Make yourself an unappealing target for class-action lawsuits with careful balancing of marketing considerations, regulatory strictures where applicable and internal costs.
Sometimes the allegation of false advertising strikes at the core of the company’s business. To avoid a protracted battle in that environment, where sales lost may never be recovered, an aggressive response may be the best path to minimizing the risk to the company. -- Thomas P. Hanrahan, Sidley Austin LLP
Over the last two years, manufacturers and sellers of consumer products across the industrial spectrum have faced growing wave of class-action lawsuits brought by consumers.
These lawsuits typically allege that the product label or packaging, or the product website, contain false, misleading or unproven claims, or omit information material to consumers’ purchase decisions.
The potential damages can be enormous – a full refund of the price paid by each consumer.
State laws permitting such claims are very broad, typically declaring unlawful any deceptive, unlawful, or unfair practice. Targets have ranged from packaged foods to cosmetics, tools and hardware to automobiles.
Hardly any consumer product is immune to such a charge, not because advertising is literally false or consumers are actually deceived, but because the charge is often very easy to make.
So how can you minimize the chance of finding yourself the target of a complaint about phantom deception, where no one has really been tricked and nothing really material has been concealed or falsified?
The short answer: Make yourself an unappealing target. Some tactics and strategies are more likely to discourage the opportunistic litigant.
Here are a few to consider. All require sound judgment and careful balancing of marketing considerations, regulatory strictures where applicable and internal costs.
1. Be skeptical, but not defensive.
Look at the claims made about your products on the label and packaging, on the product website and in other advertising. Bring a degree of skepticism to that exercise. Are the statements literally true and complete? Could they be construed as misleading? Does the product claim benefits or effects that may be dubious or at least hard to prove? Do the claims comply with any governing regulations?
The object is to sift what is arguably not accurate, or potentially misleading or incomplete. This does not mean that advertising must be so colorless and uninformative, so neutered of content that it tells consumers nothing of value. There is a balance to be struck, and testing the marketing message with a skeptical eye is the best protection against a lawsuit.
2. Variety makes for safer marketing.
Vary the promotional messages over time and place. Change the theme, the emphasis, the images, the words. Why? The more variety there is in how you promote, the harder it is for a class-action plaintiff to prove that every consumer was taken in by the same misleading message. If your advertising pattern rebuts the hypothesis of a common misleading message, the chance of avoiding a class action lawsuit is much greater.
3. “Puffery” requires planning.
It is tempting to suppose that advertising challenged by consumers is usually sales “puffery,” subjective opinions that no reasonable person would take as statements of literal fact. Courts are reluctant to see it that way. Judges are more disposed to let a jury decide the question. But you can tilt this bias a bit in your direction by lacing your advertising with opinion words that provide anchors for a “puffery” defense. This means thinking in advance about what words to use, where and why.
4. Consumers are not all alike.
Consumers know that not everyone has the same experience with every product, especially when that experience depends on the consumer’s individual characteristics or usage. For example, people vary in their response to food, medications and similar products. They use products differently and under different circumstances with different results. Marketing messages that acknowledge this are less exposed to litigation. So marketing messages that do not imply that every consumer will have the same experience are less attractive litigation targets.
