Infant Formula Maker’s Ads About Store Brands Barred

This posting was written by William Zale, Editor of CCH Advertising Law Guide.

Infant formula manufacturer Mead Johnson was properly enjoined from publishing any advertisement containing a false representation about store brand infant formula produced by PBM Products, the U.S. Court of Appeals in Richmond has ruled.

In addition to affirming the permanent injunction (CCH Advertising Law Guide ¶63,672), the court upheld the trial court’s rejection of Mead Johnson’s defamation and Lanham Act counterclaims (CCH Advertising Law Guide ¶63,764).

The injunction expressly barred Mead Johnson from making the following claims:

“It may be tempting to try a less expensive store brand, but only Enfamil LIPIL is clinically proven to improve brain and eye development,” and

“There are plenty of other ways to save on baby expenses without cutting back on nutrition.”

Irreparable Harm, Inadequate Remedy at Law

PBM suffered irreparable harm, the court held. Mead Johnson’s advertising misled customers. PBM’s reputation was, and potentially continued to be, damaged. The entire goal of Mead's 2008 mailer was to deter mothers from considering a switch to store brand formula.

The remedies at law were inadequate, the court determined. While the jury awarded PBM $13.5 million in damages, the damages judgment compensated PBM for harm that flowed directly from the mailer. The injunction prevented Mead Johnson from infecting the marketplace with the same or similar claims in different advertisements in the future.

Balance of Hardships, Public Interest

The balance of hardships favored PBM, and the public interest heavily favored injunctive relief, the court said.

The general public interest in preventing false and misleading advertising was perhaps heightened when, as in this case, the misleading information pertained to issues of public health and infant wellbeing. The injunction was not overbroad because it only reached the specific claims that the district court found to be literally false, according to the court.

PBM’s “Compare to” Ad Claims

Mead Johnson's Lanham Act false advertising counterclaims were properly rejected because they were untimely under the analogous two-year Virginia statute of limitation and the doctrine of laches, and because Mead Johnson failed to establish that PBM's “Compare to” ads were impliedly false.

Defamation

Because false advertising was substantially synonymous with lying, in the court’s view, Mead Johnson could not establish defamation under Virginia law based on a press release issued by the CEO of PBM Products declaring that “Mead Johnson Lies About Baby Formula . . . Again.” Mead Johnson was held to have engaged in false advertising in this case, and it did not dispute that it had distributed false statements about PBM's formulas on prior occasions, the court observed.

The decision is PBM Products, LLC v. Mead Johnson & Co.,CCH Advertising Law Guide ¶64,264.

Further information about CCH Advertising Law Guide appears here.

Class Certified in Infant Formula Advertising Case

This posting was written by William Zale, Editor of CCH Advertising Law Guide.

A class was certified by the federal district court in Ft. Lauderdale in an action alleging that Mead Johnson’s advertising and labeling misrepresented its Enfamil LIPIL infant formula as the only baby formula containing the breast milk nutrients DHA and ARA in violation of the Florida Deceptive and Unfair Trade Practices Act and False and Misleading Advertising Law.

Lower-priced store brand and private label formulas allegedly contained the same nutrients in equal or greater amounts.

The case involved issues common to the proposed class, including whether the representations about the product were true, whether an objective consumer acting reasonably in the circumstances would be deceived, what measure of loss was proper, and whether the class members were entitled to injunctive relief, the court found.

Typicality

Claims asserted by the named plaintiff were typical because she purchased Enfamil LIPIL, she testified she was deceived by Mead Johnson’s representations, and she was exposed to the same messages as class members even if they had viewed different labels.

The named plaintiff had purchased Enfamil LIPIL within the relevant four-year statute of limitations and thus could not be held an inadequate class representative on the theory that her claims were time-barred, the court determined.

Predominance of Common Issues

Common issues predominated, namely whether Enfamil LIPIL contained nutrients that other brands of infant formula did not and whether Mead Johnson’s representations would deceive a reasonable consumer. Because the controversy involved many questions of law and fact, a class action would be superior to other available methods for fair and efficient adjudication, the court concluded.

The decision is Nelson v. Mead Johnson Nutrition Co., November 1, 2010. Text of the decision will appear at CCH Advertising Law Guide ¶64,048.

Further information about CCH Advertising Law Guide appears here.

Enfamil Ad Claims Enjoined; Store Brand Awarded $13.5 Million

This posting was written by William Zale, Editor of CCH Advertising Law Guide.

A jury awarded $13.5 million to store brand infant formula producer PBM Products on a finding that Mead Johnson & Co. falsely advertised its Enfamil® LIPIL® formula in violation of the Lanham Act.

After the jury returned its verdict on November 10, the federal district court in Richmond, Virginia enjoined Mead Johnson from publishing any advertisement containing a false representation about PBM’s infant formula. PBM supplies store-brand infant formulas to Walmart, Sam's Club, Target, Kroger, Walgreens, and other retailers.

The December 1 injunction order expressly bars Mead Johnson from making the following claims: “It may be tempting to try a less expensive store brand, but only Enfamil LIPIL is clinically proven to improve brain and eye development,” and “There are plenty of other ways to save on baby expenses without cutting back on nutrition.”

The court directed Mead Johnson to retrieve any and all advertisements, promotional materials, or other literature containing the above claims.

The December 1 order does not articulate the basis for entering the injunction. In an earlier ruling (see Trade Regulation Talk, May 28, 2009), the court had denied PBM’s motion for a preliminary injunction (CCH Advertising Law Guide ¶63,417; 2009-1 CCH Trade Cases ¶76,619).

Laches Defense

Mead Johnson unsuccessfully contended that PBM’s suit was barred by the defense of laches on the theory that PBM had not diligently pursued its Lanham Act claim.

Mead Johnson argued that its challenged ad claims in a 2008 mailer had been made for more than two years. The court viewed the two-year Virginia statute of limitation period for fraud as analogous to false advertising under the Lanham Act, which lacks a statute of limitations.

Contrary to Mead Johnson’s contention, the 2008 Mailer took a new approach in tone and message towards store brand infant formula, according to the court. Mead Johnson consciously decided that its marketing should be more aggressive and risky, as it had witnessed a decrease in its sales and an increase in store brand sales, the court said.

The 2008 Mailer and its attack on store brands was the result of that marketing decision. On these facts, the court determined that Mead Johnson had not shown that PBM lacked diligence in pursuing its Lanham Act claim.

The December 1 order in PBM Products, LLC v. Mead Johnson Nutrition Co. will be reported in CCH Trade Regulation Reports and CCH Advertising Law Guide.

“Unique” Infant Formula Ad Claims Not Enjoined

This posting was written by William Zale, Editor of CCH Advertising Law Guide.

A producer of store brand infant formula (PBM Products) asserting Lanham Act violations was denied a preliminary injunction barring “unique formulation” advertising claims made in a mailer by Mead Johnson, the producer of Enfamil LIPIL formula.

The federal district court in Richmond found that PBM failed to demonstrate a likelihood of success on its claim that Mead’s national advertising campaign falsely stated that only Enfamil LIPIL had two lipids—docosahexaenoic acid (DHA) and arachidonic acid (ARA).

Mead’s advertisements cited studies that compared its current and prior formulas and apparently found that the addition of the lipids resulted in improved eye and brain development for infants. The parties acknowledged that both PBM’s store brand formula and Mead Johnson’s Enfamil LIPIL used the same levels of the lipids and obtained them from the same supplier—the only FDA-approved source.

Studies

Mead claimed, “It may be tempting to try a less expensive store brand, but only Enfamil LIPIL is clinically proven to improve brain and eye development.” The claim was not literally false, in the court’s view, because it was undisputed that the studies demonstrated, concomitant with the presence of the lipids in Mead’s formula, the benefits to vision and brain development claimed in this advertisement.

Because the claim was not literally false, PBM had the burden of demonstrating that it tended to mislead consumers, and nothing in PBM’s pleadings demonstrated this. In addition, a disclaimer clarified the point that the studies only compared the current version of Mead’s formula with its prior version, which did not contain the lipids.

Unique Formulation

PBM also failed to show that it likely would succeed in challenging another Mead claim: “En-Fact: Enfamil LIPIL’s Unique Formulation Is Not Available in Any Store Brand.”

An objective reading of this statement suggested that “unique” referred, not to an isolated component of the formula, but rather to the formula in its entirety, the court said. That is, Enfamil LIPIL contained various ingredients, in addition to the lipids, that provided the consumer with a “unique formulation” unavailable elsewhere. As long as Mead Johnson’s product contained ingredients that other brands did not, the statement could not be considered literally false.

Graphic, Captions

Finally, PBM failed to show a likelihood of success on its claims regarding a “blurry duck” graphic and associated captions. The graphic, which was divided down the middle, contained a picture of a duck. One side of the picture looked blurry, while the other appeared clear. Next to the blurry side were the words “without LIPIL®,” while the caption next to the clear side read “with LIPIL®.”

The question of literal falsity turned on whether the captions clearly conveyed what Mead claimed was the intention of the graphic—that Enfamil LIPIL provided a benefit that Enfamil without the lipids did not. The court acknowledged that a plausible argument existed that the duck graphic might tend to convey the false impression that, in order to obtain formula with the lipids a consumer had to purchase Enfamil LIPIL, when in fact this was not the case. This plausible mistake notwithstanding, Mead did provide the disclaimer clarifying the comparison.

In sum, at this stage of the case, PBM had not satisfied its burden of demonstrating that these statements tended to mislead or confuse the consuming public, the court concluded.

The May 7 opinion in PBM Products LLC v. Mead Johnson Nutrition Co. will be reported at CCH Advertising Law Guide ¶63,417 and at 2009-1 Trade Cases ¶76,619.