Customer Loyalty Program Bites Plaintiff

The class action plaintiff in this case claimed that an attribute of our client's packaging tricked consumers into buying the product and they wouldn't discover the deception until they got the product home and opened the container. Our client's packaging did have a problem associated with it, so plaintiff's case looked pretty strong.

After a thorough review of all aspects of the case, we discovered that the client's largest customer was an on line retailer that, among its promotions, sold goods under a loyalty rewards program that tracked which customers where purchasing, and repurchasing, which products. We looked at the evidence and saw that many of the consumers of the product had reordered it many times. So it struck us that it was impossible to claim a customer was misled by packaging when that customer would continue buying the product on repeated occasions. After the first purchase, if there was any deception, the customer's repeated purchases meant he didn't care about it. Equally, the repeated purchases could signal that purchasers weren't deceived at all. The only way to get to the bottom of the "deception," issue would be to find out why each customer repurchased the goods. The problem for plaintiff is that in a class action, you can't have multiple mini trials to determine who should be in the class. If the plaintiff can't identify the deception and the class members without mini-trials, there is no class action.

We pointed out to plaintiff's counsel that he had a fundamental failing of evidence. The case was then settled on very favorable terms.


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