Yesterday I opined that consumer fraud litigation against the maker of Nutella was frivolous because the amount of saturated fats, the calorie count, and the fact that Nutella contains sugar were all disclosed on the label of the product. As such, a consumer's purported reliance on advertising puffery about Nutella being part of a healthy breakfast to conclude otherwise was per se unreasonable, I harrumphed.
Late last night Bryan Redding at Lexis Nexis wrote me about a decision that came up online just as my post went up, denying the defendant's motion to dismiss. There's also an article about it at Product Liability Law360. Apparently basic fraud law does not apply in the People's Republic of California, I lamented. But perhaps I was too quick to reach an opinion on the subject.
In In re Ferrero Litigation, Case No. 11-CV-205-H (CAB), Slip op. (S.D. Cal. Aug. 29, 2011), the defendant argued that plaintiffs lacked standing because they had not identified a "long-term" advertising campaign for Nutella. The TV campaign, the defendant said, had only begun in 2009.
Citing the California Supreme Court's decision in In re Tobacco II Cases, 46 Cal. 4th 298 (2009), the court opined that the plaintiffs did not need to identify with specificity the misrepresentations they relied on where they alleged exposure to a long-term advertising campaign. Slip op. at 3. Because there was a dispute as to whether such a long-term campaign existed -- and the complaint alleged that it did -- the court gave the plaintiffs the benefit of the doubt and denied the motion to dismiss, observing that issue could be one upon which the defendant would prevail on summary judgment or at class certification.
The court also held that the UCL allegations met the Rule 9(b) pleading standard by identifying specific statements in the advertisements that were part of the "long-term" advertising campaign and explaining how they are allegedly deceptive. Slip op. at 4.
Interestingly, the defendant's motion does not appear to have argued that there can be no deception as a matter of law where the label itself discloses the ingredients, calories, and the amount of saturated fats. Of course, I have posted previously about decisions holding that where the product contains the ingredients listed on the label, mere advertising puffery describing the product as "healthy" is not enough to sustain a consumer fraud claim.
We'll see if Ferrarro ultimately is successful in getting these putative class actions dismissed. Maybe, maybe not. But I stand behind my belief that the JPML, in concluding that these cases did not present complicated fact issues, had in the back of its mind that this was frivolous litigation that ought to be dismissed, not consolidated into a federal MDL to manage massive pre-trial discovery.