Chew on this

Smith v. Wm. Wrigley Jr. Co., 2009 WL 3172771 (S.D. Fla.)

Wrigley’s Eclipse gum advertises itself as scientifically proven to help kill the germs that cause bad breath as a result of a “natural” ingredient, Magnolia Bark Extract. Plaintiff, a putative class representative, alleged that this is materially false and has helped propel Eclipse into a top-selling product with a price premium over other gums. NAD found the Eclipse campaign deceptive for lack of substantiation; there may be suggestive evidence of the extract’s germ killing capability, but NAD recommended against any express or implied claim that there’s credible scientific evidence that the gum has been proven to kill germs or provide fresh breath based on germ killing. (The proceeding is apparently on appeal to NARB.)

Wrigley argued that the plaintiff made only conclusory allegations of damage that couldn’t support her state-law consumer protection claim, and that her claim for breach of express warranty failed because she wasn’t in privity with Wrigley and because she failed to allege a legally cognizable injury.

The court found that Florida courts accept diminished value as actual damages in a consumer protection case. If the allegations of a price premium, plus plaintiff’s reliance on the false ads, are true, then she suffered a loss in that she didn’t get what she bargained for, thus stating a claim. (Incidentally, the court also rejected Wrigley’s Twombly/Iqbal argument; expect to see a lot more of those. Here there was a short and plain statement of the claim, and not a merely conclusory allegation of deception but allegations of an extensive advertising campaign making specific germ-killing claims.)

The court also found that plaintiff stated a claim for breach of express warranty; she alleged damages for the same reasons stated above. As for privity, the court found that Florida law was a “moving target,” filled with inconsistencies, and there’s no settled rule for whether privity is required to recover economic losses for breach of express warranty. Examining the caselaw, as well as instructive precedent from other states, the court concluded that privity was not required where, as here, the alleged warranty was express; this is a matter of fairness given that the manufacturer who makes express warranties is in the best position to know the facts. “[I]t defies common sense to argue that purchasers of Eclipse gum presumed that the cashier at the local convenience store is familiar with the scientific properties of [the extract].” The court also found it significant that the allegedly breached warranty is on the package of the gum.