I. Introduction to Consumer-Driven False Advertising Class Actions
When a consumer brand goes to market and formulates its brand strategy, it must decide, among other things, how it will differentiate itself and its products from other brands and products in its category. To this end, the brand may use descriptive phrases (i.e., plant-based, organic, reef-friendly, Made in the U.S.A.) or "romance" language and puffery (luxurious and smooth, best ever) as differentiators. When making branding decisions, companies should bear in mind that their advertising claims are regulated (federally by FTC and/or FDA) and there is significant enforcement activity focused on marketing statements. Consumers are among these "enforcers," as they can file putative class action lawsuits alleging that false or misleading marketing claims violate state consumer protection statutes or common law. Depending on the claim asserted, consumers can seek equitable relief such as an injunction to stop or change the marketing statement, or may be able to pursue money damages. Companies can also be liable for the attorneys' fees of a successful consumer-plaintiff.
Consumer-plaintiffs target labeling or advertising statements that they claim are either actually untrue (the product is labeled as "free of" an ingredient but testing shows it contains that ingredient), or that have the tendency to mislead even if true (marketing claims that a product is recyclable and while technically true, no recycling centers can actually accept and process the product). These putative class actions may target express claims appearing on packaging as well as product claims that may reasonably be inferred or implied by elements of the product's marketing (the packaging gives the overall impression that a food item is healthy to eat, but in fact it contains so much sugar as to be unhealthy; i.e., "health halo" litigation). Hundreds of these putative class actions are filed every year and for high volume products in particular, place at risk millions of dollars on certified class claims.1 This article will address the "reasonable consumer" standard which is used to evaluate these consumer class action claims, including the trajectory and application of this standard in the Ninth Circuit at the motion to dismiss phase.
II. The "Reasonable Consumer" Standard
Putative class action plaintiffs in California commonly assert that the brand has violated California's Unfair Competition Law (UCL) and/or Consumers Legal Remedies Act (CLRA). The UCL prohibits any "unlawful, unfair or fraudulent business act or practice." Cal. Bus. & Prof. Code ' 17200. Similarly, the CLRA prohibits "unfair methods of competition and unfair or deceptive acts or practices." Cal. Civ. Code ' 1770. Claims for violation of these statutes are governed by the reasonable consumer standard.2 Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008), citing Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496, 506-07 (2003).
The reasonable consumer test is an objective one. The reasonable consumer is not the "least sophisticated consumer" or an "unwary consumer," but rather the standard is meant to approximate the interpretation or perspective of "the ordinary consumer within the larger population." Hill v. Roll International Corp., 195 Cal. App. 4th 1295, 1300-01 (2011). Thus there must be a likelihood that the consumer-plaintiff's proffered interpretation of a challenged claim will be shared by "a significant portion of the general consuming public or of targeted customers, acting reasonably in the circumstances." Lavie, 105 Cal. App. 4th at 508.
To state a claim for relief, plaintiffs must allege that the reasonable consumer would be deceived by the alleged false or misleading marketing. Deficient pleading of this standard creates opportunities for defendant-companies to seek dismissal of putative class action complaints at the motion to dismiss phase.
III. Trajectory and Application of the Reasonable Consumer Standard in the Ninth Circuit Through Motion To Dismiss Caselaw
Because alleging that the reasonable consumer would be deceived is a pleading requirement, it goes without saying that a failure to plead this entirely opens a claim to attack and dismissal under Federal Rule 12(b)(6). When the...
