Wednesday, November 16, 2011

mmmm, litigious: Nutella class action survives motion to dismiss

In re Ferrero Litigation, 2011 WL 5438979 (S.D. Cal.)

Plaintiffs alleged that Ferrero misleadingly promoted its Nutella spread as healthy and beneficial to children when in fact it contains dangerous levels of fat and sugar, in violation of the UCL, FAL, and CLRA, as well as in breach of express warranty and implied warranty of merchantability. Ferrero argued that plaintiffs lacked standing for claims based on statements on Nutella’s website, to which plaintiffs responded that they were exposed to a long-term ad campaign. Actual reliance is required for the representative plaintiffs, but they don’t need to demonstrate individualized reliance on specific misrepresentations when a long-term ad campaign is at issue. Ferrero argued that its campaign wasn’t long-term, because it only began nationwide TV commercials in 2009, and that plaintiffs hadn’t visited the Nutella website. The parties disagreed as to the duration of the campaign and whether the named plaintiff visited the website. These might raise valid issues for a motion for summary judgment or class certification, but not for a motion to dismiss. Plaintiffs identified a 10-year class period, along with specific statements on Nutella’s labeling, website, TV ads, word-of-mouth marketing, and product categorization. They specifically alleged exposure to a long-term ad campaign and reliance thereon. By identifying specific statements from the ad campaign and how those statements are deceptive, along with the duration of the campaign, plaintiffs satisfied Rule 9(b).

Ferrero attempted to distinguish Tobacco II because, “unlike in that case, here it is not unrealistic for the Plaintiffs to plead and prove actual reliance on the specific statements that influenced their purchasing decision.” Except that Ferrero cited no law that such a distinction made a difference. Tobacco II says that, for long-term ad campaigns, a plaintiff isn’t required to plead reliance on particular ads or statements with an unrealistic degree of specificity.

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