Monday, September 26, 2011

No more lawsuit (until plaintiff lathers, rinses and repeats)

Clinically Proven Help Baby Sleep Better labelLieberson v. Johnson & Johnson Consumer Companies, Inc., --- F.Supp.2d ----, 2011 WL 4414214 (D.N.J.)

Lieberson filed a putative class action based on J&J’s claims about certain baby bath products: Johnson's Bedtime Bath, Johnson's Bedtime Moisture Wash, Johnson's Bedtime Lotion, and Johnson's Bedtime Baby Bubble & Wash. Except for the Bubble Wash, the front label says, “*Clinically Proven* Help Baby Sleep Better,” and the back label says J&J "has created a nightly routine that is clinically proven to help your baby fall asleep easier and sleep through the night better." The Bubble Wash front label says "help baby sleep better," and advises using the product as part of a "3-step, nightly routine to help your baby sleep better." Bubble Wash help baby sleepNote: most of the pictures I found online are of packages that omit the “clinically,” but I can’t see that this change in favor of grammatical coherence makes a difference; how else would it be proven?
Proven Help Baby Sleep Better label
Lieberson bought the Moisture Wash and Lotion when her first child was four months old after seeing ads for the products and the products themselves. She used them, but they didn’t work. She tried again with her second child, but still no success.

She sued for misrepresentations and omissions in violation of the NJCFA as well as breach of the implied warranty of merchantability, arguing that no clinical studies existed to support J&J’s claims and that the products weren’t fit for the ordinary purpose for which they were advertised, because they weren’t clinically proven to do anything.

J&J challenged Article III standing, which requires (1) injury in fact; (2) causation; and (3) redressability. J&J argued that the plaintiff didn’t buy 2 of the 4 products over which she was suing, and the court agreed that she couldn’t show injury in fact as to them. (A friend has pointed out that this kind of ruling would likely have been different 10 years ago, when courts were more willing to accept that injury of the same kind as the plaintiff suffered can be aggregated—the nature of the injury here is the same whether you buy the oil or the bubble wash, at least at the pleading stage where the allegation is that they’re all falsely advertised.) If the lawyers find a suitable class plaintiff who bought those products, they can refile.

The NJCFA requires (1) unlawful conduct by the defendant; (2) an ascertainable loss by the plaintiff; and (3) a causal connection between them. Unlawful acts can be affirmative or knowing omissions; only the latter requires intent. (Regulatory violations are also unlawful but not at issue here.)

J&J argued that plaintiff failed to plead with particularity under Rule 9(b), as required for NJCFA claims. This requires details that give precision or some measure of substantiation for the fraud allegation. Here, though plaintiff alleged nine omissions and misrepresentations, she didn’t specify which TV commercials, print ads, or websites had which statements, when they were made, or when she saw them. Though she alleged that she routinely read various parenting magazines, she didn’t allege whether or when the ads appeared in those magazines or whether or when she saw them.

The labels were a different matter: she alleged that they reinforced her purchase decision, and the court therefore inferred that she saw them, at the least, at the time of purchase. For the labels, that was sufficient to plead unlawful conduct. Moreover, the court rejected J&J’s (ridiculous) argument that the statements were puffery. “Clinically proven” is not vague or highly subjective. The court stated, in my opinion rashly and unnecessarily, that the claim that the products would help babies sleep might otherwise be considered puffery. That’s still measurable, even if measurement isn’t mentioned.

The court also noted that false claims can’t be excused or remedied by footnotes because inconspicuous language that purports to change the apparent meaning of claims is likely to be overlooked; here, though, the asterisks around the “clinically proven” claim were apparently mere typography rather than indications of some further explanation to be found on the products.

Finally, though, J&J argued that plaintiff failed to plead an ascertainable loss, which has to be quantifiable or measurable. This can be the difference in value between what was promised and what was received. Plaintiff alleged that J&J charged a premium of at least $1 for its products and that comparable products cost at least 25% less. However, “other than these unsupported conclusions concerning her alleged loss, Plaintiff has not provided any specificity which would give Defendant notice of the possible damages.” She didn’t allege the price she paid in 2008 and 2010 (gee, I sure hope she kept all her receipts), nor did she allege the identity or cost of any allegedly comparable products. Is this really required by Iqbal and Twombly? These factual allegations seem reasonably specific to me, but the court found them to be “unsupported conclusory statements.” So the claims were dismissed without prejudice. (This is, I think, part of the uncertainty created by Iqbal and Twombly--because different judges have different intuitions about the world, it’s very hard to predict what’s enough. Dismissing a complaint with these allegations also seems like a bad idea because J&J, unlike the plaintiff class, is likely to have excellent information on historical pricing both of its own products and of those of rivals’, but you need discovery to get that.)

The claim for implied warranty of merchantability also failed because the complaint did not allege that the products weren’t fit for the ordinary purpose of cleansing and moisturizing babies’ skin. Merchantability only requires fitness for general purpose, which was satisfied here; though the products were advertised as helping babies sleep, ads alone can’t transform the general purpose of soap and lotion into something unrelated. There were no allegations of manufacturing defects, design defects, or failure to give the buyer proper instructions with respect to the goods, which are the three types of defects that generally violate the warranty.

No comments:

Post a Comment