Friday, March 01, 2013

Cold comfort: claim against P&G partially revived

Loreto v. Procter & Gamble Co., 2013 WL 645952 (6th Cir.)

Plaintiffs appealed the dismissal of their putative class action against P&G; the court of appeals affirmed in part and reversed in part.  They alleged that P&G was unjustly enriched and violated the consumer-protection laws of all fifty states when it sold DayQuil Plus Vitamin C and NyQuil Plus Vitamin C.  P&G sought to exploit the commonly held, yet allegedly unfounded, belief that Vitamin C is effective for treating cold symptoms by using the following statements in its advertisements:

VICKS NyQuil Cold & Flu Symptom Relief Plus Vitamin C provides multi-symptom cold and flu relief so you can get the sleep you need to enjoy an even sweeter tomorrow. Plus, you'll also replenish your body with 150% of the daily value of vitamin C.

Vitamin C: It won't cure a cold, but vitamin C can help blunt its effects. Aim for 500 mg a day.

Fighting Cold and Flu Season.... Don't forget to take your daily vitamins. Consider taking extra vitamin C, vitamin A, and zinc, all of which may help you.

Plaintiffs alleged that they chose these products over competing ones in part because of these statements, but that no scientific evidence supports the Vitamin C claims, and that without the false advertising they would’ve bought cheaper competing products instead.

Since each state was the place of injury, the law of all 50 states applied, even though the ad campaign originated in Ohio.  That left plaintiffs’ New Jersey CFA claims.  The district court found them preempted by the FDCA and not cognizable under New Jersey law.

There’s no private cause of action under the FDCA, and plaintiffs can’t “label as arising under a state law for which there exists a private enforcement mechanism a claim that in substance seeks to enforce the FDCA.”  (Except for NLEA-related claims, of course.)  The issue is then when a state law claim is really seeking to enforce the FDCA, and the test is whether the claim would exist in the absence of the FDCA.  If the conduct on which the claim is premised would traditionally give rise to state law liability, the claim is not preempted.

Here, only one of plaintiffs’ two theories was impliedly preempted.  The preempted theory was that P&G failed to tell consumers that its products were “illegal” because their labels didn’t comply with FDCA requirements.  This theory depended entirely on an FDCA violation.

Separately, plaintiffs alleged that P&G violated state law by representing that taking Vitamin C can blunt the effects of a cold.  This was a traditional tort theory that would exist in even in the absence of the FDCA.  True, the complaint referred extensively to an FDA warning letter stating that FDA regulations do not permit combining Vitamin C with any of the active ingredients contained in DayQuil and NyQuil in part because the evidence is “insufficient to classify vitamin C as safe and effective” for over-the-counter use. But plaintiffs’ claim does not depend upon the FDA’s conclusion “and would logically exist even in its absence.”

The district court also held that plaintiffs didn’t plausibly allege an ascertainable loss as required by the statute.  The New Jersey Supreme Court has held that out of pocket loss counts; the plaintiff’s burden at summary judgment is to put forth “evidence of loss that is not hypothetical or illusory,” “with some certainty demonstrating that it is capable of calculation.”

The district court reasoned that plaintiffs got the benefit of their bargain: an effective cold remedy.  This was error because it ignored the allegation that they would’ve bought a cheaper product were it not for the alleged misrepresentations.  The “quantifiable or measurable” loss was the alleged price difference, which is the measure of their damages.  The overall effectiveness of the product as a treatment for cold symptoms doesn’t mean there was no loss.  P&G repackaged this argument as an Article III standing claim, where it was equally unavailing.

Then, P&G argued that none of the statements on which plaintiffs based their claims were false or plausibly misleading. The court of appeals agreed except for the statement: “Vitamin C: It won't cure a cold, but vitamin C can help blunt its effects.” It was plausible that plaintiffs could prove that Vitamin C has no effect on cold symptoms “or has such a marginal effect that advertising its ability to blunt cold symptoms creates a ‘capacity to mislead’ the average consumer.” Though the ad expressly says vitamin C can’t cure colds, but blunting the effects of a cold is a separate claim.  The other statements weren’t plausibly misleading, though “Consider taking extra vitamin C, vitamin A, and zinc, all of which may help you” presented a closer question.  The court of appeals, uninterested in how consumers actually interpret words like “can” and “may,” found that the statement couldn’t plausibly be misleading “because it does not state that the listed products will do anything, only that they might.”  So I guess I can advertise that buying my advertising law casebook might help your cold?  I mean, I have no reason to think it won’t. 

Finally, the court affirmed the dismissal of claims under the other forty-nine states’ laws.  In view of recent circuit case law finding that a nationwide consumer protection class couldn’t be certified given Ohio's choice-of-law rules and the material differences between the States' consumer-protection laws, reinstating the claims would be futile.

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