Monday, August 01, 2022

In Nevada, no sale is necessary for false advertising liability if sufficient causation exists

R.J. Reynolds Tobacco Co. v. Eighth Judicial District Ct., --- P.3d ----, 2022 WL 3008304, 138 Nev. Adv. Op. 55 (Jul. 28, 2022)

The state supreme court denied mandamus against a district court order reinstating a deceptive trade practices complaint based on false claims about the safety of tobacco products. The applicant argued that the plaintiffs lacked standing to bring that claim against RJR because they never used RJR’s products (they smoked other makers’ cigarettes) and thus couldn’t show that they were victims of consumer fraud who sustained damages therefrom. However, the Nevada Deceptive Trade Practices Act creates a cause of action for “victims” of consumer fraud, and nothing in the statute required victims of consumer fraud to have used the manufacturer’s product. Plaintiffs also sufficiently pled that they were directly harmed by RJR’s false and misleading advertising.

To read “victim” to mean only a person who used the product “would needlessly narrow the remedial reach of the NDTPA, which is contrary to the liberal construction that applies to such statutes.” The court pointed out that “the plain language of the NDTPA contemplates situations in which liability may be found even when, like here, an individual did not actually purchase or use the product.” Liability attaches to those who “[k]nowingly makes a false representation” as to the product “for sale,” and the definition of “sale” explicitly includes an “attempt to sell” the product or service. “[I]ndividuals violate the NDTPA when they make a knowingly false representation regarding the product in an attempt to sell the product and the claimant suffered a direct harm from the attempted sale, regardless of whether the claimant purchased the at-issue product.”

Here, the plaintiff didn’t use RJR products, but pled that it violated the law by making “false and misleading statements” that denied cigarettes are addictive, claimed “it was not known whether cigarettes were harmful or caused disease,” advertised various types of cigarettes as either safe, “low tar,” or “low nicotine,” and made several other knowingly false statements regarding the potential health risks of cigarettes. The plaintiff allegedly relied on those representations to smoke generally, even though she did not smoke Reynolds products, which resulted in her cancer. The limit here is the direct harm requirement; there is no purchase/use requirement.

One justice concurred only in the denial of the petition for mandamus.

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