Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Consumers’ false and deceptive advertising claims against Tempur-Sealy may proceed, (Jan 29, 2016)

By Linda O’Brien, J.D., LL.M.

In a putative class action against a leading bedding manufacturer, a group of bedding purchasers sufficiently alleged false and misleading advertising claims in relation to the company’s statements of the content and quality of its bedding products, according to the federal district court in San Francisco (Todd v. Tempur-Sealy International, Inc., January 28, 2016, Tigar, J.).

In 2013, Alvin Todd and other consumers filed a putative class action against bedding manufacturer Tempur-Sealy International. They alleged that the company made misrepresentations in the marketing and sale of mattresses, pillows, and other bedding products containing Tempur brand material, in violation of California’s Consumer Legal Remedies Act (CLRA), Unfair Competition Law (UCL), False Advertising Law (FAL), and various state consumer protection laws. Specifically, the consumers alleged that Tempur-Sealy misrepresented that its Tempur-Pedic products were formaldehyde free, allergen resistant, and hypoallergenic, when testing revealed that the products contained formaldehyde and other compounds that could cause allergic reactions. Tempur-Sealy moved to dismiss.

Heightened pleading requirements. The court found that the plaintiffs’ complaint provides sufficient factual allegations to meet the heightened pleading requirements under Federal Rule of Civil Procedure 9(b) for fraud. According to the court, the plaintiffs plausibly alleged that: (1) since at least 2007, Tempur-Sealy misrepresented the content and quality of its products in marketing materials; (2) the defendant knew the assertions were untrue based on their own internal testing and consumer complaints; (3) such representations were likely to deceive a reasonable consumer; (4) the plaintiffs relied on those misrepresentations; and (5) the misrepresentations caused injury to the plaintiffs. The plaintiffs also identified the specific marketing phrases they saw and relied on, and provided copies of the various advertisements themselves.

Standing. The plaintiffs had standing for claims of misrepresentation by omission, since they alleged an injury. The court noted that the complaint claimed that the chemicals in Tempur-Sealy’s products could and did cause physical harm and that the products injured some customers. The plaintiffs also alleged that they would not have purchased the product had they known of the products’ chemical contents, which was sufficient to show an injury-in-fact.

California claims. The defendants argued that the omission claims under California law must be dismissed because the plaintiffs failed to show that the levels of volatile organic compounds or formaldehyde caused harm to the plaintiffs. The court disagreed, finding that the plaintiffs adequately pleaded an injury-in-fact caused by the alleged inaccurate or misleading information provided by the defendants.

Duty to disclose. The court determined that the plaintiffs alleged sufficient facts to support a duty to disclose under Massachusetts, New Jersey, and New Mexico consumer protection laws. The complaint claimed that the defendants were aware of information that was contrary to the statements in their advertising and that their advertising was misleading without this information. The plaintiffs also alleged many examples of harms that result from the presence of chemicals in Tempur-Sealy products, pointed out specific advertisements that they saw, and claimed that the defendant concealed contrary information that would have corrected the misleading advertising. Therefore, Tempur-Sealy’s motion to dismiss was denied.

The case is No. 3:13-cv-04984-JST.

Attorneys: Allen Mark Stewart (Allen Stewart, PC) for Alvin Todd. Mark Lemar Eisenhut (Call & Jensen) for Tempur-Sealy International, Inc. f/d/b/a Tempur-Pedic International, Inc. and Tempur-Pedic North America, LLC.

Companies: Tempur-Sealy International, Inc.; Tempur-Pedic North America, LLC

Cases: Advertising StateUnfairTradePractices CaliforniaNews