Since the Federal Trade Commission (“FTC”) published its updated 2023 Guides Concerning the Use of Endorsements and Testimonials in Advertising earlier this year, consumer reviews have been front of mind. This guidance covers, in part, the treatment of consumer reviews, and companies have been (or should be) preparing for an uptick in FTC enforcement. But it’s not just the FTC to watch out for. A recent wave of class actions arising under California Civil Code § 1670.8 related to a customer’s right to make statements about their experience with a seller has raised the bar for retailers to another level.Continue Reading I Can’t Say What? New Wave of Class Actions Target Consumer Review Terms & Conditions
Consumer Class Actions
Surveys Seal the Deal in Defeating Starbucks and 5 Hour Energy Class Actions
Surveys play an increasingly important role in consumer class actions, whether used to deny class certification, defeat plaintiffs’ allegations of consumer “deception,” or even refute damages arguments.
Recently, beverage giant Starbucks Corp. defeated a proposed class action alleging that Starbucks had violated consumer protection statutes in California, Florida, and New York by uniformly filling its lattes and mochas with more foam – and less actual beverage – than a reasonable consumer would expect. In dismissing the case on summary judgment and denying class certification as moot, U.S. District Judge Yvonne Gonzalez Rogers for the Northern District of California focused on the plaintiffs’ flawed survey results. Strumlauf et al. v. Starbucks Corp., No. 16-CV-01306-YGR, 2018 WL 306715 (N.D. Cal. Jan. 5, 2018). The plaintiffs had introduced an expert report presenting the results of two surveys purporting to show that 70-80% of consumers expected that the “Promised Beverage Volume” of Starbucks lattes did not include foam. The first survey showed respondents a sample menu board with small, medium, and large and asked how many fluid ounces of beverage they expected to receive. This survey was flawed, the court found, because it did not measure consumers’ understanding of what “fluid ounce” means. The second survey showed images of a cup with varying amounts of fluid and foam and then asked which “medium 16 fl. oz. beverage” the respondents expected to receive. This survey, too, fell short because it showed a “caricatured image” and “the ‘question begg[ed] its answer [and was] not a true indicator of the likelihood of consumer confusion.’” In sum, the Court attacked the surveys as “leading and suggestive” and ultimately found they failed to establish a triable issue on consumer deception.