Monday, September 09, 2013

No standing to bring claims based on ads, only on product labels

In re Gerber Probiotic Sales Practices Litig., No. 12–835, 2013 WL 4517994 (D.N.J. Aug. 23, 2013)

Plaintiffs alleged that Gerber’s Good Start Protect Infant Formula, Good Start Protect Formula for 9 through 24 months, and DHA & Probiotic Cereal were falsely advertised as providing immune system benefits and near equality with breast milk.  First, plaintiffs alleged that despite Gerber’s claims for the immune system effect of probiotic bacteria, Bifidus BL, “numerous studies show that the Products do not and cannot provide the immune-related health benefits Defendant claims.”  Gerber’s use of “IMMUNIPROTECT” was therefore a deceptive marketing ploy, and that this was reinforced by the claim that the products’ “advanced” immune system benefits result from the use of Bifidus BL, which is found in breast milk.  The marketing allegedly implied a proven scientific basis for the immune system benefits, using the terms “studies” and “research” to bolster the claims, whereas in fact they lacked scientific support.  Gerber’s own studies allegedly actually contradicted the ads and otherwise didn’t support its immunity strengthening claims: “[n]one of these studies, even if they could be characterized as clinical—which they cannot—supports the conclusion that Gerber Products in fact strengthen and support a baby and toddler’s immune system as labeled and advertised.”

Second, plaintiffs alleged that, despite unanimous agreement on the superiority of breast milk, Gerber claimed near nutritional equivalence.  Scientific evidence allegedly demonstrates that “breast milk provides unique nutritional benefits that Defendant’s Products do not provide.”

They alleged that reasonable consumers would be deceived, as they were, into paying the premium Gerber charges over predecessor and regular formula products without probiotics.  They brought claims under New Jersey, California, Illinois, New York, and Washington consumer protection law, as well as claims for breach of warranty and unjust enrichment.

Gerber challenged plaintiffs’ Article III standing, and the court concluded that they could only assert claims based on alleged misrepresentations on product labeling and not on other forms of advertising/marketing, and couldn’t seek injunctive relief.  Because the claims were based on Gerber’s overall marketing and not just the label, the complaint didn’t sufficiently allege false advertising.

Gerber argued that no plaintiff alleged injury in fact—failure to receive the promised health benefits.  But that wasn’t the claimed injury; the injury was the deception and overpayment.  As to causation, Gerber argued that plaintiffs didn’t specify which ads they reviewed and how that influenced their decisions.  But such specificity isn’t required to demonstrate constitutional standing.  The causation alleged was that plaintiffs thought they were paying for products with the stated immune benefits, but they didn’t get that.  A number of plaintiffs alleged that they relied on alleged misrepresentations contained only on the labels.  Others alleged that they relied on ads and labeling, and the complaint named a number of representative advertisements, including television commercials, press releases, and excerpts from Gerber’s website. But no plaintiff provided facts sufficient to allege causation in connection with those aspects of Gerber’s marketing campaign, such as alleging the general type or medium of advertising to which they were allegedly exposed.  So the only sufficiently alleged injury fairly traceable to Gerber’s representations would have to come from the labeling.

Plaintiffs lacked standing to seek injunctive relief because they weren’t threatened with future injury, now knowing the truth.  (I hate to say it, but given that these are baby products that will quickly be outgrown, might plaintiffs be entitled to an exception for harms that are “capable of repetition, but evading review”?).

Gerber argued that plaintiffs couldn’t bring lack of substantiation claims.  Plaintiffs responded that they weren’t making such claims.  Rather, they argued that competent scientific evidence demonstrated that Gerber’s claims were objectively false.  They didn’t merely allege that no credible science supported Gerber’s claims, but rather that the representations were affirmatively false; however, to the extent that the claims were based on lack of substantiation, they were dismissed with prejudice.  (Consumer protection cases haven’t really grappled with the “establishment claim” line of Lanham Act cases.  Both logically and practically, plaintiffs should be able to challenge “tests prove X” and “studies prove X” claims as factually false without having to show that “not X” is the true state of the world.  As long as tests don’t prove X, the speaker has made a false statement, and one that’s likely to be material given the importance we place on scientific evidence.)

Gerber argued that the studies cited did support its claims, or were irrelevant.  That was a classic factual dispute.

The court turned to whether a reasonable consumer could find Gerber’s representations misleading.  Gerber argued that it “endorses breast milk in the clearest of terms on its products and its website as the ideal source of nutrition for babies.”  But Gerber touted the benefits of probiotic cultures in Good Start which it claimed were “like those naturally promoted by breast milk to support an infant’s healthy immune system.” Thus, plaintiffs alleged, “Gerber clearly holds out breastfeeding as the gold standard, and then (falsely) equates Good Start to that gold standard.”  But these claims were based on the overall marketing of the products—including press releases and Gerber’s website—not just the labeling, and thus there was no standing.  The complaint was dismissed without prejudice.

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