Antitrust Law Daily Wrap Up, ADVERTISING—C.D. Cal.: LED TV purchasers denied certification of deceptive labeling claims, (Jun 24, 2016)

By Jody Coultas, J.D.

A television purchaser was denied certification of a consumer protection class action filed against Toshiba America Information Systems, Inc. by the federal district court in Los Angeles (Pierce-Nunes, et al. v. Toshiba America Information Systems, Inc., June 23, 2016, Gee, D.). The proposed class would require individualized inquiries into what class member understood about Toshiba’s television labeling.

The purchasers alleged that Toshiba falsely marketed and advertised its televisions as "LED TVs," "LED HDTVs," or "LED televisions" by failing to disclose that its references to light emitting diodes (LEDs) refer to the light source that illuminates the liquid crystal display (LCD panel), rather than the display technology itself. Alleging that he would not have purchased or would have paid less for his television had the television not been falsely and deceptively advertised, the purchaser filed California Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act, and the Florida Deceptive and Unfair Trade Practices Act claims against Toshiba.

In its motion for certification, the purchaser sought to represent a class of all persons who purchased a Toshiba-brand LED-lit LCD television on or after January 1, 2010. Toshiba opposed class certification.

Adequacy of representation. The class representative was an adequate class representative, according to the court. Toshiba argued that the class representative was not an adequate class representative because: (1) he lost his receipt, (2) his credibility has been compromised because his interrogatory responses do not match his deposition testimony regarding his television purchase history, and (3) he was unfamiliar about the legal theories of the case. The loss of the receipt did not put the purchaser in conflict with other class members because many class members may also lack receipts and can provide proof of purchase through other means. Although the testimony did not match his interrogatory responses regarding the identity of "flat panel televisions" purchased since January 1, 2004, such discrepancies did not impact issues directly relevant to the litigation given that he did not purchase another LED TV. The class representative was sufficiently familiar with the basic elements of his claims.

Typicality. However, the class representative failed the typicality requirement, according to the court. The test of typicality is whether other members have the same or similar injury, whether the action is based on conduct which is not unique to the named plaintiffs, and whether other class members have been injured by the same course of conduct. The class representative failed to provide any evidence that he relied on Toshiba’s advertising and product packaging when he decided to purchase an LED TV. Toshiba’s marketing, at times, disclosed that LED TVs use LEDs as the light source to illuminate the television panel. Because the class representative did not rely on the advertising, he was exposed to the defenses related to causation, reliance, and/or injury.

Predominance. The issues of reliance and materiality required individualized inquiry in this case,according to the court. The class representative alleged that because he is challenging the very name of the product itself—LED TV—common issues predominate because class members’ exposure to the challenged deception is apparent. Even assuming that each class member may have been exposed to the LED TV label, the court would have to inquire into what each class member understood about the product labeling and whether each class member relied on the LED TV label when purchasing a Toshiba-brand LED-lit LCD TV.

Also, Toshiba introduced evidence that its product packaging and advertising varied over time. Where exposure to the alleged misleading advertising and labeling varied, courts have found that individual issues predominate because consumers’ understanding of the alleged misrepresentation would not be uniform.

The court held that the class representative would not be able to demonstrate on a class-wide basis that the LED TV label was material to consumers’ purchasing decision. There are numerous reasons a consumer may purchase LED-lit LCD TVs. The question of whether reasonable consumers would find the "LED TV" label deceptive and material to their purchasing decision was not susceptible to class-wide proof.

The case is No. CV 14-7242-DMG (KSx).

Attorneys: Eric W. Buetzow (Zelle Hofmann Voelbel and Mason LLP) for Stacey Pierce-Nunes. Sean A. Commons (Sidley Austin LLP) and Alex Doherty (Allen Matkins Leck Gamble Mallory & Natsis) for Toshiba America Information Systems Inc. Amanda R. Farfel (Sidley Austin LLP) for Toshiba Corp. and Toshiba Lifestyle Products & Services Corp.

Companies: Toshiba America Information Systems, Inc.

Cases: Advertising StateUnfairTradePractices CaliforniaNews