Thursday, June 16, 2022

comparator product need not be on the shelf at p's store to show harm via price premium theory

Eidelman v. Sun Prods. Corp., 2022 WL 1929250, 21-1046-cv (2d Cir. Jun. 6, 2022)

The district court granted summary judgment to Sun Products on Eidelman’s claims for violations of sections 349 and 350 of New York’s GBL and for unjust enrichment arising out of his purchase of defendants’ all Free Clear Plus detergent, reasoning that he hadn’t shown injury. The court of appeals reversed.

Actual injury is required under the GBL, though not necessarily pecuniary harm.” One, though not the only, way to show actual injury is to show a price premium. The district court acknowledged that Arm & Hammer Plus Oxi Free & Clear detergent—one of Eidelman’s proposed comparators—sells at a lower price per bottle and per load of laundry, and that internal Sun communications reflect that it is a primary competitor for the White Bottle product. But the district court nonetheless rejected the comparison because A&H Free Clear was not sold at the Costco store Eidelman visited on the day he purchased the detergent at issue in this litigation.

However, the purpose of using a comparator product is to show a price premium. “The presence or absence of a price premium attributable to a defendant’s alleged deception is objective and does not depend on whether a plaintiff could have or would have, in fact, purchased a lower-priced, truthfully marketed alternative.” As the court of appeals pointed out, NY’s highest court has held that “reliance is not an element of a section 349 claim.” This reasoning was therefore error:

A&H Free Clear was a competitor “free and clear” detergent that retailed at a lower price than the White Bottle, but did not contain the allegedly misleading advertising statement at issue in this case. The central question therefore is whether the higher price can be attributed, in whole or in part, to that advertising statement. On the cross motions for summary judgment, Plaintiff presented evidence of Defendant’s internal communications implying that the Defendants could charge a higher price because of the allegedly misleading claim, among other factors, and reflecting that Defendants assigned considerable value to the claim that they allegedly used in a deceptive manner. Especially in light of this evidence, a reasonable jury could conclude that some of the price premium which Eidelman paid was attributable to Defendants’ alleged deception and Eidelman was therefore injured within the meaning of §§ 349 and 350.

There was also evidence going the other way; it was a jury issue.

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