Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.D. Ill.: Deceptive conduct claim found against seller of diaper disposal product, (Nov 8, 2013)

By Edward L. Puzzo, J.D.

The federal district court in Chicago has refused to dismiss allegations that a seller of a diaper disposal product engaged in deceptive conduct by displaying unsubstantiated claims of odor control on its packaging in violation of Illinois law (Muir v. Playtex Products, November 6, 2013, Feinerman, G.).

Kevin Muir, representing a class of purchasers, brought a claim against Playtex Products under the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA), alleging that the packaging for the Playtex diaper disposal system was deceptive. Packaging for that system, known as the “Diaper Genie II Elite”, displayed a large banner stating “Proven #1 in Odor Control”, but subsequent tests showed that Playtex’s product was not superior to competing products in odor control. Playtex moved to dismiss based on the failure to state a claim and on lack of standing, but the court ruled against the motion.

Deceptive conduct. To state a claim under the ICFA, the court explained, plaintiff must allege deceptive conduct by the defendant in the course of commerce, with the intent that plaintiff rely on the deception, resulting in actual damage proximately cased by the deception.

Playtex argued that its “Proven #1 in Odor Control” was not deceptive as a matter of law because the packaging also included text specifying the limitations of the claim. The court agreed that a statement deceptive in isolation could be non-deceptive when placed in context. However, opined the court, Playtex’s alleged placement of the disclaimer in much smaller type on the back of the package could have the capacity to deceive by not being sufficiently available as context presented to the consumer. Playtex also argued that the claim was not deceptive as a matter of law because “Proven #1 in Odor Control” is nothing more than permissible puffery. The court responded claims of odor control were capable of being measured precisely, unlike puffery, which is a subjective description of quality. Thus the court ruled that the complaint stated a claim that met the requirements of Federal Rule of Civil Procedure 12(b).

Actual damages. The actual damages element of an ICFA claim, as distinguished from the Article III injury-in-fact requirement discussed below, does not require an allegation that the product’s performance was deficient, the court stated. Actual loss may occur if the seller’s deception causes the purchaser to pay more than the actual value of the product. Illinois courts, it was noted, allowed damage claims based on the diminished value of a product regardless of whether it has yet malfunctioned, provided that the product has a defect affecting value. Muir’s allegation, that he was deprived of the benefit of the bargain because the product was worth less than it would have been had it had odor control superior to its competitors, was sufficient to plead actual damages under the ICFA, the court ruled.

Standing. To establish Article III standing, the court explained, plaintiff must allege injury-in-fact, causation, and redressability. Muir alleged financial injury, in purchasing a product at a premium price he would not have purchased without the claim; he alleged causation in the form of purchasing the product based on Playtex’ alleged misrepresentations; and he alleged redressibility in the form of financial compensation. These allegations were sufficient to establish standing, the court ruled. Playtex protested that the complaint failed to allege how the product actually performed, but that was unnecessary for standing, the court stated. Under Seventh Circuit precedent, the court continued, it was sufficient to make the mere allegation that, based on the alleged misrepresentation, the plaintiff paid more for the product than he otherwise would have been willing to spend and thus incurred financial injury. Thus standing for Article III purposes was established by plaintiff, the court ruled.

The case is Civil Action No. 13 C 3570.

Attorneys: Patricia N. Syverson (Bonnett Fairbourn Friedman & Balint, PC) for Kevin Muir. Athanasios Papadopoulos (Neal, Gerber & Eisenberg) for Playtex Products, LLC.

Companies: Playtex Products, LLC

Cases: StateUnfairTradePractices IllinoisNews