Response Magazine Site Response Expo Site Direct Response Market Alliance Site Job Board

 

   Log in
  
The Voice

Nutella Case Speaks to Limits on Scope of Class Actions

6 Mar, 2012 By: Jeffrey Richter, John Waller, Blank Rome LLP


As noted in the December 2011 issue of the DRMA Voice, the marketer of Nutella recently succeeded in substantially limiting the size of the proposed putative class of purchasers of its product by arguing that not everyone in the proposed class had been exposed to the alleged misrepresentation. An equally important lesson to be gleaned from this case is that nationwide marketers who find themselves sued for alleged violations of a single state’s unfair competition laws need not necessarily fear that they will always need to defend their conduct in a nationwide class action based upon that single state’s unfair competition laws.

In the In re Ferrero case, the plaintiffs sought to certify a nationwide class of purchasers of Nutella who had allegedly been exposed to misleading labeling and advertising about the benefits of consuming Nutella. The plaintiffs alleged that the marketer promoted Nutella as being healthy and beneficial to children despite its high levels of fat and sugar.

The named class representatives were all California residents who viewed the advertisements for Nutella in California and thereafter purchased Nutella in California. No doubt seeking to take advantage of California’s consumer-favorable unfair competition laws and desiring to maximize the size of the putative class, the plaintiffs asked the court to certify a nationwide class of purchasers of Nutella and to apply California’s unfair competition laws to the entire class.

Although the court concluded that it was appropriate to certify a class consisting solely of California-based purchasers of Nutella, it refused to certify a nationwide class of purchasers of Nutella notwithstanding that the same advertisements and label were used throughout the United States. The court noted that the plaintiffs made no showing that non-California purchasers saw the allegedly misleading advertising for Nutella in California, purchased Nutella in California, or that their claims arose out of conduct that occurred in California. The court, following established precedent that California’s unfair competition laws embody a presumption that they do not apply to conduct occurring outside of California, concluded that it was not appropriate to apply California’s unfair competition statutes to non-California residents in this case.

Although nationwide marketers may not always be as fortunate as the marketer of Nutella in limiting the scope of the putative classes that they face to consumers located in a single state – and may occasionally desire to resolve all potential claims about their products or the advertising or labeling therefore in a single lawsuit rather than in multiple lawsuits – the Nutella case is a good reminder that even marketers that run the same advertisements nationwide need not always fear that a single state’s laws will be applied to their conduct nationwide. Although the Nutella decision was based upon specific case law interpreting California’s unfair competition statutes, if faced with an attempt by an artful plaintiff to apply one state’s laws to residents of other states, carefully review the applicability of that state’s laws to residents of other states before assuming and accepting that they are correct. 

Jeffrey Richter and John Waller are partners at Los Angeles-based Finestone & Richter. They can be reached at (310) 575-0800, or at jrichter@frlawcorp.com and jwaller@frlawcorp.com.


Add Comment

DRMA Putting Unity in Community


The DRMA is vibrant and growing marketing alliance with one singular focus: to serve and support marketing professionals that utilize performance-based, trackable and measurable marketing.

If you are responsible for a product or service that is sold and marketed to a consumer via direct response, digital or data-driven tactics, or if you are part of the supply chain that helps facilitate a marketing and sales campaign, then the DRMA is a vital organization to join.

The DRMA uses a combination of education and networking to foster clear channels of communication and transparent pathways to nurture long term relationships in a comfortable and neutral environment.



DRMA Voice
FTC Joins Legal Barrage Against VW Over Emissions Scandal     12 Apr, 2016

Article By: William I. Rothbard

Piling on to Volkswagen’s legal woes regarding its admitted cheating on emissions tests, the...More>>

Plaintiff Steeps in Green Tea Class Action Defeat     12 Apr, 2016

Article By: Jeffrey D. Knowles, Stephen R. Freeland

A California federal court recently ruled that a consumer’s false labeling claims against tea...More>>

FTC Hits Lord & Taylor Over Native Advertising, Social Influencer Campaign     12 Apr, 2016

Article By: Linda A. Goldstein, Lauren B. Aronson

In December 2015, the Federal Trade Commission (FTC) issued its long-awaited enforcement policy...More>>

Brand Security: Why It May Be Time to Stop Manufacturing in China     4 Mar, 2016

Article By: Paula Brillson Phillips

“Made in China.” It’s on almost every product we buy. Most product marketers and distributors...More>>

California Call Recording Class Actions: Present and Future – Part II     4 Mar, 2016

Article By: Yosef Mahmood, Ana Tagvoryan

As plaintiffs have run into greater difficulty certifying call-recording class actions under...More>>


Breaking News
White House Supports FCC in Unlocking Set-Top Boxes     20 Apr, 2016

News By: Doug McPherson

WASHINGTON – The White House is supporting the Federal Communications Commission’s (FCC)...More>>

Email Privacy Act Approved; Microsoft Sues Justice Dept. Over Gag Orders     20 Apr, 2016

News By: Doug McPherson

WASHINGTON – In a rare bipartisan vote of 28-0, the House Judiciary Committee approved the Email...More>>

Viewers Flock to Netflix, but Digital Video Growth Continues to Shrink     20 Apr, 2016

News By: Doug McPherson

NEW YORK – Consumers continue to flock to Netflix as 126.9 million people are expected to view it...More>>

Interactive Video Ads More Engaging Than Pre-Roll, Banners     20 Apr, 2016

News By: Doug McPherson

NEW YORK – A new study says interactive video is more engaging than pre-roll or standard banners.More>>

NBCU to Use ‘New Currency’ for Upfront Guarantees     20 Apr, 2016

News By: Doug McPherson

NEW YORK – NBCUniversal reports it will use non-Nielsen data to guarantee audiences for targeted...More>>


DRMA Spotlight
DRMA Spotlight: Perfecting the Process     1 Mar, 2016

Article By: Thomas Haire

It’s been one year since we turned the DRMA Spotlight on Los Angeles-based Swipe Payment...More>>