Alert September 26, 2016

Advertising in MA: Can Consumers Bring Class Actions for ‘Deceptive’ Advertising that has Neither Deceived Nor Harmed Them?

Summary

If your company advertises and sells products in Massachusetts, it could be subjected to a class action lawsuit by Massachusetts consumers who purchased one of its products if the consumers can show that a reasonable person could have construed the advertisements to convey a deceptive implication. Under Massachusetts’ Consumer Protection Act, G.L. c. 93A, § 9, the company potentially could be found liable to pay damages, plus attorneys’ fees, even if the advertisements were technically accurate and regardless of whether all consumers in the class were misled by the advertisements.

Massachusetts’ Consumer Protection Act, G.L. c. 93A, § 9 (93A), provides consumers who are “injured” as the result of an “unfair or deceptive” act or practice in trade or commerce with a cause of action and a variety of remedies. Under 93A, it can be easier for plaintiffs to obtain class certification than is typical in other claims under Massachusetts law or under the federal rules. Plaintiffs must only show that “the unfair or deceptive act or practice has caused a similar injury to numerous other persons similarly situated” and the named plaintiff(s) “adequately and fairly represent. . . such other persons.”

Under 93A, plaintiffs can recover damages where they can show that the defendant engaged in “deceptive” conduct that “injured” them. Massachusetts courts have held that a statement made in advertising in the course of promoting or selling a product is “deceptive” where it is merely capable of conveying an impression that is unsubstantiated and/or could mislead a reasonable consumer into purchasing the product, regardless of whether the statement was technically accurate, the product advertiser intended to mislead consumers, or the plaintiffs were actually misled. Advertising is broadly defined here to include virtually any communication, whether oral, written or graphic, and regardless of the mode of communication (e.g., T.V., radio, print ads or the internet).

The requirement that plaintiffs prove they have been “injured” by “deceptive conduct” is the most important (and sometimes the only) obstacle 93A places between a plaintiff who purchased a deceptively advertised product but was not deceived and an award of money damages. However, Massachusetts courts have issued confusing and sometimes contradictory decisions on what it means to be “injured,” and whether plaintiffs who have suffered no physical or emotional harm, or provable economic loss, can be deemed to have suffered a compensable injury.

Background

Twelve years ago, the Supreme Judicial Court, in Aspinall v. Philip Morris Companies, Inc., 442 Mass. 381 (2004), ruled that a class of plaintiffs who purchased Marlboro Lights and claimed that the terms “lights” and “lowered tar and nicotine,” as used on the cigarette packages, conveyed the misleading impression that Marlboro Lights were safer than full-flavored Marlboros, had properly alleged that they each suffered a per se injury in purchasing and using the cigarettes. The SJC deemed it irrelevant that the terms were technically accurate (Marlboro Lights measured lower in tar and nicotine than did regular Marlboros under the Federal Trade Commission’s standard test for measuring these substances), that some of the plaintiffs admittedly received lower tar and nicotine from Marlboro Lights than they would have from regular Marlboros, and some of the plaintiffs were not mislead by the implied representations.

In subsequent decisions, the SJC has appeared to cut back on its Aspinall holding, and suggest that, to prove an “injury” under 93A, consumers must establish they suffered some form of cognizable harm apart from the mere purchase of a deceptively advertised product. For example, in Hershenow v. Enterprise Rent-A-Car Co. of Boston, Inc., 445 Mass. 790 (2006), plaintiffs who purchased collision damage waiver protection (CDWs) in renting automobiles had not alleged an injury under 93A where, even though the rental agreements contained provisions concerning the cancellation and restriction of, and exclusions to, the CDW protection that contravened Massachusetts law and were therefore deceptive, plaintiffs had not been involved in a car accident and the offending provisions therefore had never been triggered. Additionally, in Tyler v. Michaels Stores, Inc., 464 Mass. 492, 503 (2013), the SJC noted, “[O]ur recent decisions generally establish the following: The invasion of a consumer’s legal right (a right, for example, established by statute or regulation), without more, may be a violation of G.L. c. 93A, § 2, and even a per se violation of § 2, but the fact that there is such a violation does not necessarily mean the consumer has suffered an injury or loss entitling her to at least nominal damages and attorney’s fees; instead, the violation of the legal right that has created the unfair or deceptive act or practice must cause the consumer some kind of separate, identifiable harm arising from the violation itself.  . . . [A] plaintiff bringing an action for damages under c. 93A, § 9, must allege and ultimately prove that she has, as a result, suffered a distinct injury or harm that arises from the claimed unfair or deceptive act itself.”

Earlier this year, the Massachusetts Superior Court, attempting the arguably difficult task of reconciling Aspinall with the SJC’s subsequent decisions purporting to distinguish it, reasoned that, while the mere purchase of a deceptively advertised product is not a per se injury, an increase in price caused by the deceptive advertising of at least “one penny” is an “injury,” and that such an increase in price may even be “inferred,” see Geanacopoulos v. Philip Morris USA Inc., 33 Mass. L. Rptr. 308, 318 and 322 n.6 (2016) (Aspinall II). However, given the absence of any clear proof in that case that the price of Marlboro Lights was increased by use of the deceptive terms, plaintiffs’ lawyers may try to argue that the case supports the proposition that the mere purchase of a deceptively advertised product can be a per se injury under 93A. The trial court held that, because the plaintiffs failed to prove the amount by which the deceptive statements had increased the price of the product in question, they could each recover a statutory minimum of $25 in damages, plus attorneys’ fees and prejudgment interest at 12% per year, see Aspinall II, 33 Mass. L. Rptr. at 321 and 322 n.17.

A few months after the Superior Court’s Aspinall II decision, the SJC, in Bellermann v. Fitchburg Gas & Elec. Co, 475 Mass. 67 (July 29, 2016), ruled that a putative class of plaintiffs could not show an “injury” in the form of overpayment for electrical service from the defendant electric company based on defendant’s alleged deception in misrepresenting its ability to respond to and quickly resolve power outages because plaintiffs never lost power, and therefore “received all the electric service for which they paid during the class period.” The SJC purported to distinguish its decision in Aspinall on the basis that “each putative class member had purchased and smoked cigarettes that did not deliver the advertised health benefit.” However, some of the Aspinall plaintiffs had received lower tar and nicotine from Marlboro Lights. Bellermann, therefore, sheds little light on when the purchase of deceptively advertised products may be deemed an “injury” under 93A.

Implications

Plaintiffs’ attorneys are aware of the lack of clarity in the Massachusetts 93A case law on this question and the opportunities it creates. They have recently held seminars showing they are focusing their cross-hairs on the food industry, and particularly on advertisements signifying that certain ingredients (such as sugar, salt or artificial ingredients) have been reduced or removed from products. Plaintiffs contend that such advertising conveys an implied claim that the reformulated product is healthier for consumers, much as the terms “lights” and “lowered tar and nicotine” were alleged to have done in Aspinall.

Plaintiffs’ counsel are also aware of some of the sharp criticisms leveled by some consumer-oriented public advocacy groups against efforts to promote certain food items as providing consumers with healthier alternatives. For instance, the Center for Science in the Public Interest contends that one of the world’s largest fast food chain’s removal of high fructose corn syrups and reduction of saturated fats from certain of its products fails to “address the big picture problem . . . namely the obesity epidemic in America,” and that promoting these product changes creates the misleading impression that they make these products healthier. Similarly, a senior staff attorney with the Public Health Advocacy Institute (PHAI) at Northeastern University of Law, which has been intimately involved in supporting litigation against tobacco companies, recently published an article that launches essentially the same emotionally charged attack against modern-day food advertisements that has been leveled against cigarette companies for years:  “digital food marketing works in conjunction with traditional media such as television, print media, and food packing by integrating websites, mobile applications (apps), viral marketing techniques and location-based tactics to get child consumers to request and consume unhealthy food and beverage products.” The article advocates that consumer protection laws should be used to address food advertisements.

There are a variety of arguments and defenses that can be raised against claims that a product has been deceptively advertised and that the mere purchase of the product constitutes an injury for which damages are available under 93A, and we anticipate that future cases may add clarity to this unsettled area of the law. In the meantime, however, companies that advertise and sell products in Massachusetts should be aware of the current uncertainty in the law and the willingness of plaintiffs’ counsel to attempt to exploit it.

If you would like to know more about how to reduce the chances that an advertisement will be construed as being deceptive, what arguments can be raised to attempt to defeat a 93A claim, or how 93A may impact your business, please contact counsel Mike Murray.