SJC Lowers Bar For Certifying Deceptive Advertising Class Actions

In a stunning 4-3 decision, the Massachusetts Supreme Judicial Court recently expanded companies’ exposure to consumer fraud class actions.

The court held in Aspinall v. Philip Morris Companies, Inc., that the mere purchase of a deceptively advertised product, without more, can satisfy the element of injury for purposes of maintaining a claim and certifying a class under the Massachusetts Consumer Protection Act (M.G.L. c. 93A). Although the case concerned claims of deceptive advertising against a tobacco company, the court’s holding will affect many industries that advertise products for sale in Massachusetts.

The Aspinall Decision

The plaintiffs in Aspinall were purchasers of “Marlboro Lights” cigarettes. They allege that the defendants’ marketing of “light” cigarettes – which defendants described in their advertising as having “lowered tar and nicotine” – was deceptive because the defendants knew that most smokers would receive as much tar or nicotine from “Marlboro Lights” as they would from regular Marlboro cigarettes.

Plaintiffs sought certification of a class of “purchasers of Marlboro Lights cigarettes in Massachusetts” under Chapter 93A, §9(2). The statute permits certification of a class “if the use or employment of the unfair or deceptive act or practice has caused similar injury to numerous other persons.”

Defendants argued that the issues of causation and injury were too individualized to permit certification of the proposed class. They contended that the plaintiffs could not prove that all members of the class had suffered a similar injury, in part because plaintiffs conceded that some smokers of Marlboro Lights in fact received lower tar and nicotine.

In upholding class certification, the majority held that the plaintiffs didn’t need to prove any injury beyond the purchase of a deceptively advertised product.

It declared: “We reject the proposition that the purchase of an intentionally falsely represented product cannot be, by itself, an ascertainable injury under our consumer protection statute.”

Because the issue of liability will depend only on the defendants’ conduct, no issues concerning individual class members affect class certification. Moreover, the court held, if liability is established, plaintiffs will be permitted to recover “benefit of the bargain damages,” i.e., the difference between the value of the product as advertised and the true market value of the product consumers received.

Even if the plaintiffs fail to prove actual damages with reasonable certainty, however, each class member will be entitled to statutory damages.

As a practical matter, the court’s willingness to equate the mere purchase of a deceptively advertised product with a legally redressable injury severely dilutes, if not eliminates, the elements of injury and causation in consumer fraud cases. Its holding that the deceptive advertising effects “a per se injury on consumers who purchased” the advertised product greatly expands businesses’ exposure for deceptive advertising in Massachusetts beyond the likely contemplation of the Legislature, and simplifies the plaintiffs’ burden in seeking certification of a consumer class.

As Justice Robert Cordy wrote in the dissenting opinion: “The requirement that the plaintiffs demonstrate an ‘injury’ may not be shrugged off lightly. Rather, as this court has consistently held, the injury requirement is a fundamental aspect of G.L. c. 93A for both individual plaintiffs and plaintiff classes.”

Although the majority was influenced by pragmatic concerns of imposing a heavy burden on plaintiffs to prove that no class members received low tar and nicotine, the dissent pointed out that the limited evidence plaintiffs had presented to the motion judge suggested that a “fairly large” group of purchasers received the benefits the defendants had advertised, and should not be included in the class. Quoting prior decisions, the dissent reasoned that the certification of a class that includes uninjured members permitted a “purely vicarious suit[] by self-constituted private attorneys-general.”

The Likely Impact

The expansion of liability that Aspinall presents is magnified in light of the already broad nature of liability for deceptive advertising under Chapter 93A. As the majority opinion explains, whether an advertisement is “deceptive” is determined by an objective, “reasonable consumer” standard. Liability “does not require proof that a plaintiff relied on the representation,… or that the defendant intended to deceive the plaintiff…, or even knowledge on the part of the defendant that the representation was false [citations omitted]. [C]onduct is deceptive if it possesses ‘a tendency to deceive.’”

As the court also explained, “Advertising need not be totally false in order to be deemed deceptive in the context of G.L. c. 93A,” and it is enough for an advertisement to consist of a half-truth, or to be literally true but, through omission, create a misleading impression.

The predictable outcome of the court’s decision in Aspinall will be a flood of consumer fraud class actions in Massachusetts courts that will present sellers of consumer products with exposure to liability of a severe and unwarranted scope.

Nevertheless, whether the opinion will apply as broadly as some of its language suggests will have to be determined in future cases. In a footnote, the dissent finds ambiguity in the court’s decision, and interprets it “to mean simply that purchase of a deceptively advertised product may in certain circumstances be alone sufficient to meet the injury requirement of G.L. c. 93A, §9(2), not that the mere purchase of a deceptively advertised product necessarily constitutes per se injury.”

One can only hope that courts presented with deceptive advertising cases, and ultimately the SJC itself, will adopt this narrow interpretation of the Aspinall holding. Even if they do, however, the majority opinion gives no guidance as to the circumstances that may give rise to per se liability. Moreover, even the dissent’s narrow interpretation leaves intact a troubling decision of unprecedented scope.

For now, the best hope for businesses affected by the decision may be to lobby the other branches of government to amend Chapter 93A in a manner that fully restores the traditional concepts of injury and causation to the state’s remedial scheme.

Donald R. Frederico is a partner in the Boston office of McDermott Will & Emery LLP (www.mwe.com), an international law firm with more than 1000 lawyers in nine domestic and six European offices. Mr. Frederico, a recent co-chair of the Litigation Section of the Boston Bar Association and founding co-chair of the Section’s Class Actions Committee, concentrates his practice in the areas of class actions and complex litigation, including consumer fraud and mass tort litigation. He can be reached at 617-535-4041, or at [email protected].