Yesterday, the New Jersey Supreme Court handed down a unanimous 50-page opinion reversing the denial of certification in a mass marketing consumer fraud case.
The case involves a dietary supplement known as Relacore -- a pill marketed as causing stress and weight reduction. According to its advertisting, Relacore attacks the "stress-to-belly-fat cycle." The complaint alleges that there's no basis to believe the pill delivers any of its claimed benefits. The trial court and intermediate appellate court both held that class certification was inappropriate because the mass marketing for Relacore took a variety of forms -- sometimes it was advertised as a weight-loss product and sometimes as a stress-reduction product -- and because there was no way of knowing which consumer relied on which claims, individual issues would necessarily predominate.
Public Citizen wrote an amicus brief, joined by other consumer groups. We argued that the lower courts' decision would mean that companies that commit fraud in multiple ways would be better off than companies that make only one false claim. We argued that pills like Relacore are what economists call "credence goods" -- you don't know anything about them until someone tells you something about them. Nobody grabs pills off the shelf randomly, so people must have decided to buy the pills in reliance on advertising.
The opinion quotes at length from our argument about "credence goods" and makes that concept central to its predominance analysis. It also relies heavily on our argument that making multiple false claims shouldn't put deceptive advertisers in a better position that those that make a single false claim:
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