Alleged Economic Injury Satisfies Article III Standing in Baby-Food Class Action Case

We previously reported on a district court's dismissal of a class action lawsuit against a baby food manufacturer in which plaintiffs alleged that the baby food contained harmful levels of heavy metals. ("Economic Harm Claims from Purportedly Contaminated Baby Food Dismissed for Lack of Injury," May 5, 2025.) The court of appeals has now reversed that dismissal.

Background

As readers may recall, the plaintiffs in this case, parents and guardians who purchased Beech‑Nut baby food, alleged that they relied on the company's representations that its products were safe, healthy and free from dangerous levels of heavy metals such as arsenic, lead, cadmium and mercury. The plaintiffs asserted that, had they known about the alleged presence or risk of these contaminants, they would not have purchased the products or would have paid less for them. These types of alleged economic harm are commonly referred to as "benefit of the bargain" and "price premium" theories.

The district court dismissed the case for lack of Article III standing, finding that the plaintiffs had not sufficiently alleged a constitutionally recognized concrete or particularized injury. It rejected both theories of economic harm, concluding that the plaintiffs failed to plausibly allege that the products were unusable or worth less than what they paid.

Second Circuit's Reversal: Economic Injury Sufficient to Satisfy Article III Standing Requirement

On appeal, the Second Circuit took a markedly different view. In a summary order, the appellate panel held that the plaintiffs had adequately alleged an economic injury sufficient to establish Article III standing at the pleading stage. Citing John v. Whole Foods Market Group, Inc., 858 F.3d 732 (2d Cir. 2017), the court explained that, at the pleading stage, plaintiffs "need only plausibly allege that the specific units they purchased did not have the promised characteristics . . . ." Cantor v. Beech‑Nut Nutrition Co., No. 25‑821‑cv, slip op. at 5 (2d Cir. Feb. 5, 2026), rev’g In re Beech-Nut Nutrition Co. Baby Food Litig., 771 F. Supp. 3d 96 (2025)

The court further held that, "[f]or standing purposes, a loss of even a small amount of money is ordinarily an 'injury.'" Id. at 6 (quoting Czyzewski v. Jevic Holding Corp., 580 U.S. 451, 464 (2017)). It also explained that the district court erred in relying on the absence of physical injury when the plaintiffs' theory was one of economic loss. Id. at 7 ("The requirements for pleading an economic injury do not change simply because the alleged overpayment was based on a misrepresentation related to the product's safety.").

Takeaways

The Second Circuit's decision makes clear that allegations of economic harm based on benefit of the bargain and price premium theories can be viable grounds for Article III standing in consumer class action cases. The potential viability of these theories should not, however, be mistaken for the proposition that simply asserting them will be sufficient to survive a motion to dismiss for lack of standing. As always, the facts matter.

Here, the Second Circuit concluded that the allegations were plausible based on congressional staff reports and third‑party testing describing the manufacturer's "systemic failure to deliver on its bargained‑for assurances regarding its testing and safety standards, and explaining how that failure allowed [the products] to be brought to market with harmful levels of toxic heavy metals." Slip op. at 7. Such evidence is not commonly available in class action cases in which plaintiffs' counsel relies on vague characterizations of product attributes to manufacture implausible claims of economic injury. Accordingly, class action defendants considering Article III standing arguments have meaningful grounds on which to distinguish this decision.