendant may have a jurisdictional defense as well.
The successful assertion of a jurisdictional defense in a class action case alleging purely economic injury is illustrated by a March 2025 decision involving claims based on the purported presence of heavy metals, such as lead, in baby food. In re Beech-Nut Nutrition Co. Baby Food Litig., ___ F. Supp. 3d ___, 2025 WL 862382 (N.D.N.Y. March 19, 2024). The plaintiff class alleged two theories of economic injury, referred to as "benefit of the bargain" and "price premium." No claims were made in this case for personal injury from ingestion of the accused products.
The plaintiffs' benefit of the bargain theory posited that the manufacturer's labeling and promotion of its products misrepresented their characteristics, and that the presence of heavy metals both 1) rendered the statements false or misleading and 2) made the products unusable. The statements on which the class relied were that products' branding as "organic," "natural," "USDA-Certified Organic," "real food for babies," "nothing artificial added," "non-GMO" and "free from artificial preservatives, colors and flavors." Id. at *5.
In support of their benefit of the bargain theory, the plaintiffs alleged that the presence of heavy metals in the products rendered them unfit for their intended use (i.e., that they were effectively worthless). Stated differently, paying money for a product of certain quality or utility based on the manufacturer's representations – when, in fact, the product was worthless because those representations were false – would by definition deny the purchasers the benefit of their bargain.
The court found that the plaintiffs' benefit of the bargain theory failed on two grounds. First, the plaintiffs did not plausibly allege that the purported heavy-metal contaminants rendered false or misleading general statements about the product's quality. Second, they did not plausibly allege that the baby food failed to serve its intended purpose (i.e., feeding their babies):
Plaintiffs allege, in a conclusory manner, that the baby foods they purchased contained unsatisfactory levels of heavy metals. But plaintiffs do not say more. Instead, plaintiffs ask the court to infer from these assertions that the alleged presence of heavy metals rendered the food unsafe, unusable, and therefore, worthless.
Plaintiffs allege that they paid for safe and healthy baby food for their children. But they do not allege that defendant's products were worth something less than this or unusable. Plaintiffs only allege that defendant branded the products as "organic," "natural," "USDA-Certified Organic," "real food for babies," "nothing artificial added," "non-GMO," and "free from artificial preservatives, colors and flavors," but do not further allege that the alleged contaminants rendered those representations to be false or misleading. Nor have plaintiffs pleaded that the goods failed to serve their intended purpose.
Therefore, this Court does not find the injury alleged by plaintiffs to be either concrete or particularized, and plaintiffs' benefit of the bargain theory will be rejected as a basis for finding standing.
Id.
The plaintiffs' price premium theory in this case was largely a slightly different version of their benefit of the bargain theory. Under the latter, the claim was that the purportedly contaminated baby food was essentially worthless. Under the former, the claim was that the products were worth less than the prices paid by plaintiffs, with the overlapping element that the purportedly false statements misled them regarding the products' diminished value (price premium) or complete lack of value (benefit of the bargain).
Given that the price premium theory was basically a less absolute version of the benefit of the bargain theory, the court's rejection of it followed the same logic:
First, plaintiffs fail to allege any facts that this baby food was marketed as superior such that a misrepresentation existed with respect to the existence of heavy metals. Second, plaintiffs have not alleged any cheaper, comparable products to support the notion of a premium. Instead, plaintiffs express regret about what they paid for a product given an unfavorable report—but they do not state what they would have done differently had they known to plausibly give rise to the notion they paid a premium.
Id. at *6 (citations omitted).
Although the price premium theory in this case was a variation on the benefit of the bargain theory, that is neither always nor necessarily the case. A more conventional price premium argument is seen when the products at issue are labeled or otherwise promoted as premium products. For example, "all natural" or "nothing artificial" products may indeed command a higher price than options that use artificial colors or flavors. Id. at xx (explaining that cognizable injury may exist under a price premium theory if a consumer is wrongly induced to pay a "premium" for a product that is falsely advertised as "superior").
As noted in the decision, the plaintiffs' claims and the grounds on which the court dismissed them closely tracked cases in New Jersey and Virginia also involving purported heavy metal contamination of baby food. Id.
The plaintiffs noticed an appeal of the district court's decision, but resolution of the appeal is unlikely to occur before the second half of 2026.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
