An Unexpected Evidentiary Battleground: The 'Causation' Element in Consumer Protection Claims

Ordinarily, the focus in a product liability case is on the defendant-manufacturer's duty to design and manufacture a safe and useful product and to warn adequately of any risks associated with its use. But an interesting and unexpected battleground can arise from a tag-a-along consumer protection claim. Here is the scenario: Plaintiff, in an individual action, sues defendant-manufacturer for injuries allegedly sustained in connection with the use of defendant's product. Plaintiff sues under traditional product liability theories as well as under the state's consumer protection statute, which proscribes deceptive and misleading trade practices. In particular, plaintiff alleges a consumer fraud has occurred because she has been injured by a product that, she claims, had been sold in connection with deceptive sales practices; in this case, certain allegedly false or misleading advertisements.

Plaintiff has testified at her deposition that she has not seen or heard the advertisements in issue. Nevertheless, she proposes to admit the advertisements because, she points out, the state consumer protection statute under which she is suing does not require that she relied on the alleged misleading sales practice. (While the majority of courts hold that proof of actual reliance is not required under the state consumer protection statute, proof of reliance is required in some jurisdictions. Be sure to check your particular state's consumer protection statute and interpreting case law.) Compare Stutman v. Chemical Bank, 95 N.Y.2d 24, 29 (2000) (no reliance required) and April v. Union Mortgage Co., 709 F. Supp. 809, 812 (N.D. Ill. 1989) (same) and Podolsky v. First Healthcare Corp., 58 Cal. Rptr. 2d 89, 98 (Cal. App. 1996) (same), with Pauley v. Bank One Colo. Corp., 205 B.R. 272, 276 (D. Colo. 1997) (reliance required) and TEX. BUS. & COM. CODE ANN. '17.50(a)(1)(B) (same). If the plaintiff succeeds, she would enjoy an evidentiary advantage, in that the potentially damaging advertisements will go to the jury and presumably influence their determination of liability on the product claims.

In response, the defendant contends that the advertisements are inadmissible because the consumer protection statute under which plaintiff is suing has not dispensed with the causation requirement.

That is, in order to recover, plaintiff must have suffered injuries “as a result of” or “by reason of” the deceptive act. See Stutman v. Chemical Bank, 95 N.Y.2d 24, 29 (2000) (reliance need not be proven in consumer protection claim, but that did not dispel plaintiffs' burden to show that the deceptive act caused the injury); International Fidelity Ins. Co. v. Wilson, 443 N.E.2d 1308, 1314 (Mass. 1983) (same). The Illinois Consumer Fraud Act “requires proof that the damage occurred 'as a result of' the deceptive act or practice” which imposes a proximate causation requirement. Oliveira v. Amoco Oil Co., 776 N.E.2d 151, 160 (2002). Similarly, New York General Business Law '349(h) requires that the person alleging a violation of the statute be injured “by reason of” the misconduct. Again, be sure to check with the law of your particular state to determine what type of causation is required. Because the plaintiff never saw or read any allegedly false statement, a fortiori she could not have been “deceived” by – and thus been injured “by reason of” – any “deceptive” statement.

What are the arguments?

'Pure' Fraud on the Market Theory: Can Causation Be Presumed?

In order to satisfy the causation requirement, plaintiff may advance an argument akin to “fraud on the market,” a theory derived from the securities context. Under a “pure” fraud on the market theory, the plaintiff need not show that he or she was aware of the misstatement. (The terms “pure fraud on the market” and “modified fraud on the market” are creations of the authors and are not drawn from the case law. The “modified” theory is discussed infra.) A plaintiff who alleges a material misstatement or omission in a proxy statement “has made a sufficient showing of causal relationship between the violation and the injury for which he seeks redress.” Mills v. Electric Auto-Lite Co., 396 U.S. 375, 384-85 (1970). Thus, when a plaintiff alleges that a defendant has made a misrepresentation or fraudulent statement in connection with the sale of securities in an efficient and competitive market, the market is presumed to have absorbed and reacted to the alleged misrepresentation so that the stock price reflects all available information, regardless of whether any particular investor knew of the alleged misrepresentation. This theory rests on the assumption that the securities market into which the allegedly false information is disclosed is open and developed, such that it “reacts immediately, digesting [the information] and adjusting the stock price accordingly.” In re Discovery Zone Securities Litig., 943 F. Supp. 924, 934 n.6 (N.D. Ill. 1996).

Extrapolating to our scenario, the plaintiff would argue that it is irrelevant whether she saw or heard any false or misleading advertisements; other people purchased the product after having seen the deceptive ads, which created a favorable market for the product, and thus causation is properly presumed because plaintiff was influenced by general beliefs prevailing in the market in deciding to purchase the product.

Our research has revealed no published case that has adopted a pure fraud on the market approach to consumer fraud cases and several that have rejected it. There is one unpublished decision, which did find that plaintiffs could rely on such a theory. See DeLima v. Exxon Corp., No. HUD-L-8969-96 (N.J. Super. Dec. 23, 1999). In DeLima, the court certified a class of plaintiffs who claimed that defendant's misleading advertisements caused them injuries in the form of inflated prices for gasoline. The court accepted this “price inflation theory of causation” and accepted plaintiffs' economist's conclusion that the gasoline's higher price was a result of the greater demand for the premium gasoline brought about by the misleading advertisements. Id. at 9. However, the DeLima court relied on an earlier decision that was later reversed by the Illinois Supreme Court in Oliveira v. Amoco Oil Co., 776 N.E.2d 151, 164 (2002). In Oliveira, the Illinois Supreme Court held that a fraud on the market approach was not available to establish causation. The Oliveira plaintiff brought a class action against the defendant oil company, claiming that the defendant's advertisements promoting its premium gasolines as superior to nonpremium gasolines were not substantiated and therefore, “false and misleading” in violation of Illinois' Consumer Fraud Act. The plaintiff did not plead that he had actually seen any of the allegedly deceptive advertisements, but instead alleged that the defendant's allegedly deceptive advertising scheme increased demand for defendant's premium gasoline, which led to an inflated price for the gasoline. This inflated price was the injury incurred by “all purchasers of [defendant's] premium gasolines … irrespective of whether they did or did not see or hear the specific advertisements and marketing materials in question.” Id. at 156. The defendant contended that the plaintiff's “marketing theory” of causation was insufficient because it did not establish that the plaintiff was deceived by the ads, and that without such deception it was not possible for the plaintiff to have been caused any injury. The trial court granted the defendant's motion to dismiss, which was reversed by the appellate court, and the defendant appealed to the Illinois Supreme Court.

The Illinois Supreme Court reversed the appellate court, on the ground that the plaintiff did not adequately plead causation. The court rejected the plaintiff's “market theory,” noting that the plaintiff's rationale would permit all purchasers of the defendant's premium gasolines to show an injury regardless of “whether they did or did not see or hear the specific advertisements and marketing materials in question.” Id. at 156, 164. The court concluded that this was insufficient to satisfy the causation requirement under the Illinois consumer protection statute because, a fortiori, the plaintiff could not prove that he was “deceived” without seeing the deceptive advertisements at issue. In essence, then, the Oliveira court found that without deception of the plaintiff himself, there could be no injury to that plaintiff.

One reported case has purported to apply a fraud on the market approach to consumer claims, but a close reading reveals that it did not in fact apply such a theory. Judge Jack B. Weinstein, in Blue Cross & Blue Shield of New Jersey, Inc. v. Philip Morris, Inc., 178 F. Supp. 2d 198, 260 (E.D.N.Y. 2001) (hereinafter referred to as “BCBS“), held that aggregate tools, such as statistical sampling, in connection with individual testimony, are appropriate when proving damages and causation under New York's consumer protection statute. At issue in BCBS was whether a health insurer could recover for increased medical costs incurred on behalf of its clients as a result of their allegedly fraud-induced smoking. Among other claims, plaintiff-insurer sought recovery under New York's consumer protection statute, which does not require that the plaintiff demonstrate reliance. N.Y. Gen. Bus. Law '349.

The defendant sought to dismiss the consumer protection claim on the grounds that it required, inter alia, proof of individual causation. In rejecting this argument, the court relied on a New York Court of Appeals decision in a consumer fraud case that referred to the “fraud on the market” theory to establish causation, citing to securities cases. BCBS at 260, see Stutman v. Chemical Bank, 95 N.Y.2d 24, 30 n.2 (2000). On this basis, the BCBS court held that individual proof of causation was not required, and that the use of sampling techniques was both permissible and a “necessary and pragmatic evidentiary approach to this and other massive tort cases.” BCBS at 247.

Specifically, the court held that it was not necessary to prove that the defendant had personally addressed each and every individual subscriber of the plaintiff's insurance by way of its promotional campaigns. Rather, the court emphasized that defendants' allegedly deceptive scheme was “pervasive” and “far-reaching” and quoted an earlier tobacco case that held that “[s]uch sophisticated, broad-based fraudulent schemes by their very nature are likely to be designed to distort the entire body of public knowledge rather than to individually misled [sic] millions of people.” Id., quoting Falise v. American Tobacco Co., 94 F. Supp. 2d 316, 335 (E.D.N.Y. 2000).

However, although Judge Weinstein cited the “fraud on the market” theory when dispensing with the need for individualized proof of causation under New York's consumer protection statute, he did not, strictly speaking, adopt a “fraud on the market” approach. That is, rather than concluding that the defendants were responsible for a fraud on the market and applying a presumption of causation in the plaintiff's favor, Judge Weinstein merely liberalized the evidentiary requirement to enable the plaintiff, via statistical sampling, to be able to carry its burden of proving causation.

In light of Oliveira and BCBS, it appears that a “pure” fraud on the market theory is not readily exportable from the securities context – and this makes sense. The market for products differs drastically from that of the securities market because they lack comparable mechanisms for the efficient processing of information. Indeed proof of causation, even in the securities context, is only presumed when the market is open and well-developed enough so that there are good grounds to assume that the market price of shares traded reflects all publicly-available information. Basic v. Levinson, 485 U.S. 224, 246-47 (1988).

Moreover, a fraud on the market theory should not be applicable in an individual action, such as our scenario, where an individual causation analysis would be fairly easy to undertake. Notably, the court in BCBS recognized this to be the case, ie, in individual actions, where the evidence is more manageable, requiring an individualized showing of causation and damages would not be difficult or inconvenient. Blue Cross & Blue Shield of New Jersey, Inc., 178 F. Supp. 2d at 247.

'Modified' Fraud on the Market Theory

Even absent the availability of a “pure” fraud on the market approach, it remains an open question whether a plaintiff may otherwise prove injury on the basis of unseen advertisements. While under a pure fraud on the market approach, causation is presumed because of the efficiencies of the market, it is conceivable that the plaintiff in our scenario would still be permitted to (i) define the relevant market, (ii) offer evidence that consumers within that market were exposed to the deceptive practices at issue, and (iii) prove that, because her decision to purchase the product was influenced by this market, her injuries were caused by defendant's deceptive practices. We have termed this approach a “modified” fraud on the market theory. In other words, under this modified market approach, the plaintiff would be permitted to prove what is assumed under the pure approach.

Although we have found no case either accepting or rejecting this modified approach, it is easy to construct scenarios in which the plaintiffs would advance such an argument. For example, such an approach might come into play when a plaintiff, claiming injury from a prescription medication, alleges in support of a consumer

protection claim that the defendant-pharmaceutical company made false and misleading promotional statements in connection with the product. The plaintiff admits that neither she nor her doctor had seen nor heard any of the alleged misrepresentations; however, the doctor testified at her deposition that, in assessing the risks and benefits of the medication, she discussed the risks and benefits of the drug with other physicians. If a court adopted a “modified” theory, a plaintiff might demonstrate that the prescribing physician's peers, with whom the plaintiff's prescribing doctor had discussed the merits of the medication, had in fact been exposed to these misleading statements; a court might find that this would satisfy the statute's causation requirement. This approach, however, opens up a Pandora's box of how to define the “relevant market.” For example, in a prescription drug case, the market could be defined

geographically or categorically by type of drug or by practice of physician. Furthermore, it remains unclear how much evidence, in addition to merely asserting that the misleading statement was made, would sufficiently establish the causal connection between the plaintiff's injuries and the deceptive statements. One court has rejected the contention that an alleged deception is itself an injury under N.Y. Gen. Bus. Law '349. Small v. Lorillard Tobacco Co., 94 N.Y.2d 43, 56 (1999) (affirming Appellate Division's “correct[ ]” rejection of “ plaintiffs' flawed 'deception as injury' theory”).

As noted above, we have uncovered no case either accepting or rejecting this “modified” market approach. Furthermore, even assuming that a court might theoretically be receptive to such an argument, any analysis must take place amid considerations of relevancy, prejudice and judicial economy, for this avenue of proof will most likely take the court far afield from the essential questions in the usual products case, ie, adequacy of design, manufacture and/or warning.

Conclusion

Consumer protection statutes can create strategic battlegrounds in individual product liability actions. While the potential liability or recovery involved in a consumer protection claim is most likely quite small, it can open the door to types of evidence that might otherwise be inadmissible. As shown above, it is unsettled whether a court would or should permit a plaintiff to prove the existence of a consumer market in order to show an indirect causal link between the allegedly deceptive act and her claimed injuries. While a “pure” fraud on the market theory is itself most likely unavailing, practitioners on both sides of the bar should be aware of the range of available arguments should such issues arise in their practice.

Ordinarily, the focus in a product liability case is on the defendant-manufacturer's duty to design and manufacture a safe and useful product and to warn adequately of any risks associated with its use. But an interesting and unexpected battleground can arise from a tag-a-along consumer protection claim. Here is the scenario: Plaintiff, in an individual action, sues defendant-manufacturer for injuries allegedly sustained in connection with the use of defendant's product. Plaintiff sues under traditional product liability theories as well as under the state's consumer protection statute, which proscribes deceptive and misleading trade practices. In particular, plaintiff alleges a consumer fraud has occurred because she has been injured by a product that, she claims, had been sold in connection with deceptive sales practices; in this case, certain allegedly false or misleading advertisements.

Plaintiff has testified at her deposition that she has not seen or heard the advertisements in issue. Nevertheless, she proposes to admit the advertisements because, she points out, the state consumer protection statute under which she is suing does not require that she relied on the alleged misleading sales practice. (While the majority of courts hold that proof of actual reliance is not required under the state consumer protection statute, proof of reliance is required in some jurisdictions. Be sure to check your particular state's consumer protection statute and interpreting case law.) Compare Stutman v. Chemical Bank, 95 N.Y.2d 24, 29 (2000) (no reliance required) and April v. Union Mortgage Co., 709 F. Supp. 809, 812 (N.D. Ill. 1989) (same) and Podolsky v. First Healthcare Corp., 58 Cal. Rptr. 2d 89, 98 (Cal. App. 1996) (same), with Pauley v. Bank One Colo. Corp., 205 B.R. 272, 276 (D. Colo. 1997) (reliance required) and TEX. BUS. & COM. CODE ANN. '17.50(a)(1)(B) (same). If the plaintiff succeeds, she would enjoy an evidentiary advantage, in that the potentially damaging advertisements will go to the jury and presumably influence their determination of liability on the product claims.

In response, the defendant contends that the advertisements are inadmissible because the consumer protection statute under which plaintiff is suing has not dispensed with the causation requirement.

That is, in order to recover, plaintiff must have suffered injuries “as a result of” or “by reason of” the deceptive act. See Stutman v. Chemical Bank, 95 N.Y.2d 24, 29 (2000) (reliance need not be proven in consumer protection claim, but that did not dispel plaintiffs' burden to show that the deceptive act caused the injury); International Fidelity Ins. Co. v. Wilson, 443 N.E.2d 1308, 1314 (Mass. 1983) (same). The Illinois Consumer Fraud Act “requires proof that the damage occurred 'as a result of' the deceptive act or practice” which imposes a proximate causation requirement. Oliveira v. Amoco Oil Co., 776 N.E.2d 151, 160 (2002). Similarly, New York General Business Law '349(h) requires that the person alleging a violation of the statute be injured “by reason of” the misconduct. Again, be sure to check with the law of your particular state to determine what type of causation is required. Because the plaintiff never saw or read any allegedly false statement, a fortiori she could not have been “deceived” by – and thus been injured “by reason of” – any “deceptive” statement.

What are the arguments?

'Pure' Fraud on the Market Theory: Can Causation Be Presumed?

In order to satisfy the causation requirement, plaintiff may advance an argument akin to “fraud on the market,” a theory derived from the securities context. Under a “pure” fraud on the market theory, the plaintiff need not show that he or she was aware of the misstatement. (The terms “pure fraud on the market” and “modified fraud on the market” are creations of the authors and are not drawn from the case law. The “modified” theory is discussed infra.) A plaintiff who alleges a material misstatement or omission in a proxy statement “has made a sufficient showing of causal relationship between the violation and the injury for which he seeks redress.” Mills v. Electric Auto-Lite Co. , 396 U.S. 375, 384-85 (1970). Thus, when a plaintiff alleges that a defendant has made a misrepresentation or fraudulent statement in connection with the sale of securities in an efficient and competitive market, the market is presumed to have absorbed and reacted to the alleged misrepresentation so that the stock price reflects all available information, regardless of whether any particular investor knew of the alleged misrepresentation. This theory rests on the assumption that the securities market into which the allegedly false information is disclosed is open and developed, such that it “reacts immediately, digesting [the information] and adjusting the stock price accordingly.” In re Discovery Zone Securities Litig., 943 F. Supp. 924, 934 n.6 (N.D. Ill. 1996).

Extrapolating to our scenario, the plaintiff would argue that it is irrelevant whether she saw or heard any false or misleading advertisements; other people purchased the product after having seen the deceptive ads, which created a favorable market for the product, and thus causation is properly presumed because plaintiff was influenced by general beliefs prevailing in the market in deciding to purchase the product.

Our research has revealed no published case that has adopted a pure fraud on the market approach to consumer fraud cases and several that have rejected it. There is one unpublished decision, which did find that plaintiffs could rely on such a theory. See DeLima v. Exxon Corp., No. HUD-L-8969-96 (N.J. Super. Dec. 23, 1999). In DeLima, the court certified a class of plaintiffs who claimed that defendant's misleading advertisements caused them injuries in the form of inflated prices for gasoline. The court accepted this “price inflation theory of causation” and accepted plaintiffs' economist's conclusion that the gasoline's higher price was a result of the greater demand for the premium gasoline brought about by the misleading advertisements. Id. at 9. However, the DeLima court relied on an earlier decision that was later reversed by the Illinois Supreme Court in Oliveira v. Amoco Oil Co. , 776 N.E.2d 151, 164 (2002). In Oliveira, the Illinois Supreme Court held that a fraud on the market approach was not available to establish causation. The Oliveira plaintiff brought a class action against the defendant oil company, claiming that the defendant's advertisements promoting its premium gasolines as superior to nonpremium gasolines were not substantiated and therefore, “false and misleading” in violation of Illinois' Consumer Fraud Act. The plaintiff did not plead that he had actually seen any of the allegedly deceptive advertisements, but instead alleged that the defendant's allegedly deceptive advertising scheme increased demand for defendant's premium gasoline, which led to an inflated price for the gasoline. This inflated price was the injury incurred by “all purchasers of [defendant's] premium gasolines … irrespective of whether they did or did not see or hear the specific advertisements and marketing materials in question.” Id. at 156. The defendant contended that the plaintiff's “marketing theory” of causation was insufficient because it did not establish that the plaintiff was deceived by the ads, and that without such deception it was not possible for the plaintiff to have been caused any injury. The trial court granted the defendant's motion to dismiss, which was reversed by the appellate court, and the defendant appealed to the Illinois Supreme Court.

The Illinois Supreme Court reversed the appellate court, on the ground that the plaintiff did not adequately plead causation. The court rejected the plaintiff's “market theory,” noting that the plaintiff's rationale would permit all purchasers of the defendant's premium gasolines to show an injury regardless of “whether they did or did not see or hear the specific advertisements and marketing materials in question.” Id. at 156, 164. The court concluded that this was insufficient to satisfy the causation requirement under the Illinois consumer protection statute because, a fortiori, the plaintiff could not prove that he was “deceived” without seeing the deceptive advertisements at issue. In essence, then, the Oliveira court found that without deception of the plaintiff himself, there could be no injury to that plaintiff.

One reported case has purported to apply a fraud on the market approach to consumer claims, but a close reading reveals that it did not in fact apply such a theory. Judge Jack B. Weinstein, in Blue Cross & Blue Shield of New Jersey, Inc. v. Philip Morris, Inc., 178 F. Supp. 2d 198, 260 (E.D.N.Y. 2001) (hereinafter referred to as “ BCBS “), held that aggregate tools, such as statistical sampling, in connection with individual testimony, are appropriate when proving damages and causation under New York's consumer protection statute. At issue in BCBS was whether a health insurer could recover for increased medical costs incurred on behalf of its clients as a result of their allegedly fraud-induced smoking. Among other claims, plaintiff-insurer sought recovery under New York's consumer protection statute, which does not require that the plaintiff demonstrate reliance. N.Y. Gen. Bus. Law ' 349.

The defendant sought to dismiss the consumer protection claim on the grounds that it required, inter alia, proof of individual causation. In rejecting this argument, the court relied on a New York Court of Appeals decision in a consumer fraud case that referred to the “fraud on the market” theory to establish causation, citing to securities cases. BCBS at 260, see Stutman v. Chemical Bank, 95 N.Y.2d 24, 30 n.2 (2000). On this basis, the BCBS court held that individual proof of causation was not required, and that the use of sampling techniques was both permissible and a “necessary and pragmatic evidentiary approach to this and other massive tort cases.” BCBS at 247.

Specifically, the court held that it was not necessary to prove that the defendant had personally addressed each and every individual subscriber of the plaintiff's insurance by way of its promotional campaigns. Rather, the court emphasized that defendants' allegedly deceptive scheme was “pervasive” and “far-reaching” and quoted an earlier tobacco case that held that “[s]uch sophisticated, broad-based fraudulent schemes by their very nature are likely to be designed to distort the entire body of public knowledge rather than to individually misled [sic] millions of people.” Id ., quoting Falise v. American Tobacco Co. , 94 F. Supp. 2d 316, 335 (E.D.N.Y. 2000).

However, although Judge Weinstein cited the “fraud on the market” theory when dispensing with the need for individualized proof of causation under New York's consumer protection statute, he did not, strictly speaking, adopt a “fraud on the market” approach. That is, rather than concluding that the defendants were responsible for a fraud on the market and applying a presumption of causation in the plaintiff's favor, Judge Weinstein merely liberalized the evidentiary requirement to enable the plaintiff, via statistical sampling, to be able to carry its burden of proving causation.

In light of Oliveira and BCBS, it appears that a “pure” fraud on the market theory is not readily exportable from the securities context – and this makes sense. The market for products differs drastically from that of the securities market because they lack comparable mechanisms for the efficient processing of information. Indeed proof of causation, even in the securities context, is only presumed when the market is open and well-developed enough so that there are good grounds to assume that the market price of shares traded reflects all publicly-available information. Basic v. Levinson , 485 U.S. 224, 246-47 (1988).

Moreover, a fraud on the market theory should not be applicable in an individual action, such as our scenario, where an individual causation analysis would be fairly easy to undertake. Notably, the court in BCBS recognized this to be the case, ie, in individual actions, where the evidence is more manageable, requiring an individualized showing of causation and damages would not be difficult or inconvenient. Blue Cross & Blue Shield of New Jersey, Inc., 178 F. Supp. 2d at 247.

'Modified' Fraud on the Market Theory

Even absent the availability of a “pure” fraud on the market approach, it remains an open question whether a plaintiff may otherwise prove injury on the basis of unseen advertisements. While under a pure fraud on the market approach, causation is presumed because of the efficiencies of the market, it is conceivable that the plaintiff in our scenario would still be permitted to (i) define the relevant market, (ii) offer evidence that consumers within that market were exposed to the deceptive practices at issue, and (iii) prove that, because her decision to purchase the product was influenced by this market, her injuries were caused by defendant's deceptive practices. We have termed this approach a “modified” fraud on the market theory. In other words, under this modified market approach, the plaintiff would be permitted to prove what is assumed under the pure approach.

Although we have found no case either accepting or rejecting this modified approach, it is easy to construct scenarios in which the plaintiffs would advance such an argument. For example, such an approach might come into play when a plaintiff, claiming injury from a prescription medication, alleges in support of a consumer

protection claim that the defendant-pharmaceutical company made false and misleading promotional statements in connection with the product. The plaintiff admits that neither she nor her doctor had seen nor heard any of the alleged misrepresentations; however, the doctor testified at her deposition that, in assessing the risks and benefits of the medication, she discussed the risks and benefits of the drug with other physicians. If a court adopted a “modified” theory, a plaintiff might demonstrate that the prescribing physician's peers, with whom the plaintiff's prescribing doctor had discussed the merits of the medication, had in fact been exposed to these misleading statements; a court might find that this would satisfy the statute's causation requirement. This approach, however, opens up a Pandora's box of how to define the “relevant market.” For example, in a prescription drug case, the market could be defined

geographically or categorically by type of drug or by practice of physician. Furthermore, it remains unclear how much evidence, in addition to merely asserting that the misleading statement was made, would sufficiently establish the causal connection between the plaintiff's injuries and the deceptive statements. One court has rejected the contention that an alleged deception is itself an injury under N.Y. Gen. Bus. Law ' 349. Small v. Lorillard Tobacco Co., 94 N.Y.2d 43, 56 (1999) (affirming Appellate Division's “correct[ ]” rejection of “ plaintiffs' flawed 'deception as injury' theory”).

As noted above, we have uncovered no case either accepting or rejecting this “modified” market approach. Furthermore, even assuming that a court might theoretically be receptive to such an argument, any analysis must take place amid considerations of relevancy, prejudice and judicial economy, for this avenue of proof will most likely take the court far afield from the essential questions in the usual products case, ie, adequacy of design, manufacture and/or warning.

Conclusion

Consumer protection statutes can create strategic battlegrounds in individual product liability actions. While the potential liability or recovery involved in a consumer protection claim is most likely quite small, it can open the door to types of evidence that might otherwise be inadmissible. As shown above, it is unsettled whether a court would or should permit a plaintiff to prove the existence of a consumer market in order to show an indirect causal link between the allegedly deceptive act and her claimed injuries. While a “pure” fraud on the market theory is itself most likely unavailing, practitioners on both sides of the bar should be aware of the range of available arguments should such issues arise in their practice.