Tuesday, March 2, 2010

Second District Publishes Opinion Reversing Certification of Listerine False Advertisement Class: Pfizer Inc., v. Superior Court

On March 2, 2010, the Second District (Division 3) published its opinion, issued last week, in Pfizer Inc., v. Superior Court, __ Cal.App.4th __ (2010). The Court’s opinion reconsiders a 2006 decision that was subsequently taken up by the California Supreme Court and transferred back subsequent to the decision in Tobacco II. The Court’s new opinion, like its previous decision, concludes that the trial court abused its discretion by certifying a broad restitutionary class comprised of “all persons who purchased Listerine in California" during a six-month period.

The heart of the Court’s analysis turned largely on the short duration of the challenged promotional campaign coupled with the fact that there were a multitude of different Listerine bottles used during the time that did not contain the challenged misleading representation:
Here, the class certified by the trial court, i.e., all purchasers of Listerine in California during a six-month period, is grossly overbroad because many class members, if not most, clearly are not entitled to restitutionary disgorgement. The record reflects that of 34 different Listerine mouthwash bottles, 19 never included any label that made any statement comparing Listerine mouthwash to floss. Further, even as to those flavors and sizes of Listerine mouthwash bottles to which Pfizer did affix the labels which are at issue herein, not every bottle shipped between June 2004 and January 2005 bore such a label. Also, although Pfizer ran four different television commercials with the "as effective as floss" campaign, the commercials did not run continuously and there is no evidence that a majority of Listerine consumers viewed any of those commercials. Thus, perhaps the majority of class members who purchased Listerine during the pertinent six-month period did so not because of any exposure to Pfizer's allegedly deceptive conduct, but rather, because they were brand-loyal customers or for other reasons.
The circumstances herein stand in stark contrast to those in Tobacco II, where the tobacco industry defendants allegedly violated the UCL "by conducting a decades-long campaign of deceptive and misleading statements about the addictive nature of nicotine and the relationship between tobacco use and disease." (Tobacco II, supra, 46 Cal.4th at p. 306.) Tobacco II allows a class representative who actually relied on the defendants' misleading advertising campaign to represent other class members who may have lost money by means of the unfair practice. Tobacco II does not stand for the proposition that a consumer who was never exposed to an alleged false or misleading advertising or promotional campaign is entitled to restitution.
As Pfizer argues, it is one thing to say that restitution can be awarded to purchasers of cigarettes where the cigarettes were marketed as part of a massive, sustained, decades-long fraudulent advertising campaign on the grounds the tobacco industry defendants "may have . . . acquired" (§ 17203) the purchase price as a result of such a pervasive fraudulent campaign. It is entirely another to say that restitution [*18] can be awarded to all purchasers of Listerine in California over a six-month period where the undisputed evidence shows many, if not most, class members were not exposed to the "as effective as floss" campaign and therefore did not purchase Listerine because of it.
In sum, the certified class, consisting of all purchasers of Listerine in California over a six-month period, is overbroad because it presumes there was a class-wide injury. However, large numbers of class members were never exposed to the "as effective as floss" labels or television commercials. As to such consumers, there is absolutely no likelihood they were deceived by the alleged false or misleading advertising or promotional campaign. Such persons cannot meet the standard of section 17203 of having money restored to them because it "may have been acquired by means of" the unfair practice. In the language of section 17203, with respect to perhaps a majority of class members, there is no doubt Pfizer did not obtain any money by means of the alleged UCL violation.
See Slip Opinion, at 11-12.

No comments:

Post a Comment