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Okay, retail shelves don’t have eyes. We coined that phrase to mimic the title of the Wes Craven films featuring desert mutants and the horror they impose on unsuspecting travelers. We watched the original 1977 film The Hills Have Eyes while traveling a few years back and thought it was not that great. Imagine then our surprise to learn that this thoroughly creepy film resulted in both a sequel and a remake and has become somewhat of a cult classic! Go figure.
The film came to mind this week not because of mutant terrorists, but because retail store shelves apparently have the human-like ability to communicate to consumers in ways of which we were previously not aware. The shelves have voices? That apparently is the opinion of two courts who recently held that the mere placement of products on store shelves near other products can represent that the one product is like the other.
We are not talking here about labeling. In Center for Inquiry, Inc. v. Walmart, Inc., No. 20-cv-392, 2022 WL 4542043 (D.C. Ct. App. Sept. 29, 2022) (to be published in A.3d), the homeopathic products at issue were accurately labeled, but DC’s high court held that nonetheless consumers could be misled into believing that they were as effective as the FDA-approved products placed next to them on the pharmacy shelves. The plaintiff was a non-profit organization that, among other things, opposes homeopathy as ineffective pseudoscience. To advance its cause, the organization sued retail pharmacies claiming that their sales of homeopathic remedies violated DC’s consumer protection laws because the retailers “falsely present homeopathic products as equivalent alternatives to ‘science-based’ medicines and falsely represent that homeopathic products are effective in treating or relieving specific diseases and symptoms.” Id. at *1.
Again, there was no claim that the product labeling was inaccurate—it clearly stated the products were homeopathic and had not been evaluated by the FDA—and there likewise was no allegation that the retailer made any express representations about the products’ properties or efficacy. So what was the alleged falsity? The retailers placed homeopathic products on their shelves alongside FDA-approved over-the-counter drugs, which allegedly implied that the products were comparably effective. Id. at *7.
The court reasoned that because representations do not necessarily have to entail verbal communications, “acts” fall within the scope of unfair or deceptive practices under the DC statute, which must be “construed and applied liberally.” Moreover, courts in other jurisdictions have likewise construed the consumer laws of other states to reach “practices such as product placement, misleading imagery, and other non-verbal cues.” Id. at *6.
Thus, where the trial court found it implausible that any reasonable person would be misled by the placement of homeopathic products alongside FDA-approved products, the appellate court disagreed. The appellate court held that it was not “facially implausible” that a reasonable consumer could believe that homeopathic products are comparably efficacious, so a jury needs to decide based on evidence. Id. at *7. Still, we think there is a difference between “liberality” and gullibility.
We can’t help but comment on a second recent case where the California Court of Appeal held that the placement of “white baking chips” on the shelve next to chocolate chips could mislead someone into thinking that the baking chips were made of chocolate. See Salazar v. Walmart, Inc., No. E076006, 2022 WL 4299338 (Cal. Ct. App. Sept. 19, 2022) (to be published). Again, there was no claim of inaccurate labeling—the label accurately disclosed the product’s ingredients. But, because the white baking chips were next to chocolate chips, they must have been made of chocolate, too. This is another instance where the trial court dismissed the case, but the appellate court reversed and revived consumer fraud claims that are extraordinarily strained.
We see multiple problems with the homeopathy case (and by extension, the white baking chip case). To start with, although the appellate court purported to apply a “reasonable consumer” standard, the opinion reads more like the court applied a standard based on “any conceivable consumer,” hence our earlier comment about liberality and gullibility. The opinion leaves very little room for a trial court to apply reason and dismiss unmeritorious claims on the pleadings. In other words, most anything could be plausible.
Moreover, the appellate court completely disregarded the product labeling, which truthfully disclosed that the products were homeopathic and that the FDA had not evaluated them. This is neither implication nor innuendo. These were express representations that dispelled any possibility that a reasonable consumer would be misled about the properties of the products.
Finally, since when do retailers vouch for the relative efficacy of healthcare products merely by placing them on their shelves? For some, ibuprofen might work better than Tylenol, and Pepto Bismol might work better than Imodium. Or they might not. Or they might not be effective for some people at all. Merely placing one next to the other on the shelve represents nothing about which is better, what the consumer’s outcome will be, or whether the consumer should even buy any product in the first place. No one is claiming that merely selling homeopathic products violated consumer protection laws, so where were the retailers supposed to put them? Next to the chocolate chips?
We are being glib with that last comment, but we think the courts in DC and California were themselves too quick to reverse the reasoned rulings of the trial courts in these cases. We also think they gave the shelves way more credit than they deserved. What’s next? Lawsuits claiming that it is deceptive to put margarine next to butter? Veggie burgers next to meat? OTC drugs next to dietary supplements? Diet soda next to sugary soda? Fiction next to non-fiction? The potential for abuse and expensive discovery is obvious.
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