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6th Circuit Reverses Dismissal of NJ Consumer Fraud Act Claim Based on Procter & Gamble's Advertising DayQuil Plus Vitamin C and NyQuil Plus Vitamin C


Procter & Gamble advertised two new products in 2009: DayQuil Plus Vitamin C and NyQuil Plus Vitamin C. Proctor & Gamble used the following statements in its advertisements.

  • Combining the powerful multi-symptom relief of DayQuil with more than 150% of the recommended value of vitamin C.
  • VICKS NyQuil Cold & Flu Symptom Relief Plus Vitamin C provides multi-symptom cold and flu relief so you can get the sleep you need to enjoy an even sweeter tomorrow. Plus, you'll also replenish your body with 150% of the daily value of vitamin C.
  • Vitamin C: It won't cure a cold, but vitamin C can help blunt its effects. Aim for 500 mg a day.
  • Fighting Cold and Flu Season.... Don't forget to take your daily vitamins. Consider taking extra vitamin C, vitamin A, and zinc, all of which may help you.

 

Two men purchased the products over competing ones in part because of these statements. The men sued Proctor & Gamble alleging that no scientific evidence supports the claim that Vitamin C can alleviate cold symptoms, and that, but for Procter & Gamble's false or misleading statements to the contrary, the men would have purchased a lower-priced competing product instead. The men claimed that Procter & Gamble was unjustly enriched and violated the consumer-protection laws of all fifty States when it sold and marketed the products. They sought a refund of the purchase price and requested class treatment.

 

United States District Court for the Southern District of Ohio dismissed all of the plaintiffs’ claims. The plaintiffs appealed.

                             

The Sixth Circuit United States Court of Appeals affirmed in part and reversed in part. Specifically, the court reversed the portion of the judgment dismissing the plaintiffs' claim under New Jersey's Consumer Fraud Act predicated on Procter & Gamble's statement in its advertising that Vitamin C “won't cure a cold, but ... can help blunt its effects.”

 

The court first determined which state’s law applied. As Ohio was the forum state, the court applied Ohio’s choice of law rules, which states that the place of the injury controls in a consumer-protection lawsuit, requiring application of the home-state law of each potential class member. As both plaintiffs resided in and purchased the products at issue in New Jersey, the court concluded that the place of injury was New Jersey. Hence, the court applied New Jersey law and held that the district court properly dismissed all claims brought under Ohio law.

 

Next, the court considered the plaintiffs’ claim under New Jersey's Consumer Fraud Act (CFA). The district court had dismissed this claim for two reasons: that it was preempted by the Federal Food, Drug, and Cosmetic Act (FDCA) or that they failed to state a claim under the CFA.

 

The court held that the preemption test is whether the conduct on which the claim is premised is the type of conduct that would traditionally give rise to liability under state law and that would give rise to liability under state law even if the FDCA had never been enacted. The court concluded that one of the plaintiffs’ theories of liability was preempted and another was not. The preempted theory was that Proctor & Gamble omitted telling consumers that its products were “illegal” because their labeling did not comply with the FDCA's requirements.

 

The non-preempted theory was that Procter & Gamble violated state law when it represented to the public that taking Vitamin C can blunt the effects of a cold, a statement plaintiffs contended was false or misleading and allegedly induced plaintiffs to purchase the advertised products instead of a lower-priced competitor's product not containing Vitamin C. The court reasoned that because this theory relied solely on traditional state tort law predating the FDCA, and would exist in the absence of the FDCA, it was not preempted.

 

The court then analyzed the district court’s alternative holding that the plaintiffs failed to state a claim under the CFA because they did not plausibly allege an “ascertainable loss.” The court held that an ascertainable loss is an actual loss, as little as an out-of-pocket loss, and that evidence can show is calculable, non-hypothetical, and non-illusory. The court found that the quantifiable or measurable loss in this case was the difference in price between Procter & Gamble's product and a lower-priced competing product. The court noted that the products' overall effectiveness in treating the plaintiffs' cold symptoms did not undercut a showing of ascertainable loss.

 

The court addressed Proctor & Gamble’s argument that the plaintiffs' CFA claims failed because the four statements upon which they were based were neither false nor plausibly misleading. The court agreed with respect to all but one statement: “Vitamin C: It won't cure a cold, but vitamin C can help blunt its effects.” The court found that plaintiffs could possibly prove that Vitamin C either has no effect on cold symptoms or has such a marginal effect that advertising its ability to blunt cold symptoms creates a capacity to mislead the average consumer.

 

Finally, the court affirmed the dismissal of the plaintiffs’ claims under the laws of the other states. The court based its decision on their decision in Pilgrim v. Universal Health Card, LLC, 660 F.3d 943, 945 (6th Cir.2011) holding that a federal district court in Ohio could not certify a nationwide class of members asserting consumer-protection claims under all fifty States given Ohio's choice-of-law rules and the material differences between the States' consumer-protection laws.

 

See: Loreto v. Procter & Gamble Co., 2013 WL 645952 (C.A.6 (Ohio), February 22, 2013) (not selected for publication in the Federal Reporter).

 

 

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