Consumer Defense: How to Protect Your Business from Consumer Claims

Puffery is a defense to consumer protection and false advertising claims that recognizes a category of promotional statements so vague, subjective, or obviously exaggerated that no reasonable consumer would rely on them as objective statements of fact, and courts have consistently held that statements like the best product on the market or America's most trusted brand are non-actionable puffery because they cannot be objectively verified as true or false. The key distinction between actionable false advertising and non-actionable puffery is whether the challenged statement makes a specific, verifiable factual claim versus a vague, subjective superiority claim that cannot be proven false.

Advertising and marketing law and false advertising lawsuit counsel can advise on the puffery defense available in the specific consumer protection claim and develop the puffery defense strategy.

Causation in consumer protection cases requires the plaintiff to demonstrate that the defendant's challenged statement or practice was the cause of the plaintiff's injury, and in most consumer protection cases this means showing that the plaintiff was actually exposed to and relied on the challenged statement in making the decision to purchase and that the reliance caused the claimed loss. Defendants can challenge causation by demonstrating that the plaintiff did not see or rely on the challenged statement before making the purchase or that other factors caused the plaintiff's injury independent of the challenged statement.

Consumer protection law and commercial litigation counsel can advise on the affirmative defenses most applicable to the specific consumer protection claim and develop the comprehensive consumer defense strategy.

Consumer protection disputes and civil litigation evidence counsel can advise on the causation challenge most appropriate for the specific claim and develop the causation defense and expert strategy.

A material misrepresentation in a consumer protection case requires the plaintiff to show that the defendant made a false or misleading statement of fact, that the statement was material in the sense that it was likely to affect the consumer's purchasing decision, and that the consumer suffered an injury as a result, and materiality is typically established by showing that the challenged statement relates to a characteristic that the typical consumer would consider important, such as the product's ingredients, efficacy, safety, or environmental attributes. A statement can be actionable even if it is technically true if the overall impression it creates in the mind of a reasonable consumer is false or misleading.

Consumer protection law and unfair competition law counsel can advise on the materiality and falsity elements of the specific claim and develop the materiality challenge and defense strategy.

Defendants can challenge the materiality element by demonstrating that the challenged statement was displayed in a location or format not likely to be seen by the typical consumer before making a purchase, that the challenged statement was adequately disclaimed in a manner that would prevent a reasonable consumer from being misled, or that the challenged statement relates to a product characteristic that typical consumers do not consider material. Defendants can challenge the falsity element by demonstrating that the challenged statement was literally true and not misleading in context or that the statement accurately described the product's characteristics based on the scientific evidence available at the time.

Consumer protection disputes and class action litigation counsel can advise on the challenges to the materiality and falsity elements most effective in the specific case and develop the consumer protection defense strategy.

When the FTC or a state attorney general opens an investigation into a company's consumer-facing practices, the company typically receives a civil investigative demand or subpoena requiring it to produce documents and information relevant to the inquiry, and the company's response strategy must balance the obligation to cooperate with the need to preserve attorney-client privilege, attorney work product protection, and the company's legal defenses. The company should immediately retain experienced regulatory counsel, conduct an internal investigation to assess the scope of the potential violation, and develop a strategy for engaging constructively with the regulatory agency.

Regulatory compliance and regulatory risk management counsel can advise on how to respond to a specific FTC or state attorney general investigation and develop the regulatory response and investigation management strategy.

A proactive consumer compliance program that identifies and remediates potential violations before they are discovered by regulators or private plaintiffs is the most effective tool for limiting consumer law liability, and a company that can demonstrate that it had a robust compliance program in place, identified a potential issue, took prompt steps to remediate the issue, and made voluntary disclosure is in a significantly stronger position than a company first alerted to the issue through a regulatory investigation. The compliance program should include regular audits of consumer-facing advertising, labeling, and online disclosures.

Corporate compliance and risk management and business compliance counsel can advise on the compliance program design most appropriate for the specific company's consumer-facing activities and develop the consumer compliance and remediation strategy.

Voluntary remediation of a consumer protection issue can limit a company's exposure in both regulatory enforcement and private litigation by demonstrating that the company acted in good faith to address the issue, that consumers who were harmed have been or will be made whole, and that the challenged practice has been stopped and is unlikely to recur. In regulatory enforcement proceedings, voluntary remediation and cooperation can be significant mitigating factors that reduce civil penalties, and in private litigation a well-documented remediation program can be used to argue that equitable relief is unnecessary.

Consumer protection disputes and consumer law counsel can advise on the remediation defense available in the specific case and develop the remediation and damages defense strategy.

The most effective strategies for defending against consumer class actions include defeating class certification by challenging the plaintiff's ability to satisfy the numerosity, commonality, typicality, adequacy, predominance, and ascertainability requirements of Rule 23, removing the action to federal court under CAFA where the more demanding certification standards are more favorable to defendants, and compelling individual arbitration if the company's consumer agreements contain a valid class action waiver. Early dispositive motions attacking the plaintiff's individual claims before the class certification hearing can be effective because a named plaintiff who lacks a viable individual claim lacks standing to serve as the basis for a class action.

Class action litigation and class actions and multi-district litigation counsel can advise on the consumer class action defense strategy most appropriate for the specific case and develop the class certification opposition and resolution strategy.