Four years ago, I spoke at a national advertising law conference on the sharp rise in consumer class action false advertising lawsuits. These lawsuits, once principally confined to California and a few other states, had by 2007 become the “next big thing” among the plaintiffs’ class action bar.
The potential for, and occasional reality of, large damages and attorneys’ fees awards, plus heavy media coverage that presumed the advertiser was guilty as charged, made these suits attractive to the plaintiffs’ bar and dangerous to advertisers throughout the U.S. These class actions are much more dangerous, in fact, than competitor versus competitor false advertising litigations filed under the federal statute known as the Lanham Act.
Below are three important factors that have helped turn the litigation tide.
- Courts, legislatures and, in California, citizens through ballot box propositions, have largely rejected the notion that consumers should be permitted to act as “private attorneys general” and file false advertising lawsuits to remedy alleged injury to the public, even if those consumers suffered no injury from and did not base their own purchasing decisions on the challenged statements.
Today, courts regularly dismiss class actions for failure to state a claim for relief when plaintiffs fail clearly to allege that they personally have suffered a specific injury or loss directly resulting from the allegedly false advertising, or that they relied on the alleged falsity in making their purchase decisions. See, for example, Lieberson v. Johnson & Johnson Consumer Companies, 2011 WL 4414214 (D.N.J. 2011); Gifford v. U.S. Green Bldg. Council, 2011 WL 4343815 (S.D.N.Y. 2011).