The New Jersey Supreme Court has reversed lower court rulings denying a motion to certify a statewide class of consumers who purchased a dietary supplement that allegedly fails to deliver its promised benefits. Lee v. Carter-Reed Co., L.L.C., No. A-38-09 (N.J., decided September 30, 2010). The plaintiff alleged that none of the product claims—shrinks belly fat, improves users’ mood, balances hormone levels, reduces anxiety, alters mood—was true and that the product distributor offered a false testimonial from a purported doctor to support the claims.
The supreme court faulted the trial and intermediate-appellate courts with failing to accept as true the named plaintiff’s “detailed allegations that all of Relacore’s advertisements were false. Because those courts failed to give a deferential view to [the plaintiff’s] case at the class-certification stage, they applied legal principles to a distorted picture of the record.” According to the court, “the trial court and Appellate Division implicitly assumed that Relacore produced some of the benefits advertised. That assumption made causation a perplexing problem, the resolution of which would depend on a number of individual inquiries.” In fact, the trial court identified 14 individual questions, each of which “assume that Carter Reed will prevail in showing that Relacore provides as least some of the benefits for which it has been marketed.” When the record is viewed in the light most favorable to the plaintiff, “common issues of law and fact predominate over individual ones,” states the court. The state consumer fraud law “provides relief to plaintiff and the putative class if Carter Reed engaged in the deceptive marketing of Relacore and plaintiff and the class members suffered an ascertainable loss causally related to that unlawful practice.… Under [the plaintiff’s] scenario, the ascertainable loss here is the cost of a bottle of broken promises; each container of Relacore, when not refunded is an out-of-pocket loss.”
The court found it unlikely that thousands of individual consumers would file actions in small claims court for “buying a worthless product that cost only about $40,” thus making a class action “a superior vehicle and perhaps the only practical vehicle for consumers who were allegedly deceived into purchasing Relacore.” The case was remanded for further proceedings.