California, like most other states, applies the “reasonable consumer” test to deceptive advertising or labeling claims. California’s Attorney General Rob Bonta recently weighed in on a Ninth Circuit appeal involving the application of this test, urging the Court to make dismissal at the pleadings stage much more difficult.
The plaintiffs in Souter v. Edgewell, a putative class action brought in the United States District Court for the Southern District of California, alleged that defendant Edgewell Personal Care labeled its Wet Ones hand wipes in a manner that misled consumers about the wipes’ efficacy and safety. The plaintiffs claimed that Wet Ones wipes did not actually “Kill 99.99% of Germs” because the active ingredient is not effective against certain germs, viruses, bacteria, and spores, and also claimed the wipes are not hypoallergenic or gentle on the skin. The district court granted the defendant’s motion to dismiss with prejudice, finding that the plaintiffs failed to plausibly allege that a reasonable consumer would be misled by the challenged representations. The plaintiffs then appealed.
In an amicus brief filed on January 30, 2023, the State urges the Ninth Circuit to reverse the district court’s dismissal of plaintiffs’ claims and “reaffirm the principle that factual questions related to false advertising claims generally should not be resolved on the pleadings.” Among other things, the State argued that false advertising cases are inherently fact-intensive and that established behavioral science supports applying a “real world” lens to consumer deception issues because real-world consumers behave differently from judges or lawyers in making purchasing decisions. The State further argues that the district court should not have “assumed” at the pleading stages how a real-world consumer exercising “situational reasonableness” would understand the labels.
If the Ninth Circuit adopts the State’s interpretation of California’s “reasonable consumer” test, that could significantly increase the difficulty for class-action defendants to challenge deceptive-advertising claims at the pleading stage. Under the prevailing current interpretation, trial courts may make some determination of reasonableness and, if appropriate, resolve claims on motion to dismiss. For example, and as the State notes in its amicus brief, courts have found that “a claim that illustrates ‘wishful thinking’ on the plaintiff’s part or ‘runs counter to ordinary common sense or the obvious nature of the product . . . is fit for disposition’ at the pleading stage.” But it is unclear how that common sense threshold, which permits courts to dismiss many claims on the pleadings, will align with the State’s proposed “real world” lens intended to limit judges’ discretion and to allow more such claims to survive.
Companies at risk of false advertising claims and class-action litigation over consumer products will want to pay close attention to the outcome of this appeal.
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