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Lee v. Carter-Reed

Topic(s): Class Actions

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Public Citizen, Center for Science in the Public Interest, National Association of Consumer Advocates, and National Consumer Law Center filed an amicus brief in Lee v. Carter-Reed , a class action lawsuit brought in New Jersey state court. The lawsuit alleged that the makers of Relacore, a weight-loss supplement that is advertised to reduce stress-induced belly fat, made false, misleading, and unsubstantiated claims about their product in violation of the New Jersey Consumer Fraud Act.

The lower courts denied class certification on the ground that individual issues would predominate at trial. Specifically, the lower courts concluded that the "causal nexus" requirement of the New Jersey Consumer Fraud Act would require evidentiary hearings for every class member. Those courts held that the plaintiff would need to prove that Carter-Reed's representations about Relacore were a cause of every class member's decision to purchase Relacore, and that individual hearings would be necessary to do so. Plaintiff appealed to the New Jersey Supreme Court.

Our amicus brief argued that the "causal nexus" requirement of the New Jersey Consumer Fraud Act did not present an individual issue in this case: Every class member was exposed to misrepresentations about Relacore and that exposure was a cause of every class members' decision to purchase Relacore. Our brief explained that the plaintiff alleges that all of the claims made about Relacore were false, and that Relacore is what economists call a "credence good"-- consumers must rely on representations made by manufacturers even to know what Relacore is, let alone whether they might be interested in purchasing it. Accordingly, the case did not present an individual issue regarding the causal nexus requirement of the state statute. Alternatively, we argued that even if some individual issues existed, numerous claims management solutions were available to handle them. Either way, the class should have been certified. In a decision adopting our arguments, the New Jersey Supreme Court held in favor of the plaintiff.