Want a cure for the common cold?
According to the makers of Airborne, an herbal supplement, their product was it.
“They advertised the product as the ‘miracle cure for the common cold,’ and one press release even said it could cure most colds in less than one hour,” said Melissa Harnett, a partner at Wasserman, Comden and Casselman in Tarzana, Calif. who represented the plaintiffs in a class action alleging false advertising against Airborne.
“They specifically advised consumers to take the product at the first sign of a cold or before entering a crowded, germ-filled environment, such as a plane,” she added.
Giving consumers the impression that the supplement’s “effervescent technology and immediate absorption” created a shield against contracting a cold was “particularly deceptive,” said Harnett, who specializes in false advertising class actions.
So she filed suit on behalf of consumers under California’s Unfair Competition Law. The nationwide class action recently reached a preliminary settlement of $23.3 million.
The case is one example of the many false advertising class actions being filed across the country – from a New York lawsuit brought by former law students claiming BAR/BRI’s advertising was false and deceptive because it misled students into believing they needed to purchase the bar prep course, to suits in multiple states against the tobacco companies for marketing “light” or “low tar” products, to a case against Microsoft in Washington state over its marketing for the Windows Vista product.
“Rather than alleging personal injury, which courts have generally been reluctant to certify as a class, plaintiffs’ lawyers are bringing claims for deceptive advertising or marketing as a way to get a class certified,” said Thomas E. Riley, a partner at Chadbourne & Parke in New York City.

Unfair and deceptive practices

Advertising in the U.S. is regulated by a myriad of state and federal laws as well as regulatory agencies. The Federal Trade Commission and the Food and Drug Administration both regulate advertising, and the National Advertising Division is a self-regulating organization that offers a hybrid form of alternative dispute resolution.
False advertising class actions typically allege violations of state law, but are often filed in federal court based on diversity jurisdiction, explained Hugh Latimer, a partner at Wiley Rein in Washington, D.C.
All 50 states have a variation of an unfair and deceptive business practices statute (commonly referred to as “UDAP” laws), such as the statute used in the Airborne case.
But the statutes aren’t based on a single standard like the UCC, explained Jon Sheldon, a staff attorney at the National Consumer Law Center in Boston.
“Because these statutes are so broad, it’s a very common count to add into a class action,” he said.
The statutes were intended to be liberally construed as a means to “handle new, evolving forms of misconduct in the marketplace,” he explained. “Instead of writing up a laundry list of prohibitions that could become obsolete or that unscrupulous people could work around, these statutes are meant to be expansive to cover misconduct in a broad variety of business transactions.”
Sheldon, an expert on UDAP statutes and the co-author of the book “Unfair and Deceptive Acts and Practices,” said there are “significant variations” among the state statutes.
“Generally the statutes are very broad in scope and prohibit deceptive practices that are unfair and/or unconscionable,” he said. “But not all of the states allow for recovery of attorneys fees and only some allow for recovery of punitive damages.”
And some states – like South Carolina – don’t allow class actions under their UDAP statutes, noted Timothy Eble, a class action practitioner in Mount Pleasant, S.C. who runs the blog http://www.classactionlitigation.com.
Sheldon said it would be rare for a class action to be based solely on a UDAP claim.
The suits typically include claims for negligent and/or intentional misrepresentation, breach of warranty or unjust enrichment, noted Eble.

Reliance and other hurdles for plaintiffs

Compared to a more traditional class action alleging design defect or personal injury, false advertising classes are difficult because a group of consumers won’t necessarily agree that they all purchased the product for the same reason.
The biggest challenge in certifying a class is establishing reliance, Latimer said.
False advertising class actions are “far more difficult to win and there are many more hurdles for plaintiffs,” said Michael Hassen, a partner at Jeffer, Mangels, Butler & Marmaro in San Francisco who specializes in class action defense.
Under most state UDAP laws, he said, “these suits require the element of reliance – the plaintiff must show that the advertising affected the consumer’s decision to purchase the product.”
A company “could have 50 different means of advertising,” Hassen noted, from radio to TV to newspaper to mailed flyers to website ads. “And the ads could all be different.”
That could make it extremely difficult for a class of plaintiffs to argue they all relied on the same deceptive advertising, and “courts have almost uniformly held that reliance is an individual matter,” Eble said.
Even with uniform advertising, establishing reliance can be an uphill battle, said Hassen, author of the Class Action Defense Blog (http:// classactiondefense.jmbm.com).
“If I get a flyer telling me that a certain kind of ketchup is better than any other, but then I run a search and read different consumer opinions and reports and rankings on ketchup that rates the product third but I buy the product anyway, I can’t argue that I relied upon the advertising to buy that product,” Hassen explained. “I did independent research, or maybe I heard from a friend who recommended the ketchup.”
The perfect example of the difficulty of establishing reliance upon advertising is the light cigarette cases, Hassen said.
“You’ll find among the light cigarette smokers lots of different reasons for why they smoke [that type of cigarette] – one person will say, ‘It’s healthier for me,’ but another will say the taste was less harsh, and another will just like the product more but not necessarily for health reasons,” he said.
And Sheldon noted that the definition of reliance varies from state to state in the UDAP statutes. California’s statute, for example, does not require reliance, making it a popular vehicle for false advertising lawsuits.
Aside from proving reliance, the burden of proof is another hurdle for plaintiffs.
“Does the plaintiff have to prove that the advertising was false or deceptive, or does the defendant need to prove that they have adequate information or statistics to back up their advertising claims?” Sheldon asked. “In most state courts, the defendant has to show that they have appropriate substantiation for their claims, but it depends on the forum.”
Riley said causation can also be a problem for plaintiffs.
“Plaintiffs need to prove that the defendant’s alleged misrepresentation caused their injury, which, like reliance, is an individual inquiry,” he said.

Puffery and other defenses

In addition to the difficulties in getting a false advertising class action certified, plaintiffs face several common defenses.
Because of the complex regulatory scheme of many products, preemption is a common defense, Riley noted.
The tobacco companies successfully argued that the light cigarette class actions against them were preempted by the Federal Trade Commission’s regulation of their advertising, for example, and food products have relied upon a similar defense.
In addition, defendants also can rely on the age-old “puffery” defense.
To be successful, a plaintiff must establish that the advertising at issue contained a misrepresentation of a fact, Riley said.
“But in some cases, courts have said that consumers couldn’t rely upon the alleged misrepresentation because it wasn’t really a statement of fact – it was an opinion, or a statement of belief known as ‘puffery,’” he said.
Companies are given latitude in their abilities to market products using subjective descriptions or exaggerations – for example, that a certain ice cream is “the best.”
“Puffery is considered within the bounds of proper business advertising,” Eble said. “The claims are amorphous and general and not specific in character. You won’t find companies being held liable for touting a product a little too strongly.”