Antitrust Law Daily Wrap Up, TOP STORY—6thCir: Consumers' Claims Against Procter & Gamble over Advertising for Cold Medicines Containing Vitamin C Revived, (Feb 25, 2013)

By Jeffrey May, J.D.

The U.S. Court of Appeals in Cincinnati has revived consumers' claims that Procter & Gamble violated New Jersey’s Consumer Fraud Act by claiming in its advertising for two new products in 2009—DayQuil Plus Vitamin C and NyQuil Plus Vitamin C—that Vitamin C “won’t cure a cold, but . . . can help blunt its effects.” Claims challenging three other advertising statements and claims under other state consumer-protection statutes were properly dismissed (Loreto v. Procter & Gamble Co., February 22, 2013, Griffen).

Consumers alleged in a proposed class action that Proctor & Gamble added vitamin C to its NyQuil and DayQuil in order to capitalize on a misconception that vitamin C treats and prevents the common cold. They argued that potential class members purchased the Proctor & Gamble products over competing ones in part because of the manufacturer's false and misleading statements.

The plaintiffs challenged the following advertising claims:

• "Combining the powerful multi-symptom relief of DayQuil with more than 150% of the recommended value of vitamin C."

• "VICKS NyQuil Cold & Flu Symptom Relief Plus Vitamin C provides multi-symptom cold and flu relief so you can get the sleep you need to enjoy an even sweeter tomorrow. Plus, you’ll also replenish your body with 150% of the daily value of vitamin C."

• "Vitamin C: It won’t cure a cold, but vitamin C can help blunt its effects. Aim for 500 mg a day." and

• "Fighting Cold and Flu Season… Don’t forget to take your daily vitamins. Consider taking extra vitamin C, vitamin A, and zinc, all of which may help you."

At the outset, the appellate court ruled that New Jersey law applied. New Jersey, the plaintiffs’ state of residence and the state where they purchased the products, was the “place of injury.” The court rejected the plaintiffs' assertion that Ohio law should apply because the challenged advertising campaign emanated from Procter & Gamble’s Ohio headquarters.

The district court had offered alternative reasons for dismissing the plaintiffs’ New Jersey Consumer Fraud Act claim: (1) it was preempted by the Federal Food, Drug, and Cosmetic Act (FDCA); and (2) it was not cognizable under New Jersey law.

Preemption. The appellate court explained that a plaintiff may not bring a claim under state law that is in substance one seeking to enforce the FDCA. The plaintiffs' claims that Procter & Gamble omitted telling consumers that its products were “illegal,” and had the plaintiffs known it, they would not have purchased the products, were impliedly preempted by federal law. The theory of liability depended entirely upon Procter & Gamble's labeling not complying with the FDCA’s requirements.

A claim that Procter & Gamble violated state law when it represented to the public that taking Vitamin C can blunt the effects of a cold was not, however, preempted, according to the court. The claim relied solely on traditional state tort law predating the FDCA. Although the Food and Drug Administration had concluded that Vitamin C had not been proven effective in cold treatment, the plaintiffs' claim did not depend upon this determination and would logically exist even in its absence, the court noted.

Ascertainable loss. The appellate court rejected the lower court's determination that the plaintiffs failed to plausibly allege an “ascertainable loss.” The plaintiffs alleged that they suffered an out-of-pocket loss when they purchased DayQuil or NyQuil Plus Vitamin C instead of a lower-priced competing cold medicine that did not contain the vitamin. The lower court should not have ignored the allegation that the plaintiffs would have purchased a lower-priced cold remedy but for Procter & Gamble’s alleged misrepresentations. The “quantifiable or measurable” loss was the difference in price between Procter & Gamble’s product and a lower-priced competing product.

The appellate court noted that the plaintiffs would not be entitled to a refund of the full purchase price if they prevailed. Their claim was that they would have purchased a lower-priced product not containing Vitamin C, not that they would have foregone purchasing any product.

With respect to the other challenged statements, there was no basis upon which to conclude that they were false, the court ruled. Any allegation that they were misleading to average consumers was implausible, the court also noted.

The case is No. 10-4274.

Attorneys: Scott A. Bursor for plaintiff-appellant. Mark A. Vander Laan (Dinsmore & Shohl) for defendant-appellee Procter & Gamble Co.

Companies: Procter & Gamble Co.

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