When it comes to evaluating false and deceptive advertising, the Federal Trade Commission considers an ad deceptive, in part, if it contains a statement - or omits information – that is likely to mislead consumers acting reasonably under the circumstances.
Similarly, California utilizes an objective, reasonable consumer standard.
Enter the California Attorney General who, in late January, filed an amicus brief in defense of California laws protecting consumers from false and misleading advertising. The brief filed in the Ninth Circuit Court of Appeals supports the plaintiff in Souter v. Edgewell Personal Care Co, who alleged in a false advertising lawsuit that defendants’ Wet Ones Antibacterial Hand Sanitizing Wipes do not in fact “kill 99.99% of germs” as their labels claim. Plaintiff alleged that the products are in fact ineffective against many common, harmful viruses, and bacteria.
The case was originally presented before the United States District Court for the Southern District of California, but the district court dismissed the plaintiff’s claims that the manufacturer had engaged in deceptive advertising, with prejudice. In doing so, the lower court held that the plaintiffs failed to plausibly allege that a reasonable consumer would be misled by the challenged representations.
The plaintiffs appealed.
In the brief, Attorney General Bonta argues that the district court erred in dismissing the case prior to receiving evidence, and failed to properly consider real-world consumer behavior in reaching its decision.
In the brief, Attorney General Bonta argues the district court erred in dismissing Souter’s case for two reasons.
First, deceptive advertising claims generally present questions of fact that are not appropriate for dismissal in the initial stages of litigation, except in rare circumstances, according to the State of California. Second, courts must consider how reasonable consumers actually behave in the real-world context in which they make every day purchasing decisions, the State argued.
California trial courts presently possess some discretion pertaining to reasonableness and granting motions to dismiss.
The brief cited the Psychological Foundations of Marketing, “the average package only has one tenth of a second to make an impression on the shopper.” Reasonable consumers prioritize easily accessible information right in front of them over additional or contradictory information that might require research or expertise, Bonta states.
The Attorney General’s office argued that the district court should not have “assumed” at the pleading stage how a real-world consumer using “situational reasonableness” would understand the labels.
“It is challenging enough for consumers to make healthy, well-informed purchasing decisions without worrying that advertisers might be making deceptive claims about their products,” said Attorney General Bonta. “When companies make claims about their products, they have a responsibility to ensure those claims are fully accurate, and when consumers raise plausible allegations that advertising is misleading, they have a right to their day in court. I urge the Ninth Circuit to reverse the district court’s decision and allow this case to move forward.”
The brief takes no position on the ultimate outcome of the case at trial.
An FTC compliance and defense lawyer can provide additional information about the FTC’s policy on advertising deception.
A copy of the amicus brief is available here.
Takeaway: California's interpretation of the “reasonable consumer” test could make it much more difficult for defendants to dispose of deceptive advertising claims at the pleading stage should it be adopted by the Ninth Circuit. Digital marketers should consult with an experienced ecommerce attorney on matters of claim substantiation and the outcome of this case.
