Consumer Fraud Suits Are Holding Brands to Higher Standard


When Teri Turner and David Lundquist hit Jamba Juice with a federal legal action last month, it was because they thought the popular smoothies provided health benefits on par with eating whole fruits and vegetables. But on the contrary, the shakes allegedly contain up to 610 calories and between 65 and 128 grams of total sugars.

“Relying on Jamba Juice’s marketing, plaintiffs bought the smoothies,” wrote Center for Science in the Public Interest attorneys in their August 23 pleading. “Plaintiffs would not have purchased the smoothies had they known that they lacked the ingredients, nutritional profile, and/or benefits marketed by Jamba Juice.”

Jamba spokesman Josh Nicosia declined to comment.

Filed in California Northern District Court, Turner v. Jamba Inc. is among a slew of false advertising complaints launched in federal court lately that are holding brands such as McDonald’s, L’Oreal and Eden Creamery to a higher standard.

“We can expect tighter advertising as a result, which is positive from the consumer’s perspective,” said Andy Lustigman, chair of Olshan Frome Wolosky’s advertising, marketing and promotions group. “For brands, it’s bad news because of the cost of litigation especially when the lawsuit is a certified class action.”

The Center for Science in the Public Interest has aggressively litigated and negotiated changes to the marketing and labeling of products such as Naked Juice, Cheerios Protein and Plum Organics baby food.

“In reality, consumers are paying premium prices for products that are primarily made of unadvertised, less nutritious, and cheap ingredients like pear and white grape juices from concentrate,” said Maia Kats, litigation director with the group.

In the federal case against McDonald’s filed in Florida Southern District Court, plaintiffs Cynthia Kissner and Leonard Werner allege the fast-food chain misrepresented its burgers in advertising and signage.

“Customers who want a quarter pounder or double quarter pounder or a value meal have been overcharged and coerced to order, purchase and pay for cheese that they do not want,” wrote plaintiff’s attorney Andrew Lavin in his May 8 complaint.

However, attorneys for McDonald’s fired back in a June 29 pleading that the lawsuit is flawed because retail restaurants don’t have a legal obligation to reduce the price of a standard menu item to reflect the customer’s decision to decline some ingredient or component that is included.

“The customer’s decision to refuse the cheese advertised as part of the sandwich, and which the restaurant is perfectly willing to supply, is no basis for imposing liability on McDonald’s Corp.,” stated McDonald’s attorneys Victoria Oguntoye and Jennifer Olmedo-Rodriguez.

The lawsuit has not changed the fast food chain’s advertising or how they prepare their burgers, according to Denise T. Wilson, southeast brand reputation manager for McDonald’s. “We do not believe the claims in this lawsuit have legal merit,” Ms. Wilson told Pacer Monitor. “The advertised Quarter Pounder Burger comes with cheese, and we strive to accommodate our customers’ requests to customize their orders, such as this one, with no cheese. Additionally, McDonald’s independent owner/operators determine menu pricing to be competitive in their respective markets.”

The court has yet to certify Ms. Kissner and Mr. Werner’s complaint against McDonald’s.

“It’s supposed to be addressed as soon as practicable—before the merits,” said Andrew S. Pollis, professor of law at Case Western Reserve University in Cleveland. “But judges have a lot of discretion over the timing of certifying a class action. It varies.”

On the upside for brands, it is rare for such a claim to proceed in federal court.

“What impacts one individual’s decision to buy a product may be different from another’s decision, and a class action complaint is based on a collective experience,” Mr. Lustigman told PacerMonitor. “When a judge does certify a claim, it’s typically because the court feels comfortable making a decision across the board for all purchasers, not just the plaintiffs.”

Most recently, federal Judge Lorna Schofield partially certified a class of consumers who claim to have experienced hair damage after the U.S. unit of French beauty conglomerate L’Oreal allegedly falsely marketed its Matrix Biolage Advanced Keratindose hair product line as containing the protein keratin.

“Because Plaintiffs were exposed to the same marketing and packaging as every other consumer who purchased the products, Plaintiffs are typical of the classes they seek to represent,” Judge Schofield ruled in her August 15 decision. L’Oréal has since asked the Second Circuit Court of Appeals to review the decision. In his appeal brief, L’Oreal Attorney Frederick B. Warder states that plaintiffs must demonstrate injury and causation but need not do so on an individual basis.

“The only way to determine whether consumers suffered injury as a result of the deceptive practice is to inquire whether consumers purchased the products – and paid a price premium – because of the challenged terms,” wrote Mr. Warder in L’Oreal’s defense.

According to court records, challenged terms refers to the claim that keratin is an ingredient in the L’Oreal product.

“Plaintiff Chadwick suffered hair loss after using the products. As a result, she ceased using the Products,” wrote Attorney Jason T. Brown on behalf of consumers Christine Chadwick and Brandi Price. “After several weeks of use, Plaintiff Price noticed that the Keratindose Spray seemed to be damaging her hair, causing it to be brittle and dry. As a result, she ceased using the Product and had to pay for conditioning treatments to fix her damaged hair.”

A request for comment from L’Oreal was unanswered by press time.

While the court of appeals reviews the decision to certify, the case is proceeding to discovery in district court. “Businesses need to be very careful,” Mr. Lustigman said. “Examine your business practices and the claims you’re making very closely because as a business owner you need not only worry about federal and state regulators but also the possibility that your advertising and marketing practices will be heavily scrutinized for any potential mis-statements, which carries a tremendous liability.”

Since the Class Action Fairness Act of 2005 was passed, it is now easier for individual plaintiffs to file class action lawsuits in federal court because of expanded subject-matter jurisdiction. “It was thought that state courts were running amok,” Mr. Pollis said. “The Act is designed to permit greater federal oversight into class actions.”  

In June, plaintiffs Youssif Kamal and Gillian Neely filed their lawsuit against Eden Creamery for allegedly cheating them out of a full pint of ice cream, and requesting an award for monetary damages, including but not limited to, compensatory, incidental and consequential damages as well as an award for punitive damages.

“The amount of underfilling appears to be random to consumers, it can vary in amount of underfilling and appears to be unrelated to flavor of ice cream or the location of purchase,” wrote Mr. Kamal and Mr. Neely’s attorney Andrew J. Brown in his Southern District of California June 15 complaint. “In short, it is difficult (if not impossible) for any consumer to know – until after purchase and upon opening the container – whether or not they will receive a full pint.”

“What’s interesting about these cases is that it used to be competitors or the Federal Trade Commission suing,” Mr. Pollis told PacerMonitor. “But more recently, it’s consumers that are filing false-advertising suits.”

For example, plaintiffs Turner and Lundquist brought their Jamba Juice lawsuit under California and New York consumer-protection statutes but could not sue under the Lanham Act because it does not include a remedy for consumers.

“Competitor brands or the FTC principally sue under the Lanham Act while consumers can rely on state-law claims, such as breach of contract and fraud, which vary from state to state,” said Mr. Pollis.

Whether it’s hair damage, a missing bit of dessert or not using ingredients such as vegetables and fruit, the plaintiff results will likely be similar to lawsuits of the past that were filed by competitors: corrective advertising campaigns and percentage-off coupons.


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