Thursday, August 02, 2012

Claim against follow-on retailer of "toning" shoes survives

Laughlin v. Target Corp., 2012 WL 3065551 (D. Minn.)
Laughlin bought a pair of TrimStep shoes from an Illinois Target.  The box bore various claims of health benefits, “including statements that the shoes could help promote muscle toning in the legs, help improve the user’s posture, and help relieve stress on the user’s feet and joints.”  In reliance on those statements, she bought the shoes for about $40.  (I know the feeling…)
Other similar “toning” shoes have been studied (e.g., the ones against which the FTC proceeded), though not TrimStep.  Laughlin alleged that the studies showed that the shoes don’t provide the advertised benefits and may actually be harmful.  She alleged that Target’s TrimStep ads were false and that she suffered economic injury from buying a product she otherwise would not have bought, or paid more for the shoes than she would have paid for other shoes.
Target, with some chutzpah, argued that its statements were puffery.  The statements included (1) “help promote muscle toning in the legs,” (2) “help improve your posture,” and (3) “help relieve stress on your feet and joints.”  In addition, the boxes elaborated with statements including: “Every person's body is different, and may experience more or less benefit to different muscle groups than others. However, walking in TrimStep® footwear primarily activates the muscles of the legs and buttocks. You may notice after a long day in your TrimStep® footwear that your calves, thighs or glutes are a little bit sore ... a clear sign that your muscles are working harder than normal.”  Target argued that these statements were puffery because there was no specifically defined benchmark from which to judge its statements and no quantifiable claim of improvement.  Further, Target argued, no reasonable person would rely on the statements that the shoes provide physical benefits because of other “disclaiming” and “noncommittal” language appearing on the shoebox, such as “[e]veryone's body is different, and therefore results may vary.”
The court pointed out that the toning, posture and stress claims were not “exaggerated statements of bluster or boast upon which no reasonable consumer would rely,” nor were they “vague or highly subjective claims of product superiority,” which is the standard for judging puffery.  They identified specific health benefits and provided a reason to believe (the shoes activate the muscles of the legs more than regular shoes did).  Even in context, these were specific, measurable, and falsifiable claims.  Indeed, the studies on which Laughlin relied purported to do just that, and similar studies could be performed on TrimStep wearers.
In a footnote, the court dispensed with Target’s factual arguments that its claims weren’t false because the studies didn’t examine TrimStep (which I take it Target maintains actually works, unlike the other destabilizing/toning shoes, despite claiming the same mechanisms), that the studies actually showed that the products worked, and that the TrimStep boxes didn’t make specific promises but instead offered disclaimers.  These were all fact issues not resolvable on a motion to dismiss.
Target then challenged Laughlin’s claimed injury, the difference between the amount paid for the TrimStep shoes and the regular athletic footwear Laughlin would have purchased if not for the allegedly false advertising.  Target argued that she needed to allege more than that she paid too much or that she would have bought cheaper shoes, relying on a case in which a court determined that an allegation of a design defect making a bed susceptible to mold was insufficient when the plaintiff hadn’t experienced any mold problems.  Damages based on a product’s propensity to fail, without actual failure or actual economic loss, were too speculative and not legally cognizable damages. But Laughlin wasn’t asserting that TrimStep shoes merely had a propensity to fail: she was alleging the product already failed to perform as advertised.  In such circumstances, arguing that she wouldn’t have bought or would have paid less was sufficient, and other Minnesota cases agree.
Target then argued that the complaint failed to allege a causal nexus between the allegedly false statements and Laughlin’s claimed injuries; the complaint referenced ads to which Laughlin was not exposed—ads that didn’t appear on the box—along with ads related to non-TripStep footwear.  But that didn’t matter.  The complaint alleged that Target sold the shoes, that the boxes had false statements on them, and that Laughlin saw and relied on these statements. 
Then, Target argued that injunctive relief would provide no public benefit, because it had discontinued selling TrimStep shoes.  This was important because a plaintiff has to show a public interest to state a claim under Minnesota’s law; a cause of action doesn’t benefit the public where it is based on “a single one-on-one transaction in which the fraudulent misrepresentation ... was made only to [the injured party].” But a claim does benefit the public if the misrepresentation was presented to the public at large, as Target allegedly did.  Also, Target was really arguing mootness, which only occurs if it’s absolutely clear that the allegedly wrongful behavior couldn’t reasonably be expected to recur.  While Target’s affiant stated that it stopped selling the shoes, the record didn’t explain why (though I have a few guesses) or provide reason to think that Target wouldn’t resume sales in the future.
Target finally argued that Illinois law should apply; though Target is a Minnesota corporation, Laughlin was an Illinois resident who made her purchase in Illinois.  But Target failed to identify a conflict of laws or argue that choosing Illinois law would determine the outcome of the case, so the court didn’t engage in a choice of law analysis for purposes of the motion to dismiss.

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