Consumer Law

In a number of cases plaintiffs have successfully argued that deceptive representations have caused them economic harm because the representations gave the product "an actual value that was less than the amount they paid for the product."  Illustrative of the theory are a couple Massachusetts Supreme Court decisions, Aspinall v. Philip Morris Cos., 442 Mass. 381 (2004) and Chenlen v. Philips Electronics North America, 2006 WL 696568 (Mass. Sup. Ct. Mar. 1, 2006), where the court found that deceptive advertising causes per se injury on consumers -- all members in the class of purchasers are injured because the product is deceptively advertised, falsely labeled or the defendant created a misleading impression.

A recent decision, again from Massachusetts, took a different view and may limit the price inflation theory.  In Kwaak v. Pfizer, Inc., 881 N.E.2d 812 (Mass. App. Ct. 2008) the putative plaintiff class alleged that ads claiming Listerine was as effective as floss were deceptive.  Since the ads and claims were changed a number of times, not all members of the proposed class were exposed to the same ads or same claims, nonetheless the lower court certified a class of all Massachusetts purchasers of Listerine. Distinguishing Aspinall because all class members saw exactly the same claim, the Massachusetts Court of Appeals reversed noting that not all proposed class members were presented with ?the same significant deceptive information? about Listerine.  For much the same reason, it expressly rejected the ?price inflation? argument ? that all purchasers paid more for the product because of the deceptive representations. According to the Court,

there were too many different reasons why consumers purchased these particular products, too many different types of advertisements, too much variation in exposure to the advertisements. . .and too little information on the market impact of the of the deceptive aspects of the advertising campaign to support a conclusion that the consumers in the class were similarly situated and similarly injured by a common deceptive act or practice.

The Court noted that it might be possible to allege a class that could be certified, however, identifying a similarly situated class that sustained economic injury would be more difficult after this decision. .