Plaintiffs Must Plead Facts Which Directly Contradict Allegedly False Statements to Plead ICFA Claims Based on Falsity
In a recent decision by Judge Thomas M. Durkin of the Northern District of Illinois, the Court recognized an important distinction for Illinois Consumer Fraud Act (ICFA) claims between a claim for “actual falsity” and one for “lack of substantiation.” Spector v. Mondelez Int’l, Inc., 15 C 4298, 2017 WL 4283711, at *10 (N.D. Ill. Sept. 27, 2017). In making this distinction, the Spector court has made clear that false advertising cases brought under ICFA must plead facts which directly contradict the advertising claim. Id. at *4 (holding that under Illinois law “a plaintiff may bring a lack of substantiation claim only if the defendant makes a substantiation claim in its advertisement.”). It is important to note that, in Illinois – unlike in many other states – a private plaintiff may bring a lack of substantiation claim where the advertisement included an establishment or substantiation claim (e.g., “Tests show that . . .”).
In Spector, the plaintiff alleged that the product at issue did not provide “4 hours of nutritious steady energy” as the defendant had represented. Id. at *2. In discussing the various factual allegations put forward by the plaintiff, the Spector opinion makes clear that the pleading standard for false advertising claim is a high bar. Id. at *3-10. Judge Durkin notes that “[i]n virtually all of the cases in which courts have held that the plaintiff adequately pled actual falsity in a false advertising case, the complaints in question cited to testing or studies that directly contradicted the advertising claim at issue.” Id. at *3. Factual allegations of falsity are insufficient when, as in Spector, they do not directly support a plaintiff’s allegation of falsity, but instead require the court to make a speculative leap. Id. at *7.
First, the plaintiff in Spector relied on a study which found that a 42 gram version of the product at issue was insufficient for the “4 hours of nutritious steady energy” claim and argued that, as a result, the 50 gram dose – when consumed without breakfast – must also be insufficient for that claim. Id.This argument would have required the court to make a speculative leap to allow the litigation to continue. As a result, the court found that plaintiff’s allegations were not sufficient to meet the required plausibility threshold. Id. at *9 (“While lack of substantiation evidence may be supportive of Plaintiff’s false advertising claim, it is not sufficient to give rise to a plausible claim of falsity.”).
Second, the plaintiff argued that the nutritional requirements of individuals vary based on a number of variables and as a result, “the 230 calories provided by a 50 gram serving of the Products could not guarantee 4 hours of nutritious steady energy for every consumer.” Id. at *9. The court found that this argument was also insufficient to state a claim. The court noted that “individual variations may exist but not impact the 4 hours of steady nutritious energy claim (which could be the floor below which no individual would ever fall).” Id.
Third, the plaintiff in Spector advanced the argument that “Plaintiff consumed the Products and did not herself experience 4 hours of steady energy.” Id. at 10. The court responded to this argument by quoting from Toback v. GNC Holdings, Inc., 2013 WL 5206103, at *3 (S.D. Fla. Sept. 13, 2013). The court held, in line with Toback, that an allegation that the plaintiff used the product and was not satisfied is insufficient to state a claim. Spector, 2017 WL 4283711, at *10. Instead, such allegations require “further detail or support.” Id. (quoting Toback, 2013 WL 5206103, at *3.) In addition, such an allegation is “too conclusory without further factual details to support the injury element of [the] ICFA claim.” Id. at *10 n.16.
The Spector decision provides a clear framework for analyzing whether a plaintiff has plausibly alleged a false advertising claim under ICFA or is simply attempting to cloak a claim for lack of substantiation in the language of falsity where the advertisements at issue do not include any such establishment or substantiation claim. The plaintiff in Spector is appealing the decision to the Seventh Circuit. The outcome of this appeal could have a substantial effect on which false advertising claims will survive a motion to dismiss going forward. The Spector court noted the stakes at play in resolving these issues:
it is not enough if those supportive factual allegations suggest “the mere possibility” of falsity. Otherwise, “a plaintiff with a largely groundless claim [would] be allowed to take up the time of a number of other people, with the right to do so representing an in terrorem increment of the settlement value.”