Friday, November 04, 2005

New mission; new false advertising case: Listerine

I am going to try to blog recent false advertising cases, in the fashion of the TTABlog and similar sources of topic-specific updates.

Today's entry is Whalen v. Pfizer, Inc., 2005 WL 2875291 (N.Y. Sup. 2005), a follow-up to the successful Lanham Act suit against Pfizer by McNeil-PPC, the largest seller of floss, for PFizer's ads claiming that Listerine is as effective as floss at controlling plaque between the teeth. While the court enjoined the ads at McNeil's behest, the consumer class action so far fared less well. The New York state court rejected class certification, reasoning that commonality was lacking because there was no one message that the members of the class all saw; indeed, the class plaintiff couldn't remember a specific Listerine ad she saw.

According to McNeil v. Pfizer, the consumer ad campaign was limited (I believe to three TV ads and a shoulder tag), all of which made the challenged claim, so it's hard to see why the class doesn't define itself. It's not as if this was a 20-year campaign, interspersed with other campaigns. The class plaintiff's faulty memory is more important. The decision indicates that she was very poorly selected and had no memory or knowledge of the basic claims of Pfizer's ads: "during her deposition, Whalen, the proposed representative of the class, admitted that she could not identify any commercial which influenced her to purchase Listerine. Furthermore, in open court, she admitted that she could not recall seeing any of Pfizer's alleged deceptive marketing ads, and that she was unfamiliar with the actual suit pending before this court."

In addition, proof of harm would have to be shown for each individual, making certification inappropriate. The putative class representative, for example, used Listerine before and after the ads ran, and also continued to use floss, suggesting she wasn't damaged by any falsity but was just being loyal to her brand. Even though plaintiffs need not show reliance on the false representations under NY consumer protection law, they must show harm. (Presumably this means they must show that the overall ads, if not specifically the false parts of the ads, caused a purchase, or in this case caused them to forego flossing.)

Furthermore, since the claim in this case is that consumers could be harmed if they switched from flossing to Listerine, only those consumers who did floss regularly could be harmed -- non-flossing consumers who believed the Listerine message wouldn't suffer the same damage. As to consumers whose only harm was economic -- they bought the product as a result of the false ads -- it would be hard to prove this harm because they probably didn't keep receipts. (This reasoning strikes me as contrary to the purpose of consumer class actions generally, which is to aggregate claims that in the individual case are too small to worry about but together are more substantial and market-distorting; by their nature, these claims are ones for which consumers are unlikely to keep records.)

Just as the consumer protection claims failed for want of commonality, so with plaintiff's unjust enrichment claims. Plaintiff failed to adequately explain her theory of damages, and she herself continues to buy and use Listerine, which makes her claim of damage hard to understand. Interestingly, the court suggests that it is the continued use of Listerine that defeats commonality, since the court would have to conduct an individual inquiry to see whether consumers continued to use Listerine even after they knew of Pfizer's misrepresentations. This seems a dangerous line of thought to me -- it suggests that a popular product, which many people are already using, can make misrepresentations with near impunity, since it will be very hard to show a change in market share, and since the advertiser can rely on habit to continue sales even when the challenged campaign goes off the market.

Finally, for the reasons mentioned above, plaintiff flunked the typicality requirement, and the court did not believe that she was a representative who'd fairly and adequately represent the claims of the class. The court agreed that a class action would be superior to other forms of litigation had the plaintiff shown commonality, but she didn't.

Consider the more general tension between the class certification standards -- which require proof "that each plaintiff was reasonably deceived by the defendant's misrepresentations and was injured by reason thereof" -- and the Lanham Act standard, which allows competitor standing by showing a general likelihood that the competitor is harmed by the advertising. A competitor gets probabilistic standing, but not a class. Is this the right way to go?

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