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The Advertising Disputes & Litigation and Consumer Protection Committees’

RECENT LITIGATION DEVELOPMENTS

Quarterly Report

[Cases from July 1 to September 30, 2014]

Prepared for the ADL and CP Committees by Dan Blynn, Sherrie Schiavetti, Katie Riley, and

Donnelly McDowell of Kelley Drye & Warren LLP; Dale Giali and Thibault Schrepel of

Mayer Brown LLP; Dave Conway, Shahin Rothermel, and Kristen Brown of Venable LLP;

Douglas Brown, Darren McCartney, and Samantha Duke of Rumberger, Kirk & Caldwell,

P.A.; Scott Dupree of Shook, Hardy & Bacon, LLP; Eugene Benick of Finkelstein Thompson

LLP; Heather Goldman of Bryan Cave LLP; Camille Calman of Davis Wright Tremaine LLP;

Lauren Valkenaar of Norton Rose Fulbright LLP; Michael Mallow and Rachel Straus of Loeb

& Loeb LLP; Hal Hodes and Linda Bean of the National Advertising Division; Peter Farnese

of Beshada Farnese LLP; Tiffany Ge of Frost Brown Todd LLC; Lauren Aronson of Manatt,

Phelps & Phillips, LLP; and Jeremy A. Schachter of Kilpatrick Townsend & Stockton LLP.

RECENT DECISIONS

Lanham Act and Other Competitor Actions

The U.S. District Court for the District of New Hampshire grants in part and denies in part defendant

Advanced Drainage Systems, Inc.’s motion for judgment on the pleadings and denies the plaintiff

Presby Environmental, Inc.’s motion for leave to amend its complaint. The parties are competing

manufacturers of in-ground waste treatment disposal systems. Plaintiff alleged breach of a prior

settlement agreement between the parties and violation of the Lanham Act. The court allowed the

claim of breach to proceed in part, but dismissed the Lanham Act claim, finding that the plaintiff

failed to state a plausible Lanham Act claim. In so ruling, the court found the complaint failed to

allege that the defendant engaged in commercial advertising of any kind, and the complaint was

silent as to consumer confusion that might have resulted from the defendant’s actions. (Presby

Envtl., Inc. v. Advanced Drainage Sys., Inc., No. 13-cv-355-LM, 2014 WL 4955666 (D.N.H.

September 30, 2014)).

The U.S. District Court for the Southern District of New York initially denies in part, but ultimately

grants in full, summary judgment in favor of the defendant on all of the plaintiff’s Lanham Act false

advertising claims. Defendant made allegedly false comparative claims concerning the parties’

competing databases, which both list and detail construction projects nationwide, and are utilized by

approximately 70,000 construction industry members annually. Plaintiff claimed that the

defendant’s claims about the manner in which the comparisons were conducted; the number of

projects listed on the databases; the ratio of different types of projects between the databases; that

some projects were exclusive to one database; and other similar claims were literally false or

misleading. The court entered judgment in the defendant’s favor on many of the statements at issue

but also found that a reasonable juror could conclude that claims that the testing involved was

independent and objective, certain construction projects were listed on the defendant’s database

exclusively, and that the defendant’s database had between three and five times more projects than

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the plaintiff’s were literally false, and denied summary judgment as to those claims. Nevertheless,

as quickly as the court denied summary judgment on those issues, it granted it, finding that none of

those claims possessed the requisite level of materiality to survive a claim under the Lanham Act.

As for the other claims, which could not be deemed by a reasonable juror to be literally false but

could be deemed implicitly false if the plaintiff proffered sufficient evidence of consumer confusion

(actual confusion because it was a case for damages not an injunction) or otherwise showing

intentional deception, the court held that no such evidence existed and granted summary judgment in

the defendant’s favor. Ultimately, summary judgment was entered in the defendant’s favor on all

counts except one. Plaintiff survived summary judgment on its New York unfair competition law

claim because the facts revealed that the defendant conceded that it used phony entity names to

subscribe to the plaintiff’s database, access its information and, in at least a few instances, take

information from the plaintiff’s database and incorporate it into its own. However, with respect to

the claim that did survive, the court also granted the defendant’s Daubert motion and excluded the

plaintiff’s damages expert entirely. (Reed Const. Data Inc. v. McGraw-Hill Companies, -- F. Supp.

3d --, No. 09-CV-8578, 2014 WL 4746130 (S.D.N.Y. Sept. 24, 2014)).

The U.S. District Court for the Northern District of California grants in part and denies in part the

University of California’s and individual defendants’ motion to dismiss a claim that they plotted

with an employee of Plaintiff Parallel Synthesis Technologies to misappropriate “Parallume,” a

proprietary product used in biotechnology research and development. The complaint alleged a

breach of fiduciary duty, fraud, misappropriation of trade secrets, and false advertising and unfair

competition under the Lanham Act. The defendants allegedly contacted the plaintiff and expressed

interest in using Parallume in their own research, representing that they had a large financial backer

and wanted to obtain a grant. Plaintiff supplied Parallume samples in confidence, with the

expectation that it would be included in the grant and future projects; the defendants then ceased

contact with the plaintiff, submitted a proposal, and received a $1 million grant. The court denied

the motion to dismiss as to the fraud claims, finding that that the plaintiff would not have shared its

material but for misrepresentations that it would be included in the grant. The court denied the

motion to dismiss with respect to the Lanham Act claims, concluding that, although the defendants

did not compete with the plaintiff, they allegedly advertise for and sell licenses for the same

Parallume technology. This was sufficiently direct, because the plaintiffs adequately pled that the

defendant misrepresented that they and not the plaintiff were the inventors and owners of the

technology, and such alleged misrepresentation harmed or likely would harm the plaintiff’s sales by

discrediting its claims. The court also found that the claims against the University of California and

the Board of Regents were entitled to sovereign immunity under Section 43(a) of the Lanham Act.

The court granted the motion to dismiss as to the plaintiff’s intentional fraud claim regarding the

defendants’ representations regarding the existence of a large financial backer. (Parallel Synthesis

Techs, Inc. v. DeRisi, et. al., No. 5:13-cv-05968, 2014 WL 4748611, (N.D. Cal. Sept. 23, 2014)).

The U.S. District Court for the Northern District of Georgia grants the plaintiff and defendants’

various cross-motions for summary judgment. The plaintiff, a marketer and seller of web-based

camera systems brought a complaint against its competitor alleging various forms of corporate

espionage surrounding the defendant’s access to its webpages. The defendant brought a

counterclaim based on statements made by the plaintiff’s agents about the defendant. Both sides

filed motions for partial summary judgment on the claims at issue. The court, first, granted the

defendant’s motions for partial summary judgment on the plaintiff’s trade secret and copyright

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infringement claim finding the alleged “trade secret” was publically available on its website. The

court also granted the defendant’s motion for partial summary judgment on the tortious interference

claim, finding the contract that was allegedly interfered with was unenforceable in Georgia. The

court granted the plaintiff’s motion for partial summary judgment on the defendant’s Lanham Act

claim because the alleged false statements were not widely disseminated to the public. (EarthCam,

Inc. v. OxBlue Corp., No. 1:11-cv-02278, 2014 WL 4702200 (N.D. Ga. Sept. 22, 2014)).

The U.S. District Court for the Central District of California denies defendant Euro-Pro Operating

LLC’s ex parte application for an order requiring plaintiff Homeland Housewares LLC, a rival home

blender manufacturer, to stop “publicizing” the preliminary injunction granted to it previously.

Homeland asserted that Euro Pro’s packaging made false representations about Homeland’s blender.

Homeland sought a preliminary injunction, and on August 22, 2014, the court granted the motion,

ordering Euro Pro to remove the challenged statements from its packaging and any advertising.

Homeland, then, sent letters to retailers notifying them of the injunction, and of another injunction

issued against Euro Pro in Pennsylvania in another false advertising case. Euro Pro sought an order

prohibiting Homeland from sending any such letters and allowing Euro Pro to issue a notice

correcting the letter’s alleged mistakes. The court reviewed the letters and found that they truthfully

stated that they were from Homeland’s counsel in a false advertising case and that the injunction was

a preliminary one. While the language could have been clearer that the case was ongoing and no

final judgment on the merits had been made, the letter “convey[ed], if infelicitously, the procedural

posture of the case” and did not misrepresent the language of the injunction. Euro Pro also argued

that the letter advised the retailers to comply with the court’s injunction, which it claimed was

incorrect because retailers are not in “active concert or participation with” the defendant. The court

held that the question of who is in “active concert or participation with” a defendant is an unsettled

area of law and, therefore, the letters put forth a plausible legal theory – the court could not say for

certain that Homeland had misrepresented the scope of the injunction. Finally, the court held that

the purpose of the Lanham Act is to protect persons engaged in commerce from unfair competition,

and, to the extent that a litigant’s possession is meritorious enough to justify a preliminary

injunction, that litigant is entitled to assert the injunction’s protection in the marketplace

aggressively. The court suggested that Homeland should not have mentioned the unrelated

Pennsylvania injunction in its letter, and cautioned it that if it did not immediately delete that

reference, it would set a hearing on whether the preliminary injunction should be vacated. The court

recommended that Euro Pro exercise its own First Amendment rights and issue its own letters.

(Homeland Housewares, LLC v. Euro-Pro Operating LLC, No. 14-cv-03954, 2014 WL 4449922

(C.D. Cal. Sept. 10, 2014)).

The U.S. District Court for the Southern District of Ohio denies the defendants’ motion for

attorneys’ fees under the Lanham Act. Defendants asserted that they are entitled to attorneys’ fees

pursuant to 15 U.S.C. § 1117(c)(3), which grants the court discretion to award attorneys’ fees to

parties who prevail “in exceptional cases” brought under the Lanham Act. The court held that

whether the defendants are entitled to attorneys’ fees “hinges on two considerations: (1) whether the

[defendant] qualify as a ‘prevailing party’; and (2) whether this case qualifies as ‘exceptional.’” In

determining whether the defendants qualify as a “prevailing party,” the court held that to be

considered a prevailing party, one must receive at least some relief on the merits of his claim,

resulting in a judicially sanctioned change in the legal relationship of the parties; a party, however,

does not need to win every claim to be considered the prevailing party. In making the determination

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of whether a case qualifies as “exceptional,” the court stated that the first step is to make an

objective inquiry into whether the suit was unfounded when it was brought, and the next step is to

make a subjective inquiry into the plaintiff’s conduct during litigation. The court further noted that,

for the first step, the relevant inquiry is not whether the plaintiff’s claims ultimately succeeded on

the merits, but whether they objectively had some legal and factual basis at the time they were

brought. In this case, the court denied the defendants’ motion because the court did not find the case

to be “exceptional” for purposes of the fee-shifting provision – objectively, the court could not

conclude that the plaintiffs’ claims were meritless from the outset, and subjectively, the court could

conclude that plaintiffs’ conduct during the case was oppressive. (Wagner v. Circle W Mastiffs, Nos.

2:08-CV-00431, 2:09-CV-00172, 2014 WL 4417761 (S.D. Ohio Sept. 8, 2014)).

The U.S. District Court for the District of New Jersey grants defendant Expansys’s motion to

dismiss Locus Telecommunication, Inc.’s Lanham Act claim against it, and dismisses the plaintiff’s

state law claims without prejudice for lack of subject matter jurisdiction. Expansys sells personal

identification numbers (“PINs”), which allow users to add minutes to prepaid cell phones. Locus

alleged that Expansys falsely claimed on its website that its PINs were “The Easiest Way to Refill a

USA PrePay Plan.” Locus purchased PINs from Expansys for resale to distributors, and claims that

the PINs did not work, thereby causing customer dissatisfaction and harm to Locus’s goodwill. The

court held that the conduct complained of did not fall within the purview of the Lanham Act,

because Locus’s injury did not “stem from conduct by Expansys which unfairly diminished Locus’s

competitive position in the marketplace.” Rather, it stemmed from Locus being “hoodwinked into

purchasing a disappointing product,” which the Supreme Court held in Lexmark, Int’l, Inc. v. Static

Control Components, Inc. was not a Lanham Act claim. The court dismissed the Lanham Act claim

with prejudice because the complaint could not be amended to state a cognizable false advertising

claim. The court denied Expansys’s motion for Fed. R. Civ. P. 11 sanctions, holding that it was not

frivolous for Locus to seek to expand the Lexmark holding. (Locus Telecomms., Inc. v. Talk Global,

LLC, No, 14-cv-1205, 2014 WL 4271635 (D.N.J. Aug. 28, 2014)).

The U.S. District Court for the District of South Carolina grants default judgment to a plaintiff that

competed with the defendant in the business of supplying and installing replacement windows.

Plaintiff alleged violations of the Lanham Act, common law unfair competition, and a violation of

the South Carolina Unfair Trade Practices Act. The court found that the defendant’s advertisements,

which stated that the defendant adhered to the “strictest industry standards” in its replacement

window installation services, were false or misleading because, contrary to the defendant’s

assertions, it installed windows without permits required by law. Defendant’s advertisements that it

was “lead certified” were also false or misleading, because the defendant neglected to notify

homeowners of lead-based paint concerns, neglected to check or perform testing to determine if

lead-based paint was present, and failed to perform lead remediation when installing replacement

windows. The court also found that the defendant’s representations were material to consumers and

likely to influence their purchasing decisions, and that its actions diverted sales from the plaintiff,

because there was evidence that 44 contracts were likely diverted from the plaintiff’s business.

Analyzing the Fourth Circuit’s six non-exclusive factors for courts to consider when making a

damages award, the court held that the plaintiff should be allowed a full recovery. In addition, the

court granted disgorgement of profits and treble damages under the Lanham Act for actual lost

contracts due to the defendant’s multiple failures, omissions, and misrepresentations. (Muhler Co. v.

Window World of N. Charleston LLC, No. 2:11-CV-00851, 2014 WL 4269078 (D.S.C. Aug. 28,

2014)).

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The U.S. Court of Appeals for the Third Circuit affirms the holding of the district court that a party

bringing a claim under the Lanham Act is not entitled to a presumption of irreparable harm when

seeking a preliminary injunction and must demonstrate that irreparable harm is likely. In the lower

court, appellant Ferring Pharmaceuticals, Inc. sought a preliminary injunction under the Lanham Act

against appellee Watson Pharmaceuticals, Inc. to enjoin Watson from making allegedly false

statements regarding one of Ferring’s competing hormone treatments. After analyzing two U.S.

Supreme Court holdings, the Third Circuit concluded that, in a comparative advertising case, a

plaintiff is required to demonstrate irreparable harm for an injunction to be issued. Because

Watson’s misrepresentations were made during a webcast that was no longer available to consumers,

the Third Circuit affirmed the district court’s holding that the evidence did not support the harm

being irreparable, such that it could only be cured by a preliminary injunction. (Ferring Pharms.,

Inc. v. Watson Pharms., Inc., -- F.3d --, No. 13-2290, 2014 WL 4194094 (3rd Cir. Aug. 26, 2014)).

The U.S. District Court for the Northern District of Illinois denies defendant Navarre Corporation’s

motion to dismiss plaintiff Toddy Gear, Inc.’s complaint, which asserted claims for false advertising

in violation of the Lanham Act and the Illinois Uniform Deceptive Trade Practices Act. Toddy

Gear, the manufacturer and distributor of a microfiber cloth, alleged that the defendant distributed a

knock-off cloth to retail stores and that the product markings for this knock-off stated that the

product was designed and produced in the United States, when, in fact, the product is actually

imported from China. In its motion to dismiss, the defendant argued: (i) that the plaintiff could not

invoke a cause of action under the Lanham Act because of the Textile Fiber Products Identification

Act; (ii) that the plaintiff failed to assert a discernable competitive injury; (iii) that the plaintiff failed

to allege that a false statement was made in a commercial advertisement; and (iv) that the false

statements alleged were insufficient under Fed. R. Civ. P. 9(b). In denying the motion to dismiss,

the court disagreed with the defendant’s arguments and held that: (i) the Textile Fiber Products

Identification Act does not preclude Lanham Act claims; (ii) as pleaded, the complaint alleged a

direct injury to the plaintiff’s commercial interests; (iii) statements made on labels constitute

commercial advertisements under the Lanham Act; and (iv) the allegations were sufficient to satisfy

Rule 9(b). (Toddy Gear, Inc. v. Navarre Corp., No. 13 CV 8703, 2014 WL 4271631 (N.D. Ill. Aug.

26, 2014)).

The U.S. Court of Appeals for the Eight Circuit affirms in part, vacates in part, and remands the

district court’s decision to dismiss the plaintiff’s United States Warehouse Act (“USWA”) and third-

party beneficiary claims on the pleadings, and granting summary judgment on the Lanham Act

claim. Plaintiff, a biotechnology company, brought suit alleging that the defendant-federally

licensed warehouse operator breached its obligation under the USWA, breached its duty to third-

party beneficiaries of the licensing agreement between the operator and the federal government, and

engaged in false advertising in violation of Lanham Act, when it refused to accept corn grown from

the plaintiff’s genetically-modified seed. The Eighth Circuit held that the USWA did not permit the

company to bring action against the operator directly, the USWA did not implicitly authorize private

causes of action, the plaintiff was not the intended third-party beneficiary of the licensing agreement,

and summary judgment on its Lanham Act false advertising claim was not warranted. In vacating

summary judgment on the Lanham Act false advertising claim, the court noted that the Supreme

Court’s recent decision in Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1337

(2014), established the zone-of-interests test and proximate causality requirement as the proper

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analysis for analyzing standing to allege a claim under the Lanham Act, and rejected the requirement

that challenged commercial speech be made by a competitor. (Syngenta Seeds, Inc. v. Bunge N. Am.,

Inc., No. 13-1391, 2014 WL 3882886 (8th Cir. Aug. 8, 2014)).

The U.S. District Court for the District of New Jersey grants in part the defendant’s motion to

dismiss the plaintiff’s complaint, which arose out of allegedly defamatory statements regarding the

plaintiff’s financial stability. The court dismissed several of the plaintiff’s claims for various

reasons. The court dismissed the Lanham Act claim because the alleged defamatory statements were

not contained in a commercial advertisement or promotion. An unfair competition claim was

dismissed because the claim merely asserted that the defendant potentially misappropriated

prospective business relationships, which does not constitute a claim for unfair competition.

(Innovasystems, Inc. v. Proveris Scientific Corp., No. 13-05077, 2014 WL 3887746 (D.N.J. Aug. 6,

2014)).

The U.S. Court of Appeals for the Second Circuit affirms the district court’s application of

presumptions for finding liability and damages in a Lanham Act false advertising action.

Defendant’s advertising claimed that its folate (a B vitamin that helps the body make new cells) was

comprised of “pure” isomers when it actually was comprised of two isomers (one natural the other

not) mixed together. The district court found that the defendant’s claim that its folate was pure was

literally false and that its claims describing the benefits of pure folate were literally true but

implicitly false when applied to its impure folate. The district court also found that the defendant

intended to deceive consumers with its advertising, and applied presumptions to find liability and to

injury and award damages. The Second Circuit held that, while a plaintiff bringing a claim about

implicitly false advertising must ordinarily prove confusion, the district court’s decision to presume

confusion (i.e., liability) was appropriate because the plaintiff, instead, proved that the defendant

intended for its advertising to deceive. Willful deception, according to the court, shifts the burden to

the defendant to prove a lack of confusion, which it did not do. The Second Circuit also affirmed the

district court’s use of a presumption in finding an injury and awarding damages by comparing this

case to a typical comparative advertising case, which does not raise concerns of speculativeness

because it is clear exactly who the false message was intended to harm. According to the court,

although the advertising at issue in this case did not make any references to the plaintiff, because the

plaintiff was the only other player in the folate market and already had proved literal falsity and

willful deception, injury and damages could be presumed. The court did not limit its holding to

damages but held that the same rationale (direct competitors in a two-player market, literal falsity,

and willful deception) may be used to award both injunctive relief and damages. (Merck Eprova AG

v. Gnosis S.p.A., -- F.3d --, No. 12-4218, 2014 WL 3715078 (2d Cir. July 29, 2014)).

The U.S. District Court for the District of Utah determines that one of the claims contained in

plaintiff Catheter Connections’ motion for preliminary injunction was precluded by the federal Food,

Drug and Cosmetic Act (“FDCA”), but the other claim was not. Catheter Connections and

defendant Ivera Medical are competitors in the medical device field; both make disinfectant caps that

prevent infection in IV lines. Ivera received approval from the FDA to market its “X10” line of

caps. Ivera, then, introduced an “X13” line of caps and used language from the FDA’s clearance

letter for the X10 model on the X13 website and packaging. Catheter Connections sued Ivera for

patent infringement and unfair competition, and the court enjoined the sale of the X13 caps in

January 2014. Following that injunction, Ivera introduced its “Rev. G” line of caps. Catheter

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Connections filed an emergency motion for temporary restraining order and preliminary injunction

against Ivera, alleging four counts of false advertising under the Lanham Act – one arising from

Ivera’s assertion that it did not need a separate FDA clearance letter for the Rev. G, and the other

three arising out of other claims about the Rev. G (including one based on clinical testing and one

based on factual findings purportedly made by the FDA about the Rev. G). Ivera argued that all four

claims were precluded by the FDCA because the FDA has exclusive jurisdiction over medical device

testing and labeling, and the court would have to interpret FDA regulations to make a ruling as to

any of the claims. Catheter Connections, citing Pom Wonderful LLC v. The Coca-Cola Company,

189 L. Ed. 2d 141 (June 12, 2014), argued that its claims could go forward because they did not

intersect with the FDA’s regulatory expertise. The court agreed with Ivera that only the FDA could

determine whether Ivera needed a new clearance letter, but agreed with Catheter Connections that

the other three advertising claims were representations about the features and functionality of the

device, and the mere fact that the FDA has jurisdiction over medical devices and their testing does

not necessarily mean that courts cannot pass judgment on representations concerning the function of

the device, results of clinical testing, or what factual findings the FDA actually made about the

device. Catheter Connections, Inc. v. Ivera Medical Corp., No. 2:14-cv-70, 2014 WL 3536573 (D.

Utah July 17, 2014).

The U.S. District Court for the Central District of California denies a motion to dismiss the Lanham

Act and state false advertising claims brought by a commodity trading firm against a competitor for

operating affiliate websites purporting to contain independent consumer reviews that, in reality, were

false advertisements disparaging the plaintiff and its products. In summary fashion, the court found

that plaintiff adequately alleged the elements of Lanham Act false advertising, trade libel,

defamation, and intentional interference with prospective economic advantage by claiming that the

defendant used phony affiliate websites to make false claims about the plaintiff and its products.

(Am. Bullion, Inc. v. Regal Assets, LLC, No. CV 14-01873, 2014 WL 3516252 (C.D. Cal. July 15,

2014)).

The U.S. District Court for the Northern District of Illinois grants in part and denies in part the

defendant’s motion to dismiss claims under the Lanham Act. Plaintiff Yellow Group sued Uber

Technologies, alleging that Uber competed unfairly by misrepresenting certain features of its

service, and also encouraged taxi drivers to breach their agreements with the plaintiff. The court

first dismissed the plaintiff’s claim that the defendant deceptively represented on its website that its

taxis charged “standard taxi rates,” because there was no allegation that that directly injured the

plaintiff. The court, then, dismissed in part the claim of misrepresentation arising out of Uber’s

reference to “fleet partners.” (Yellow Group LLC v. Uber Techs. Inc., No. 12 C 7967, 2014 WL

3396055 (N.D. Ill. July 10, 2014)).

The U.S. District Court for the Northern District of Illinois grants summary judgment in favor of the

plaintiff and denies the defendant’s cross-motions for summary judgment, in a patent infingement

action, which also asserted Lanham Act false advertising claims. Plaintiff sued the defendant for

infringement of seven of its patents related to oxygen absorber technology; the defendant

counterclaimed, alleging infringement of two of its own patents, and false advertising in violation of

the Lanham Act. With respect to the Lanham Act counterclaim, the court held that, because none of

the customers deposed testified that they cared the least bit whether the system was patent-protected

or not, the defendant’s counterclaim could not be sustained. (Pactiv, LLC v. Multisorb Techs., Inc.,

No. 10 C 461, 2014 WL 2976558 (N.D. Ill. July 2, 2014)).

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The U.S. District Court for the District of Minnesota grants the defendant’s motion to transfer venue

to the Central District of California. Plaintiff’s complaint stated causes of action for, among other

things, false advertising in violation of the Lanham Act, deceptive trade practices in violation of

Minnesota’s consumer protection statute, and unfair competition under Minnesota common law. In

granting the motion to transfer, the court held, in part, that, to the extent that the plaintiff could

properly pursue the Lanham Act and unfair competition claims, third-party buyers of the product at

issue would be “potentially significant sources of discovery.” Because there was only one such

buyer of the product in Minnesota and 28 in California and the surrounding states, the court held that

this was a factor weighing heavily in favor of transfer. (WhatRU Holding, LLC v. Bouncing Angels,

Inc., No. 13–2745, 2014 WL 2986657 (D. Minn. July 1, 2014)).

State Consumer Protection Laws

The U.S. Court of Appeals for the Ninth Circuit affirms the district court’s dismissal of a complaint

for violation of the California Unfair Competition Law (“UCL”) by three business owners against

YELP!, Inc., which operates a popular web-based company ratings system based on consumer

reviews. The business owners alleged that YELP utilized extortion to compel the purchase of

advertising from YELP, by threatening to take actions, including removal of positive reviews,

increasing prominence of negative reviews, and creating false reviews unless the business owners

purchased advertising from YELP. The district court dismissed the case, holding that the allegations

did not set forth a plausible claim. The Ninth Circuit affirmed, holding that the business owners

failed to allege a “wrongful” act, because the business owners had no preexisting right to positive

reviews on YELP’s website, and the business owners had no pre-existing right to be free of

prominent negative reviews. In addition, the Ninth Circuit held that the business owners’ allegations

regarding YELP’s purported authoring of false negative ads failed to reach the plausibility standard,

because the allegations did not make the possible authoring of reviews by YELP any more likely

than the possibility that the negative ads were made by disgruntled customer, neighbor, or other

person. Therefore, the Ninth Circuit affirmed the dismissal. In footnotes, the Ninth Circuit made

clear that it was not holding that no remedy existed for the alleged wrongful activity, only that it did

not reach the level of extortion and, therefore, did not violate the UCL. (Levitt v. YELP! INC., No.

11-17676, 2014 WL 4290615 (9th Cir. Sept. 2, 2014)).

The U.S. District Court for the Northern District of California Division grants in part and denies in

part defendant Apple, Inc.’s motion for judgment on the pleadings in putative class action alleging

violations of, among other things, California’s Consumer Legal Remedies Act and Unfair

Competition Law. Plaintiff alleged that the defendant falsely represented that the offering of a

“Season Pass” for Season 5 of the television show “Breaking Bad” included all 16 episodes for that

season, when, in fact, it included only half of them. Defendant claimed that the second half of

Season 5 was the “Final Season” and, therefore, was not included as part of Season 5. According to

the complaint, the defendant advertised the Season Pass as including “every episode in [Season 5]

and at a better price than if you were to purchase it one at a time.” The court granted the defendant’s

motion as to all claims except for the alleged violation of California’s Unfair Competition Law,

citing to the reasonable interpretation by consumers that their Season Pass purchase would include

all 16 episodes of Season 5. (Lazebnik v. Apple, Inc., No. 5:13-CV-04145, 2014 WL 4275008 (N.D.

Cal. Aug. 29, 2014)).

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The U.S. District Court for the Northern District of California grants Defendant Apple, Inc.’s motion

to dismiss a putative class action alleging seven causes of action, including violations of the

Magnuson-Moss Warranty Act, and California’s Consumer Legal Remedies Act and Unfair

Competition Law, related to the defendant’s iPhone app, “Apple Maps.” Plaintiff claimed that, had

she known Apple Maps was “defective,” she would not have purchased her iPhone 5. The court

granted dismissal on all counts, holding that plaintiff’s dissatisfaction of the product was not a legal

claim because the defendant had not made any representations that its Maps app would operate

without fail. Further, the court found that the plaintiff had not identified with particularity the actual

defect she experienced, alleging only that the app led her to incorrect locations. As a result, the

court held the plaintiff failed to meet the Fed. R. Civ. P. 9(b) pleading standards for her claims

sounding in fraud. (Minkler v. Apple, Inc., No. 5:13-CV-05332, 2014 WL 4100613 (N.D. Cal. Aug.

20, 2014)).

The U.S. District Court for the District of New Jersey denies defendant MonaVie’s motion to

dismiss claims alleging false and deceptive advertising under the New Jersey Consumer Fraud Act.

Plaintiffs allege that the defendant posted a deceptive video online where an individual purporting to

be a doctor testifies that MonaVie’s juice product can ease cancer pain, along with customer

statements in brochures representing that consumption of the juice allowed them to cease other

medications. According to the plaintiffs’ allegations, the defendant knew that its product did not

provide these health benefits. Because all the statements were made by unrelated third parties, the

defendant claimed that it could not be held liable. The court determined that MonaVie could be

found vicariously liable for these misrepresentations because individuals contract with the defendant

to sell their products, a fact demonstrating that the defendant has control over the advertisements

used by distributors. The court also determined that the plaintiffs satisfied the heightened pleading

requirement under the New Jersey Consumer Fraud Act because the pleadings were adequate to

place the defendant on notice. Finally, the plaintiffs successfully pled a claim under the New Jersey

Consumer Fraud Act by alleging that the defendant’s statements about its product were false, that the

plaintiffs paid a premium for the product based on these allegations and thereby suffered an

ascertainable loss, and that the plaintiffs would not have paid a premium for the products if they did

not provide the advertised health benefits. (Pontrelli v. MonaVie, Inc., No. 13-CV-4649, 2014 WL

4105417 (D.N.J. Aug. 19, 2014)).

The U.S. District Court for the District of Massachusetts denies the plaintiff’s partial motion for

summary judgment and grants the defendants’ motion for summary judgment in an action based on

allegations that the drug “Celexa” was represented to be safe and effective for minor children.

Plaintiff brought individual claims under California’s Unfair Competition Law (“UCL”) and False

Advertising Law (“FAL”) after his motion to certify a class was denied. In denying the plaintiffs’

motion for summary judgment on materiality under the UCL, the court held that the defendants’

concealment of a negative study from the public was insufficient to establish materiality as a matter

of law. While a jury may infer such a fact, the defendants’ “belief as to materiality does not establish

that the study was, in fact, material to a reasonable physician or consumer.” (In re Celexa and

Lexapro Mktg. and Sales Practices Litig., No. MDL 09-2067, 2014 WL 3908126 (D. Mass. Aug. 8,

2014 )).

10

The California Court of Appeal reverses the trial court’s order granting defendant Yelp’s anti-

strategic lawsuit against public participation (“SLAPP”) motion to strike the plaintiff’s complaint.

Plaintiff’s complaint, which sought injunctive relief under California’s Unfair Competition Law and

False Advertising Law, was aimed at preventing Yelp from making claims about the accuracy and

efficacy of the filter it used to separate out unreliable and/or biased reviews. In granting Yelp’s

motion to strike, the trial court found that Yelp’s statements about filtering were matters of public

interest and that the public interest exemption did not apply. In reversing the trial court’s decision,

the Court of Appeal concluded that the commercial speech exemption did apply to Yelp’s statements

concerning the accuracy and efficacy of its review filter because such statements were about the

quality of its product and were intended to reach third parties to induce them to engage in a

commercial transaction. (Demetriades v. Yelp, Inc., No. B247151, 2014 WL 3661491 (Cal. App.

July 24, 2014)).

The U.S. District Court for the Western District of Pennsylvania grants in part and denies in part

defendant Capella University’s motion to dismiss the plaintiff’s complaint, which arose out of her

purchase of educational services from the university. Addressing the plaintiff’s claim under the

Pennsylvania Unfair Trade Practices Consumer Protection Law (“UTPCPL”), the court held that the

plaintiff’s purchase of educational services were for personal and not business use. The court further

explained that the defendant’s position effectively asked the court to conclude as a “categorical and

definitional matter” that educational services could never be covered by the UTPCPL as a matter of

law, “no matter the facts.” The court expressly stated that, at the dismissal stage, it could not make

such a ruling, but would be willing to revisit the issue at summary judgment. (Sibeto v. Capella

Univ., No. 2:13-CV-1674, 2014 WL 3547344 (W.D. Pa. July 17, 2014)).

The U.S. Court of Appeal for the Fifth Circuit affirms the district court’s decision granting summary

judgment in favor of defendant Marvin Lumber and Cedar Company. Plaintiff sued the defendant

under the Texas Deceptive Trade Practices Act for false representations, breach of warranty, and

negligence relating to the manufacture and installation of leaking windows. The court determined

that the plaintiff produced no evidence proving that the allegedly deceptive practices were “in

connection” with the purchase of the plaintiff’s home, as required by the statute. (Klein v. Marvin

Lumber and Cedar Co., No. 13-20754, 2014 WL 3412979 (5th Cir. July 15, 2014)).

The U.S. District Court for the Middle District of Florida grants the defendant-drug manufacturer’s

motion to dismiss, after removal of the litigation from Florida state court. Plaintiff alleged that the

defendant designed, manufactured, and marketed a prescription drug for acne, and represented that

the drug was safe for treatment of acne, when in reality, the drug caused hair loss. Plaintiff alleged

that the defendant failed to provide a warning regarding the hair loss. Plaintiff alleged that he

experienced significant hair loss as a result of taking the drug, and the seven count complaint

asserted claims for, among other things, breach of warranty, misrepresentation, and fraud. The court

dismissed all counts based on the learned intermediary doctrine coupled with the plaintiff’s failure to

provide any allegations of fact regarding the manufacturer’s failure to warn the doctor, privity with

the manufacturer (required for Florida breach of warranty claims), or any details regarding the fraud

sufficient to meet the requirements of Fed. R. Civ. P. 9(b). (Dimieri v. Medicis Pharms. Corp., No.

2:14-cv-176, 2014 WL 3417364 (M.D. Fla. July 14, 2014)).

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The U.S. District Court for the Eastern District of North Carolina grants in part and denies in part

defendant-bakery’s motion to dismiss fraud and consumer protection violation claims. The plaintiff

purchased a distribution route, which granted him exclusive rights to purchase bakery products from

the defendant and sell those products to grocery chains in a designated area. The defendant

terminated the agreement citing to various “material breaches” of the agreement made by the

plaintiff. The plaintiff brought suit alleging breach of contract, fraud, and violation of the state

consumer protection statute based on the alleged false “material breaches” identified in the notice of

termination. The court granted the defendant’s motion to dismiss the fraud claim finding that the

plaintiff was not, in fact, deceived by any statement in the notice because the plaintiff challenged the

notice of termination immediately. The court denied the motion to dismiss the statutory claim

finding that, although a mere breach of contract is not a statutory violation, the plaintiff alleged

sufficient facts that the defendant acted unfairly and deceptively by pretextually terminating the

agreement. (Martin v. Bimbo Foods Bakeries Distrib., Inc., No. 5:14-CV-17, 2014 WL 3487618

(E.D.N.C. July 11, 2014)).

The Texas Court of Appeals reverses a jury verdict that found defendant Patrick Cox liable under the

Texas Deceptive Trade Practices Act for misrepresentations made by sales associates employed by

his tax resolution company. The court found that even though his company violated the statute, no

findings justified piercing the corporate veil; therefore, Cox could not be found personally liable.

The court, then, examined whether the State of Texas presented sufficient evidence of Cox’s

personal conduct to uphold liability. The jury previously found that Cox had violated five “laundry

list” items under the statute. Because there was no evidence that Cox accepted payment from

consumers, represented another entity that was endorsed or affiliated with his company, spoke with

consumers, or advertised his company’s services directly, the court reversed the jury’s findings.

While Cox did state he would solve the consumers’ tax problems by settling debts for “pennies on

the dollar” with employees who were former IRS agents, the court found these declarations were not

false or misleading. After reversing on the merits, the appellate court also reversed the trial court’s

permanent injunction and award of attorney’s fees. (Cox v. State, No. 07-12-00453-CV, 2014 WL

2965420 (Tex. App. July 1, 2014)).

Consumer Class Actions

The California Court of Appeal affirms the denial of class certification to a putative class action

against Hasbro, Inc., asserting unfair competition and false advertising claims related to Hasbro’s

“Tinkertoy” construction set. The plaintiff alleged that the models on the pictures in the toy’s

packaging could not be constructed with the pieces contained in the set, and the disclaimer “some

pictures show pieces not included with this set” was false and misleading because none of the

pictured models could be constructed using only pieces contained in the set. Additionally, the

plaintiff alleged that no design guide was included in the set. The court noted that the plaintiff

purchased the set from an online reseller, instead of an authorized retailer, and online resellers’

packaging varied from one another. In addition, non-contradicted evidence showed that all five

models indistinguishable from pictures on the set could be constructed using only pieces from the

set. Design guides, which were not included in shipments made to Sam’s Club, were included in

sets shipped to Toys “R” Us, and were made available to consumers who did not receive one. The

court upheld the denial of certification, finding common issues of fact do not predominate regarding

the design guide because not all customers could see the part of the label when purchasing the set

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online. In addition, every set purchased from Toys “R” Us contained a design guide, so many

members of the proposed class were not exposed to the representation, or the representation was not

false or misleading to them because a design guide was enclosed. Common issues of fact also did

not predominate regarding claims surrounding the disclaimer that some pictures show pieces not

included with the set, because not all consumers could see that part of the label when purchasing the

set online. Finally, the plaintiff did not prove how the label’s depiction of five models was

misleading, because she did not identify how they were visually distinguishable from models that

could be constructed with pieces in the set. As a result, the plaintiff failed to carry her burden of

establishing a community of interest because she introduced no evidence that Hasbro “engaged in

uniform conduct likely to mislead the entire class.” (O’Brien v. Hasbro, Inc., No. B247434, 2014

WL 4896388 (Cal. Ct. App. Sept. 29, 2014)).

The U.S. Court of Appeals for the Third Circuit affirms the district court’s approval of a class action

settlement, the related attorneys’ fees award, and the imposition of the appellate bond. Plaintiffs

brought claims asserting, among other things, violations of the New Jersey Consumer Fraud Act,

negligent misrepresentation, and intentional misrepresentation. The case was resolved through a

nationwide settlement. On appeal, objectors to the settlement argued it was an abuse of discretion

for the court to award class counsel a fee relating to the injunctive relief from the settlement fund.

The Third Circuit rejected this argument because, under the common fund doctrine, the plaintiff

class bears the burden of attorneys’ fees. With respect to the appellate bond, the Third Circuit held

that the lower court did not abuse its direction in imposing an appeal bond because: (1) the objectors

did not meaningfully respond to claims that their appeals were meritless, and (2) the objectors were a

geographically diverse group that failed to represent they could pay the costs of the appeal. The

Third Circuit further affirmed the imposition of an appeal bond of $22,500 to cover the costs of

briefing and the administrative costs of the settlement fund while the case was on appeal. (In re

Nutella Mktg. and Sales Practices Litig., -- Fed. App’x. --, No. 12-3456, 2014 WL 4801262 (3d Cir.

Sept. 29, 2014)).

The U.S. District Court for the Northern District of California denies the defendant’s motion to

dismiss claims alleging violations of California’s Consumer Legal Remedies Act and False

Advertising Law, among other things. Plaintiff brought a class action lawsuit alleging that she

purchased defendant Triple Leaf Tea Inc.’s “Dieter’s Green” herbal tea in reliance on purportedly

false and misleading statements on the packaging, which included statements that led her to believe

that the tea would help her diet and to lose weight. The court rejected all of the defendant’s

arguments in support of dismissal and decided to let the case proceed with all five claims. The court

held that the plaintiff had standing to proceed on both her individual claims and on behalf of a class

consisting of persons who purchased Dieter’s Green and two other teas sold by the defendant,

because the plaintiff would not have purchased the tea but for the defendant’s labeling claims and

there is sufficient similarity between the products she purchased and did not purchase. In addition,

the court held that the claims are not subject to dismissal for failure to state a claim because the

statements challenged here are not merely general assertions of superiority (puffer) but are

characterized more properly as factual representations. The court also noted that whether a

reasonable consumer is likely to interpret the challenged statements in the manner alleged by the

plaintiff is not a finding appropriate for the pleading stage; it is an issue more appropriate for the

summary judgment stage. The court further held that a plaintiff can assert breach of an implied

warranty claim if the plaintiff relies on written labels or advertisements of a manufacturer, even if

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the plaintiff is not in vertical privity with the defendant. (Johnson v. Triple Leaf Tea Inc., No. C-14-

1570, 2014 WL 4744558 (N.D. Cal. Sept. 23, 2014)).

The U.S. District Court for the Northern District of California grants in part and denies in part

defendant Uber Technologies, Inc.’s motion to dismiss a class action complaint. The basis for the

complaint, which asserted claims under the California Unfair Competition Law (“UCL”) and

Consumer Legal Remedies Act (“CLRA”), and for breach of contract, was that Uber misrepresented

that a 20% fee that is charged above the metered fare was for the driver when, in fact, a significant

portion of this fee was actually taken by Uber as additional revenue. In denying the motion to

dismiss in part, the court held that the plaintiff sufficiently had pled her UCL and CLRA causes of

action. In so holding, the court further found that the plaintiff: (1) had alleged a sufficient nexus

between California and the misrepresentations, which formed the basis of the complaint; (2)

adequately alleged economic harm by alleging that, but for Uber’s misrepresentation, she would not

have agreed to or paid Uber the full amount charged; (3) stated a claim under the UCL’s fraudulent

and unfairness prongs because the court could not conclude, at this early stage, that the alleged cost

of the misrepresentation was justified by Uber’s reasons and motives behind it; and (4) stated a claim

under CLRA sections 1770(a)(5) and (a)(9). In granting the motion to dismiss in part, the court

found that the plaintiff failed to state a claim under CLRA sections 1770(a)(13) and (a)(16) because

she did not allege necessary facts. (Ehret v. Uber Techs., Inc., No. C-14-0113, 2014 WL 4640170

(N.D. Cal. Sept. 17, 2014)).

The U.S. District Court for the Northern District of California grants the plaintiffs’ motion for

certification of liability issues – though not damages issues – for a California consumer class on

claims that Jamba Juice smoothie products are falsely marketed as “all natural.” Plaintiffs alleged

that the “all natural” statement was misleading because the products, made in five flavors, contained

several synthetic ingredients. Plaintiffs sued Jamba Juice Co. and Inventure Foods Inc., alleging

violations of California’s Consumer Legal Remedies Act, False Advertising Law, and Unfair

Competition Law, as well as for breach of warranty. The court determined that the case meets all

Fed. R. Civ. P. 23 requirements to litigate “natural” issues on a class-wide basis, including

ascertaining class members. The court rejected the Third Circuit’s ascertainability decision in

Carrera v. Bayer Corp. (i.e., requiring objective, contemporaneous evidence of purchases) as not

being the law in the Ninth Circuit. The court further determined that the meaning and impact of

“natural” labeling on a food product may be litigated on a class-wide basis. The court ruled,

however, that the plaintiffs failed to meet the Comcast standard requiring a sufficient record that

damages could be feasibly and efficiently calculated on a class wide basis consistent with their

theory of liability. Among other things, the plaintiffs submitted no expert report or detailed analysis

of a damages theory. “With no evidence in the record demonstrating that these damages models can

be feasibly and efficiently calculated, a class cannot be certified for the purpose of seeking

damages.” Finally, the court ruled that it will address an injunctive relief class by separate order

(that issue was the subject of a separate round of briefing). (Lilly v. Jamba Juice Co., No.

3:13cv2998, 2014 WL 4652283 (N.D. Cal. Sept. 18, 2014)).

The U.S. District Court for the Southern District of New York grants in part and denies in part the

defendants’ motion to dismiss, and grants the plaintiff’s motion for class certification in a consumer

class action against the sellers of “Capatriti” brand olive oil. The olive oil was labeled “100% Pure

Olive Oil,” but the plaintiff alleges that it contained olive-pomace oil. Plaintiff asserted claims of

14

deceptive acts and practices under New York General Business Law § 349. Defendants argued that

there could be no liability for two of the three individual defendants except under a veil-piercing

theory. The court agreed, dismissing the individual claims against the two individuals, but allowing

the direct claims against the other individual and the company to proceed. As for the class

certification motion, the court rejected the defendants’ theory that the class was not ascertainable

because the company sold only to retailers; the court held that whether an individual purchased the

product was “about as objectively determinable [a] question as one can ask.” The court also held

that, while some fraud claims are inappropriate for class resolution, this case was appropriate for

certification because everyone who purchased the product relied on the label that it was 100% pure

olive oil, “since otherwise the individual would merely be purchasing a random tin of unknown

fluid.” (Ebin v. Kangadis Family Mgmt., No. 14-cv-1324, 2014 WL 4638700 (S.D.N.Y. Sept. 18,

2014)).

The U.S. District Court for the Southern District of California largely denies the defendant-

supplement company’s motion to dismiss a nationwide consumer class action. Defendant

Infinitelabs, LLC was sued under California consumer protection laws for falsely advertising its

product as helping build lean muscle and supporting testosterone production. The court dismissed

claims for injunctive relief, ruling that the plaintiff – who has no interest in purchasing the product

again – did not have Article III standing for injunctive relief because there is not a likelihood he will

suffer future harm from the defendant’s conduct. In all other respects, the defendant’s motion was

denied. The court rejected the defendant’s argument that the plaintiff was asserting that the

challenged advertising lacked substantiation (a theory the defendant argued was not cognizable).

The court ruled that the plaintiff’s theory was that the labeling claims were false (not merely

unsubstantiated) and that there was scientific evidence “directly refuting” the advertised attributes.

The court concluded that these allegations assert the existence of evidence showing that the

defendant’s claims are false and misleading. The court also rejected the defendant’s argument that a

reasonable consumer would not be misled in the manner alleged. The court ruled that the complaint

sufficiently pled that the labeling contains misrepresentations, and that whether a reasonable

consumer would be misled is a question of fact that should not be decided on a motion to dismiss.

The court agreed with the defendant, however, that the plaintiff’s claims sound in fraud and,

therefore, must meet the heightened pleading requirement of Fed. R. Civ. P. 9(b), but the court

concluded that the plaintiff met that standard. “In sum, Plaintiff has alleged the who, what, when,

where and how of the misconduct, and has pled sufficient facts to allow Defendant an adequate

opportunity to defend.” (Dabish v. Infinitelabs, LLC, No. 3:13cv2048, 2014 WL 4658754 (S.D. Cal.

Sept. 17, 2014)).

The California Court of Appeal affirms the trial court’s judgment following a bench trial that the

plaintiffs, on behalf of themselves and a class, failed to prove that a significant portion of targeted

consumers, acting reasonably, would have been misled by the defendants’ gym enrollment

agreement. Plaintiffs went to trial under California’s Unfair Competition Law challenging whether

the defendant’s gym enrollment contract was facially deceptive as to whether the class could keep

their dues at the same rate for a period longer than a year if they renewed their membership when the

initial multi-year term expired. The appellate court affirmed that the plaintiffs failed to carry their

burden because the contract in question was silent on the key point. In doing so, the appellate court

approved of the trial court’s reliance on class survey/statistical evidence demonstrating that an

overwhelming majority of class members renewed on an annual basis without complaint. (Harper v.

24 Hour Fitness, Inc., No. B243322, 2014 WL 4634982 (Cal. Ct. App. Sept. 17, 2014)).

15

The U.S. District Court for the District of Maryland denies the plaintiffs’ Fed. R. Civ. P. 60(b)

motion to reconsider the court’s order dismissing their class action complaint with leave to amend.

Plaintiffs alleged under various state laws that, despite the defendants’ representations to the

contrary, the defendants’ products containing glucosamine hydrochloride and chondroitin sulfate,

when ingested orally, had only a negligible effect on treating joint discomfort. The court dismissed

the plaintiffs’ complaint with leave to amend to include an allegation “that no reasonable expert

could conclude that glucosamine and chondroitin do not improve joint health in non-arthritic

consumers.” In denying the plaintiffs’ Rule 60 motion, the court elaborated on its prior order that

the osteoarthritic studies that the plaintiffs cited in their complaint could not be extrapolated to

support their broader allegation that the pills were ineffective for non-arthritic users. (In re GNC

Corp. Triflex Prods. Mktg. and Sales Practices Litig., No. 14-2491, 2014 WL 4447113, (D. Md.

Sept. 9, 2014)).

The U.S. District Court for the Southern District of Florida grants in part and denies in part the

defendant-food manufacturers’ motion to dismiss a consolidated class action complaint. The

plaintiffs alleged they were induced to buy the defendants’ products because of the “all natural”

label on the package, and that label was deceptive and likely to mislead the public because the

defendants’ products contain genetically modified organisms (“GMOs”) which do not meet the

definition of “all natural.” The claims were brought under the consumer protection statutes of

Florida and California. The defendants, first, moved for dismissal, claiming that the plaintiffs’

claims were preempted by federal labeling requirements. The court found that the plaintiffs’ claims

were not expressly or impliedly preempted by the FDA policy or regulation. The defendants also

argued that the claims were subject to dismissal pursuant to the primary jurisdiction doctrine. The

court held, however, that the issue of whether the label “all natural” is misleading is not a technical

area where the FDA has more expertise than the court. It also found that the complaint met the

heightened pleading requirements of Fed. R. Civ. P. 9(b) and that the plaintiffs’ claims stated a cause

of action under the state consumer protection statutes. The court did grant the defendants’ motion to

the extent that the plaintiffs lacked standing to bring claims for products they did not purchase. The

court also dismissed the claims against defendant Kellogg because the plaintiff failed to allege

sufficiently that defendant Kashi was a mere instrumentality or alter ego of Kellogg. (Garcia v.

Kashi Co., No. 12-21678, 2014 WL 4392163 (S.D. Fla. Sept. 5, 2014)).

The U.S. District Court for the Southern District of Florida grants in part and denies in part the

defendant-beer manufacturer’s motion to dismiss the plaintiffs’ putative class-action complaint,

which alleged that the manufacturer’s beer was deceptively labeled and the labeling misled

consumers into believing that the beer was brewed in Germany, when in fact, the beer was brewed in

Saint Louis, Missouri. The defendant argued that the complaint should be dismissed because the

packaging clearly stated that the beer was a product of the United States and listed the brewery’s

address in Missouri. However, the court found that the purported language was not readily visible

because of font and coloring choices for the packaging. Further, the it held that, in order to see the

language, the beer bottles would have to be removed from the package or the consumer had to pick

up the package and look at the bottom. The court found that a reasonable consumer could not be

expected to do either before purchasing the beer. In addition, the court found the fact that the beer

brand in question had been brewed in Germany for more than a hundred years as contributing to the

deceptive nature of the statements on the package. The court, however, did dismiss the claims for

16

injunctive relief because the plaintiffs implied that they had stopped purchasing the beer and,

therefore, faced no significant risk of future harm. (Marty v. Anheuser-Busch Cos., LLC, No. 13-

23656-CIV, 2014 WL 4388415 (S.D. Fla. Sept. 5, 2014)).

The U.S. District Court for the Northern District of California dismisses with prejudice a consumer’s

first amended complaint, asserting claims based on alleged false advertising by a drug manufacturer,

and holds that the consumer’s claims were barred by the statute of limitations for the asserted claims.

The consumer asserted claims on her own behalf and that of a putative class against a drug

manufacturer for violations of California’s Consumer Legal Remedies Act (“CLRA”), Unfair

Competition Law (“UCL”), and False Advertising Law (“FAL”) based on alleged false and

misleading label and advertisements as to the efficacy of the drug for the treatment of depression.

The plaintiff alleged that she specifically saw and relied upon the statements of the drug’s efficacy

and that, had she known it was not effective, she never would have purchased it. She further alleged

that she had ceased taking the brand drug in 2006, but continued to take a generic version of the drug

until June 2008. She alleged that she stopped taking the drug because it did not work for her.

However, she did not file suit until January 2013, more than four years after she admitted to stopping

treatment with the drug. The consumer attempted to rely on the delayed discovery doctrine to toll

the statute of limitations, but she failed to allege that she took any diligent action to discover the

cause of her harm. The court took judicial notice of numerous articles and other media, which were

available to the consumer had she looked, and determined that the consumer had failed to

demonstrate diligence in pursuing her claims, which barred the application of the delayed discovery

doctrine. The court dismissed the case with prejudice, because it had already provided the plaintiff

with an opportunity to amend and specifically warned that if facts demonstrating diligence were not

present in the new complaint, dismissal with prejudice would result. (Plumlee v. Pfizer, Inc., No.

13-CV-00414, 2014 WL 4275519 (N.D. Cal. Aug. 29, 2014)).

The U.S. District Court for the Northern District of California grants, in part, and denies, in part,

defendant Tetley USA, Inc.’s motion to dismiss a second amended consumer class action complaint,

alleging that the tea company falsely advertises its “British Blend Premium Black Tea” and “Green

Tea” products, and more than 80 additional substantially-similar products across nine product lines.

Plaintiff alleges violations of California’s Unfair Competition Law (“UCL”), False Advertising Law

(“FAL”), and Consumers Legal Remedies Act (“CLRA”), asserting that the defendant’s labels do

not comply with federal (Food, Drug & Cosmetics Act (“FDCA”)) and state (Sherman Law) labeling

law. Plaintiff claimed that such violations are, themselves, actionable under the “unlawful” prong of

the UCL, without allegations of deceptions or reliance. Plaintiff separately asserted that the same

violations render the labels false or misleading under the “fraud” or “unfair” prongs of the UCL.

The court ruled that reliance and deception are required elements of all of the plaintiff’s claims under

the UCL because “the predicate unlawfulness is misrepresentation and deception,” i.e., “[t]he federal

and state [food labeling] statutes relied on by Plaintiff prohibit a particular type of consumer

deception, the mislabeling of food products.” The court, therefore, dismissed the plaintiff’s

“unlawful,” strict-liability-type claim (without prejudice). The court also ruled that the plaintiff did

have standing to sue over the non-purchased products because substantial similarity to the purchased

products is sufficient and the plaintiff showed that the various product lines are identical in material

respects (ingredients, manufacturing facility, and challenged labeling statements). The court rejected

the defendant’s express federal preemption and Buckman/Perez implied preemption arguments. The

court ruled that plaintiff is attempting to enforce California’s Sherman Law, not the FDCA, and that

17

the Sherman Law imposes labeling requirements identical to the FDCA. Accordingly, the state-law

claims do not fall within the FDCA’s express preemption provision, which bars certain non-identical

state-law labeling requirements, and are not impliedly preempted as back-door attempts to enforce

the FDCA. The court also rejected the defendant’s argument that the complaint should be dismissed

in favor of the primary jurisdiction of the FDA, ruling that the complaint does not raise issues of first

impression or of particular complexity that requires FDA’s handling. The court found that the

complaint’s allegations satisfied Fed. R. Civ. P 9’s particularity requirement as to challenges to

label-based statements, but struck references to the defendant’s website because the plaintiff did not

allege sufficient facts to support challenges to the website. (De Keczer v. Tetley USA, Inc., No.

5:12cv2409, 2014 WL 4288547 (N.D. Cal. Aug. 28, 2014)).

The U.S. District Court for the District of New Jersey grants the plaintiff’s motion to certify a class

and denies defendant Avis’s Daubert motion to exclude the plaintiff’s expert. Plaintiff sued Avis for

charging consumers 75 cents per rental day to participate in Avis’s “Travel Partner Program,” which

allows consumers to earn frequent flyer and other reward points for car rentals. Plaintiff argued that

Avis’s failure to disclose this fee on his rental confirmation email violated the New Jersey Consumer

Fraud Act. Plaintiff’s expert opined that virtually none of Avis’s customer could have known about

the surcharge. Among other arguments, Avis argued that the expert should have conducted a

survey. However, the court held that she was not required to do so, because she instead reviewed

records of activity on Avis’s website and determined that less than 1% of website visitors clicked the

link where Avis’s disclosures were located. The court also rejected Avis’s arguments that the expert

should have asked consumers if they read their receipts and knew what “FTP SUR” meant, and that,

because many car renters are repeat customers, the expert should have examined website data going

further back than 2009. At best, the court held, Avis’s points go to the weight, not the admissibility,

of the expert’s testimony. The court also held that the expert’s testimony on the surcharge’s

materiality was admissible. To the extent that Avis’s expert’s survey showed that roughly the same

number of consumers opted for the frequent flyer miles whether or not the surcharge was disclosed,

the court held that was a potential basis to impeach the plaintiff’s expert, not to exclude her. As for

the class certification motion, Avis did not challenge the numerosity and commonality prongs, but

argued that the plaintiff’s claim was not typical because he had not argued an injury-in-fact; that

plaintiff and his counsel “may not” meet the adequacy of representation requirement because

plaintiff might have learned from counsel that he was charged for frequent flyer miles; that

individual issues predominated over class issues; and that a class action was not a superior method

for the adjudication of the case. The court rejected all of these arguments. (Schwartz v. Avis Rent a

Car System, LLC, No. 11-cv-4052, 2014 WL 4272018, (D.N.J. Aug. 28, 2014)).

The U.S. District Court for the Northern District of California grants in part and denies in part the

defendant-food manufacturers’ motion to dismiss. Plaintiff filed a purported class action on behalf

of a class of consumers of eight different “Lipton” brand beverage products that she purchased

(“purchased products”) and a class of consumers of 83 different food products sold by the

defendants that she did not purchase (“non-purchased products”). Plaintiff argued that the

defendants’ labeling practices for their food products were unlawful (1) by representing “all natural”

or “natural” when they contain chemical preservatives, synthetic chemicals, added artificial color

and other artificial ingredients; (2) by failing to disclose the presence of chemical preservatives,

artificial flavorings, or artificial added colors; (3) by making nutrient content claims on the labels of

food products that fail to meet the minimum nutritional requirements legally required for the nutrient

content claims being made; (4) by making antioxidant claims on the labels of food products that fail

18

to meet the minimum nutritional requirements legally required for the antioxidant claims being

made; and (5) by making health claims about its products on the defendants’ website that are

prohibited by law. Plaintiff alleged violations of California’s Unfair Competition Law (“UCL”),

False Advertising Law (“FAL”), and Consumers Legal Remedies Act (“CLRA”), and that the

defendant’s conduct was unlawful under the California Sherman Food, Drug, and Cosmetic Law.

Defendant moved to dismiss the plaintiff’s second amended complaint on the grounds that the

plaintiff lacked of standing; the plaintiff failed to state a claim; and that the plaintiff’s state law

claims were preempted. Defendant argued that the plaintiff lacked standing to pursue claims based

on products she did not purchase because she failed to explain how the 83 products with different

labels and ingredients, across different product lines, are “substantially similar” to the eight products

she bought. The court held that the plaintiff failed to allege substantial similarity among the

purchased products and the non-purchased products, noting that the defendants showed in their

motion numerous examples where the products had considerable differences among the labels.

Moreover, the court rejected the plaintiff’s argument that the purchased and non-purchased products

are substantially similar simply because they share an alleged Sherman Law violation. The court

dismissed the plaintiff’s claims involving non-purchased products without prejudice. Defendants

argued that the plaintiff’s causes of action predicated upon state law are preempted by the FDCA.

Defendants contended that the language in federal law explicitly precludes the plaintiff, a private

actor, from enforcing the FDCA and the FDA regulations, and the plaintiff cannot use the Sherman

Law as a way to sidestep preemption. Defendants further argued that such enforcement is expressly

preempted because a judgment in the plaintiff’s favor would impose requirements different from or

in addition to the exhaustive federal laws and regulations. Citing recent California district court

decisions, the court found that, whether the challenged “natural” labels in this case would deceive a

reasonable consumer is not akin to defining FDA policy, but rather a factual determination better left

to triers of fact. The court granted the defendants’ motion to dismiss Plaintiff’s unlawful claims

under the UCL without prejudice because the plaintiff failed to plead reliance on the alleged

“misbranding” violations. The court held that actual reliance applies to claims under the unlawful

prong of the UCL. Plaintiff could not circumvent the reliance requirement by simply pointing to a

regulation or code provision that was violated by the alleged label misrepresentation, summarily

claiming that the product is illegal to sell and therefore negating the need to plead reliance.

However, with respect to the plaintiff’s “fraudulent” prong UCL claims, those claims for nutrient

content, antioxidant content, nutritional value claims, and natural representations are properly pled,

may deceive a reasonable consumer, and are inappropriate to resolve at the motion to dismiss stage.

(Maxwell v. Unilever United States, Inc., No. 5:12-CV-01736, 2014 WL 4275712 (N.D. Cal. Aug.

28, 2014)).

The U.S. District Court for the Eastern District of New York grants defendants, The Estee Lauder

Companies Inc.’s, Estee Lauder, LLC’s, and Estee Lauder Inc.’s (collectively, “Estee Lauder”)

motion to dismiss the plaintiff’s amended class action complaint, alleging violation of Sections 349

and 350 of the New York General Business Law, breach of express warranty and the implied

warranty of merchantability, and unjust enrichment, seeking both injunctive relief and damages.

Plaintiff’s allegations arose out of Estee Lauder’s marketing of five cosmetic products from its

“Advanced Night Repair Collection.” Plaintiff alleges that Estee Lauder made false efficacy claims

and misrepresented the products in their advertisements. The court dismissed her claims for

injunctive relief because the plaintiff had not alleged a sufficient future injury to establish standing

to assert such claims. The court, then, dismissed New York General Business Law claims and the

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breach of warranty claims because the plaintiff failed to plead with the requisite plausibility that any

of the defendants’ claims were materially misleading, and failed to provide the defendants with

timely notice of the alleged breach of warranty claims. The court also dismissed the unjust

enrichment claim and noted that “[w]here an express contract is conceded, as it is here, a plaintiff

may not proceed also on a quasi-contract theory because it is foreclosed by the very existence of the

express contract.” (Tomasine v. Estee Lauder Cos. Inc., No. 13-CV-4692, 2014 WL 4244329

(E.D.N.Y. Aug. 26, 2014)).

The U.S. District Court for the Southern District of California, in a consumer fraud class action

brought under California law, grants the class plaintiff’s motion to withdraw and to substitute

another class member as class representative. The court observed that the defendant’s objections to

the plaintiff’s substitution motion were based mostly on its view that the case is “a sham lawsuit of

sorts, driven more by lawyers’ interest in attorney’s fees than meaningful relief for consumers.”

Although the court acknowledged that this belief was a “standard view of cases of this kind,” it

nonetheless, permitted substitution of the new class representative on the grounds that the original

plaintiff sought substitution diligently and without undue delay upon learning he would need to

move away from the district to care for a sick relative. Also, the court determined that the defendant

would not be prejudiced by the substitution because it presented no threat of negating work that had

already been done in the case or giving the plaintiff a tactical advantage. (Nilon v. Natural-

Immunogenics Corp., No. 3:12-cv-930, 2014 WL 4197555 (S.D. Cal. Aug. 22, 2014)).

The U.S. Court of Appeals for the Seventh Circuit reverses the district court’s decision granting

summary judgment to defendant Sturm Foods, Inc., and denying class certification. Defendant

introduced a coffee product to compete directly with the “K-Cup,” a small plastic cartridge

containing fresh coffee grounds designed to be used exclusively with Keurig coffee machines.

Keurig held a patent over the K-Cup’s filter technology until 2012, when the patent expired and

similar products began entering the market. Dissimilar to the K-Cup, the defendant’s product

contained instant coffee, which was marketed as “naturally roasted soluble and microground Arabica

coffee.” Plaintiffs claimed this representation was deceptive and in violation of the consumer

protection laws of a number of states. In reversing the district court’s denial of class certification,

the Seventh Circuit found that the lower court failed to recognize the question common to the claims

of all putative class members: whether the defendant’s packaging was likely to mislead a reasonable

consumer. Further, the lower court had applied too strict a test when it considered whether common

questions predominate over individual questions. In reversing the award of summary judgment, the

Seventh Circuit held that the lower court failed to take the disputed facts in the light most favorable

to the plaintiffs, the non-moving parties, and found that its own de novo review indicated that there

were genuine questions of material fact regarding whether the product packaging was likely to

mislead a reasonable consumer. (Suchanek v. Sturm Foods, Inc., No. 13-3843, 2014 WL 4116493

(7th Cir. Aug. 22, 2014)).

The U.S. District Court for the Northern District of California grants in part and denies in part

defendant Coca-Cola Company’s motion to dismiss a consumer class action complaint, which

alleged that the defendant mislabeled its Coca-Cola beverage product in violation of, among other

things, California’s Unfair Competition Law, False Advertising Law, and Consumers Legal

Remedies Act. Plaintiffs challenged the ingredients label on the defendant’s Coca-Cola product,

claiming the ingredient “phosphoric acid” was falsely labeled in accordance with applicable

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regulations. With respect to the false advertising claims, the court held that the plaintiffs had

sufficiently pled that they did not know that phosphoric acid was an artificial flavor or a chemical

preservative, that they would not have purchased the product had they known, and that they had

relied on the product labels. Therefore, the court denied the defendant’s motion to dismiss as to the

false advertising claims. (Engurasoff v. Coca-Cola Co., No. 4:13cv3990, 2014 WL 4145409 (N.D.

Cal. Aug. 21, 2014)).

The U.S. District Court in the Southern District of Ohio grants in part and denies in part defendant

Jos. A. Bank Clothiers’ motion to dismiss a consumer class action complaint brought under the Ohio

Consumer Sales Practices Act. Plaintiffs purchased a suit at the “regular price” of $795, based on

the advertisement at the time that stated they each would receive three “free suits” after their original

purchase. Plaintiffs alleged that the “regular price” was inflated high above the usual price paid for

the defendant’s suits. The court held these factual allegations were sufficient to properly assert a

claim under the Ohio Consumer Sales Practices Act. However, the court also determined the claims

could not proceed as a class because the complaint did not include factual allegations to support

actual damages. Plaintiffs’ pleading based damages on the loss of the benefit of the advertised

bargain; however, their pleadings were insufficient because they lacked a claim that the products

obtained were worth less than the paid amount, or that four of the defendants’ suits were worth less

than $795 combined. (Johnson v. Jos. A. Bank Clothiers, Inc., No. 2:13-CV-756, 2014 WL 4129576

(S.D. Ohio Aug. 19, 2014)).

The U.S. District Court for the Northern District of California grants in part and denies in part

defendant Frito-Lay North America Inc.’s motion to dismiss a class action lawsuit asserting claims

under California’s Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies

Act. Plaintiffs claimed that the labeling of three varieties of “Rold Gold Pretzels” contained false

and misleading statements that the products were “Made with All Natural Ingredients” and were

“LOW FAT” or “FAT FREE” (and, thus, allegedly healthy – when they actually contained a large

amount of sodium). Plaintiffs also claimed that the products were misbranded (and, therefore,

unsaleable and “legally worthless) because they failed to include the statement “See nutrition

information for [sodium] content,” despite containing more than 480 milligrams of sodium per

serving. Frito-Lay moved to dismiss on multiple grounds, including that (1) the named plaintiffs

lacked standing as to products they had not purchased; (2) plaintiffs had no standing to seek

injunctive relief as to statements that had been removed from package labeling before the lawsuit

was filed; (3) plaintiffs sought to apply California law to products bought outside California from a

Texas company; (4) plaintiffs’ misbranding claims failed to allege reliance and injury sufficiently;

and (5) plaintiffs’ other claims failed to sufficiently allege deception and reasonable reliance. The

court found that the purchased and unpurchased products were substantially similar, and, thus, the

plaintiffs had standing as to all three varieties of pretzels. They also had standing to seek injunctive

relief to the extent that Frito-Lay continued to sell its existing stock of product with the old labeling.

Because the plaintiffs had alleged a nationwide class and had not alleged a California-specific

subclass, however, the court dismissed all of their claims without prejudice and with leave to amend

because California law did not apply extraterritorially. As to the misbranding claim, the plaintiffs

argued that they did not need to plead reliance except for a customer’s general reliance that the

products they purchase are saleable. The court disagreed, holding that the plaintiffs were required to

plead actual reliance, and dismissed the claim with prejudice (but gave them the opportunity to plead

alternate theories of reliance). The court dismissed with leave to amend the allegations regarding the

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“all-natural” claims because the plaintiffs failed to allege with the specificity required under Fed. R.

Civ. P. 9(b) why the ingredients were “unnatural.” As for the “LOW FAT” and “FAT FREE”

claims, the court agreed with Frito-Lay that it was implausible that consumers who read labels

carefully – as plaintiffs alleged they did – would take “LOW FAT” or “FAT FREE” to make a

statement about sodium content, particularly when the sodium content was clearly listed on the

ingredients panel and pretzels with visible salt crystals could be seen through the clear packaging.

Those claims were also dismissed with leave to amend. Figy v. Frito-Lay North America, Inc., ---

F.Supp.2d ----, No. 13-cv-3988, 2014 WL 3953755 (N.D. Cal., Aug. 12, 2014),

The U.S. District Court for the Southern District of California grants defendant Kashi Company’s

motion and dismisses the food false advertising action without prejudice pursuant to the primary

jurisdiction of the U.S. Food and Drug Administration. Plaintiffs filed a nationwide consumer class

action under California and New Jersey consumer protection and warranty laws against the

defendant-food manufacturer, challenging more than 75 of its products as being misbranded because

the products listed evaporated cane juice (“ECJ”) as an ingredient. Plaintiffs alleged that ECJ is

ordinary sugar and that Kashi uses the name ECJ to conceal the presence of sugar in the products.

Defendant argued that the precise issue – i.e., whether ECJ is the common or usual name for the

sugar cane based sweetener ingredient – currently is pending before FDA as the subject of draft

guidance. The FDA draft guidance was issued in October 2009 and, in March 2014, FDA published

notice inviting additional comments and confirming that it has not reached a final decision on the

issue, but intends to do so. Defendant moved to dismiss or stay the action pursuant to the FDA’s

primary jurisdiction over the issue. Plaintiffs argued that the 2009 draft guidance, as well as several

subsequent FDA Warning Letters, clearly indicate the FDA’s rejection of the name ECJ, and neither

the pending draft guidance proceeding nor the March 2014 notice re-opening the comment period

changes that. The court disagreed, ruling that food labeling is within the FDA’s special competence,

“a determination as to the propriety of using the term ‘evaporated cane juice’ . . . involves highly

technical considerations,” FDA is currently and actively engaged in that very issue, and “FDA’s

articulation of its considered view on this matter will undoubtedly affect issues being litigated in this

action.” The court found it compelling that “[a]llowing the FDA to resolve this matter in the first

instance would permit the Court to benefit from the agency’s technical expertise and would also

provide for uniformity in administration of the agency’s food labeling requirements.” Plaintiffs’

complaint that the FDA has not set a time-table for a decision was rejected in light of the FDA’s

March 2014 notice that indicates that the FDA will issue the guidance in final form consistent with

its regulations. Finally, the court rejected the plaintiffs’ argument that the U.S. Supreme Court’s

recent decision in Pom Wonderful LLC v. Coca-Cola Co. disapproves of deferring to FDA on the

issues of whether a food label is deceptive. “Pom Wonderful makes no mention of the primary

jurisdiction doctrine and stands principally for the proposition that Lanham Act unfair competition

claims brought by a competitor are not precluded by the regulatory scheme of the [FDCA].”

(Saubers v. Kashi Company, -- F. Supp. 2d --, No. 3:13cv899, 2014 WL 3908595 (S.D. Cal. Aug.

11, 2014)).

The U.S. District Court for the Northern District of California, in a nationwide consumer class action

brought under the California consumer protection statutes, denies defendant Trader Joe’s motion to

strike the plaintiffs’ nationwide class claims; denies the defendant’s motion for interlocutory appeal

on the issue of the plaintiffs’ standing to assert claims based on products they did not purchase; and

stays the litigation on primary jurisdiction grounds pending an FDA decision regarding the use of the

term “evaporate cane juice.” With respect to the defendant’s motion to strike, the court ruled that,

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despite substantial differences among state consumer protection laws, it was at least plausible for the

plaintiffs to demonstrate a suitable and realistic plan for trial of nationwide class claims. With

respect to the interlocutory appeal issue, the court determined that the key questions regarding the

products that the plaintiffs did purchase were the same as the questions regarding the products they

did not purchase, so an interlocutory decision by the Ninth Circuit would not materially advance the

lawsuit. Finally, with respect to the litigation stay, the court observed that the FDA had taken up the

issue of “evaporated cane juice” in March 2014, so the court determined that it made “sense to stay

the plaintiffs’ claims to see if the agency does, in fact, issue final guidance on the issue.” (Gitson v.

Trade Joe’s Co., No. 13-cv-1333, 2014 WL 3933921 (N.D. Cal. Aug. 8, 2014)).

The U.S. District Court for the Northern District of California grants in part and denies in part, he

defendant’s motion to dismiss and motion to strike portions of the complaint. Plaintiff filed a class

action complaint, alleging that defendants Kimberly-Clark Corporation, Kimberly-Clark Worldwide,

Inc., and Kimberly-Clark Global Sales LLC falsely advertised their “Cottonelle® Fresh Care

Flushable Wipes and Cleansing Cloths,” “Scott Naturals® Flushable Moist Wipes,” “Huggies®

Pull-Ups® Flushable Moist Wipes,” and “U by Kotex® Refresh” as “flushable,” when in fact, they

are not. Specifically, the plaintiff claimed that “flushable” should be defined as “suitable for

disposal by flushing down a toilet.” Plaintiff asserted that the defendants’ products are not

“flushable” because, after they are flushed down a toilet, they fail to “disperse,” with the result being

that they may clog municipal sewer systems and septic systems, and/or damage pipes and sewage

pumps. Among other things, the plaintiff pleaded violations of California’s Consumer Legal

Remedies Act (“CLRA”), False Advertising Law (“FAL”), and Unfair Competition Law (“UCL”),

and common law fraud, deceit, and/or misrepresentation. Defendants moved to dismiss the

complaint pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6), and sought an order striking certain

allegations in the complaint as immaterial, impertinent, or irrelevant. Defendants argued that the

complaint should be dismissed for lack of subject matter jurisdiction because the plaintiff failed to

establish Article III and statutory standing. Defendants asserted that the plaintiff did not allege an

injury-in-fact, and that she lacked standing either to state a claim for prospective injunctive relief, or

to bring a class action relating to products that she did not allege she purchased. Defendants also

argued that the complaint should be dismissed for failure to state a claim, because it lacks the degree

of particularity required by Rule 9(b), and failed to plead facts sufficient to show an actionable

omission. Although the plaintiff did not allege that she actually suffered any damage to her pipes,

septic system, or sewage system, the court held that she had standing to bring her false advertising

claims because she alleged that she suffered economic harm in that she would not have paid a

premium for the wipes had the defendants not misrepresented the product as “flushable.” Noting

that the facts alleged in the complaint as to whether the plaintiff intended to purchase the product in

the future were “sketchy,” the court found that the plaintiff lacked standing to seek prospective

injunctive relief because she failed to allege facts showing that she intends to purchase the “same

product” at issue in the future. Allegations that a defendant’s conduct will subject unnamed class

members to the alleged harm is insufficient to establish standing to seek injunctive relief on behalf of

the class. Finally, with respect to whether the plaintiff could act as a class representative for

products she did not purchase, the court denied that part of the motion without prejudice to raising

the issue again at the class certification stage. The court noted that district courts in the Ninth

Circuit are split on the question whether a plaintiff has standing to sue on behalf of purchasers of a

product that the plaintiff himself/herself did not purchase. In general, a plaintiff may bring claims

regarding products that she did not purchase where “common misrepresentations are the crux of [the

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plaintiff’s] case.” The court, however, agreed with the defendants that the plaintiff failed to plead

the requisite “who, what, when, where, and how” of the alleged misconduct by failing to plead the

specific advertisements she viewed and facts showing how she came to believe that the wipes were

not “flushable.” The court denied the defendants’ motion to dismiss the plaintiff’s omissions claim.

Because of the dispute regarding the definition of “flushable,” the court was unable to determine

whether the omissions claim was or was not viable at the pleading stage of the litigation. Lastly, the

court denied the defendants’ motion to strike portions of the complaint with the exception of the

allegations regarding on-line reports/articles and websites regarding problems caused by disposable

or “flushable” wipes at various municipal waste-water treatment plants and sewage systems.

(Davidson v. Kimberly-Clark Corp., No. CV-14-1783, 2014 WL 3919857 (N.D. Cal. Aug. 8, 2014)).

The U.S. Judicial Panel on Multidistrict Litigation grants defendant Coca-Cola’s request for

centralization of six actions, which each concern the alleged deceptive labeling of “Coca-Cola” soft

drink (particularly regarding the identification of phosphoric acid on the labels), in the Northern

District of California. Plaintiffs opposed the request for centralization on the grounds that the

allegations of each action were fairly straightforward. Alternatively, the plaintiffs requested that the

Northern District of Illinois or the Eastern District of New York, which each had one case pending,

be chosen for centralization. In ordering that the cases be centralized, the Panel found that the

actions, if they proceeded to discovery, could involve “numerous and complex issues of fact” and

stated that the cases “resemble[d]” food misbranding litigation regarding whether a product is

“natural,” which the panel had transferred in the past. In choosing the Northern District of

California, the Panel stated that it was an appropriate court because four of the six cases were

pending there and Judge Jeffrey S. White, who was presiding over those four actions, is well-versed

in multidistrict litigation. (In re Coca-Cola Prods. Mktg. and Sales Practices Litig., MDL No. 2555,

2014 WL 3896027 (U.S. Jud. Pan. Mult. Lit. Aug. 7, 2014)).

The U.S. Court of Appeal for the Seventh Circuit affirms the dismissal with prejudice of an Illinois

consumer’s class action claims alleging that Jos. A. Bank violated the Illinois consumer protection

statutes by advertising the normal retail prices of its products as temporary price reductions. The

court agreed with the district court’s finding that the plaintiff’s claims “sounded in fraud,” and, thus,

were to subject to Fed. R. Civ. P. 9(b)’s heightened pleading requirement even though they were cast

as “unfair practices” claims. The court also agreed that the plaintiff failed to identify adequately the

advertisements at issue by alleging only that “merchandise was offered at ‘sales prices,’” and failed

to allege how he subjectively learned that the sales were not temporary price reductions. Apart from

the truthfulness of the advertising at issue, the court also concluded that the plaintiff failed to allege

actual damages in the form of paying more than the value of the merchandise received or being able

to find cheaper options elsewhere. (Camasta v. Jos. A. Bank Clothiers, Inc., No. 13-2831, 2014 WL

3765935 (7th Cir. Aug. 1, 2014)).

The U.S. District Court for the Southern District of California grants in part and denies in part

defendant ConAgra Foods, Inc.’s motion to dismiss the plaintiff’s class action complaint arising out

of the marketing for the defendant’s “Chef Boyardee Mac & Cheese” product. Plaintiff alleged that

the defendant misrepresented that the product contained “No MSG” or had “No MSG Added” in

violation of California’s Consumers Legal Remedies Act, False Advertising Law, Unfair

Competition Law, and common law express warranty. In its motion to dismiss, the defendant argued

that the plaintiff’s state claims were preempted entirely by the FDA’s issuance on November 19,

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2012, of an informal ruling on MSG labeling. In granting the defendant’s motion to dismiss in part,

the court found the state labeling requirements mirrored the FDA regulations after November 19,

2012. Therefore, the plaintiff’s claims predating November 19, 2012 were preempted by the FDA,

but the claims post-dating that time period were not. (Peterson v. ConAgra Foods, Inc., No. 13-CV-

3158, 2014 WL 3741853 (S.D. Cal. July 29, 2014)).

The U.S. District Court for the Northern District of California denies a motion for class certification

in a case involving allegedly false statements Clorox made about its “Fresh Step” cat litter.

Plaintiffs alleged that Clorox made false statements that Fresh Step, which uses carbon instead of

baking soda, is more effective at eliminating odors than cat litters that use baking soda. The court

denied the motion for class certification, finding that the class was not ascertainable and common

questions did not predominate, as required by Fed. R. Civ. P. 23(b)(3). The court also found that the

plaintiffs were required provide sufficient evidence that retailer records could be be used to identify

the class but failed to do so; consumer affidavits alone are insufficient to identify members of the

class. In addition, the court found that individual questions predominated, specifically whether

members of the proposed class saw and relied upon the allegedly misleading claims. Finally, the

court found that the problems with ascertainability and predominance would affect superiority, by

rendering the management of the class extremely complicated. (In re Clorox Consumer Litig., 12-

00280, 2014 WL 3728469 (N.D. Cal. July 28, 2014)).

The U.S. District Court for the Southern District of California grants defendant Tristar’s motion to

dismiss the plaintiff’s claims for injunctive relief. Plaintiff filed a putative class action complaint,

alleging that Tristar marketed and distributed its “Flex-Able Hose” product in California with claims

that the product is a “durable and strong garden hose.” Plaintiff alleged that the Flex-Able Hose

packaging and infomercial touted the product as having “a tough double construction,” and being

“designed like a fire-hose for speed, storage and strength, to last a really long time.” Plaintiff

alleged that Tristar’s advertising claims are false because Tristar concealed the existence and nature

of inherent defects that the hose quickly leaks and ruptures. Plaintiff further alleged that, had she

known that the Flex-Able Hose was a flimsy hose with a propensity to leak and rupture, she would

not have purchased the product. Plaintiff brought claims for, among other things, violations of

California’s Consumers Legal Remedies Act, Unfair Competition Law (“UCL”), and False

Advertising Law, and fraud by omission. Tristar argued that the plaintiff lacked Article III standing

to pursue her injunctive relief claims because there is no threat of a repeated injury. Plaintiff

opposed the motion, arguing that recent California district court decisions have held that plaintiffs in

false advertising class actions retain standing to pursue injunctive relief so long as the products

continue to be marketed deceptively and sold by the defendant. Those courts reasoned that to hold

otherwise would severely undermine the objective of California’s consumer protection laws to

protect both consumers and competitors by promoting fair competition in commercial markets for

goods and services. The court agreed with Tristar, reasoning that the Supreme Court and Ninth

Circuit are clear that, for a plaintiff to have standing to pursue injunctive relief, there must be a “real

and immediate threat of repeated injury.” According to the court, other cases that purport to create a

public-policy exception to the standing requirement, that exception does not square with Article III's

mandate. Here, the plaintiff failed to allege any facts that plausibly suggest that her alleged injury

will occur again. Plaintiff emphasized multiple times in her complaint that, had she known the

quality of the product – that it is allegedly prone to leaks and ruptures – she would not have

purchased the Flex-Able Hose. Given those allegations, the plaintiff was determined to lack Article

III standing to pursue her claims for injunctive relief. Therefore, the court dismissed the claims for

25

injunctive relief without prejudice because it is possible that another plaintiff could be added that

would have standing to pursue injunctive relief. The court, however, denied the plaintiff’s request to

remand her claims for injunctive relief to state court because she failed to adequately justify such

relief, and the plaintiff could commence a separate action for injunctive relief in state court in any

event. (Burns v. Tristar Prods., Inc., No. 14-CV-749, 2014 WL 3728115 (S.D. Cal. July 25, 2014)).

The U.S. District Court for the Middle District of Florida grants in part and denies in part defendant

Chattam, Inc.’s motion to dismiss a putative Florida-only consumer class action relating to

mouthwash that was advertised as being able to “rebuild[] tooth enamel.” Plaintiff claimed that the

advertising campaign violated various Florida consumer protection laws, and state and federal

warranty laws because Fluoride, the main ingredient in the mouthwash, worked by “remineralizing”

teeth rather than rebuilding enable. Defendant argued that customers would not have made a

distinction between the terms “remineralizing” and “rebuilding,” but the court found that argument

to be a factual issue beyond the scope of a motion to dismiss. Further, the court ruled that the

plaintiff has pled plausible alternative theories of recovery, including that the product was valueless

because it was misbranded or that it was worth less than she paid. However, the court dismissed

without prejudice state and federal implied warranty claims because the plaintiff was not in privity

with defendant. (Foster v. Chattem, Inc., No. 6:14cv346, 2014 WL 3687129 (M.D. Fla. July 24,

2014)).

The U.S. District Court for the Western District of Washington denies the plaintiffs’ amended

motion for class certification. Plaintiffs asserted a single claim for violation of Washington’s

Consumer Protection Act (“CPA”) by defendant, Shea Homes, Inc., for alleged construction defects

in homes at the “Trilogy at Redmond Ridge” housing development, an “affluent” planned

community for persons age 55 and over. Plaintiffs alleged that Shea Homes failed to deliver the

high quality construction it represented in its marketing and promotional materials, and that Shea

Homes failed to disclose its noncompliance with geotechnical engineering requirements, architects’

plans, and building codes. Plaintiffs sought to certify a Fed. R. Civ. P. 23(b)(3) class composed of

“[a]ll persons who purchased homes at Trilogy at Redmond Ridge,” and further divided the class

into subclasses based on different things that were missing from the homes. The court first denied

the plaintiffs and the defendant’s respective motions to strike expert reports and held that “[a]t the

class certification stage, district courts are not required to conduct a full Daubert analysis. Rather

the court must conduct an analysis tailored to whether an expert’s opinion was sufficiently reliable to

admit for the purpose of proving or disproving Rule 23 criteria, such as commonality and

predominance.” The court, then, denied the plaintiffs’ class certification motion, holding that a court

must conduct a rigorous analysis to determine whether the party seeking class certification has

satisfied all the necessary Rule 23 elements before certifying a class. The court analyzed all the Rule

23 elements in this case, and held that plaintiffs met the numerosity, commonality, typicality, and

adequacy requirements, but failed to meet Rule 23(b)(3)’s predominance requirement because

individualized inquiries would be required with respect to the causation and injury prongs of

plaintiffs’ CPA claim. The court explained that, given the substantial variation within the class,

determining damages in this case likely would devolve into as many individualized showings as

there are homes of class members and would fracture the class action into an unmanageable number

of mini-trials. (Blough v. Shea Homes, Inc., No. 2:12-cv-01493, 2014 WL 3694231 (W.D. Wash.

July 23, 2014)).

26

The U.S. District Court for the Southern District of Florida denies the plaintiff’s motion to

reconsider the court’s denial of his motion to certify a nationwide class of purchasers of the

defendant’s weight loss product, “VPX Meltdown,” and a subclass of New York, purchasers against

the product’s manufacturer. The plaintiff argued in support of reconsideration that newly discovered

evidence demonstrated that various retailers may have credit card purchase information, which

would allow the parties to determine the members of the class without resort to evidentiary hearings.

The court rejected this argument because the plaintiff was aware of the fact that the defendant sold

its products through retailers. The court also determined that it did not commit clear error on the

issue of ascertainability, reasoning that under the Eleventh Circuit law, the ascertainability of class

members is dependent upon identification of class members in an administratively feasible manner.

The court also concluded that the plaintiff failed to establish the appropriateness of a New York

subclass because the plaintiff failed to conduct a meaningful analysis of the substantive variations in

state laws as was his burden. The court emphasized that New York law appears to require

individualized inquiries that would weigh against class certification. (Karhu v. Vital Pharms., Inc.,

No. 13-60758-CIV, 2014 WL 3540811 (S. D. Fla. July 17, 2014)).

The U.S. District Court for the Middle District of Pennsylvania grants in part and denies in part the

defendants’ motion to dismiss the plaintiffs’ class action complaint alleging representations about

the peak horsepower and tank capacity of Shop-Vac vacuums. Plaintiffs brought claims for, among

other things, breach of warranty, violation of the Magnuson-Moss Warranty Act, and consumer

fraud. Seeking to dismiss the plaintiffs’ breach of warranty claim, the defendants argued that the

representation of “peak horsepower” was a term of art that referred to the horsepower level achieved

in laboratory conditions, not during actual consumer use, and that use of the term on the packaging

was, therefore, true and standard in the industry. Because that argument relied on information

outside of the pleadings, including the product packaging, of which the court declined to take

judicial notice due to an authenticity dispute, the court held it would be improper to consider such

materials at the motion to dismiss stage. (In re Shop-Vac Mktg. and Sales Practices Litig., No. 4:12-

MD-2380, 2014 WL 3557189 (M.D. Pa. July 17, 2014)).

The U.S. Court of Appeals for the Ninth Circuit affirms the district court’s final settlement approval

in a California consumer class action challenging the truthfulness of advertising for “Nutella”

spread. The final approved settlement created a $550,000 monetary fund for class members,

awarded $900,000 in fees to class counsel, and provided substantial injunctive relief requiring the

defendant to revise its advertising campaign and supply more nutritional information on Nutella’s

label. The Ninth Circuit affirmed the settlement over the objections of three class members who

claimed that notice was inadequate, the injunctive relief did not justify the fee award, and class

counsel failed to represent the class adequately. (In re Ferrero Litig., Nos. 12-56469, 12-56478,

2014 WL 3465685 (9th Cir. July 16, 2014)).

The U.S. District Court for the Northern District of Illinois grants in part and denies in part

defendant Uber Technologies, Inc.’s motion to dismiss plaintiffs-taxi and livery drivers’ class action

complaint, which alleges that Uber violated the Illinois Consumer Fraud and Deceptive Business

Practices Act, and the Illinois Uniform Deceptive Trade Practices Act by misrepresenting its rates

and misidentifying itself as a “transportation company.” In denying the motion, the court found that

plaintiffs had stated a valid claim that Uber misrepresented the cost of its services, the nature of the

gratuity, and its status as a transportation provider. The court granted the motion, however, as it

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related to allegations that Uber violated Chicago Municipal Code provisions regulating taxi and

livery services, finding that under Dial A Car, Inc. v. Transportation, Inc., a plaintiff-livery service

cannot bring a Lanham Act claim against a competing taxicab company when the plaintiff seeks

only to declare the defendant’s conduct illegal under local taxicab ordinances and regulations. With

regard to the allegation that Uber misrepresented its livery fare as being at or below fares charged by

other livery services, the court denied the motion and held that, while Dial A Car bars claims

premised merely on Uber’s illegality, it does not warrant dismissing the allegations of actual

misrepresentations that independently create a cause of action. (Manzo v. Uber Techs., Inc., No. 13

C 2407, 2014 WL 3495401 (N.D. Ill. July 14, 2014)).

The U.S. District Court for the Northern District of Illinois grants defendant snack bar manufacturer

KIND, LLC’s motion to dismiss a consumer class action complaint without prejudice. Plaintiff

alleged that the defendant’s practice of labeling its products as containing “no refined sugar” and

identifying an ingredient as “evaporated cane juice” deceptively hid the fact that the ingredient is

actually sugar. The court granted the defendant’s motion, ruling that the plaintiff did not adequately

allege that she was injured or deceived. The court found it very persuasive that the product labeling

disclosed the sugar content per serving to the gram and that the plaintiff did not allege that she

believed the product had no sugar. Moreover, the court ruled that that it was not plausible that the

plaintiff was deceived given that she did not have an understanding of what evaporated cane juice

was if not a sugar. The court declined to rule at the pleading stage on whether the plaintiff had

standing to sue for products not purchased, and refrained from substantively considering the

defendant’s primary jurisdiction argument. (Ibarrola v. KIND, LLC, No. 3:13cv50377, 2014 WL

3509790 (N.D. Ill. July 14, 2014)).

The U.S. District Court for the District of New Jersey grants, without prejudice, defendant Gerber

Products Company’s motion to dismiss the New Jersey Consumer Fraud Act (“NJCFA”) claim

contained in a third amended consolidated complaint filed in a consumer class action alleging false

advertising relating to baby food products. The court ruled that, under the NJCFA, plaintiffs must

allege specific facts setting forth an ascertainable loss. Plaintiffs attempted to allege an ascertainable

loss by alleging “the full retail price, as well as the difference between the amount paid and the

reasonable value of what Plaintiffs received.” But, because the plaintiffs did not allege that the

product was worthless (nor could they) or that they bought a product they did not want or need, they

were not allowed to rely on the purchase price as the ascertainable loss. And, as to the benefit of the

bargain theory, the plaintiffs failed to allege a specific difference in value between what was

promised and what they received. The difference in price must be specific and certain, and may not

by hypothetical or illusory. Plaintiffs’ allegations failed these requirements. Defendant also moved

to strike plaintiffs’ punitive damages claim brought under the California Consumers Legal Remedies

Act cause of action, but the court ruled that the plaintiffs adequately pleaded the punitive damages

allegations by claiming malice and fraud, though not oppression. (In re Gerber Probiotic Sales

Practices Litig., No. 2:13cv835, 2014 WL 3446667 (D.N.J. July 11, 2104)).

The U.S. Court of Appeals for the Second Circuit affirms the district court’s judgment dismissing

the plaintiffs’ class action complaint for false advertising and related claims. Plaintiffs alleged that

Clinique’s marketing of seven different “Repairwear” skin products containing false and misleading

claims about their efficacy. The Second Circuit affirmed the district court’s dismissal of claims

related to four of the seven products due to a lack of standing because the plaintiffs only bought

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three of the products at issue. In so doing the court rejected the plaintiff’s argument that the court’s

decision in NECA-IBEW Health & Welfare Fund v. Goldman Sachs & Co., 693 F.3d 145, 162 (2d

Cir. 2012) was binding in this case. The NECA court held that the plaintiff-purchasers of securities

could bring claims on behalf of purchasers of other related securities where the allegedly fraudulent

conduct was a “nearly identical misrepresentation[] . . . common to every Certificate’s registration

statement.” Here, the court found that because all seven products had different ingredients and

involved entirely different allegedly false advertising claims, there was no basis for claiming a

“nearly identical misrepresentation” common to all products. The district court’s dismissal of the

plaintiffs’ claims concerning the allegedly false advertising statements on the remaining three

products also was affirmed because the complaint failed to plead them with particularity. The

Second Circuit found that the plaintiffs failed to allege (1) which ingredients in which product lack

the ability to improve skin appearance; (2) that they ever even used the products, let alone as

directed; (3) which statement(s) they allegedly relied on in purchasing which products; and (4) the

benefits they expected to receive but did not. (DiMuro v. Clinique Labs., LLC, No. 13-4551-cv,

2014 WL 3360586 (2d. Cir. July 10, 2014)).

The U.S. District Court for the District of New Jersey, in a class action lawsuit brought by a New

Jersey attorney on behalf of himself and a proposed class under the New Jersey Consumer Fraud

Act, grants in part and denies in part the defendant-dietary supplement manufacturer’s motion for

judgment on the pleadings. The plaintiff accused the defendant of misrepresenting the glucosamine

content of its canine nutritional supplement. The court refused to dismiss the plaintiff’s statutory

fraud claim on the grounds that the plaintiff had adequately alleged a misrepresentation (i.e.,

misstating the amount of chondroitin in the product), an ascertainable loss (i.e., the product had a

measurable amount of chondroitin less than advertised), and a causal connection (i.e., the plaintiff

relied on the chondroitin claim when purchasing the product). In doing so, the court rejected the

defendant’s “collectivized pleading” defense because it found that the plaintiff’s allegations were

sufficient to notify the defendant of the alleged counts. However, the court dismissed without

prejudice the plaintiff’s common law fraud claim for failure to adequately plead the elements of

knowledge and reasonable reliance, and it dismissed with prejudice the plaintiff’s unjust enrichment

claim upon concluding that indirect purchasers cannot bring such claims under New Jersey law. The

court also dismissed with prejudice all claims against the manufacturer’s web designer for lack of

personal jurisdiction because he was a California resident with no contacts in New Jersey. (Hoffman

v. Liquid Health Inc., No. 14-01838, 2014 WL 2999280 (D.N.J. July 2, 2014)).

The U.S. District Court for the Northern District of California denies the plaintiffs’ motion to alter a

judgment insofar as relates to the court’s application of the primary jurisdiction doctrine, but grants

the motion insofar as it seeks to convert the dismissal to a stay. Plaintiffs, on behalf of themselves

and a nationwide consumer class, sued defendant Santa Cruz Natural, a soda and juice manufacturer,

for false advertising under California consumer protections laws based on the defendant’s use of

“evaporated cane juice” as the name of a cane-based sweetener ingredient in its products. Defendant

moved to dismiss on, among other grounds, the primary jurisdiction of the Food and Drug

Administration based on FDA’s ongoing, formal process of issuing guidance as to whether

evaporated cane juice is the common or usual name of the ingredient. On April 2, 2014 – and based

largely on a March 5, 2014 notice by FDA confirming that it was still engaged in its formal review

of the issue – the court granted the defendant’s motion, dismissed the case without prejudice, and

entered judgment on the basis of FDA’s primary jurisdiction. Plaintiffs moved to alter, amend, or be

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relieved from the judgment under Fed. R. Civ. P. 59(e) (correct manifest error and prevent manifest

injustice) and 60(e) (correct a mistake). The court denied the plaintiffs’ motion regarding the

underlying primary jurisdiction ruling, finding that they simply were re-litigating issues considered

(or that could have been considered) in the motion to dismiss proceedings. The court also noted that

multiple similar primary jurisdiction rulings had issued in numerous other evaporated cane juice

cases since the court issued its April 2 order. The court, however, granted the plaintiffs’ request to

convert the dismissal without prejudice to a stay “based on the unique circumstances of th[e] case,

the potential prejudice to plaintiffs, and the apparent lack of prejudice to defendant.” The court

accepted the plaintiffs’ argument that a stay (as opposed to a dismissal without prejudice) was

appropriate because further judicial proceedings were contemplated following the completion of

FDA’s review, and because of the potential that the plaintiffs may confront a statute of limitations

issue if the case were dismissed and they were later forced to re-file it. (Swearingen v. Santa Cruz

Natural Inc., No. 3:13-cv-4291, 2014 WL 2967585, (N.D. Cal. July 1, 2014)).

State Attorneys General Litigation Decisions

The U.S. District Court in the Middle District of Louisiana grants the plaintiff’s motion to remand its

suit brought against numerous pharmaceutical companies asserting violations of the Louisiana

Unfair Trade Practices Act for allegedly marketing false information that caused the submittal of

ineligible and unapproved prescription drugs to the Louisiana Medicaid Agency. Plaintiff, the State

of Louisiana alleged that the defendants intentionally falsified FDA approval information, which

influenced the State’s Medicaid agency to reimburse millions of dollars for unapproved drugs.

Defendants argued removal was proper, claiming federal question jurisdiction was based on the

interpretation of the Food, Drug and Cosmetic Act and Medicaid legislation. The court rejected the

defendants’ argument, placing emphasis on the fact that the plaintiff’s claims were fact specific,

based in state law, and did not give rise to a significant federal issue. Because the defendants did not

establish a dispute based in federal law, remand was proper. (Louisiana v. Abbott Labs., No. 3:13-

CV-00681, 2014 WL 4924329 (M.D. La. Sept. 30, 2014)).

The U.S. District Court in the Middle District of Louisiana grants a motion to remand filed by the

Office of the Louisiana Attorney General. The Attorney General sued defendants Abbott

Laboratories, PharMerica, and Omnicare for deceptive, false, misleading, and fraudulent practices in

the distribution, advertising, and pricing of the prescription drug, “Depakote.” The complaint

alleged that the defendants marketed the drug for non-FDA approved uses that improperly

influenced proscribing doctors, which violated Louisiana’s Medical Assistance Programs Integrity

Law and Louisiana’s Unfair Trade Practices and Consumer Protection Law. After the case was

removed to federal court, the Attorney General sought remand, alleging the suit only sought

judgment in favor of the state under state laws, therefore, federal question jurisdiction was lacking.

The court agreed, finding the mere fact that the court may examine whether the proscribed drug’s

use was supported by federal regulations does not give rise to a federal issue. The court also

determined that diversity jurisdiction was lacking, because the only named plaintiff was the state of

Louisiana, which was not a citizen under the diversity statute. (Caldwell v. Abbott Labs., No. 3:13-

CV-00561, 2014 WL 4726271 (M.D. La. Sept. 23, 2014)).

The U.S. District Court for the Northern District of Illinois denies defendants Alta Colleges and

Westwood College, Inc.s’ motion to dismiss, sever, and remand claims that the State of Illinois

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brought under the Illinois Consumer Fraud and Deceptive Business Practices Act. Plaintiff later

amended its complaint to include a claim under the federal Consumer Financial Protection Act.

Plaintiff alleged that the defendants offered fraudulent loans, misrepresented their accreditations, and

misled students by exaggerating future employment prospects. The court denied the defendants’

motion to dismiss, finding the case was sufficiently pled in the initial complaint, and the state court

applied the appropriate heightened pleading standard. Although the defendants argued that the state

and federal claims were separate and distinct, the court continued to exercise supplement jurisdiction

over the state claims because the actions involved the same transactions and it was more efficient to

litigate them together. Even though the case addresses the novel issue of whether extending loans to

borrowers without determining their ability to pay is an unfair practice under the state act, this alone

was insufficient to deny supplemental jurisdiction. (Illinois v. Alta Colleges, Inc., No. 14-C-3786,

2014 WL 4377579 (N.D. Ill. Sept. 4, 1014)).

The U.S. District Court for the Northern District of Indiana approves the magistrate judge’s report

and remands to Louisiana state court an action in which the Louisiana Attorney General alleged that

defendant Pfizer engaged in false, misleading, unfair, and deceptive acts in marketing “Zoloft,” an

antidepressant. The State alleged that Pfizer deceptively concealed test results regarding Zoloft’s

efficacy. Pfizer argued that remand was improper because Congress gave federal courts jurisdiction

over FDA decisions regarding the efficacy of prescription drugs, and the State’s claims raise

substantial, disputed federal issues concerning the FDA’s approval of Zoloft as effective for treating

depression. Pfizer argued that the federal Food Drug and Cosmetic Act (“FDCA”) preempted state

law; the court found that there was no complete preemption under the FDCA, because the FDCA

does not contain a civil enforcement provision. Thus, the court did not have subject matter

jurisdiction over the action under the federal question statute. (Louisiana v. Pfizer, Inc., 3:13-CV-

00727, 2014 WL 3541057 (N.D. Ind. July 17, 2014)).

Federal Trade Commission (FTC) Litigation Decisions

The U.S. District Court for the District of Columbia grants in part and denies in part FTC’s motion

for summary judgment in an action brought by a group of charities under the Freedom of

Information Act (“FOIA”) to compel disclosure of consumer complaint information held in the

FTC’s “Consumer Sentinel Network” database for the stated purpose of converting the database into

a publicly-accessible consumer review tool. Prior to filing suit, the charities had submitted and

appealed three separate FOIA requests, which the FTC mostly denied. Before the district court, the

charities contended that the FTC should be forced to produce the withheld information because

disclosure of the Consumer Sentinel database would educate consumers about businesses they might

patronize, would allow businesses to identify and correct possible unlawful practices, and would

permit the public to monitor and verify the effectiveness of the FTC’s consumer protection efforts

and statistical conclusions. In response, the FTC argued that it correctly denied the charities’

requests under FOIA Exemptions 6 and 7(C), which bar disclosure of personal information that

would constitute an “unwarranted invasion of personal privacy.” According to the FTC, the data

fields requested were likely to contain personal identifying information because consumers often

mistakenly insert personal information about themselves into “free form” data fields or include

information about alleged individual wrongdoers, as opposed to corporate wrongdoers, when

describing alleged conduct. However, the FTC argued it could not realistically redact the exempt

personal information because manual redaction of the roughly 20 million complaints in the

Consumer Sentinel database would take approximately 8,000 hours of labor, thereby imposing an

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undue burden on the agency. The court granted summary judgment in the FTC’s favor based on

undisputed evidence that the information sought was likely to contain exempt personal information

and that manual redaction would be unduly burdensome for the agency. However, in so doing, the

court observed that it would have likely ordered the FTC to simply redact the exempt information if

the charities had sought disclosure of a smaller subset of Consumer Sentinel complaints. Finally, the

FTC granted summary judgment in the charities’ favor with respect to disclosure of the

complainants’ zip code information. (Ayuda, Inc. v. FTC, -- F. Supp. 3d --, No. CV 13-1266, 2014

WL 4829574 (D.D.C. Sept. 30, 2014)).

The U.S. District Court for the Central District of California grants the United States’ motion for

summary judgment on its complaint against Zaken Corporation, related entities, and its president,

Tiran Zaken, for misleading consumers concerning Zaken’s “quick-sell” liquidation program. Zaken

promised customers who wanted to work at home that they could make $4,000 by purchasing

defendants’ quick-sell liquidation kit for $148.00. The representations included assurances that an

average consumer would make $3,000-$6,000 by working two-to-four hours a week. Zaken

promised to repurchase merchandise that consumers purchased by using Zaken’s sales program.

Over 110,000 consumers purchased the $148.00 kits form Zaken from 2003 to 2013 and many

consumers purchased additional services from the defendants. Consumers spent about $25,666,437

buying services from Zaken. Unfortunately, Zaken’s estimates of sales for customers proved to be

somewhat optimistic. Ninety-nine point eight percent (99.8%) of all customers never made any

sales, and less than 9,000 received refunds. The court held that the defendants’ conduct was a

violation of the FTC’s Business Opportunities Rule, 16 C.F.R. § 437.0, which had been amended in

2012 to apply to deceptive home sales schemes even if certain costs was not imposed by the seller.

The court held that the advertising of the sales scheme violated the Business Opportunity Rule and

Section 5(a) of the FTC Act. The court held that consumers only could earn money from Zaken, so

the rule applied, and alternatively, Zaken was the sole outlet to resell the merchandise, or at the very

least, the defendants promised that they would provide outlets to consumers. The earnings’ claims

were held to be deceptive. Regarding relief, the court ordered the defendants to pay more than

$25,000,000 which was based on gross sales minus refunds or commissions earned by consumers.

The court held that the Government need only provide a reasonable estimate of consumer injury and,

then, the burden shifted to the defendants to show that the amount should be reduced. Based on the

long term misconduct of Zaken and his lack of remorse, the court entered a lifetime ban prohibiting

Zaken from marketing work at home business opportunities. (United States v. Zaken Corp., No. CV

12-09631, 2014 WL 4666965 (C.D. Cal. Sept. 18, 2014)).

The U.S. Court of Appeals for the Sixth Circuit affirms a summary judgment order in favor of the

FTC in a case filed against James Benhaim and Daniel Michaels, and a series of corporations that

they controlled. The Sixth Circuit found that the defendants’ statements to consumers with serious

debt problems about their association with lenders and/or the government, as well as other

statements concerning the defendants’ ability to obtain significant debt reduction were misleading.

Notably, the Sixth Circuit formally adopted the “common enterprise” theory of liability against the

defendants. Benhaim and Michaels operated a series of interrelated Canadian and American entities

that were used to solicit consumers in debt by “cold calls” in order to sell debt relief services. The

district court had found that the defendants (1) misrepresented their relationship with lenders; (2)

falsely suggested that the lenders could reduce their debt by 50% to 70%; (3) claimed that their fees

were only nominal; and (4) instructed debtors not to speak to creditors, but instead, stop making

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payments to the creditor who then would be forced to negotiate. The defendants told consumers to

send them the payments and claimed that they would retain only a small percentage of these funds

for fees for their services. Defendants eventually sent consumers a contract that more accurately

described their services and their fees. The defendants also failed to notify consumers that their

contracts would be assigned to third-parties who would charge additional fees. The Sixth Circuit

held that the record supported the trial court’s order granting the FTC’s motion for summary

judgment and the defendants’ conduct in misrepresenting their services was sufficient to find

liability under Section 5 of the FTC Act. Further, the Sixth Circuit held that the defendants violated

the Telemarketing Sales Rule’s “Do Not Call registry” provision by failing to purchase the federal

Do Not Call list. The court also concluded that the defendants’ violated the MARS (Mortgage

Service Relief Services) Rules (1) by telling consumers not to communicate with creditors; (2)

misrepresenting results; (3) misrepresenting the defendants’ affiliations; and (4) obtaining

compensation prior to execution of a written contract. The Sixth Circuit found that a subsequent

contract that more accurately described the defendants’ services was not a defense to the FTC’s

allegations. The defendants, first, were found jointly and severally liable because they were on

notice of the deceptive acts, and the statements were in fact misleading. The fact that they received

complaints established their knowledge of the defendant-corporation’s conduct. Alternatively, the

Sixth Circuit found the defendants liable under the “Common Enterprise Doctrine,” which requires

proof of a structure of integrated business entities that carry on the challenged acts and practices.

(FTC v. E.M.A. Nationwide, Inc., No. 13-4169, 2014 WL 4401247 (6th Cir. Sept. 8, 2014)).

The U.S. District Court for the Western District of Oklahoma grants the FTC’s Motion for the Entry

of a Preliminary Injunction and Asset Freeze against an Oklahoma corporation, and two current

officers of Your Yellow Book, Inc. The FTC alleged that the defendants made false representations

to businesses by sending “proposals” to provide a yellow book Internet service that were deceptively

drafted to appear to be an invoice for services already rendered. The FTC previously had obtained

an ex parte TRO and asset freeze. The allegations against the defendants included

misrepresentations of (1) a pre-existing business relationship, (2) a previous agreement to purchase

the listings, and (3) money owed to defendants. The court found that the defendants had adopted a

new solicitation that used the term “current list information” and also stated “total amount to be

paid” that “could be cancelled without any penalty, except for pro rata payment for services

rendered,” suggesting that a prior agreement existed and services already had been provided. The

court characterized the defendants’ collection efforts “as crossing into the realm of the outrageous,”

based on the affidavits of businesses that they were threatened with collection efforts for non-

existent debt. The court entered a preliminary injunction prohibiting future deceptive or unfair

conduct, requiring that the defendants post information about the FTC lawsuit on the YYB’s

website, and ordering third parties not to transfer assets in which the defendants had a beneficial

interest. (FTC v. Your Yellow book, Inc., No. CIV-14-786-D, 2014 WL 4187012 (W.D. Okla. Aug.

21, 2014)).

The U.S. Court of Appeals for the Second Circuit reverses the order of the district court denying in

part the FTC's motion for contempt damages against defendant BlueHippo Funding LLC. In 2008,

the FTC brought suit against the credit company, alleging that the company failed to disclose

information about its return and store credit policy to customers who purchased computers and other

electronic products in violation of Section 5 of the FTC Act. The parties entered into a consent order

to settle the claims, after which the company continued to deceive customers about its policies. In

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July 2010, the district court found the defendant in contempt of the consent order, but refused the

FTC’s request for over $14 million in contempt damages, an amount equal to the defendants’ gross

receipts. On appeal, the Second Circuit reversed the district court’s damages order, holding that the

baseline for assessing contempt damages was gross sales. The court held that the FTC was entitled

to a presumption that consumers relied on the defendants’ representations and omissions when

deciding to purchase the defendant’s products,. (FTC v. BlueHippo Funding, LLC, No. 11-374, 2014

WL 3907017 (2d Cir. Aug. 12, 2014)).

The U.S. District Court for the Eastern District of New York affirms a magistrate’s report and

recommendation, which recommended entry of a default judgment and a permanent injunction in a

case brought by the FTC against The Cuban Exchange, Inc., and the owner and an officer of the

company, Suhayaylee Rivera. The FTC charged the defendants with violations of Section 5(a) of

the FTC Act and the Telemarketing Sales Rule (“TSR”) by lying to consumers in order to obtain

confidential financial information. Specifically, the defendant advertised on the Internet, and made

robocalls to consumers with falsified caller I.D. information to make it appear that the calls came

from the FTC itself. (This last sentence is not a misprint.) The defendants misled consumers by

indicating that they were eligible for consumer redress from the FTC and, in order to expedite

receipt of a refund, the consumers should supply their confidential financial information. In fact, the

consumers were not eligible for any redress and the defendants had no connection with the FTC.

The court entered the FTC’s proposed injunction, reasoning that when a default is entered, all well-

pleaded allegations in the complaint pertaining to liability are deemed admitted. The magistrate

judge also concluded that the compliance monitoring provisions were similar to those that had been

included in similar circumstances by the courts in the Second Circuit. (FTC v. Cuban Exchange,

Inc., No. 12-CV-5890, 2014 WL 3756358 (E.D.N.Y. July 30, 2014)).

The U.S. District Court for the Western District of Washington grants in part the FTC’s motion for a

temporary restraining order. The FTC sued four entities and the owner alleging that the defendants

were misleading purchasers by asserting that their companies previously had agreed to advertise in

the defendants’ business directory, and through unsolicited telephone calls, told customers that they

were simply confirming their business addresses and contact information. Then defendants would

attempt to bill the “customers” at least $479.95, and sometimes threaten suit, using the recordings to

induce the “customers” to pay for the ad placement in the business directory. The court granted the

FTC’s motion for a temporary restraining order, but limited the relief in several respects. First, the

court held that the FTC only had to prove likelihood of success and the balance of the equities, with

greater weight being provided to the public interest, compared to private interests. However, the

court denied the FTC’s request for an asset freeze, holding that the FTC must present evidence

showing a likelihood of dissipation of the claimed assets or other inability to recover monetary

damages. The court also denied the FTC any relief sought in their proposed temporary restraining

order, but not addressed in its motion for entry of the temporary restraining order. (FTC v.

Onlineyellowpagestoday.com, Inc., No. C14-838, 2014 WL 3051196 (W.D. Wash. July 3, 2014)).

National Advertising Division (NAD) Decisions

The NAD has determined that evidence offered by The Procter & Gamble Company (“P&G”) was

sufficient to support some claims challenged by Kimberly-Clark Global Sales LLC, the maker of

“Huggies” brand diapers, for the company’s “Luvs with Nightlock.” However, NAD recommended

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that P&G discontinue use of a product demonstration that featured a rubber duck weighted with lead

beads. The challenger took issue with P&G’s claim that Luvs “locks away wetness better than

Huggies, even overnight” as compared to Huggies and with a side-by-side demonstration. The

challenger also objected to the name “Luvs with NightLock,” including an accompanying lock and

key logo, which it contended contributed to the misleading impression of absolute protection from

wetness overnight. Following its review of the scientific evidence provided by the parties, NAD

determined that P&G provided a reasonable basis for its claim that Luvs “locks away wetness better

than Huggies, even overnight” and found that P&G provided a reasonable basis for the message

conveyed by the product name – Luvs with NightLock – in the context of the challenged advertising.

However, NAD recommended that P&G discontinue the use of a side-by-side product

demonstration. In the advertising video, blue liquid was poured on both diapers, and then blotter

paper was placed on top of the wet spot, followed by a rubber ducky. The rubber ducky was

removed and the blotter papers were displayed to the camera, revealing different sized stains on each

diapers’ blotters. NAD noted in its decision that “the use of a familiar object that consumers

recognize as being very light (but which in fact had been artificially weighted with metal balls)

implies that even a slight pressure will makes wetness seep out of Huggies’ core – a message which

is unsupported by the results of P&G’s underlying . . . testing.” (The Procter & Gamble Company

(Luvs with NightLock), NAD Report No. 5767 (Sept. 30, 2014)).

The NAD has recommended that Philosophy, Inc. discontinue certain advertising claims for the

company’s “Time in a Bottle Age-Defying Serum.” The advertiser has said it will appeal NAD’s

determination to the National Advertising Review Board. The claims at issue included, “Women

told us their skin looked 730 days younger*, that’s 2 years on your side with our age-defying serum.

*In an 8 week study of 56 women, 60% indicated their skin looked at least 2 years younger after 60

days,” and “82% showed improvement in signs of aging not yet visible on the surface after 4 weeks.

95% showed significant reduction in visible signs of aging after 8 weeks. *clinical study, 120

women ages 25-55, once daily use. Measurement of aging not yet visible on the surface using cross-

polarized light to reveal sub-surface signs of aging in the epidermal layer.” The advertiser’s primary

support in this case was an independent, blinded, clinical study of the product. The purpose of the

six-month study was to determine “changes to facial skin appearance and hydration as a function of

time and product use.” NAD questioned the reliability of the study. It noted that the advertiser did

not adequately account for change in environmental factors (i.e., the change from winter to summer

during the course of the study) and that that skin-imaging analysis was conducted on only a small

subset of the study’s participants (26 out of 117 subjects). Further, NAD criticized the study’s

failure to use trained experts to conduct visual grading of the skin. While the use of self-assessments

based on a visual analog scale is appropriate in a number of clinical settings, NAD’s prior cases

reviewing anti-aging claims involved visual grading of anti-aging parameters by clinicians. NAD

also noted that the actual improvements in the identified anti-aging parameters were far more modest

than the claims suggest. Finally, NAD questioned the reliability of the self-assessment questionnaire

used in the study that formed the basis for the claim, “Women told us their skin looked 730 days

younger*, that’s 2 years on your side with our age-defying serum.” The questionnaire was lengthy

and elicited arbitrary responses from the subjects (e.g., asking subjects to fill in, “Skin appears __

years younger”). Based on the lack of supporting evidence in the record, NAD recommended that

all of the challenged claims and accompanying visuals be discontinued. (Philosphy, Inc. (Time in a

Bottle Age-Defying Serum), NAD Report No. 5765 (Sept. 15, 2014)).

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American Express, which operates the “OPENForum.com” website, has informed the NAD that it

has modified its native advertising practices to assure that consumers who click on OPENForum

images-plus-text “ad units” are aware that the content is sponsored by American Express. The

OPENForum website is designed for small business owners and offers links to American Express

cards and services. American Express advertises the OPENForum site on the Internet through the

use of content “recommendation widgets.” In its initial review, NAD was concerned that the links

to OPENForum placed in recommendation widgets could be understood by consumers to be links to

independent editorial content, rather than sponsored content created by an advertiser. The links

consisted of a small picture, the title of the article, and a label, which read “OPENForum” but did

not include “American Express” or “AmEx.” The advertiser explained that “OPEN” is an American

Express brand geared to small business owners, that the OPEN brand was clearly labeled on the

links, and that the links brought users to the OPENForum site for articles containing advice for small

business owners. American Express further advised NAD that its labeling of links to articles on its

OPENForum website has been modified permanently and such links are now labeled as either

presented by “American Express OPEN” or “American Express OPEN Forum.” NAD appreciated

that American Express voluntarily made changes to the label on links to its OPENForum website,

and that the changes provided greater transparency to consumers regarding the website to which

consumers would be directed, an action NAD deemed necessary and appropriate. (American

Express Compnay (OPEN Forum Sponsored Content), NAD Report No. 5760 (Sept. 15, 2014)).

The NAD has recommended that Cerebral Success, maker of the dietary supplement “SmartX,”

discontinue a wide range of product performance claims, ingredient claims, and consumer

testimonials challenged by the Council for Responsible Nutrition (“CRN”). The advertiser had

presented evidence about certain SmartX ingredients. NAD noted in its decision that, while there

may be limited circumstances under which health performance claims can be substantiated without

clinical studies on the actual product, in such cases, the advertiser must demonstrate that it is

scientifically sound to extrapolate conclusions drawn about ingredients and apply them to the

performance of the product in question. In this case, NAD noted that the data submitted by the

advertiser did not support many of its performance claims because the studies provided by the

advertiser did not test formulas similar to SmartX’s combination of ingredients and the studies’

findings were limited to individual ingredients. Following its review, NAD recommended that the

advertiser discontinue product performance claims for SmartX, including: “Designed to enhance

memory, focus & mental agility: boost focus & concentration; stimulate mental energy & agility;

enhance memory & recall; improve brain health & function; and reduce anxiety;” and “. . . Cerebral

Success was specifically designed as a study pill to provide an Adderall alternative for students who

are taking the drug without a prescription. It is not, however, designed to treat the condition. Along

with focus and mental energy (the hallmarks of Adderall), Cerebral Success was designed to

increase memory and strengthen and protect the brain, which Adderall does not do.” While NAD

determined that the advertiser provided a reasonable basis for certain limited claims regarding the

benefits of particular ingredients, it recommended that, in the absence of competent and reliable

scientific evidence, the advertiser discontinue other claims about the benefits of various ingredients,

such as that Huperzine A “has been proven useful in improving short term memory as well as

preventing long term memory loss as a result of aging,” and that the ingredients contained within

SmartX “are intended to strengthen brain cell walls,” “increase blood flow & oxygenation to the

brain; stimulate protein synthesis; and boost production of acetylcholine.” NAD further

recommended that the advertiser discontinue the use of consumer testimonials that contain

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unsupported product performance claims. (Cerebral Success (SmartX Premium Brain Supplement,

Now with Cognizin), NAD Report No. 5761 (Sept. 10, 2014)).

The NAD has recommended that Alcon Laboratories, Inc., discontinue certain comparative

superiority claims for the company’s “Air Optix Aqua Contact Lenses,” following a challenge from

Johnson & Johnson Vision Care, Inc. (“JJVC”), the maker of “Acuvue OASYS.” The claims at

issue in JJVC’s challenge included claims made in advertisements directed to eye care professionals,

including claims that Air Optix Aqua lenses provide “superior surface deposit resistance,” “Acuvue

OASYS contact lenses attract up to 31x more lipid deposits,” and “Superior Surface with Moisture

and Consistent Comfort.” At issue in this case was whether Alcon could support claims that its Air

Optix Aqua contact lenses were better at resisting deposits of lipids, which are present in one’s tears,

on the surface of the lens, and better at resisting the absorption of lipids into the matrix of the lens.

Alcon asserted that the challenged claims for its contact lenses were truthful and wholly

substantiated by reliable studies and data, and via multiple reputable scientific authorities and

sources. JJVC maintained that the testing on which Alcon based its superior surface deposition-

resistance claims did not measure deposits on the contact lens surface and argued that JJVC’s own

head-to-head clinical testing showed that Alcon’s “31x claim” was without clinical relevance.

Following its review of the evidence presented by the advertiser and challenger, NAD determined

that Alcon could not support the challenged claims and recommended that the claims at issue be

discontinued. However, NAD noted that nothing in its decision precludes the advertiser from claims

– in a stand-alone context – that Air Optix Aqua lenses possess unique plasma surface technology

that resists lipids and deposits, offering clear vision and consistent comfort. (Alcon Laboratories,

Inc. (Air Optix Aqua Contact Lenses), NAD Report No. 5758 (Sept. 8, 2014)).

The NAD has recommended that The Procter & Gamble Company, maker of “Olay Sensitive Body

Wash,” discontinue claims that convey the unsupported message that the challenger’s Dove

Sensitive Skin Body Wash, made by Unilever United States, Inc., is “harsh.” Further, NAD

recommended that the advertiser modify claims that the Dove product can dry one’s skin over time.

NAD noted that a recent National Advertising Review Board decision addressed unqualified

comparative “harshness” claims, recommending that an advertiser discontinue claims that used the

image of barbed wire to illustrate the harshness of competing products. It concluded that one body

wash being “less mild” is not the same as it being “harsh,” as far as consumers understand the term.

In this case, NAD noted that the claims and visual were more muted, but the same principles apply.

It stated that, even if the evidence demonstrated that the challenger’s competing body wash was

more drying than a water control, the evidence would not necessarily provide a reasonable basis for

a claim that it was “harsh” or significantly “harsher” than the advertiser’s product. In support of its

claim, the advertiser submitted an independent “leg controlled application test” (LCAT) of subjects

with dry skin. During the 12-day test, the challenger’s “Dove Sensitive Skin Body Wash” and the

advertiser’s Olay Sensitive were tested against a water control. The results indicated that Dove

Sensitive Skin was directionally more drying than water at most of the reported time points and

statistically significantly more drying than water at the last time point of the study. Following its

review of the evidence in the record, NAD recommended that the advertiser discontinue its

“harshness” claims and modify its claim that “Dove Sensitive Skin Body Wash dries out your skin

over time” to more accurately reflect the LCAT results. Finally, NAD recommended that the

advertiser modify its advertising to avoid conveying the unsupported messages that consumers who

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use Dove Sensitive Skin Body Wash will have noticeably drier skin with continued use. (The

Proctor & Gamble Company (Olay Sensitive Body Wash), NAD Report No. 5755 (Sept. 2, 2014)).

The NAD has recommended that Virtua Health System discontinue certain advertising claims for the

hospital chain’s minimally invasive, “quad-sparing” knee-replacement surgery. The claims,

challenged by The Rothman Institute, a competing provider of orthopedic surgery services, appeared

in print, radio, and video advertisements and promotional literature, and were posted at Virtua’s

website. The challenged claims included: “It’s what we don’t cut that counts” and “Because we

don’t cut the quadriceps tendon, patients have a significantly reduced recovery time.” While

surgeons at both Virtua and Rothman use minimally invasive techniques when performing knee

replacement surgery, the parties dispute the purported reduced recovery time of the “quad-sparing

technique” as compared to other surgical approaches to knee replacement. The advertiser relied on

clinical research studies, abstracts, and meta-analyses to support its “faster recovery” claims, the

results of a federal patient satisfaction survey (Hospital Consumer Assessment of Healthcare

Providers and Systems or “HCAHPS”), and its own survey of patients who had surgery at the Virtua

Joint Replacement Institute (“VJRI”), compared to those who had surgery at other Virtua facilities.

Following its review of the evidence in the record, however, NAD determined that the meta-analyses

and their conclusions with respect to the superiority of minimally-invasive surgery in general, were

not adequately tailored to the specific claims at issue, which relate only to quad-sparing surgery.

NAD noted in its decision that, while it appreciated that patients at the VJRI have consistently high

satisfaction scores, such evidence was not reliable support for the advertiser’s claims that the

minimally invasive, quad-sparing knee-replacement technique provided patients with demonstrably

faster recovery than those who underwent other types of knee replacement surgery. NAD

determined that the advertiser’s evidence was insufficient to support its faster recovery claims and

recommended that the challenged claims be discontinued. It also noted, however, that nothing in its

decision precludes the advertiser from accurately communicating to consumers the benefits of the

minimally invasive, quad-sparing knee-replacement technique, as long as the advertiser avoids

conveying the unsupported message that the technique provides faster recovery than other types of

knee replacement procedures. (Virtua Health System (Quadriceps-Sparing Knee Replacement

Surgery), NAD Report No. 5753 (Aug. 14, 2014)).

The NAD has recommended that Verizon Communications, Inc. modify certain advertising claims,

including claims that are based on PC Magazine surveys, to better disclose the basis for the claims.

CSC Holdings, LLC, which operates Cablevision, a competing internet services provider, challenged

claims that appeared in two Verizon commercials and in print advertising. Verizon permanently had

discontinued some of the subject advertising prior to the onset of the challenge. The advertiser

argued that the challenged claims that remained in the marketplace – superior speed claims and a

“Rated #1” by PC Magazine claim – were fully supported. Cablevision challenged the claim that a

FiOS consumer could download an HDTV video in 10 seconds compared to a 45-seconds cable

download time, four times faster than cable. The claim was accompanied by a disclosure that read:

“Comparison based on simulated FiOS 500/100 Mbps speeds and Cable Internet 101/35 Mbps

speeds.” NAD noted in its decision that the claim is literally true. However, NAD was concerned

that Verizon did not clearly communicate that the claims referred to the top tiers offered by the ISPs.

NAD determined that a reasonable consumer takeaway from the comparative speed claims that

Verizon FiOS was four times faster than cable for downloading video in any service tier. NAD

determined that Verizon should clearly and conspicuously communicate that a specific service tier is

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being compared and identify the service tier in a way that is meaningful to consumers. NAD also

noted that Verizon made several claims attributed to a PC Magazine study including, “Rated #1” for

“speed, customer satisfaction, and reliability.” In prior decisions NAD had determined that the PC

Magazine “Reader’s Choice Awards” was “relevant to demonstrate ‘consumer satisfaction’ with a

particular service provider.” In this case, NAD recommended that the advertiser modify its “Rated

#1 for Speed, Reliability and Customer Satisfaction” claim to make clear that the claim is based on a

customer satisfaction survey of consumers’ rating of their own ISPs’ performance. (Verizon

Communications, Inc. (FiOS Internet Service), NAD Report No. 5750 (Aug. 7, 2014)).

The NAD has recommended that Chobani, Inc. discontinue its “Farmland” commercials – the

centerpiece of the company’s campaign to promote its “Simply 100” Greek yogurt – and modify

other online adverting. NAD noted, however, that the advertiser was entitled to promote its use of

natural sweeteners as compared to the artificial sweeteners used by some other yogurt brands. The

claims were challenged by General Mills, Inc., the maker of “Yoplait” yogurt products. General

Mills explained that its “Yoplait Greek 100” is the best-selling 100-calorie Greek yogurt on the

market and contended that Chobani’s advertising campaign communicated that Yoplait Greek 100

yogurts contain no real fruit and are made with artificial flavors and colors instead of fruit. The

advertiser argued that reasonable consumers would not perceive its “Farmland” commercial as

referring specifically or exclusively to Yoplait Greek 100. The advertising did not reference Yoplait

Greek 100, instead referencing “100-calorie yogurts,” “some yogurts,” and “some companies.”

Chobani maintained that its claims were substantiated against some or most competitors, including

Yoplait Greek 100. Following its review, however, NAD determined that the commercial conveyed

a broad, comparative message that competing Greek yogurts – whether construed narrowly as 100-

calorie Greek yogurts, or more broadly – are made with artificial coloring, artificial fruit flavoring,

and possibly artificial milk. Further, NAD noted, Yoplait Greek 100 is not made with artificial

flavors, artificial colors, or artificial (or even powdered) milk. NAD has long held that claims that

expressly or implicitly disparage a competing product must be truthful, accurate, and narrowly

drawn. Consequently, NAD recommended that the advertiser discontinue the commercial. NAD

also recommended that Chobani revise its Facebook advertising so that it no longer suggests that

most competing 100-calorie products use aspartame. However, NAD noted that the advertiser may

promote its use of natural sweeteners as compared with the artificial sweeteners used by Yoplait and

other brands. (Chobani, Inc. (Simply 100 Greek Yogurt), NAD Report No. 5744 (July 28, 2014)).

RECENT FILINGS

Lanham Act and Other Competitor Actions

Euro-Pro Operating LLC filed a complaint against rival vacuum manufacturer Dyson, Inc. in the

U.S. District Court for the District of Massachusetts, requesting injunctive relief and damages under

the Lanham Act and Massachusetts False Advertising Law. Euro-Pro challenges Dyson’s “Twice

the Suction” advertising claims on the grounds that Euro-Pro recently introduced a new vacuum

which renders the claim false and misleading based on third-party independent laboratory testing.

(Euro-Pro Operating LLC v. Dyson, Inc., No. 14-CV-13720 (D. Mass complaint filed on Sept. 26,

2014)).

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State Consumer Protection Law Litigation

Private Attorney General action filed in California Superior Court (Los Angeles County) against

Costco Wholesale Corporation and Apotex Corporation, alleging violations of the California Unfair

Competition Law and False Advertising Law arising out of defendant’s failure to declare the country

of origin on certain drug products such as “avorstatin,” removed to the U.S. District Court for the

Central District of California,. According to the complaint, the failure to declare the country of

origin caused the plaintiff to believe that the drug was made in the United States when in fact it was

not. (Joseph v. Costco Wholesale Corp., No. 14-CV-06899 (Cal. Super. Ct. filed on Sept. 4, 2014)).

Consumer Class Actions

Putative class action filed against various Colgate-Palmolive entities in the U.S. District Court for

the Eastern District of New York, alleging that they engage in deceptive and improper business

practices because the packaging of their “Speed Stick” deodorants make its appear to a reasonable

consumer that consumers are buying more than what is actually being sold. According to the

complaint, the deodorants come in 3.0 ounce sticks and have non-functional slack-fill in violation of

the federal Food, Drug & Cosmetic Act and New York General Business Code Section 349.

(Alberto, et al v. Colgate-Palmolive Co., et al., No. 1:14-CV-05649 (E.D.N.Y. complaint filed on

Sept. 25, 2014)).

Putative nationwide class action filed in the U.S. District Court for the Southern District of New

York against Unilever United States Inc., alleging violations of New York’s General Business Law

based on the defendant’s packaging of its “Degree Dry Protection” and “AXE Gold Temptation”

antiperspirants and deodorants. According to the complaint, Unilever sold the products in packaging

that made it appear that the consumer was buying more product than was actually being sold because

the packaging contained nearly 3 inches of slack-fill in height. (Bimont, et al. v. Unilever United

States, Inc., No. 14-CV-07749 (S.D.N.Y. complaint filed on Sept. 24, 2014)).

Putative class action filed against the New York State Gaming Commission in the U.S. District

Court for the Eastern District of New York. The plaintiffs claim that the defendant engaged in

deceptive practices in its marketing, advertising, and promotion of its “Franklin’s Fortunes”

scratchcard lottery game. According to the plaintiffs, the defendant used “unreliable and ambiguous

language” to describe the available scratchcard lottery game prizes, leading reasonable consumers to

believe that the minimum monetary prize they could win from the game was much larger than it

actually was. More specifically, the plaintiffs noted that they only received a prize of $10 from

playing the Franklin’s Fortunes game, even though the language on the scratchcard claimed the card

was “loaded with pries from $50 to $500.” This alleged misconduct, according to the plaintiffs,

violates New York’s General Business Law, constitutes common law fraud and a negligent

misrepresentation, and results in unjust enrichment. (Zaika, et al. v. N.Y. State Gaming Comm’n,

No. 1:14-cv-05576 (E.D.N.Y. complaint filed on Sept. 23, 2014)).

Putative class action filed against Avon Products Inc. in the U.S. District Court for the Southern

District of New York, alleging that Avon uses aggressive marketing to mislead consumers into

believing that its “Anew” product line has “fountain of youth properties.” Plaintiff claims that the

scientific research and studies, and clinical and consumer tests that permeate Avon’s marketing for

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its Anew product line are false, misleading and/or deceptive. Plaintiff is pursuing claims for

violations of, among other things, Nebraska’s Consumer Protection Act and New York’s General

Business Law. (Tillman, et al. v. Avon Products, Inc., No. 1:14-CV-07625 (S.D.N.Y. complaint

filed on Sept. 19, 2014).

Putative class action filed against Peg Perego, U.S.A., Inc. in California Superior Court (San Diego

County), removed to the U.S. District Court for the Southern District of California. The plaintiffs

claim that the defendant manufactured, marketed, and sold a variety of its “PEG PEREGO” vehicles

with the untrue designation and representation that the vehicles were “Made in the USA.”

According to the plaintiffs, the vehicles were manufactured or produced from component parts that

were manufactured outside of the United States, in violation of California law governing “Made in

USA” claims. For example, the plaintiffs allege the foreign-made component parts in the John

Deere Farm Power Brand 12 Volt Riding Vehicle include the battery, wiring harnesses, electric

battery charger, electric motors, decals (including two “Made in the USA” decals for prominent

display on the toy itself), wiring connectors, fuses, thermo protector, switches, gearing, screws,

rivets, bolts, lock washers, and/or washers. This alleged conduct, according to the plaintiffs, violates

California’s Unfair Competition Law, its law addressing “Made in USA” claims, and the state’s

Consumer Legal Remedies Act. (Hoffmann, et al. v. Peg Perego USA, Inc., No. 3:14-CV-02227

(S.D. Cal. complaint removed on Sept. 18, 2014)).

Putative nationwide class action filed against Johnson & Johnson, which alleges violations of

California’s Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act,

as well as the consumer fraud statutes of 39 additional states and D.C., removed from California

Superior Court (Ventura County) to the U.S. District Court for the Central District of California.

Plaintiff claims that Johnson & Johnson falsely advertises that its “Nectresse” no-calorie sweetener

is “natural” and “100% natural” when, in reality, the product’s main ingredient – erythritol – is

synthetically made. (Viggiano, et al. v. Johnson & Johnson, No. 2:14-cv-7250 (C.D. Cal. complaint

removed on Sept. 17, 2014)).

Putative California-only class action filed against R.A.B. Food Group, LLC in the U.S. District

Court for the Northern District of California, alleging violation of California’s Unfair Competition

Law, False Advertising Law, and Consumer Legal Remedies Act. Plaintiffs claim that R.A.B. Food

Group falsely advertises that several of its “Manischewitz” line of products, including kettle chips

and matzo ball chicken soup, are “all natural” when, in reality, the products contain genetically

modified organisms (GMOs). (Pekarsky, et al. v. R.A.B. Food Grp., LLC, No. 3:14-cv-4173 (N.D.

Cal. complaint filed on Sept. 16, 2014)).

Putative California-only class action filed against The Neiman Marcus Group LLC alleging violation

of California’s False Advertising Law, Unfair Competition Law, and Consumer Legal Remedies Act

removed from California Superior Court (Los Angeles County) to the U.S. District Court for the

Central District of California. Plaintiff claims that Neiman Marcus falsely advertises, through price

comparisons, that clothing sold at its “Last Call” stores is authentic “Neiman Marcus” clothing

previously sold at the company’s retail department stores but offered at a substantial discount.

(Rubenstein, et al. v. Neiman Marcus Group LLC, No. 2:14-cv-7155 (C.D. Cal. complaint removed

on Sept. 12, 2014)).

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Putative statewide class action filed in the U.S. District Court for the District of Massachusetts

against Blue Diamond Growers, alleging violations of Massachusetts law defining “natural” and

Massachusetts law prohibiting false and misleading labeling based on representations made for the

defendant’s “Almond Breeze” almond milk products. According to the complaint, the defendant

violated these laws by deceiving its customers into believing that Blue Diamond products are

naturally sweetened by using the term “Evaporated Cane Juice,” when the products actually contain

artificial ingredients and synthetic additives, and are sweetened with sugar and not the healthier

sounding “juice.” (Vass, et al. v. Blue Diamond Growers, No. 14-CV-13610 (D. Mass complaint

filed on Sept. 11, 2014)).

Putative class action filed against B&G Foods, Inc. in the U.S. District Court for the Southern

District of Florida, alleging violations of Florida’s Deceptive and Unfair Trade Practices Act and the

federal Magnusson-Moss Warranty Act, and common law negligent misrepresentation. The

plaintiffs claim that the defendant has “negligently, unlawfully, unfairly, misleadingly, and/or

deceptively represented” that a number of its products are “all natural,” even though they contain

synthetic ingredients. According to the plaintiffs, the defendant’s “Maple Grove Farms All Natural

Gluten Free Pancake & Waffle Mix,” “Old London All Natural Sourdough Melba Toast,” “New

York Style All Natural Sea Salt Mini Bagel Crips,” “New York Style All Natural Parmesan, Garlic

& Herb Pita Chips,” and “Mrs. Dash All Natural Taco Seasoning Mix,” despite their names, contain

unnatural, synthetic, and/or artificial ingredients, including soy flour, dextrose, corn starch, xanthan

gum, soy lecithin, maltodextrin, yellow corn flour, and citric acid. (Pettinga, et al. v. B&G Foods,

Inc., No. 9:14-CV-81159 (S.D. Fla. complaint filed on Sept. 9, 2014)).

Putative class action filed against Knudsen & Sons, Inc. in California Superior Court (Los Angeles

County). The plaintiffs claim that the defendant has placed a “No Sugar Added” statement on the

label of a number of its juice products in violation of FDA regulations regarding the use of “No

Sugar Added” statements, including, but not limited to, the requirement that such statements must be

accompanied by language that indicates that the food is not a “low calorie” or “calorie reduced”

food, and that directs consumers to read the nutrition label. The plaintiffs note that under

California’s Sherman Law, California has incorporated “[a]ll [federal] food labeling regulations and

any amendments to those regulations.” As such, according to the plaintiffs, the defendant’s alleged

failure to comply with applicable FDA regulations violates California’s Unfair Competition Law,

False Advertising Law, and Consumer Legal Remedies Act, and also constitutes negligent

misrepresentation and a breach of quasi-contract. (Park, et al. v. Knudsen & Sons, Inc., No.

BC556802 (Cal. Super. Ct. complaint filed on Sept. 5, 2014)).

Putative California-only class action filed against Ralph Lauren Corp. in the U.S. District Court for

the Southern District of New York, alleging violation of California’s Unfair Competition Law, False

Advertising Law, and Consumer Legal Remedies Act. Plaintiff claims that Ralph Lauren

deceptively prices merchandise at Polo Ralph Lauren Factory stores because the listed former price

(the “Value Was” price) – from which the store allegedly is offering a steep discount – does not

represent the bona fide price at which Ralph Lauren sold Polo Factory Products. (Branca, et al. v.

Ralph Lauren Corp., No. 1:14-cv-7097 (S.D.N.Y. complaint filed on Sept. 3, 2014)).

Putative nationwide class action filed in the U.S. District Court for the Southern District of Florida

against Whole Foods Market, Inc., alleging, among other things, negligent misrepresentation, and

42

violations of the Florida Deceptive and Unfair Trade Practices Act arising out of the defendant’s

marketing of homeopathic drugs under its “365 Be Well” brand line, including “Cough Ease,” “Flu

Ease,” and “Arnica Montana 30C.” According to the complaint, the products were deceptively

marketed as relieving coughs, flu symptoms, and muscles aches and pains, despite the fact that the

products had no such alleviating effects. Further, the plaintiff alleges that the products actually

contain no active ingredients and the “serial dilution le[ft] ingredients non-existent and incapable of

producing any biological effect in humans.” (Herazo, et al. v. Whole Foods Market, Inc., No. 14-

CV-61909 (S.D. Fla. complaint filed on Aug. 21, 2014)).

Putative class action filed against Ambir Energy, L.P. and Ambit Texas, LLC in the U.S. District

Court for the District of New Jersey, alleging violations of the New Jersey Consumer Fraud Act.

Plaintiffs claim that the Texas-based power reseller made false promises to customers of low

electricity rates and other rewards. In reality, plaintiffs claimed the rates actually charged to

customers were not competitive and bore little relation to prevailing market conditions, resulting in

putative class members having been “scammed” out of millions of dollars. (Urbino, et al. v. Ambit

Energy, L.P., No. 3:14-CV-05184 (D.N.J. complaint filed on Aug. 19, 2014)).

Putative class action filed against De Waffelbakkers, LLC in California Superior Court (Alameda

County), alleging violations of California consumer protection laws, common law fraud, and

negligent misrepresentation. Plaintiffs claim that the defendants knowingly engaged in unlawful,

deceptive, and fraudulent practices by falsely advertising certain products as “all natural” even

though they contained the chemical Calcium Acid Pyrophosphate. (Ham, et al. v. De Wafelbakkers,

LLC, No. RG14737405 (Cal. Super. Ct. complaint filed on Aug. 19, 2014)).

Putative class action filed against Pharmavite, LLC, in the U.S. District Court for the Central District

of California, alleging violations of California’s consumer protection statutes. The plaintiffs alleged

that the defendant engaged in a nationwide marketing campaign to advertise that its “Nature Made®

Vitamin E” products would help maintain a healthy heart. According to the plaintiffs, however, the

defendant’s Vitamin E products did not help consumers maintain a healthy heart and the defendant

lacked any substantiation to prove that Vitamin E supplements have any effect on heart health.

(Bradach, et al. v. Pharmavite, LLC, No. 2:14-CV-06337 (C.D. Cal. complaint filed on Aug. 12,

2014)).

Putative class action filed in California Superior Court (Los Angeles County) against Lechat Nail

Care Products, alleging violations of the California Consumer Legal Remedies Act and Unfair

Competition Law. The plaintiffs alleged that the defendant engaged in deceptive marketing of its

nail lacquer products by touting them as “free of DBP, Toluene and Formaldehyde” when the

California Environmental Protection Agency, Department of Toxic Substance Control found that the

defendant’s products actually contained those components. (Mehrazar, et al. v. Lechat Nail Care

Prods., No. BC-554341 (Cal. Super. Ct. complaint filed on Aug. 11, 2014)).

Putative class action filed against Aliphcom in the U.S. District Court for the Northern District of

California, alleging violations of various California consumer protection laws. The plaintiff alleged

that the defendant falsely marketed its fitness-tracking device as having the ability to track users as

they slept and as they moved throughout the day, thereby allowing them to “make smarter choices

and feel [their] best.” According to the complaint, however, the product was defective and failed to

43

maintain a charge for the advertised number of days or to sync to the mobile application. (Frenzel,

et al. v. Aliphcom, Case No. 3:14-cv-03587 (N.D. Cal. complaint filed on Aug. 7, 2014)).

Putative nationwide class action filed against Sony Computer Entertainment America, LLC in the

U.S. District Court for the Northern District of California, alleging, among other things, fraud in the

inducement, negligent misrepresentation, and violations of California’s Unfair Competition Law,

False Advertising Law, and Consumers Legal Remedies Act. The plaintiff claimed that, in order to

promote the technological capabilities of the newly-launched “PlayStation 4” video game console,

the defendant falsely advertised and deceptively marketed its marquee game for the console,

“Killzone: Shadow Fall,” as capable of displaying high-resolution 1080p multiplayer graphics.

According to the complaint, the defendant released an official statement conceding that it had not

designed the game to display 1080p multiplayer graphics, but rather used a technological shortcut

that provided “subjectively similar’ results.” (Ladore, et al. v. Sony Computer Entm’t Am., LLC, No.

3:14-cv-03530 (N.D. Cal. complaint filed on Aug. 5, 2014)).

Putative nationwide class action filed in the U.S. District Court for Massachusetts against Whole

Foods Market, Inc. alleging breach of warranty and unjust enrichment based on defendant’s labeling

of its “Whole Foods 365 Every Day Value Plain Greek Yogurt” as containing only 2 grams of sugar

per serving. According to the complaint, testing from the consumer publication Consumer Reports

shows that the product actually contains 11.4 grams of sugar per serving on average, and the

plaintiffs suffered material harms by the false representations regarding sugar content. (Knox, et al.

v. Whole Foods Market, Inc., No. 14-cv-13185 (D. Mass. complaint filed on Aug. 1, 2014)).

Putative nationwide class action filed against Guthy-Renker LLC in the U.S. District Court for the

Central District of California, alleging violations of, among other things, California and Florida

consumer protection statutes. Plaintiff alleged that the defendant’s “WEN Cleansing Conditioner”

hair care products contain an inherent design and/or manufacturing defect that causes significant hair

loss. Plaintiff further alleged that, despite the defendant’s longstanding knowledge of the alleged

defect, it: (1) failed to warn consumers that the products would cause substantial hair loss; and (2)

actively concealed customers’ comments concerning hair loss by blocking and/or erasing such

comments from the WEN Facebook page. (Friedman, et al. v. Guthy-Renker LLC, No. 2:14-CV-

06009 (C.D. Cal. complaint filed July 31, 2014)).

Putative class action filed against Novex Biotech, LLC, Sierra Research Group, LLC, and GNC

Corporation in the U.S. District Court for the Northern District of California, alleging violations of

California’s Unfair Competition Law and Consumers Legal Remedies Act. The plaintiffs claim that

the defendants promise that “Growth Factor-9,” an amino acid supplement manufactured, marketed,

sold, and distributed by the defendants, is “clinically tested” to boost human growth hormone by a

mean of 682% for those who take it. According to the plaintiffs, however, the defendants’ growth

hormone representations are false, misleading, and reasonably likely to deceive the public. The

plaintiffs allege that the clinically tested representation is false because the study the defendants cite

to is flawed, and does not and cannot serve as the basis for the representations made by the

defendants. (Engel et al. v. Novex Biotech, LLC, No. 14-cv-03457 (N.D. Cal. complaint filed on

July 30, 2014)).

Putative nationwide class action filed in the U.S. District Court for the Central District of California

against U-Haul International, Inc., alleging violations of California law regulating rental rates (Cal.

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Civil Code § 1936.01) based on the defendant’s alleged failure to disclose its mandatory

environmental fee as part of its advertising of daily rental rates for its U-Haul trucks. (Arevalo, et

al. v. U-Haul Int’l, Inc., No. 14-cv-01179 (C.D. Cal. complaint filed on July 25, 2014)).

Putative California-only class action filed against Michael Kors (USA), Inc. in the U.S. District

Court for the Southern District of New York, alleging violations of California’s Unfair Competition

Law, False Advertising Law, and Consumer Legal Remedies Act. Plaintiff claims that the

defendant’s practice of listing a Manufacturer’s Suggested Retail Price (MSRP) and a lower, outlet

store price on product hang tags misrepresents that outlet customers are receiving a discount or

bargain on their purchase. According to the complaint, the defendant manufactured these products

for sale exclusively at its outlet stores and never intended that they be sold at the listed MSRP.

(Gattinella, et al. v. Michael Kors (USA), Inc., No. 1:14-cv-5731 (S.D.N.Y. complaint filed on July

25, 2014)).

Putative Florida-only class action filed against That’s How We Roll, LLC in the U.S. District Court

for the Southern District of Florida, alleging violations of the Florida Deceptive and Unfair Trade

Practices Act. Plaintiff claims that defendant falsely advertised at least three flavor varieties of its

“Party’tizers Dippin’ Chips” products were are “All Natural,” when, in fact, they contain unnatural,

synthetic, and/or genetically modified ingredients, such as white corn, corn oil, and toasted corn

germ. (Scarola, et al. v. That’s How We Roll, LLC, No. 9:14-cv-80983 (S.D. Fla. complaint filed on

July 25, 2014)).

Putative class action filed against Best Buy Co., Inc. BestBuy Stores, L.P., and Bestbuy.com, LLC in

the U.S. District Court for the District of Minnesota, alleging violations of Minnesota’s Prevention

of Consumer Fraud Act and Uniform Deceptive Trade Practices Act, and Massachusetts General

Laws, Chapter 93A §§ 2 and 9 The plaintiffs claim that the defendants falsely marketed and

advertised “Insignia”-brand televisions as “LED TVs,” “LED HDTVs” and “LED” televisions.

According to the plaintiffs, the televisions are not LED TVS but instead are LCD televisions that use

light emitting diodes (“LEDs”) instead of cold cathode fluorescent lights (“CCFLs”) to light the

liquid crystal display (“LCD”) panel that is present in each of the televisions at issue. The plaintiffs

allege that the defendants’ failure to disclose that its references to LED refer to the light source that

illuminates the LCD panel, instead of the display technology itself, and its nondisclosure and

concealment that each of the televisions is otherwise functionally identical to televisions that are

advertised and sold as “LCD TVs,” were at all times knowing, intentional, and intended to mislead

consumers. (Ferrari, et al. v. Best Buy Co., Inc., et al., No. 0:14-cv-02956 (D. Minn. complaint filed

on July 21, 2014)).

Putative statewide class action filed in the Ohio Court of Common Pleas alleging that defendant

Allstar Products, Group LLC violated the Ohio Consumer Sales Practices Act by representing that

its children’s toy, “Juggle Bubbles,” “do not pop” and easily can be used for hours of bubble tossing,

bouncing, and juggling. According to the complaint, these claims are false because “many or most

of the children who obtain Juggle Bubbles become frustrated and disappointed when Juggle Bubbles

do not perform as advertised.” (Culotta, et al. v. Allstar Products Group, LLC, No. CV-14-829906

(Ohio Ct. C.P. complaint filed on July 17, 2014)).

Putative class action filed against Revolution Laboratories L.L.C. and others in the U.S. District

Court for the Southern District of Illinois, alleging violations of the Illinois Consumer Fraud Act and

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the Illinois Uniform Deceptive Trade Practices Act. Plaintiff’s claims arise out of the defendants’

sale of “Green Coffee Bean Extract” pills to the plaintiff and failing to disclose material information

about the true length of its 14-day free trial program; for enrolling the plaintiff in a negative option

60-month purchase commitment without her consent; and for making five unauthorized charges to

her credit/debit card on a recurring basis without providing her with a copy of a signed, written

authorization signed or similarly authenticated authorization for pre-authorized electronic fund

transfers from her account. (Goeke, et al. v. Revolution Labs., et al., No. 3:14-cv-00806 (S.D. Ill.

complaint filed on July 16, 2014)).

Putative nationwide class action filed against Wellness and Health, LLC and its executive officer

and co-founder, Bruce Gezon, in the U.S. District Court for the Southern District of Illinois, alleging

violations of the Illinois Consumer Fraud and Deceptive Practices Act, the Illinois Uniform

Deceptive Trade Practices Act, and the federal Electronic Funds Transfer Act. Plaintiff alleges that

the defendants failed to disclose material information concerning an advertised 15-day no-risk free

trial program for their “Max Detox” weight-loss dietary supplements. Specifically, the plaintiff

asserts that the defendants’ risk-free trial offer is illusory, deceptive, and fraudulent because the

defendants (1) measure the 15-day trial period from the date consumers place (rather than receive)

the order without disclosing this to consumers at the point of sale, (2) require that consumers return

the product unopened and obtain a “return merchandise authorization” (“RMA”) number with which

the returned merchandise must be marked, and (3) use procedures that make it difficult for

consumers to obtain the requisite RMA numbers in time to return the product within the trial period.

According to the plaintiff, the defendants also maintain a website for their “Max Detox”

supplements on which they represent that consumers may lose a substantial amount of weight by

using that product and that the product promotes weight loss and provides “all-natural solution” to

help dissolve carbohydrates, metabolize fat and “gently flush pounds away.” In actuality, the

product does not cause substantial weight loss and defendants allegedly lack a reasonable basis to

substantiate these weight-loss claims. Plaintiff also asserts that the defendants enrolled her and other

consumers in a negative option auto-shipment purchase program without their consent and made

unauthorized charges to the plaintiff’s and other consumers’ credit/debit cards on a recurring basis.

Plaintiff alleges that the defendants fail clearly and conspicuously to disclose that consumers

participating in the purported “no commitments” risk-free product trial are agreeing to receive and

pay for additional product via this auto-shipment program. (Goeke, et al. v. Wellness & Health,

LLC, et al., No. 3:14-cv-00807 (S.D. Ill. complaint filed on July 16, 2014)).

Putative nationwide class action filed against Expedia, Inc. in Washington Superior Court (King

County), alleging violation of Washington’s Sellers of Travel Act and Consumer Protection Act.

Plaintiff claims that Expedia falsely advertises that an airline does not impose baggage fees or that

those fees are lower than they actually are, in violation of Washington law and the U.S. Department

of Transportation’s airline fare advertising and notice of baggage fee rules. (Weidenhamer, et al. v.

Expedia, Inc., No. 14-2-19097-2 (Wash. Super. Ct. complaint filed July 11, 2014)).

Putative California-only class action filed against Jos. A. Bank Clothiers, Inc. (“JAB”) in the U.S.

District Court for the Southern District of California, alleging violation of California’s Unfair

Competition Law and Consumer Legal Remedies Act. Plaintiffs claim that the “regular prices”

advertised in JAB’s “buy one [regular priced item] get one [or more] free” suit offers, and percent

off sales are fabricated, inflated, and not representative of the true former price, within the preceding

three months, for the product. The plaintiffs further allege that no consumer actually ever has paid

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the “regular price” for a suit outside of a promotion and that JAB products are perpetually on sale.

(Lucas, et al. v. Jos. A. Bank Clothiers, Inc., No. 3:14-cv-1631 (S.D. Cal. complaint filed on July 9,

2014)).

Putative class action filed against Fuhu, Inc. and Fuhu Holdings in California Superior Court (Los

Angeles County), alleging violation of the California Legal Remedies Act, false advertising, unfair

trade practices, breach of express and implied warranty, fraud, deceit and/or misrepresentation.

According to the allegations in the complaint, the defendants manufacture, distribute, and sell

“Nabi” brand electronic tablets for children and represent to consumers that the Nabi tablets are

“rechargeable” and include a “power adapter.” According to the complaint, however, the power

adapters included with the Nabi tablets do not reliably recharge the tablets and do not permit the

tablet to be operated while plugged into a power source. The complaint further alleges that, because

the Fuhu defendants sell the Nabi tablets with proprietary power adapters, consumers cannot use any

alternative power adapters to provide power to or to recharge the batteries of the Nabi tablets.

(Miller, et al. v. Fuhu, Inc., et al., No. BC550858 (Cal. Super. Ct. complaint filed on July 7, 2014)).

Putative class action filed against ASA College, Inc. and its officers in the U.S. District Court for the

Southern District of New York, alleging violations of New York General Business Law § 349. ASA

College is a privately owned, for-profit career college located in New York City. Plaintiffs allege

that ASA College students have been “victimized by a massive scheme to draw millions of dollars of

federal and state financial aid to ASA at the students’ expense and detriment by systematically and

fraudulently misrepresenting the nature of ASA’s certificate and degree programs to past, current,

and prospective students” and various state and federal agencies. According to the plaintiffs, the

defendants represent that ASA College programs provide occupational training that leads to specific

types of employment; that ASA will place its students in externships that will lead to its students

obtaining jobs in their fields; that ASA will provide its students with effective job placement

assistance; that ASA graduates have a proven track record of obtaining jobs in their fields; and that

an ASA degree is a fast and affordable route to obtaining a job. In reality, however, ASA

purportedly conceals from students that its programs do not provide relevant or necessary

occupational training; that the programs cannot be completed in the short amount of time

represented; that ASA does not provide meaningful externships or job placement assistance; that the

large majority of ASA students never graduate; that the vast majority of those who do graduate are

unable to find work; and that all students gain from enrolling in ASA is crippling student loan debt

that they are unable to afford and lost eligibility for future federal and state educational loans and

grants. (Sanchez, et al. v. ASA College, Inc., No. 1:14-CV-05006 (S.D.N.Y, complaint filed on July

3, 2014)).

Putative nationwide class action filed in the U.S. District Court for the Southern District of New

York against Hain Celestial Group, Inc., alleging violations of the California Organic Products Act,

Consumers Legal Remedies Act, False Advertising Law and Unfair Competition Law based on

“organic” and “all natural” claims made for Hain Celestial’s “Earth’s Best” brand infant foods, baby

foods, kids’ food, baby care products, and home care products. According to the complaint, the

products were deceptively labeled as “organic” and “all natural” because they allegedly contained a

multitude of non-organic, synthetic compounds, such as benzyl alcohol, dimethicone, ethylhexyl

palmitate, magnesium sulfate, panthenol, and phenoxyethanol. (Segedie, et al. v. Hain Celestial

Group, Inc., No. 7:14-CV-05029 (S.D.N.Y. complaint filed on July 3, 2014)).