Courts traditionally have been reluctant to certify plaintiff classes of consumers in cases alleging deception from mass media advertising.  Almost invariably, courts found that individual issues of whether each consumer was duped by the challenged ads would overwhelm any issues common to all class members, that the class would not be manageable, or that the named plaintiffs could not be considered "typical" of the multitude of consumers they sought to represent.  In recent years, however, some entrepreneurial plaintiffs and their counsel have been emboldened by a spate of state court decisions that seemed to buck the traditional rules.

Cause for Concern

In Florida, for example, a state appeals court in 2000 certified a class of mobile phone purchasers in a case alleging that consumers were misled by promotions that over-promised on the phones' capabilities.¹  In 2003, West Virginia's highest court held that a class of all purchasers of a diabetes drug could be certified on allegations that the drug's safety profile had been misstated in promotional materials.²  Massachusetts' high court, the following year, similarly gave the green light to a class of cigarette purchasers who alleged they had been misled by "low tar" claims on their cigarette packs.³

These decisions understandably left advertisers with more than a little unease.  Class litigation – especially in the event that a class is certified – can be exceedingly burdensome and costly.  The mere filing of a class action, let alone class certification, can also have crippling public relations consequences for a brand.  Moreover, whereas federal court false advertising challenges brought by a competitor are often confined to injunctive relief, class plaintiffs routinely seek sizeable monetary damages.  Just to avert such uncertainties, some advertisers have felt pressure to acquiesce in high dollar settlements, even when the underlying allegations of false advertising had no merit.

Advertisers can now once again breathe a bit easier.  A series of decisive class action rulings in favor of McNeil Nutritionals, the maker of SPLENDA, illustrates that advertisers can still successfully thwart spurious class litigation.

Facing Worst Fears

McNeil markets SPLENDA^®, the ubiquitous no-calorie sweetener sold in yellow packets that has taken the market by storm to become the best-selling branded sweetener in the United States.  The patented process used to make the sweetening ingredient in SPLENDA – known as "sucralose" – starts with pure cane sugar.  The sucralose molecule closely resembles sugar in key respects, and SPLENDA shares many of the taste and performance properties of sugar.  However, unlike sugar, SPLENDA imparts no calories.

The packaging and advertising for SPLENDA highlights the various ways in which the product differs from its competitors.  In particular, virtually all promotional materials have noted that SPLENDA is "made from sugar so it tastes like sugar."  In late 2004, McNeil's leading U.S. competitor in the low-calorie sweetener market and a trade association representing major U.S. sugar companies filed separate federal false advertising lawsuits.  Both alleged that SPLENDA advertising falsely implies, among other things, that the product is "natural" or actually "contains sugar" as opposed to sucralose.

The filing of those lawsuits triggered a cascade of copycat state consumer class actions. Indeed, the allegations in the state class complaints were in some cases literally cut and pasted from the federal court pleadings.  More than a dozen class actions were filed in total, across seven different states:  Florida, New York, California, New Jersey, Massachusetts, Ohio and West Virginia.

Rather than seek to compromise these cases at an early stage – a strategy that likely would have led to even more cases being filed – McNeil mounted an aggressive strategy to defeat class certification.  If class certification could be successfully opposed in just one or two states, McNeil surmised that the remaining states might follow suit.  That's exactly what happened.

Challenging Class Representation

A critical first step was to bifurcate the issues of class certification from the merits.  Among other benefits, focusing the litigations on the sole issue of whether class treatment was appropriate protected McNeil's business from the expense and business disruption of merits discovery.  It also made the taking of the named plaintiffs' depositions the first order of business.  The primary purpose in deposing the named plaintiffs was to test whether their individual claims, in fact, were "typical" of the class allegations and whether they were "adequate" class representatives.  It was in those depositions that the class actions showed the first signs of unraveling.

Central to the class complaints was the allegation that the putative classes of prior SPLENDA purchasers in each state bought the product on the mistaken belief that it was "natural" or "contained sugar."  But the depositions revealed that several named plaintiffs bought SPLENDA for reasons having nothing to do with any supposed deception.  The Ohio plaintiff, for example, testified that she bought SPLENDA because it didn't have calories, she liked the taste, and it didn't contain aspartame.  One New Jersey plaintiff purchased SPLENDA only because her brother recommended it.  Some plaintiffs even testified that they bought the product because they were specifically looking for an artificial sweetener suitable for diabetics or dieting.  Far from being "typical," these plaintiffs' stories were completely at odds with the allegations of their complaints.

Still other named plaintiffs proved to be plainly inadequate class representatives.  Courts test the "adequacy" of class representatives in order to guard against the possibility that the named plaintiffs and class counsel will make decisions for their mutual benefit but to the detriment of absent class members.  A judge, in other words, wants to be assured that named plaintiffs have some measure of independence from class counsel.  Far from making such a showing, the New York plaintiff divulged at deposition that class counsel was her daughter.  A Massachusetts plaintiff turned out to be her counsel's mother-in-law. A West Virginia plaintiff meanwhile disclosed he was the spouse of class counsel's office manager.

Using Survey Evidence To Defeat Predominance

Most motions for class certification turn on the issue of predominance.  In general, plaintiffs argue that class members are bound together by common legal and factual issues and that those common issues predominate, rendering class treatment the most efficient means of resolving class members' individual grievances.  Defendants, on the other hand, counter that any efficiencies to be gained by proceeding as a class action would be outweighed by issues that could only be determined on a person-by-person basis.

In false advertising cases, courts most often find a lack of predominance when there is reason to doubt whether every class member even saw the challenged advertisements.  In the case of SPLENDA, however, that argument would have rung hollow because the "made from sugar so it tastes like sugar" claim appears in every SPLENDA ad, on every SPLENDA package, and even across each yellow packet.  However, even conceding that nearly every purchaser was exposed to the challenged claim, McNeil argued that a court would still have to make a series of highly individualized factual determinations.

First, the plaintiffs' cases were premised on a theory of implied falsity.  The plaintiffs, McNeil argued, would therefore have to show that each purchaser who saw the advertisements actually took away one of the implicit false messages allegedly lurking in the ads.  Not every class member, in other words, could simply be presumed to have misinterpreted the ads in precisely the manner plaintiffs alleged in their complaints.

Second, even if some purchaser did hold a mistaken impression about the product, McNeil argued that a court would still have to determine whether that individual's misperception actually played a role in her purchase decision.  A consumer, for example, might in theory mistakenly believe that SPLENDA grows on trees, but that person would not be entitled to recovery under most states' unfair competition laws if her sole reason for buying the product was that she liked the taste.

McNeil demonstrated these points through survey evidence.  A nationally recognized market research firm was commissioned to survey previous SPLENDA purchasers about their reasons for buying the product.  The results of the survey belied the plaintiffs' allegations of widespread deception.  In overwhelming numbers, respondents indicated that they bought the product because they liked the taste; it was recommended by a friend or doctor; they had a health or diet reason for wanting to reduce calories; or they just wanted to try something new.  Only a tiny percentage of people indicated that a belief that SPLENDA is "natural" or "contains sugar" factored into their decision to buy.

Armed with such evidence, McNeil argued that the touchstones of liability in each state – the elements of "injury" and "causation" – would ultimately require individual "mini-trials" to ascertain each purchaser’s interpretation of the challenged ads and her ultimate reasons for purchase.

Falling Like Dominos

The first court to address the issue of class certification was a Circuit Court in the State of Florida.  In what local lawyers report may be the longest decision ever issued by this particular judge, the court accepted each of McNeil's arguments and denied class certification in all respects.  Whether any class member "suffered a loss," the court wrote, "depends on the individual's reasons for purchasing Splenda."  A court therefore would have to investigate each consumer's reasons for purchase, lest the class sweep in many "satisfied customers, who sustained no loss (and might happily continue to purchase the product)."⁴

Next up was New York.  There, too, the Court rejected a state-wide class of SPLENDA purchasers upon finding that each class member's right to recover would turn on a host of individualized factors, including "the number of times each proposed class member purchased Splenda" and "whether each purchase was influenced by the allegedly deceptive advertising."⁵  


With those precedents in hand, McNeil turned its attention to California.  California was perhaps the "most worrisome" of the numerous class actions because the case was to be among the first to test the effect of Proposition 64 - an amendment to California's  consumer protection law enacted through a ballot initiative in 2004 - on class certification. 

McNeil argued that Proposition 64 effected a radical change to California's statutory scheme, bringing California in line with the majority of states in which a class will not be certified absent a showing that each class member was deceived by the challenged ads and purchased the product in question on account of that deception.  On that issue of first impression, the California court agreed fully with McNeil's reading of the statute.⁶  Accordingly, the class sought by the plaintiffs – which might well have been certified prior to Proposition 64 – could not stand.

In the aftermath of the denials of class certification in Florida, New York and California, the class allegations in each of the remaining cases challenging SPLENDA advertising were dismissed and nearly all of the cases have now been discontinued.  These precedents should embolden defendants in future cases and help them defeat attempts to certify plaintiff classes of consumers who allege they were injured by mass media advertising.

Endnotes

1. Davis v. Powertel, Inc., 776 So.2d 971 (Fla. 1st Dist. Ct. App. 2000).

2. In re West Virginia Rezulin Litig., 214 W.Va. 52 (2003).

3. Aspinall v. Philip Morris Cos., 442 Mass. 381 (2004).

4. Green v. McNeil Nutritionals, LLC, et al., No. 2004-0379-CA, 2005 WL 3388158 (Fla. Cir. Ct. Nov. 16, 2005).

5. King v. McNeil Nutritionals, LLC, et al., No. 600168/05 (N.Y. Super. Ct. Jan. 26, 2006).

6. Turner v. McNeil Nutritionals LLC, et al., No. BC-326265 (Cal. Super. Ct. Jan. 26, 2006)