NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 13a0197n.06
No. 10-4274
FILED
UNITED STATES COURT OF APPEALS Feb 22, 2013
FOR THE SIXTH CIRCUIT DEBORAH S. HUNT, Clerk
RICHARD LORETO, on behalf of himself and others )
similarly situated; LARRY BUFFA, on behalf of )
himself and others similarly situated, )
) ON APPEAL FROM THE
Plaintiffs-Appellants, ) UNITED STATES DISTRICT
) COURT FOR THE SOUTHERN
v. ) DISTRICT OF OHIO
)
THE PROCTER & GAMBLE COMPANY, )
)
Defendant-Appellee. )
)
BEFORE: GRIFFIN and KETHLEDGE, Circuit Judges; and THAPAR, District Judge.*
GRIFFIN, Circuit Judge.
Plaintiffs Richard Loreto and Larry Buffa appeal the district court’s dismissal of their claims
against Procter & Gamble for violation of various consumer-protection statutes. For the following
reasons, we affirm in part and reverse in part.
I.
This proposed class action involves the charge that Procter & Gamble was unjustly enriched
and violated the consumer-protection laws of all fifty States when it sold and marketed two new
products in 2009: DayQuil Plus Vitamin C and NyQuil Plus Vitamin C. According to plaintiffs,
*
The Honorable Amul R. Thapar, United States District Judge for the Eastern District of
Kentucky, sitting by designation.
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Loreto, et al. v. Procter & Gamble Co.
the company sought to exploit the commonly held, yet allegedly unfounded, belief that Vitamin C
is effective for treating cold symptoms by adding the vitamin to its DayQuil and NyQuil products
and using the following statements in its advertisements:
Combining the powerful multi-symptom relief of DayQuil with more than 150% of
the recommended value of vitamin C.
VICKS NyQuil Cold & Flu Symptom Relief Plus Vitamin C provides
multi-symptom cold and flu relief so you can get the sleep you need to enjoy an even
sweeter tomorrow. Plus, you’ll also replenish your body with 150% of the daily
value of vitamin C.
Vitamin C: It won’t cure a cold, but vitamin C can help blunt its effects. Aim for
500 mg a day.
Fighting Cold and Flu Season. . . . Don’t forget to take your daily vitamins.
Consider taking extra vitamin C, vitamin A, and zinc, all of which may help you.
Plaintiffs purchased the products over competing ones in part because of these statements. They
allege that no scientific evidence supports the claim that Vitamin C can alleviate cold symptoms, and
that, but for Procter & Gamble’s false or misleading statements to the contrary, plaintiffs would have
purchased a lower-priced competing product instead. Plaintiffs seek a refund of the purchase price.
They also request class treatment. Exercising original jurisdiction under the Class Action Fairness
Act of 2005, 28 U.S.C. § 1332(d), the district court dismissed all of plaintiffs’ claims. Plaintiffs
timely appealed.
II.
We first address which state’s law applies. Ohio is the forum state, so we apply its choice-of-
law rules. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). Under Ohio’s rules, “the
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place of the injury controls in a consumer-protection lawsuit, requiring application of the home-state
law of each potential class member.” Pilgrim v. Universal Health Card, LLC, 660 F.3d 943, 947
(6th Cir. 2011) (applying Morgan v. Biro Mfg. Co., 474 N.E.2d 286 (Ohio 1984)). New Jersey,
plaintiffs’ state of residence and the state where they purchased the products, was the “place of
injury” here, so its law applies. See id.
Plaintiffs respond that Ohio law should apply because the advertising campaign they
challenge emanated from Procter & Gamble’s Ohio headquarters. They rely on two decisions
—Parker v. Berkley Premium Nutraceuticals, Inc., 2005 Ohio Misc. LEXIS 605 (Ohio C.P. 2005),
and Brown v. Market Development, Inc., 322 N.E.2d 367 (Ohio C.P. 1974). But we declined to
follow those very decisions in Pilgrim, and Pilgrim is indistinguishable. See Pilgrim, 660 F.3d at
947. The district court correctly dismissed plaintiffs’ claims under Ohio law.
III.
That leaves plaintiffs’ claim under New Jersey’s Consumer Fraud Act, which the district
court dismissed under Federal Rule of Civil Procedure 12(b)(6).1 We review that decision de novo.
See Roberts v. Hamer, 655 F.3d 578, 581 (6th Cir. 2011).
The district court offered alternative reasons for dismissing plaintiffs’ New Jersey claim. It
determined first that the claim was preempted by the Federal Food, Drug, and Cosmetic Act (the
“FDCA” or “Act”). It also ruled that the claim was not cognizable under New Jersey law.
1
Plaintiffs abandoned their unjust-enrichment claim by not addressing it in their opening
brief. See Music v. Arrowood Indem. Co., 632 F.3d 284, 286 n.1 (6th Cir. 2011).
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A.
We first consider Procter & Gamble’s preemption argument. “The FDCA leaves no doubt
that it is the Federal Government rather than private litigants who [is] authorized to file suit for
noncompliance with” its substantive provisions. Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S.
341, 349 n.4 (2001); see Bailey v. Johnson, 48 F.3d 965, 966 (6th Cir. 1995) (recognizing that the
FDCA creates no express or implied private cause of action). The statute’s public enforcement
mechanism is thwarted if savvy plaintiffs can label as arising under a state law for which there exists
a private enforcement mechanism a claim that in substance seeks to enforce the FDCA. Under
principles of “implied preemption,” therefore, private litigants may not “bring a state-law claim
against a defendant when the state-law claim is in substance (even if not in form) a claim for
violating the FDCA[.]” Riley v. Cordis Corp., 625 F. Supp. 2d 769, 777 (D. Minn. 2009) (citing
Buckman Co., 531 U.S. at 352–53); see In re Epogen & Aranesp Off-Label Mktg. & Sales Practices
Litig., 590 F. Supp. 2d 1282, 1290–91 (C.D. Cal. 2008) (“[P]laintiffs may not use other federal
statutes or state unfair competition laws as a vehicle to bring a private cause of action that is based
on violations of the FDCA.”).
The question, then, is how to determine whether a claim formally asserted under state law
is in substance one seeking to enforce the FDCA. The Supreme Court supplied the test in Buckman:
If the claim would not exist in the absence of the FDCA, it is impliedly preempted. 531 U.S. at 353.
In other words:
[T]he conduct on which the claim is premised must be the type of conduct that would
traditionally give rise to liability under state law—and that would give rise to liability
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under state law even if the FDCA had never been enacted. If the defendant’s conduct
is not of this type, then the plaintiff is effectively suing for a violation of the FDCA
(no matter how the plaintiff labels the claim), and the plaintiff’s claim is thus
impliedly preempted under Buckman.
Riley, 625 F. Supp. 2d at 777. In Buckman, for example, the Court deemed preempted a state tort
claim that the defendant defrauded the FDA in the course of obtaining approval for its medical
devices and that, as a result, the devices improperly obtained market clearance and were later used
to the plaintiffs’ detriment. The claims, the Court held, did not rely on “traditional state tort law
which had predated” the FDCA, for the Act’s existence was “a critical element” of the plaintiffs’
case. 531 U.S. at 353. In other words, were it not for the federal regulatory scheme the FDCA
created, there would have been no fraud that could support the tort claim.
In this case, plaintiffs have asserted claims under state consumer-protection laws based upon
two different theories, only one of which is impliedly preempted by the FDCA.
First, the preempted theory. Plaintiffs allege that Procter & Gamble omitted telling
consumers that its products were “illegal,” and had plaintiffs known it, they wouldn’t have purchased
the products. The products were illegal, plaintiffs maintain, because their labeling did not comply
with the FDCA’s requirements. This theory of liability depends entirely upon an FDCA
violation—i.e., the only reason Procter & Gamble’s products were allegedly “illegal” was because
they failed to comply with FDCA labeling requirements. The theory is impliedly preempted by
federal law.
Apart from this clearly preempted theory, plaintiffs also allege that Procter & Gamble
violated state law when it represented to the public that taking Vitamin C can blunt the effects of a
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cold, a statement plaintiffs contend is false or misleading. These statements allegedly induced
plaintiffs to purchase the advertised products instead of a lower-priced competitor’s product not
containing Vitamin C. This theory relies solely on traditional state tort law predating the FDCA, and
would exist in the absence of the Act. Buckman, 531 U.S. at 353. This claim is not preempted.
To be sure, the complaint does include extensive reference to a warning letter the FDA issued
to Procter & Gamble concerning its products, which might suggest plaintiffs’ second theory also
depends upon the FDCA. That letter warns that FDA regulations do not permit combining Vitamin
C with any of the active ingredients contained in DayQuil and NyQuil in part because the evidence
is “insufficient to classify vitamin C as safe and effective” for over-the-counter use. Even though
the FDA has apparently concluded that Vitamin C has not been proven effective in cold treatment,
plaintiffs’ claim does not depend upon this determination and would logically exist even in its
absence. Cf. In re Epogen, 590 F. Supp. 2d at 1291 (“[S]ome false statements made in connection
with prescription drug marketing are actionable under state or federal law, even if their truth may be
generally within the purview of the FDA.” (citation and internal quotation marks omitted)).
B.
The district court alternatively held that plaintiffs failed to state a claim under New Jersey’s
Consumer Fraud Act because they did not plausibly allege an “ascertainable loss.” N.J. Rev. Stat.
§ 56:8-19; see Bosland v. Warnock Dodge, Inc., 964 A.2d 741, 749 (N.J. 2009) (an ascertainable loss
is “without any question” an element of a private plaintiff’s prima facie case under the Act).
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“Ascertainable loss” is not defined in the statute, and “[t]here is little that illuminates the
precise meaning that the Legislature intended in respect of the term.” Thiedemann v. Mercedes-Benz
USA, LLC, 872 A.2d 783, 792 (N.J. 2005). Recognizing this analytical void, the New Jersey
Supreme Court offered guidance in Thiedemann. In order to reach a jury, the court instructed, “a
private plaintiff must produce evidence from which a factfinder could find or infer that the plaintiff
suffered an actual loss.” Id. (emphasis added). An “out-of-pocket loss” will do. Id. Moreover, a
plaintiff’s burden at summary judgment is to put forth “evidence of loss that is not hypothetical or
illusory”; he must present the evidence “with some certainty demonstrating that it is capable of
calculation.” Id.; see also Bosland, 964 A.2d at 749–50 (an ascertainable loss is “quantifiable or
measurable,” not “merely theoretical”).
Here, plaintiffs allege that they suffered an out-of-pocket loss when they purchased DayQuil
or NyQuil Plus Vitamin C instead of a lower-priced competing cold medicine that did not contain
the vitamin. The district court found this loss insufficient as a matter of law. In its view, plaintiffs
suffered no loss in the absence of any allegation that the product failed to treat their colds, one
plaintiffs never made. In other words, plaintiffs received precisely what they paid for—an effective
cold remedy.
The district court erred by ignoring the allegation that plaintiffs would have purchased a
lower-priced cold remedy (thus saving money) were it not for Procter & Gamble’s alleged
misrepresentations. The “quantifiable or measurable” loss in this case is the difference in price
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between Procter & Gamble’s product and a lower-priced competing product.2 The products’ overall
effectiveness in treating plaintiffs’ cold symptoms does not undercut a showing of ascertainable loss.
Cf. Desiano v. Warner-Lambert Co., 326 F.3d 339, 349–50 (2d Cir. 2003) (finding loss sufficient
to support a similar claim under New Jersey’s Consumer Fraud Act, explaining that the plaintiffs’
claim was “unaffected” by whether anyone was physically injured by the defendant’s drug; the fact
that the plaintiffs purchased the defendant’s product instead of a cheaper alternative was sufficient
to demonstrate loss); In re Bayer Corp. Combination Aspirin Prods. Mktg. & Sales Practices Litig.,
701 F. Supp. 2d 356, 380–81 (E.D. N.Y. 2010) (allowing a similar claim under New Jersey law to
proceed, noting that the plaintiffs’ inability to point to any physical injuries from the product was
“immaterial”; economic loss existed where, as here, the plaintiffs alleged that the defendant’s
misrepresentations were the very reason plaintiffs purchased the product); In re Bextra & Celebrex
Mktg., Sales Practices & Prod. Liability Litig., No. MDL 05–01699, 2007 WL 2028408, at *5–6
(N.D. Cal. July 10, 2007) (finding economic loss where the plaintiffs alleged “that physicians
prescribed Celebrex and insurers paid for it precisely because defendants falsely marketed it as
having fewer gastrointestinal symptoms than the [cheaper] available over-the-counter NSAIDs”; “in
other words, plaintiffs could have and would have received exactly the same relief at a much lower
cost but for defendants’ deception”).
2
Although plaintiffs seek a refund of the full purchase price, even if they prevail, they are not
entitled to one. Their claim is that they would have purchased a lower-priced product not containing
Vitamin C but for the misrepresentation, not that they would have foregone purchasing any product.
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IV.
Procter & Gamble offers alternative grounds for affirming. See Harchar v. United States (In
re Harchar), 694 F.3d 639, 644 (6th Cir. 2012) (“We may affirm the district court’s dismissal of a
plaintiff’s claim on any preserved ground, including a ground not relied upon by the district court.”).
First, Procter & Gamble contends that plaintiffs lack Article III standing because they can
demonstrate no “injury in fact.” See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). This
argument simply repackages the company’s argument regarding ascertainable loss. Plaintiffs’
allegation that they suffered a monetary loss by paying more for a cold remedy because of the
company’s misrepresentation establishes a cognizable injury.
The cases Procter & Gamble relies upon are inapposite. See Rivera v. Wyeth-Ayerst Labs.,
283 F.3d 315, 319–21 (5th Cir. 2002) (finding no legal injury where the plaintiffs purchased a drug
that failed to warn of possible side-effects yet performed as expected; however, the plaintiffs did not
allege that they would have purchased a lower-priced alternative but for the failure to warn); Medley
v. Johnson & Johnson Consumer Cos., No. 10-cv-02291, 2011 WL 159674, at *2 & n.2 (D.N.J.
Jan. 18, 2011) (holding that there was no injury where parents who purchased baby shampoo used
the product without adverse health effects and only later discovered that the product contained a
potentially harmful chemical; however, the parents never alleged an economic injury from paying
a premium for the product); Williams v. Purdue Pharma Co., 297 F. Supp. 2d 171, 177–78 (D.D.C.
2003) (finding no standing where the plaintiff suffered no physical injury from the drug, declining
to recognize an economic injury based on the claim that the drug’s price was inflated because of false
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advertising; however, the plaintiff never claimed he would have purchased a lower-priced alternative
but for the advertising).
Second, Procter & Gamble contends that plaintiffs’ claims fail because the four statements
upon which they are based—set forth in section I above—are neither false nor plausibly misleading.
We agree with respect to all but one statement: “Vitamin C: It won’t cure a cold, but vitamin C can
help blunt its effects.”3 It is plausible that plaintiffs could prove that Vitamin C either has no effect
on cold symptoms or has such a marginal effect that advertising its ability to blunt cold symptoms
creates a “capacity to mislead” the average consumer. Union Ink Co. v. AT&T Corp., 801 A.2d 361,
379 (N.J. Super. Ct. App. Div. 2002); see also Miller v. Am. Family Publishers, 663 A.2d 643,
653–54 (N.J. Super. Ct. Ch. Div. 1995) (“[A] claim of literal truth will not constitute a defense to
a charge that the overall impression created by an advertisement is misleading and deceptive to an
ordinary reader.”). The company responds that the statement, “taken in its entirety, clearly and
expressly disclaims the usefulness of vitamin C as a cure for colds.” (Emphasis added.) True
enough, but the statement goes beyond disclaiming the vitamin’s ability to cure a cold; it claims the
vitamin can blunt the effects of a cold, a claim plaintiffs have plausibly alleged is false or misleading.
3
The complaint states no basis upon which to conclude that the three remaining statements
are false, and any allegation that they are misleading to average consumers is implausible. Although
the statement “Consider taking extra vitamin C, vitamin A, and zinc, all of which may help you”
presents a somewhat closer question, we ultimately find that the statement cannot be misleading
because it does not state that the listed products will do anything, only that they might. See New
Jersey Citizen Action v. Schering-Plough, 842 A.2d 174, 177 (N.J. Super. App. Div. 2008) (holding
that, to be actionable under the New Jersey Consumer Fraud Act, allegedly misleading statements
must be “statements of fact”); Wendling v. Pfizer, Inc., No. L-348-04, 2008 WL 833549, at *3–5
(N.J. Super. App. Div. Mar. 31, 2008) (per curiam) (same).
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V.
Finally, the district court dismissed plaintiffs’ claims under the consumer-protection laws of
the other forty-nine States because it found plaintiffs could state none of their own claims. Now that
we have revived a portion of plaintiffs’ New Jersey statutory claim, the district court’s rationale no
longer applies. In the ordinary case, we would reinstate the claims and allow the district court on
remand to consider whether class treatment is appropriate. See Glazer v. Chase Home Fin. LLC, —
F.3d — , 2013 WL 141699, at *3 n.2 (6th Cir. Jan. 14, 2013). However, in view of our recent
decision in Pilgrim that a federal district court in Ohio could not certify a nationwide class of
members asserting consumer-protection claims under all fifty States given Ohio’s choice-of-law
rules and the material differences between the States’ consumer-protection laws, 660 F.3d at 945,
reinstating the claims would be futile. Therefore, we affirm the dismissal of these claims.
VI.
For these reasons, we reverse the portion of the judgment dismissing plaintiffs’ claim under
New Jersey’s Consumer Fraud Act predicated on Procter & Gamble’s statement in its advertising
that Vitamin C “won’t cure a cold, but . . . can help blunt its effects.” In all other respects, we
affirm.
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