Antitrust Law Daily Wrap Up, ADVERTISING—D.N.J.: Consumers state claims against L’Oreal over marketing of anti-wrinkle products, (Dec 11, 2013)

By Edward L. Puzzo, J.D.

Claims of false advertising in connection with anti-wrinkle products sold by L’Oreal under various product names were pleaded with sufficient particularity to survive a motion to dismiss, the federal district court in Newark, New Jersey, has ruled (In Re L’Oreal Wrinkle Cream Marketing and Sales Practices Litigation, December 9, 2013, Martini, W.).

The multidistrict putative class action litigation involved twelve named plaintiffs in five states. They alleged false advertising by L’Oreal and its related brands, regarding anti-wrinkle creams sold under thirty product names in six collections. The plaintiffs contended that the purchases were made in reliance on false and misleading L’Oreal advertisements.

According to the plaintiffs, the defendants engaged in a misleading and deceptive marketing campaign by falsely claiming that L’Oreal anti-wrinkle products were “the product of vigorous scientific research and resulting discoveries.” The plaintiffs alleged that the studies were too small to derive statistically significant results and that photoshopped images gave a false impression of product efficacy.

Standing. The named plaintiffs collectively purchased sixteen of the thirty products. On standing grounds under Rule 12(b)(1) of the Federal Rules of Civil Procedure, L’Oreal moved to dismiss claims based on the fourteen products plaintiffs admittedly did not purchase.

There are circumstances in which putative class action plaintiffs can bring class claims based on products they did not purchase, the court explained. The standing inquiry can survive the motion to dismiss stage and wait for the class certification stage as long as the basis for the claims, between products purchased and products not purchased, were the same; the products were closely related; and the defendants were the same, the court stated. Since the plaintiffs’ claims met these criteria, the court ruled, the motion of dismiss on standing grounds had to be dismissed.

Fraud, unjust enrichment, and breach of express warranty. L’Oreal also sought to dismiss plaintiff’s claims of fraud, unjust enrichment, and breach of express warranty, for failure to meet Rule 9(b)’s pleading with particularity requirement.

The plaintiffs’ pleadings did satisfy the “who, where, how, when and what” particularity requirements, the court explained. L’Oreal is accused of using advertising to induce the purchase of products that could not provide the promised results. Plaintiffs provided the approximate time of exposure to the ads, pleaded the specific products purchased, and the statements within the advertising that caused them to purchase the products.

Since the pleadings met the particularity requirement, the court ruled, L’Oreal’s motion to dismiss the fraud, unjust enrichment, and breach of express warranty claims must be denied, with one exception. Since New Jersey law does not allow a recovery based on unjust enrichment when purchases are made from a third party, the court dismissed the New Jersey unjust enrichment claims with prejudice.

The case is Civil Action No. 2:12-03571 (WJM).

Attorneys: James E. Cecchi (Carella Byrne Cecchi Olstein Brody & Agnello, PC), Judith S. Scolnick (Scott & Scott LLP), and Scott A. George (Seeger Weiss, LLP) for Lydia Fabend. Jennifer Sarnelli (Gardy & Notis, LLP), Martin S Bakst (Martin S Bakst Law Offices), and Maxwell M Blecher (Blecher and Collins PC) for Sonia Kallen. Aaron Samuel Podhurst (Podhurst Orseck Josefsberg), and Jeremy William Alters (Alters Law Firm) for Constanza Nino. Jeffrey Samuel Jacobson (Debevoise & Plimpton LLP) for L’Oreal USA, Inc., Lancome, Inc., and Lancome Luxury Products, LLC.

Companies: L’Oreal USA, Inc.; Lancome, Inc.; Lancome Luxury Products, LLC.

Cases: Advertising StateUnfairTradePractices NewJerseyNews