'No-Injury' Product Liability Cases

The plaintiff's complaint was replete with allegations that the defendant's advertisements were deceptive and misleading. According to the plaintiff, additional processing was employed to get the mass-produced product to consumers, and the defendant failed to highlight this information. As a result, the defendant's advertising and marketing materials were misleading where they represented the orange juice as “fresh squeezed,” “pure,” or “100% orange juice.” Id. at *1. Based upon these alleged misrepresentations and omissions, the plaintiff asserted that his injury was the actual purchasing of the defendant's orange juice over a period of six years at a higher price than he would have otherwise paid. Id. at *1, 4.

'The court found the plaintiff's “benefit of the bargain” argument completely unavailing. As an initial matter, the court noted that despite the plaintiff's criticism of the defendant's marketing and advertising practices, the plaintiff did not assert either a false advertising or misrepresentation claim. Veal, 2013 WL 120761, at *6. The court also noted that despite the plaintiff's contention that the defendant manipulated the flavor of its orange juice to mask the taste resulting from processing and pasteurization, the plaintiff did not dispute that the defendant's product was indeed squeezed from Florida oranges or that it was “100% orange juice.” Id. at *1, 6.

The court held that the plaintiff did not allege an injury in fact and thus lacked standing to pursue a claim against the defendant. Id. at *6. In doing so, the court made several frank observations. First, identifying the “essence” of the plaintiff's claim as one concerning the limit of processing allowable for products labeled “fresh,” “100%,” or “pure,” the court, without examining the “extensive FDA Regulations governing orange juice,” simply questioned why the plaintiff offered “no explanation as to why he does not squeeze his own oranges if he truly seeks fresh squeezed orange juice.” Id. at *2. More pointedly, the court held that:

[T]he fact that the plaintiff may have believed defendant hired individuals to hand squeeze fresh oranges one by one into juice cartons, then boxed up and delivered the same all over the country does not translate into a concrete injury to plaintiff upon his learning that beliefs about commercially grown and produced orange juice were incorrect.

Id. at *7.

What Is a No-Injury Lawsuit?

The methods employed by the plaintiff in Veal are not new or novel in the ongoing effort to blur the line between contract and tort claims seeking benefit of the bargain damages from product manufacturers. Considered “no-injury” product liability law suits, these cases persist even though “[c]ourts have been particularly vigilant in requiring allegations of injury or damages in products liability cases.” Briehl v. Gen. Motors Corp., 172 F.3d 623, 627-28 (8th Cir. 1999). As described by the Fifth Circuit Court of Appeals:

The wrongful act in a no-injury products suit is thus the placing of a dangerous/defective product in the stream of commerce. ' The striking feature of a typical no-injury class is that the plaintiffs have either not yet experienced a malfunction because of the alleged defect or have experienced a malfunction but not been harmed by it. Therefore, the plaintiffs in a no-injury products liability case have not suffered any physical harm or out-of-pocket economic loss. Here, the damages sought by the [plaintiffs] are not rooted in the alleged defect of the product as such, but in the fact that they did not receive the benefit of their bargain.

Coghlan v. Wellcraft Marine Corporation, 240 F.3d 449, 455 (5th Cir. 2001) (emphasis added). The Fifth Circuit again addressed this issue in Rivera v. Wyeth-Ayerst Laboratories, 283 F.3d 315 (5th Cir. 2002):

The confusion arises from the plaintiffs' attempt to recast their product liability claim in the language of contract law. The wrongs they allege ' failure to warn and sale of a defective product ' are products liability claims. [ ] Yet, the damages they assert ' benefit of the bargain, out of pocket expenditures ' are contract law damages. The plaintiffs apparently believe that if they keep oscillating between tort and contract law claims, they can obscure the fact that they have asserted no concrete injury. Such artful pleading, however, is not enough to create an injury in fact.

Id. at 320-21.

The plaintiffs in Rivera argued that they were denied the benefit of their bargain in purchasing a pain medication that was withdrawn from the market, even though they did not allege that the medication caused them any mental or physical harm, or that it was ineffective as a pain medication. Id. at 319. Like the plaintiff in Veal, the Rivera plaintiffs only sought to recover economic damages. Id. at 319. However, unlike the plaintiff in Veal, the Rivera plaintiffs chose not to assert a breach of contract claim, a decision the Fifth Circuit deemed “smart,” “given that there was no contract.” Id. at 320.

Recognizing that the Fifth Circuit “applauded the plaintiffs for not arguing breach of contract,” the district court in Veal held that, like the plaintiffs in Rivera, the plaintiff had failed to allege an actual injury based upon the purchase and consumption of defendant's product. Veal, 2013 WL 120761, at *5 & 11 n.8. In short, “the plaintiff paid for orange juice, and received orange juice.” Id. at *11 n.8.

Advertising and Marketing in No-Injury Cases

As in Veal, many cases seeking contract damages under the guise of a product liability case attempt to support such claims with allegations targeted at the manufacturers' advertising and marketing campaigns. Often, such allegations are expressed in exceedingly general terms without detailing specific misrepresentations or omissions made by the defendant and instead relying on broad statements regarding the targeted product and its alleged defect.

In Weaver v. Chrysler Corporation, 172 F.R.D. 96 (S.D.N.Y. 1997), the plaintiff alleged that the defendant “spent millions of dollars in advertising the purported quality of its vehicles, but failed to warn the public of the defective shoulder belt clip on the integrated child seat.” Id. at 98. As a result of the alleged omissions, the plaintiff purchased one of the defendant's vehicles. Id. Though the alleged defect never manifested in the plaintiff's vehicle, the plaintiff sought economic damages based upon common law fraud, negligent misrepresentation, breach of implied warranty, and violation of the New York Consumer Protection Act. Id. The court held that “[p]laintiff's allegation of possible economic loss fails to plead adequately the required damages element for fraud, negligent misrepresentation, and breach of warranty.” Id. at 100. As additional justification for dismissing the plaintiff's fraud claim, the court also found that the plaintiff failed to “specify the time, place, and content of [defendant's] representations, advertisements, and promotional materials.” As a result, the plaintiff failed to satisfy the particularity requirements of Federal Rule of Civil Procedure 9(b). Id. at 102.

In In re General Motors Corporation Anti-Lock Brake Products Liability Litigation, 966 F. Supp. 1525 (E.D. Mo. 1997), the plaintiffs brought claims for breach of express warranty and breach of contract, alleging that the defendant's “advertisements and public promotions contained broad claims that the vehicles were safe from defects when, in fact, [defendant] knew the [anti-lock braking system] was defective.” Id. at 1531.

As in Weaver, the plaintiffs sought economic damages for the alleged diminution in value of the vehicles and did not claim that the alleged defect ever actually manifested in their own vehicles. Id. at 1530. Noting that the plaintiffs had “merely alleged that they have suffered a loss of resale value and that they paid more for the vehicles than they were worth,” the court held that “dismissal of Plaintiffs' Complaint in its entirety is warranted for the failure to adequately plead damages. ' ” Id. Beyond the holding dismissing plaintiffs' complaint for lack of standing, the court provided several additional reasons for reaching the same result on plaintiff's breach of contract and breach of express warranty claims based on plaintiffs' allegations regarding the defendant's advertising and marketing materials. The court also dismissed the plaintiffs' claims because: 1) they were based on puffery; 2) the plaintiffs failed to allege that cited statements were false; 3) cited press releases and advertisements failed to disclose the alleged defect; and 4) the plaintiffs “failed to allege that the advertisements were the basis of their bargains. '” Id. at 1531.

More recently, in In re Vioxx Products Liability Litigation, 874 F. Supp. 2d 599, 607 (E.D. La. 2012), the plaintiff asserted a claim under the D.C. Consumer Protection Procedures Act (CPPA) following the defendant's withdrawal of its product, a prescription pain and anti-inflammatory medication, from the market in 2004 due to an increased risk of cardiovascular complications. Id. at 601. Despite the recall, the plaintiff did not assert a personal injury claim. Id. at 609 n.4. Instead, the plaintiff alleged that he “paid for Vioxx out-of-pocket but would not have if Merck had not misrepresented its safety profile.” Id. at 606.

According to the plaintiff, he relied upon misleading marketing communications disseminated by the defendant. Id. at 608. Citing Rivera, the court found that “[p]laintiff thought he was purchasing a medication that would relieve his pain without causing him personal injury ' and that is what he received.” Id. Accordingly, as in Veal and Rivera, the court held that the plaintiff failed to allege “a concrete, particularized injury in fact to his economic interests.” Id. at 607. Thus he lacked standing to bring the economic injury claim. Id.

Since the plaintiff also alleged a statutory basis for standing, the court considered that issue in light of the plaintiff's allegations concerning the defendant's advertisements and marketing. While the court noted that the plaintiff alleged facts concerning the nature and scope of the defendant's communications regarding its product, the court found that the plaintiff failed to “connect that conduct to himself.” Id. at 608. Citing the plaintiff's lack of “any plausible nexus or causation” to the defendant's alleged conduct, the court held that the plaintiff failed to show a statutory injury establishing Article III standing. Id. at 609.'

Conclusion

As shown in recent cases, plaintiffs continue to make numerous factual assertions regarding the advertising and marketing efforts of product manufacturers in support of their no-injury product liability cases. Nonetheless, courts, in large part, remain focused on first determining whether plaintiffs have standing to sue based upon benefit of the bargain damages. Where the case is deemed a no-injury product liability case, the court likely will dismiss for lack of standing. Thus, as with many no-injury cases, the lack of an injury-in-fact proved fatal to the plaintiff's claims. See Briehl, 172 F.3d at 627-28 (collecting cases). Where plaintiffs' claims are based upon the defendant's advertising or marketing campaigns, such allegations are either immaterial to the court's final determination of standing, or may instead provide the court with additional rationale to dismiss the complaint. Consequently, the first priority in combating such claims is to convince the court that there is “no-injury” other than the plaintiff's desire to be paid for a product that caused no actual harm.

Sean A. Simmons is a senior associate in the Atlanta office of Alston & Bird LLP. He focuses his practice on complex litigation matters with an emphasis on class actions and product liability.

On Jan. 8, 2013, the U.S. District Court in the Northern District of Alabama dismissed the plaintiff's claims in Veal v. Citrus World, Inc., No. 2:12'CV'801'IPJ, 2013 WL 120761 (N.D. Ala. Jan. 8, 2013), holding that “the court is of the opinion that the plaintiff lacks standing to pursue a claim against the defendant because the plaintiff has suffered no injury from his purchase of the defendant's orange juice.” Id. at *11.

The Case

In Veal, the plaintiff sued for breach of contract and breach of express warranty because the orange juice marketed by the defendant as “100% orange juice” was allegedly “heavily processed, stored, and flavored before reaching market shelves for purchase by consumers.” Id. at *1. There were no allegations that the orange juice made the plaintiff ill, that it lacked the expected nutritional value, or that it tasted any different from the orange juice sought by plaintiff. Id. at *1, n.7. Instead, the plaintiff merely asserted that “had he 'known the truth about the defendant's orange juice products, he would not have made his purchase choices, and would not have paid the higher value charged for the alleged quality of [defendant's] orange juice.'” Id. at *2.

The plaintiff's complaint was replete with allegations that the defendant's advertisements were deceptive and misleading. According to the plaintiff, additional processing was employed to get the mass-produced product to consumers, and the defendant failed to highlight this information. As a result, the defendant's advertising and marketing materials were misleading where they represented the orange juice as “fresh squeezed,” “pure,” or “100% orange juice.” Id. at *1. Based upon these alleged misrepresentations and omissions, the plaintiff asserted that his injury was the actual purchasing of the defendant's orange juice over a period of six years at a higher price than he would have otherwise paid. Id. at *1, 4.

'The court found the plaintiff's “benefit of the bargain” argument completely unavailing. As an initial matter, the court noted that despite the plaintiff's criticism of the defendant's marketing and advertising practices, the plaintiff did not assert either a false advertising or misrepresentation claim. Veal, 2013 WL 120761, at *6. The court also noted that despite the plaintiff's contention that the defendant manipulated the flavor of its orange juice to mask the taste resulting from processing and pasteurization, the plaintiff did not dispute that the defendant's product was indeed squeezed from Florida oranges or that it was “100% orange juice.” Id. at *1, 6.

The court held that the plaintiff did not allege an injury in fact and thus lacked standing to pursue a claim against the defendant. Id. at *6. In doing so, the court made several frank observations. First, identifying the “essence” of the plaintiff's claim as one concerning the limit of processing allowable for products labeled “fresh,” “100%,” or “pure,” the court, without examining the “extensive FDA Regulations governing orange juice,” simply questioned why the plaintiff offered “no explanation as to why he does not squeeze his own oranges if he truly seeks fresh squeezed orange juice.” Id. at *2. More pointedly, the court held that:

[T]he fact that the plaintiff may have believed defendant hired individuals to hand squeeze fresh oranges one by one into juice cartons, then boxed up and delivered the same all over the country does not translate into a concrete injury to plaintiff upon his learning that beliefs about commercially grown and produced orange juice were incorrect.

Id. at *7.

What Is a No-Injury Lawsuit?

The methods employed by the plaintiff in Veal are not new or novel in the ongoing effort to blur the line between contract and tort claims seeking benefit of the bargain damages from product manufacturers. Considered “no-injury” product liability law suits, these cases persist even though “[c]ourts have been particularly vigilant in requiring allegations of injury or damages in products liability cases.” Briehl v. Gen. Motors Corp. , 172 F.3d 623, 627-28 (8th Cir. 1999). As described by the Fifth Circuit Court of Appeals:

The wrongful act in a no-injury products suit is thus the placing of a dangerous/defective product in the stream of commerce. ' The striking feature of a typical no-injury class is that the plaintiffs have either not yet experienced a malfunction because of the alleged defect or have experienced a malfunction but not been harmed by it. Therefore, the plaintiffs in a no-injury products liability case have not suffered any physical harm or out-of-pocket economic loss. Here, the damages sought by the [plaintiffs] are not rooted in the alleged defect of the product as such, but in the fact that they did not receive the benefit of their bargain.

Coghlan v. Wellcraft Marine Corporation , 240 F.3d 449, 455 (5th Cir. 2001) (emphasis added). The Fifth Circuit again addressed this issue in Rivera v. Wyeth-Ayerst Laboratories , 283 F.3d 315 (5th Cir. 2002):

The confusion arises from the plaintiffs' attempt to recast their product liability claim in the language of contract law. The wrongs they allege ' failure to warn and sale of a defective product ' are products liability claims. [ ] Yet, the damages they assert ' benefit of the bargain, out of pocket expenditures ' are contract law damages. The plaintiffs apparently believe that if they keep oscillating between tort and contract law claims, they can obscure the fact that they have asserted no concrete injury. Such artful pleading, however, is not enough to create an injury in fact.

Id. at 320-21.

The plaintiffs in Rivera argued that they were denied the benefit of their bargain in purchasing a pain medication that was withdrawn from the market, even though they did not allege that the medication caused them any mental or physical harm, or that it was ineffective as a pain medication. Id. at 319. Like the plaintiff in Veal, the Rivera plaintiffs only sought to recover economic damages. Id. at 319. However, unlike the plaintiff in Veal, the Rivera plaintiffs chose not to assert a breach of contract claim, a decision the Fifth Circuit deemed “smart,” “given that there was no contract.” Id. at 320.

Recognizing that the Fifth Circuit “applauded the plaintiffs for not arguing breach of contract,” the district court in Veal held that, like the plaintiffs in Rivera, the plaintiff had failed to allege an actual injury based upon the purchase and consumption of defendant's product. Veal, 2013 WL 120761, at *5 & 11 n.8. In short, “the plaintiff paid for orange juice, and received orange juice.” Id. at *11 n.8.

Advertising and Marketing in No-Injury Cases

As in Veal, many cases seeking contract damages under the guise of a product liability case attempt to support such claims with allegations targeted at the manufacturers' advertising and marketing campaigns. Often, such allegations are expressed in exceedingly general terms without detailing specific misrepresentations or omissions made by the defendant and instead relying on broad statements regarding the targeted product and its alleged defect.

In Weaver v. Chrysler Corporation , 172 F.R.D. 96 (S.D.N.Y. 1997), the plaintiff alleged that the defendant “spent millions of dollars in advertising the purported quality of its vehicles, but failed to warn the public of the defective shoulder belt clip on the integrated child seat.” Id . at 98. As a result of the alleged omissions, the plaintiff purchased one of the defendant's vehicles. Id. Though the alleged defect never manifested in the plaintiff's vehicle, the plaintiff sought economic damages based upon common law fraud, negligent misrepresentation, breach of implied warranty, and violation of the New York Consumer Protection Act. Id. The court held that “[p]laintiff's allegation of possible economic loss fails to plead adequately the required damages element for fraud, negligent misrepresentation, and breach of warranty.” Id. at 100. As additional justification for dismissing the plaintiff's fraud claim, the court also found that the plaintiff failed to “specify the time, place, and content of [defendant's] representations, advertisements, and promotional materials.” As a result, the plaintiff failed to satisfy the particularity requirements of Federal Rule of Civil Procedure 9(b). Id. at 102.

In In re General Motors Corporation Anti-Lock Brake Products Liability Litigation, 966 F. Supp. 1525 (E.D. Mo. 1997), the plaintiffs brought claims for breach of express warranty and breach of contract, alleging that the defendant's “advertisements and public promotions contained broad claims that the vehicles were safe from defects when, in fact, [defendant] knew the [anti-lock braking system] was defective.” Id. at 1531.

As in Weaver, the plaintiffs sought economic damages for the alleged diminution in value of the vehicles and did not claim that the alleged defect ever actually manifested in their own vehicles. Id. at 1530. Noting that the plaintiffs had “merely alleged that they have suffered a loss of resale value and that they paid more for the vehicles than they were worth,” the court held that “dismissal of Plaintiffs' Complaint in its entirety is warranted for the failure to adequately plead damages. ' ” Id. Beyond the holding dismissing plaintiffs' complaint for lack of standing, the court provided several additional reasons for reaching the same result on plaintiff's breach of contract and breach of express warranty claims based on plaintiffs' allegations regarding the defendant's advertising and marketing materials. The court also dismissed the plaintiffs' claims because: 1) they were based on puffery; 2) the plaintiffs failed to allege that cited statements were false; 3) cited press releases and advertisements failed to disclose the alleged defect; and 4) the plaintiffs “failed to allege that the advertisements were the basis of their bargains. '” Id. at 1531.

More recently, in In re Vioxx Products Liability Litigation, 874 F. Supp. 2d 599, 607 (E.D. La. 2012), the plaintiff asserted a claim under the D.C. Consumer Protection Procedures Act (CPPA) following the defendant's withdrawal of its product, a prescription pain and anti-inflammatory medication, from the market in 2004 due to an increased risk of cardiovascular complications. Id. at 601. Despite the recall, the plaintiff did not assert a personal injury claim. Id. at 609 n.4. Instead, the plaintiff alleged that he “paid for Vioxx out-of-pocket but would not have if Merck had not misrepresented its safety profile.” Id. at 606.

According to the plaintiff, he relied upon misleading marketing communications disseminated by the defendant. Id. at 608. Citing Rivera, the court found that “[p]laintiff thought he was purchasing a medication that would relieve his pain without causing him personal injury ' and that is what he received.” Id. Accordingly, as in Veal and Rivera, the court held that the plaintiff failed to allege “a concrete, particularized injury in fact to his economic interests.” Id. at 607. Thus he lacked standing to bring the economic injury claim. Id.

Since the plaintiff also alleged a statutory basis for standing, the court considered that issue in light of the plaintiff's allegations concerning the defendant's advertisements and marketing. While the court noted that the plaintiff alleged facts concerning the nature and scope of the defendant's communications regarding its product, the court found that the plaintiff failed to “connect that conduct to himself.” Id. at 608. Citing the plaintiff's lack of “any plausible nexus or causation” to the defendant's alleged conduct, the court held that the plaintiff failed to show a statutory injury establishing Article III standing. Id. at 609.'

Conclusion

As shown in recent cases, plaintiffs continue to make numerous factual assertions regarding the advertising and marketing efforts of product manufacturers in support of their no-injury product liability cases. Nonetheless, courts, in large part, remain focused on first determining whether plaintiffs have standing to sue based upon benefit of the bargain damages. Where the case is deemed a no-injury product liability case, the court likely will dismiss for lack of standing. Thus, as with many no-injury cases, the lack of an injury-in-fact proved fatal to the plaintiff's claims. See Briehl, 172 F.3d at 627-28 (collecting cases). Where plaintiffs' claims are based upon the defendant's advertising or marketing campaigns, such allegations are either immaterial to the court's final determination of standing, or may instead provide the court with additional rationale to dismiss the complaint. Consequently, the first priority in combating such claims is to convince the court that there is “no-injury” other than the plaintiff's desire to be paid for a product that caused no actual harm.

Sean A. Simmons is a senior associate in the Atlanta office of Alston & Bird LLP. He focuses his practice on complex litigation matters with an emphasis on class actions and product liability.