The State of California has multiple statutes that protect consumers from misleading and false advertising. Some of these laws include the Unfair Competition Law (“UCL”), the False Advertising Law (“FAL”), and the Consumer Legal Remedies Act (CLRA”). Combined, these laws serve to both protect consumers and afford legal recourse in the event of a company’s false advertising of a product or service. In a recent court action, Plaintiffs (consumers), brought an action in a California District Court, against Abbott Laboratories (“Abbott”), the maker of “nutrition” drinks, offered under the “Ensure” brand. The suit alleged multiple false advertising causes of action against Abbott.
False Advertising Case Allegations
Plaintiffs claimed that in purchasing the Ensure drinks, they relied on Abbott’s label representations, including that the products were both “Doctor Recommended” and characterized as “nutrition shake[s].” In support of their claims, Plaintiffs pointed out that Abbott added up to 22 grams of sugar per serving to the Ensure drinks, and that there is scientific evidence to support the notion that “consuming sugar-sweetened beverages harms, rather than supports, overall health.” Accordingly, Plaintiffs alleged that the labeling found on Ensure beverages, promoting them as “balanced, nutritious, and healthy,” amounts to false and misleading advertising.
How the Court Handled the Motion to Dismiss the False Advertising Claims
Abbott asserted many defenses to Plaintiffs’ claims, including, but not limited to: 1) lack of statutory standing; 2) preemption of state law claims; 3) application of a reasonable consumer standard; 4) disclosure of added sugar; 5) truth in some of the advertising language; and 6) inactionable “puffery.” The Court analyzed each of these defenses, and ultimately granted the motion to dismiss only with respect to those claims that the Court determined were “preempted nutrient content claims . . . .” Many of Plaintiffs’ false advertising claims survived the motion to dismiss. In rendering its decision, the Court reviewed the labeling of the subject products as it relates to the nutrient content and harmful nature of the added sugar. The Court concluded that it is “reasonable that a consumer could be misled by packaging promoting the products as ‘Complete, Balanced Nutrition’ and ‘for everyday health,’” implying that they help, rather than harm consumer health.
Additional Policing of False Advertising Campaigns
In addition to state consumer protection laws, companies must be aware of the Federal Trade Commission’s (“FTC”) mandate. Under the Federal Trade Commission Act (“FTC Act”), the FTC is tasked with policing false advertising and deceptive practices in commerce. According to the FTC Act, false advertising occurs when businesses make misleading, deceptive, or plainly false claims about a particular product or service. Claims may be misleading if they imply something that is untrue or leave out relevant information. As we learn from the Abbott case, consumers’ interpretation of the misleading claim must be reasonable.
Avoid False Advertising Claims by Carefully Designing Your Marketing Campaigns
In this case, consumers sufficiently asserted claims for false advertising, breach of warranty, and unjust enrichment. To avoid such a predicament, companies that market products and services must be sure to avoid making claims that could rise to the level of false advertising. The best way to ensure that a marketing campaign is compliant with applicable regulatory requirements is to work with an experienced marketing attorney.
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
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