Coke Gets a Smile from the Third Circuit in Enviga Litigation
After having received a disappointing decision from the Eastern District of New York in Vitaminwater litigation a few weeks ago, on Tuesday The Coca Cola Company had something to smile about: the Third Circuit affirmed the grant of summary judgment in a consumer fraud class action challenging the marketing of Coke's "Enviga" green tea soft drink as a calorie burner. See Franulovic v. The Coca Cola Company, No. 09-3068, Slip op. (3d Cir. Aug. 10, 2010).
Franulovic was one of those lawsuits originally brought by the nutrition nannies at the Center for Science in the Public Interest. They dropped out of the suit, however, substituting Ms. Franulovic, who was a real winner of a class representative. Coke had advertised Enviga as a calorie-burning drink based on the results of a short-term study funded by its corporate partners. In fact, the complaint alleged that the marketing suggested that "drinking three cans per day would lead to weight loss." Slip op. at 2.
When it came time to depose Ms. Franulovic, however, she admitted that she had not monitored her weight or caloric intake while drinking Enviga. She believed that she gained weight while drinking the beverage, but her only basis for that belief was that her pants felt tighter. Slip op. at 3.
The district court held that she failed to set forth sufficient evidence that she suffered an ascertainable loss, and the Third Circuit agreed. The appellate court also concluded that she could not prove loss causation: "Franulovic's failure to monitor her weight and caloric intake also makes it impossible to prove with any legal certainty that any weight gain was the result of drinking Enviga. Accordingly, she cannot show that Coca Cola caused her any ascertainable loss." Slip op. at 5.
Plaintiff also advanced another theory of liability -- namely, that the defendant failed to conduct any tests prior to marketing Enviga to substantiate the calorie burn claim that it had based on another entity's study. The Third Circuit refused to read a "prior substantiation" duty into New Jersey's Consumer Fraud Act:
No New Jersey or Third Circuit decision has applied the prior substantiation theory to the New Jersey Consumer Fraud Act, and we, therefore, decline to do so here. Because the District Court correctly held that a New Jersey Consumer Fraud Act claim cannot be premised on a prior substantiation theory of liability, it did not abuse its discretion when it denied Franulovic's leave to file a fourth amended petition.
Slip op. at 6.
Although the opinion in Franulovic is designated "not precedential," it should still give potential consumer fraud plaintiffs pause. Courts will not excuse a lack of clear evidence on loss and loss causation, nor will they invent new theories of liability under the already liberal consumer fraud statutes.
