Friday, November 05, 2010

Enfamil class action certified

Nelson v. Mead Johnson Nutrition Co., --- F.R.D. ----, 2010 WL 4282106 (S.D. Fla.)

More follow-on PBM litigation. Nelson alleged that Mead Johnson misrepresented the qualities of Enfamil Lipil by falsely representing that it was the only formula that contains DHA and ARA. Thus, she and other putative Florida class members paid more for Mead Johnson’s products than for less expensive but equivalent products, mistakenly believing they were buying the only source of essential nutrients. The court granted certification of her state unfair competition/deceptive advertising claims.

The Florida Deceptive and Unfair Trade Practices Act provides a cause of action "against a party who has engaged in 'unfair or deceptive acts or practices in the conduct of any trade or commerce,' but it does not define the elements of such an action." Instead, it tells Florida courts to give “due consideration and great weight” to FTC and federal court interpretations of the FTC Act. The court here was persuaded that actual reliance is not required under the FDUTPA if a reasonable person would have relied on the representations. Though some cases identify a causation element, this is not the same as reliance. A deceptive practice may allow a seller to charge a premium, so even if an individual seller doesn’t rely on the deception, she may pay more than she otherwise would have. To impose a reliance requirement would “eviscerate” the law’s protections, especially since it would make class actions impossible, and class actions are necessary in many instances given the small amounts individually in controversy and the enormous expense of litigating “the complex questions that invariably arise when a consumer challenges a defendant manufacturer's representations about the qualities or contents of a particular product.”

On to certification. The court easily found commonality. Mead Johnson argued that Nelson wasn’t typical. There was some quibbling about the products covered by the proposed class, since there are a lot of Enfamil sub-brands. The court read the complaint to cover the basic Enfamil Lipil product, which Nelson bought, and therefore she had standing. She also testified that she was deceived by Mead Johnson’s misrepresentations.

Mead Johnson argued that she continued to purchase Enfamil not because she thought it was superior but because she knew it was working, even after she learned that it wasn’t the only formula with DHA and ARA. Nelson responded that, although she learned about DHA and ARA, Mead Johnson’s claims led her to believe that Enfamil Lipil contained something other formulas didn’t—the thing that would improve brain and eye development. E.g., Enfamil LIPIL is the "Only Brand CLINICALLY PROVEN to Improve VISUAL AND MENTAL DEVELOPMENT”; "Only Enfamil has LIPIL, our blend of DHA and ARA, important nutrients found in breast milk"; “En-Fact: Enfamil LIPIL's unique formulation is not available in any store brand"; "It may be tempting to try a less expensive store brand, but only Enfamil LIPIL is clinically proven to improve brain and eye development.” Especially given the lack of a reliance requirement, her claims were typical.

Mead Johnson argued that different claims were made at different times, and that the message “Clinically proven to improve the brain and eye development" did not appear on cans of Enfamil Lipil until December 2005, more than one year after she began buying the product. The court thought this conflated typicality with reliance. First, the proposed class covers all Florida consumers who bought Enfamil Lipil within the limitations period, and so Nelson was part of that class. Second, she need not prove reliance on any particular representation, so the fact that different class members viewed different representations doesn’t defeat typicality. Third, Nelson testified that she bought Enfamil after receiving a flyer and coupons that contained the “clinically proven” message, and that at the time she bought, she was exposed to the following messages: "Enfamil LIPIL has a unique blend of DHA and ARA" and "Enfamil LIPIL gives you more than store brands, which may cost less." This was enough for typicality.

Nelson was also an adequate class representation because some of her purchases fell within the limitations period, though she couldn’t claim for time-barred purchases.

Then the inquiry turned to Rule 23(b)(3), which requires predominance. Mead Johnson argued that every class member would be required to prove causation and damages individually. The court agreed that damages would likely require individualized evidence, but that’s not generally fatal to certification if liability could be determined class-wide. The court concluded that class members need not submit individualized proof to show causation, as long as they showed that Mead Johnson’s alleged misrepresentations would deceive an average reasonable consumer—an issue that could be treated identically for every class member.

Predominance then affects the superiority analysis, because predominance makes a class action more attractive as a vehicle for adjudicating the plaintiffs’ claims. Because of the common questions of law and fact, a class action would be superior to the alternatives. Certification granted.

1 comment:

Rachel Barenblat said...

It's sort of hilarious the extent to which seeing the name of a baby formula product -- even though it's not the one we use; Drew drinks Gerber GoodStart -- makes me go, "ooh, I need to click on that link and learn more."