Didn't lose weight, but did lose a lawsuit

Franulovic v. The Coca-Cola Co., 2007 WL 3166953 (D.N.J.)

Defendants make Enviga, a “carbonated beverage with a proprietary blend of caffeine and epigalocatechin gallate (EGCG), an antioxidant that occurs in green tea.”

Plaintiff Melfi filed a putative class action alleging breach of express warranty, breach of implied warranty of fitness for a particular purpose, and violation of the New Jersey Consumer Fraud Act. The express warranty claim was that defendants warranted that Enviga “causes a consumer to burn more calories than consumed, thus resulting in a net caloric expenditure,” causing consumers to buy the drink for $1.29-1.49 per can, but this warranty was unsubstantiated, uncorroborated, and simply untrue. The implied warranty claim was that Enviga’s ad campaign impliedly warranted that Enviga was useful for the purposes of weight loss and weight control, though it was not.

The NJCFA claim was similar, attacking defendants’ absence of substantiation, use of phrases such as “the calorie burner” in ads, and broad advertising of Enviga despite knowledge that the minimal study evidence showed a benefit only for a discrete and minor segment of the population. Further, defendants failed to disclose the material fact that one would have to drink over three cans daily in order to achieve even a minimal and unpredictable effect; it would take weeks and at least 100 cans (about $150) to lose one pound – if you were lucky.

Plaintiff Franulovic made similar claims. She started drinking Enviga after reading the label’s representations about calorie burning. Her putative class action alleged violation of the NJCFA and the New Jersey Food & Drug Laws.

The court first rejected defendants’ argument that an implied warranty claim requires a direct communication between a buyer and a seller. The law only requires that the seller has reason to know the purpose for which the goods are required and that the buyer is relying on the seller’s skill or judgment. Melfi pleaded sufficient facts to show that defendants knew the particular purpose for which the goods were intended, given their extensive advertising of Enviga’s weight-loss benefits.

However, the implied warranty claim was nonetheless dismissed because she didn’t allege that she had a “particular purpose” that differed from Enviga’s original purpose. Without a difference between the ordinary and the particular, there can be no breach of implied warranty of fitness for a particular purpose.

On the NJCFA claim, Melfi faltered by failing to allege an ascertainable loss. She alleged that she purchased Enviga, but not how much she paid, how much she consumed, what ads she relied on, what her expectations were, or how Enviga failed to live up to them. General allegations of falsehood that would deceive a reasonable consumer are insufficient to plead a particularized ascertainable loss. Given that she actually received a beverage for her money, she needed to explain how it caused her specifically a loss. The court denied her leave to amend the complaint.

Franulovic’s complaint faltered for basically the same reasons. She satisfied the relevant pleading requirements by identifying the label as the source of the false representations; she didn’t need to allege exact store locations or dates of purchase to put Coke on notice of the misconduct of which she complained. Moreover, she specifically alleged that after she read the can, she increased her consumption to three cans a day on the understanding that doing so would help her lose weight.

Nonetheless, she failed to plead an ascertainable loss. She didn’t allege that she failed to burn more calories or to lose weight, and thus it’s not clear what cognizable harm she suffered. The court therefore didn’t need to deal with her argument that violation of the New Jersey Food & Drug laws provided her with a separate claim (privately enforceable by way of the NJCFA, which makes violations of other consumer protection statutes actionable even if those statutes create no private right of action of their own force).