The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10. Presenting a live 90-minute webinar with interactive Q&A False Advertising Consumer Class Actions: Best Practices and Latest Developments Bringing or Defending Misleading Advertisement Litigation Today’s faculty features: 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific THURSDAY, NOVEMBER 19, 2015 Joshua A. Reiten, Partner, Perkins Coie, San Francisco Ali R. Rabbani, Winston & Strawn, Los Angeles
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False Advertising Consumer Class Actions: Best Practices ...
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The audio portion of the conference may be accessed via the telephone or by using your computer's
speakers. Please refer to the instructions emailed to registrants for additional information. If you
have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.
Presenting a live 90-minute webinar with interactive Q&A
False Advertising Consumer Class Actions:
Best Practices and Latest Developments Bringing or Defending Misleading Advertisement Litigation
Failure to Plead False or Misleading Representations
• Fink v. Time Warner Cable, 837 F. Supp. 2d 279 (S.D.N.Y. 2011), aff’d, 714 F.3d 739 (2d Cir. 2013)
• The Southern District of New York dismissed false advertising claims under California and New York law.
• The court found that plaintiffs insufficiently alleged that Time Warner’s advertised internet speeds were misleading. In particular, Time Warner’s claims of speeds “up to” 3x faster than DSL and 100x faster than dial-up were not misleading because plaintiffs’ allegations only related to specific computer applications, not their internet connections as a whole.
• The court also found that a reasonable consumer would not be misled because the advertisements were qualified with the phrase “up to.”
• The Northern District of California dismissed false advertising class action based on assertion that the “made with real fruit” label on Nabisco’s strawberry and raspberry Newton cookies was misleading.
• The Court found that the complaint’s allegations were insufficient to meet the reasonable consumer standard.
• The Sixth Circuit affirmed, in part, the Southern District Ohio’s dismissal of false advertising claims under Ohio and New Jersey law.
• The court found that all but one of defendant’s claims relating to the cold medicine with vitamin C were neither false nor plausibly misleading.
• Wright v. General Mills, Inc., 2009 WL 3247148 (S.D. Cal. 2009)
• The Southern District of California dismissed UCL, FAL, and CLRA claims, finding that plaintiff failed to allege that defendant’s use of “100% Natural” on granola bar labeling and advertising was misleading under Twombly/Iqbal.
• Elias v. Hewlett Packard Co., 950 F. Supp. 2d 1123 (N.D. Cal. 2013) • The Northern District of California dismissed false advertising claims under California
law.
• The Court found that the alleged misrepresentation of “compact but powerful” amounted to non-actionable puffery because it says “nothing about the specific characteristics or components of the computer.”
• Hughes v. Panasonic Consumer Electronics Co., 2011 WL 2976839 (D.N.J. July 21, 2011)
• Marketing televisions as having “industry leading black levels and contrast ratios.”
• The District of New Jersey found that “Panasonic’s alleged misrepresentations about the Televisions’ ‘industry leading’ technology and features, which create superior image and color quality, are not ‘statements of fact,’ but rather subjective expressions of opinion.”
• In re Ferrero Litig., 794 F. Supp. 2d 1107 (S.D. Cal. 2011) • Advertising Nutella as “healthy.”
• The Southern District of California noted that “[g]eneralized, vague, and unspecified assertions constitute ‘mere puffery’ upon which a reasonable consumer could not rely ….” However, the court denied the motion to dismiss because a reasonable consumer could be deceived.
• Apple’s statement that the iPad can be used “just like a book.”
• The Northern District of California found such claim was “mere puffery.”
• Vitt v. Apple Computer, Inc., 2012 WL 627702 (9th Cir. Feb. 28, 2012)
• Apple’s advertisement of iBook G4 as “mobile,” “durable,” “portable,” “rugged,” “built to withstand reasonable shock,” “reliable,” “high performance,” “high value,” an “affordable choice,” and an “ideal student laptop.”
• The Ninth Circuit affirmed that these statements are generalized, non-actionable puffery because they are “inherently vague and generalized terms” and “not factual representations that a given standard has been met.”
• The Northern District of California dismissed UCL claims for failure to allege reliance on allegedly misleading representations.
• Consumers failed to allege that their prescribers believed that the drug was effective for the challenged indication as a result of allegedly fraudulent off-label promotion.
• Payers failed to allege that prescribers relied upon off-label promotion as opposed to “perfectly legitimate channels of communication” with defendant.
• Cleary v. Philip Morris Inc., 656 F.3d 511 (7th Cir. 2011)
• The Seventh Circuit affirmed dismissal of putative class action complaint, holding that plaintiffs failed to state a claim for unjust enrichment, even assuming that Illinois recognized an independent tort, where they alleged no deception, causation, or harm.
• Astiana v. Dreyer’s Grand Ice Cream, Inc., 2012 WL 2990766 (N.D. Cal. July 20, 2012).
• The Northern District of California held that (1) plaintiff stated claims that “All Natural Flavors” and “All Natural Ice Cream” slogans were misleading, and (2) claims were not preempted by the Food, Drug & Cosmetic Act and FDA regulations (but dismissed claim under Magnuson-Moss Act).
• Taradejna v. General Mills, Inc., 12-cv-00993 (D. Minn.) (Dec. 10, 2012 Order)
• Plaintiffs challenged General Mills’ use of Milk Protein Concentrate in its Greek Yogurt products.
• Minnesota federal court dismissed claims because FDA had primary jurisdiction over the underlying question of whether yogurt could contain milk protein concentrate.
• Ascertainability. Are class members objectively identifiable?
• Carrera v. Bayer Corp., 727 F.3d 300 (3d Cir. 2013)
• Denying certification where there was no “reliable, administratively feasible method to determine class membership.”
• Overbreadth. Does the class definition include persons without claims?
• Sanders v. Apple Inc., 672 F. Supp. 2d 978 (N.D. Cal. 2009)
• Striking class allegations where definition would include owners of computers who neither purchased them nor saw ads, individual reliance issues would predominate, and different state laws would apply.
• Failsafe. Does the definition incorporate merits inquiry?
• This is often done in order to avoid overbreadth, causing the class to be unascertainable without detailed inquiry.
• Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (U.S. 2011)
• “Commonality requires the plaintiff to demonstrate that the class members ‘have suffered the same injury.’ This does not mean merely that they have all suffered a violation of the same provision of law.…Their claims must depend upon a common contention - for example, the assertion of discriminatory bias on the part of the same supervisor. That common contention, moreover, must be of such a nature that it is capable of classwide resolution—which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.”
• Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1432 (2013) • Suggested that need to calculate invidualized damages may, on its own, defeat class
• Major v. Ocean Spray Cranberries, Inc., 2013 WL 2558125 (N.D. Cal. June 10, 2013)
• A plaintiff who seeks to bring claims for products she did not purchase is atypical.
• In re Aqua Dots Products Liability Litig., 654 F.3d 748 (7th Cir. 2011) • A plaintiff who seeks class-wide relief already available through defendant’s voluntary
refund program does not fairly and adequately represent class members.
• “Plaintiffs want relief that duplicates a remedy that most buyers already have received, and that remains available to all members of the putative class. A representative who proposes that high transaction costs (notice and attorneys' fees) be incurred at the class members' expense to obtain a refund that already is on offer is not adequately protecting the class members' interests.”
• Peviani v. Natural Balance Inc., 2011 WL 1648952 (S.D. Cal. May 2, 2011) • A plaintiff who does not share the same injuries is an inadequate representative, and
her claims are not typical.
• Holding that wife of user of performance enhancement product failed to satisfy adequacy and typicality requirements because she did not suffer injuries users may have suffered.
• Pelman v. McDonald’s Corp., 272 F.R.D. 82 (S.D.N.Y. 2010)
• Individual questions:
• Whether class members purchased because they believed the products were healthful.
• Causal relationship between fatty, salty food and alleged health conditions.
• Sources of food consumed.
• The Southern District of New York denied class certification.
• Rule 23(c) issue certification also denied for lack of proof of numerous persons of age who relied upon advertising and suffered health effects as a result.
• Weiner v. Snapple Beverage Corp., 2010 WL 3119452 (S.D.N.Y. Aug. 5, 2010) (denying certification).
• The Southern District of New York denied class certification.
• Claim that consumers paid more for beverages because of “All Natural” labeling could not be proved on a class-wide basis (causation and actual injury).
• Economist’s contention that he could develop models showing injury to all consumers was speculative and insufficient.
• The potentially millions of class members were also unascertainable, since purchasers likely did not retain receipts.
• Mazza v. Am. Honda Motor Co., 666 F.3d 581, 596 (9th Cir. 2012)
• District Court certified a nationwide class.
• Ninth Circuit decertified the nationwide class:
• Common questions did not predominate: “[V]ariances in state law overwhelm common issues and preclude predominance for a single nationwide class.”
• No presumption of reliance: California-only class would fail because the class would “almost certainly include[] members who were not exposed to, and therefore could not have relied on, Honda's allegedly misleading advertising material.”
• Red v. Kraft Foods Inc., 2011 WL 4599833 (C.D. Cal.)
• Declining to certify a nationwide class based solely on the grounds that Kraft engaged in nationwide marketing. (Sept. 29, 2011)
• Renewed motion for class cert. denied because even under subclasses “individual class members, to recover, would need to show, at a minimum, proof of how many purchases they made of the offending products, where and when, in order to discern [damages].” (Oct. 26, 2012)
• Ries v. Arizona Beverages USA LLC, 287 F.R.D. 523 (N.D. Cal. 2012)
• Plaintiffs challenged “all natural” labeling” on Arizona iced tea drinks that contain high-fructose corn syrup and citric acid. Plaintiffs sought certification under Rule 23(b)(2).
• Injunctive relief class certified
• Monetary relief rejected
• Plaintiffs sought monetary restitution that would require “individualized assessments of damages” based on the number of products bought.
• Even though the amount of damages could be calculated based on overall beverage sales, “it would be unmanageable under Rule 23(b)(2), which lacks Rules 23(b)(3)’s notice and opt-out requirements designed to facilitate the award of monetary damages to individual class members.”
• Often more favorable procedure and procedural law.
• Coordination (especially after Smith v. Bayer, 131 S. Ct. 2368 (2011))
• Potentially more effective enforcement of judgments.
• Potential Disadvantage
• Shady Grove Orthopedic Assocs. v. Allstate Ins. Co., 130 S. Ct. 1431 (2010) (holding that state law class action prohibitions that are procedural rather than substantive do not supersede Rule 23 in federal court).