Two identical products. But packaged in different size bottles and with different claims on the labels. And one is twice as expensive as the other (on a per ounce basis). Are consumers misled?
That is the issue in a pending putative class action asserted against Beiersdorf, maker of Coppertone products. In that case, pending in the district court of Connecticut, the plaintiff is asserting violations of California's Unfair Competition Law, California Legal Remedies Act, and California's False Advertising Law, claiming that she was misled by the defendant's labeling on its 2.5-ounce bottle of Coppertone Sport Mineral sunscreen. Specifically, plaintiff claims that she was misled because the product label conveys that the product was "specifically designed" or "specifically formulated" for use on the face.
Plaintiff points to three statements on the label : "FACE," "Won't Run Into Eyes," and "Oil Free." Further, she alleges that the sunscreen in the 2.5-ounce "FACE" packaging is identical to the sunscreen contained in the defendant's larger 5-ounce bottle which does not label itself with the word "FACE," but is priced at half the cost per ounce. Accordingly, her theory of deception is that Coppertone purports to provide a specialized facial sunscreen which it sells at a premium, but the product is actually no different from the sunscreen sold in the larger (and significantly cheaper per ounce) bottle.
Defendant filed a motion to dismiss the complaint, arguing that the plaintiff cannot rely on a price comparison between the two bottles of sunscreen to demonstrate deception and that she failed to adequately plead that the "FACE" bottle is deceptive in and of itself. The defendant also argued that "there is nothing deceptive about emphasizing different but equally true aspects of a product to different market segments, or pricing products differently when sold to different market segments or in different retail channels." The court denied defendant's motion.
How the court got there is the interesting part because the defendant's argument is accurate: courts have indeed been loathe to adjudicate either pricing or segmenting decisions by marketers (in the absence of anti-competitive or discriminatory concerns). However, here, the court did not premise its decision on a finding that defendant's pricing strategy was itself unlawful. Rather, it pointed to plaintiff's allegation that the "price disparity reinforces the deception that Defendant's misleading "FACE" packaging conveys, i.e., that the 2.5-ounce bottle contained more expensive but specifically formulated facial sunscreen." In other words, the different labeling combined with the different prices together created an allegedly false message that the product was specifically formulated for (as opposed to, say, appropriate for) use on the face, even though plaintiff did not allege that she actually saw the bigger (cheaper per ounce) bottle at the time of purchase.
Although the Court noted that plaintiff's argument would be strengthened if she had in fact seen both bottles at the time of purchase, one specifically labeled "FACE" and another bottle without "FACE" sold at half the price per ounce, the plaintiff's claim that she relied on the "FACE" label for her belief that the ingredients were tailored specifically for the face – and whether the product is in fact specially formulated for the face -- survived dismissal as questions for development in discovery.
So what's the learning here? Pricing itself may be, as one court noted, "a quintessentially political question and thus nonjusticiable," but potentially misleading advertising and labeling claims are not. In this case, the pricing issue became relevant, if not itself "justiciable," because it may have helped to convey a claim that defendant will have to substantiate: that the more expensive cream was specially formulated for the face. (Whether or not the Court will expect the defendant to also show that the more expensive cream was specially formulated for the face unlike the cheaper cream remains to be seen.) That a pricing strategy can have implications for what messages a consumer takes away from a product label is an important lesson. Many things on a product label convey can claims to consumers --- the product name itself, the explicit statements about its benefits, the directions for use -- and apparently, price can potentially convey a claim too.
Akes v. Beiersdorf, Case No. 3:22-cv-869 (JBA), (D.CT. August 4, 2023)
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