The Ninth Circuit recently affirmed the dismissal of a putative class action against Wal-Mart alleging that Wal-Mart misled its customers into paying more for its store-brand migraine medicine that contains the same active ingredients in the same amounts as its headache medicine. The Court found that the migraine medication’s higher price and a difference in the color of the packaging were insufficient to constitute a misrepresentation, thus ruling that Wal-Mart had not deceived its costumers as alleged. See Boris v. Wal-Mart Stores, Inc., No. 14-cv-55752, 2016 WL 1622207 (9th Cir. Apr. 25, 2016)).
The putative class’s claims against Wal-Mart sounded in violations of California’s Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act, New Jersey’s Consumer Fraud Act, and New York’s deceptive acts and practices law. Id., at *1. Specifically, the Plaintiffs alleged that Wal-Mart sells Equate Migraine Relief and Equate Extra Strength Headache Relief, store-brand drugs that contain the same active ingredient in the same amounts, claiming that Wal-Mart fraudulently charged $9.00 for the migraine medicine as compared to $3.00 for the identical headache remedy. Further, the Plaintiffs allege that other than the price disparity, the only other difference between the products is that Equate Migraine Relief is in a red package, while Equate Extra Strength Headache Relief’s package is green. Thus, according to the Plaintiffs, Wal-Mart deceived reasonable consumers into believing that the more expensive migraine medication was more potent and effective.
Counsel for the putative class argued that Wal-Mart intentionally tricked shoppers by making the more expensive Equate Migraine appear to be better than the Equate Extra Strength headache medicine when the two are “pharmaceutically identical pills.” During oral arguments, the Court responded to this position critically, pointing out that the consumers were getting exactly what they were seeking, which was a pill that treats migraines, even if he or she was not told by Wal-Mart that an identical medicine was available at a lower cost. Counsel for Wal-Mart argued that in the absence of a misrepresentation or omission of material fact, the suit actually amounted to an improper request for price regulation, as opposed to a claim of a violation of consumer protection laws.
Wal-Mart was also sure to point out that the two drugs are provided to Wal-Mart by two different manufactures, although they are both sold under the same Wal-Mart brand, Equate. Moreover, while the two drugs contain the same ingredients, because they are marketed to treat different ailments, they each go through their own regulatory approval process with the U.S. Food and Drug Administration. Thus, Wal-Mart argued, it should not have to inform its customers that the products are indeed the same, since the FDA regulates migraine products differently. In other words, the manufacturer that provides Equate Migraine Relief incurs a greater cost to perform clinical studies and to go through the application process to demonstrate that the drug treated migraines, while the other manufacturer decided to market its drug as treating headaches.
Ultimately, the Court found Plaintiffs had unsuccessfully argued that the price differential and the color of the packaging, alone, would cause reasonable consumers to believe that one was more potent than the other. Thus, the Court found that Plaintiffs failed to state a claim upon which relief could be granted under the consumer protection, fraud, and deceptive practices laws of California, New Jersey, and New York, as cited above.
This case provides an interesting illustration of the application of consumer fraud laws in California, New York, and New Jersey, which the Court described as “already protective laws to cover the claims pled by [Plaintiffs].” Id. As such, the Court refused to extend the laws of those states so as to find that “the mere fact of the proximate presentation of the two products with their different colors and prices is sufficient to run afoul of those laws, even though the ingredients and their amounts are listed on the packages.” Id.