As most pomegranate aficionados no doubt are aware, pomegranates sometimes can be sweet and sometimes a bit tangy. Well, for present and future class defendants in consumer products advertising litigation, POM Wonderful likely is tasting fairly sweet.
The company won a significant decertification ruling from a federal judge in a $450 million putative class action, in what may be the first of many decisions that adopt similar reasoning.
Plaintiffs in the case alleged false advertising touting the health benefits of POM’s pomegranate juice. The court determined that the plaintiff purchasers had not established class-wide damages as required in the recent U.S. Supreme Court decision Comcast Corp. v. Behrend, 133. S. Ct 1426 (2013).
Giving that decision teeth, the court rejected each of the alternative damages models put forth by the plaintiffs.
- Unsurprisingly, the court rejected the all-or-nothing “Full Refund” model, through which consumers would receive back the entire purchase price of the product, on the ground that it fails to account for the value consumers received from their POM purchases.
- Of greater interest, the court also rejected the more modest “Price Premium” model of damages. That model assumes that the price of the product includes a premium to account for the perceived benefit from the alleged misrepresentations. The court took particular issue with the premise that a typical purchaser of POM Wonderful made her purchasing decision due solely to the alleged misrepresentations.In music to future defendants’ ears, the court found it more likely that individual consumers made unique purchase decisions based on any of a variety of factors.
In one passage sure to be cited in future briefing in other cases, the court stated, “even a material misrepresentation might not necessarily have any effect on prices. Absent such traceable market-wide influence, and where, as here, consumers buy a product for myriad reasons, damages resulting from the alleged misrepresentations will not possibly be uniform or amenable to class proof.”
In addition, the court questioned whether the class was ascertainable - i.e., whether there was an “administratively manageable method” of figuring out who was a member of the class, given the large number of bottles sold and the low dollar amount of each purchase.
The order is another example of increasing difficulty for class plaintiffs in consumer product litigation, where the product at issue is low cost and sold in high volumes at retail locations. Not only is ascertainability particularly difficult in such situations, see, e.g., Carrera v. Bayer Corp., 727 F.3d 300 (3d Cir. Aug. 21, 2013), but judges also are increasingly also reluctant to tie the purchasing behavior of a “typical” consumer to an alleged misrepresentation when consumers are making smaller, more impulsive purchases for a variety of reasons. Under such circumstances, courts are saying, damages cannot be calculated on a class-wide basis.
Are the days of consumer products advertising class litigations of this sort numbered? It is far too soon to reach that conclusion. Plaintiff attorneys are endlessly inventive, and the courts are far from uniform in their approach to these issues. Nonetheless, it is undeniable that the balance has shifted, and plaintiff attorneys often will face a higher climb in seeking class certification.
Caveat Vendor is Paul Hastings’ Consumer Issues blog. We welcome your feedback. Please contact our blog editor with any thoughts or suggestions.
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