A lawyer for dissatisfied users of the dietary supplement Relacore took his third and probably final shot Tuesday at getting class action treatment for the suit, which alleges the manufacturer made false claims about the drug's effectiveness in cutting belly fat and stress.
Two lower New Jersey courts have held that there are too many possible variables to satisfy the class action requirement that questions of law or fact common to the class predominate over questions affecting only individual members.
But plaintiffs lawyer Jeffrey Carton told the state Supreme Court that both courts were wrong: that the common variable is manufacturer Carter-Reed Co.'s fraud on consumers. "These people spent their hard-earned money on a worthless product, thanks to a slick mass media advertising campaign," said Carton, of White Plains, N.J.'s Meiselman, Denlea, Packman, Carton & Eberz.
The suit, Lee v. Carter-Reed Co., A-38-09, seeks certification of a class comprised of all New Jersey residents who bought Relacore since it came to market in 2002.
The marketing campaign for Relacore varied over time. Some advertisements claimed the drug could reduce belly fat while others touted its ability to reduce stress, enhance mood or fight metabolic syndrome.
Lead plaintiff Melissa Lee alleges she bought Relacore in April 2004 after seeing an ad that claimed it would reduce belly fat, but after using it for 90 days, at $39.99 for each month's supply, her waistline actually increased.
Her complaint, filed in Union County, N.J., in 2004, includes claims under the Consumer Fraud Act, N.J.S.A. 56:8-1 to -166, and common law claims for fraud, unjust enrichment and breach of express and implied warranty.
Superior Court Judge Katherine Dupuis denied certification after identifying 14 individual factors that would necessitate an evidentiary hearing for each class member on the fraud claims.
Those factors included the reason for buying Relacore, which advertisements induced the purchase, whether buyers were influenced by a personal recommendation, how the buyers' underlying health might have affected the product's efficacy, how much they paid and whether they sought or obtained a refund.
Relacore users might have bought the product for different reasons and been disappointed in different ways by its alleged failure to measure up to the advertised promises, Dupuis said.
She identified additional issues on the other claims, such as whether class members received any benefit, on the unjust enrichment claim, and whether timely notice to the seller was provided, on the express warranty.
Appellate Division Judges Mary Catherine Cuff, Clarkson Fisher Jr. and Linda Baxter affirmed Dupuis' ruling, though acknowledging that the relatively small losses suffered by class members, roughly $40 to $120, made it unlikely they would sue individually.
On Tuesday, Carton said the court should reject the trial and appeals judges' concerns about the manageability of the case. "The lower courts have turned their backs on Ms. Lee and the others," he said. "Without the [class action] remedy the Consumer Fraud Act affords, these wrongs might go unvindicated."
Justice Roberto Rivera-Soto said there was no way to tell why individual members of the putative class bought the drug because of the varied reasons for which it was marketed.
Carton stated again that all of the claims boil down to one central allegation -- fraudulent advertising for a product that did nothing that was advertised.
"Not one of the defendants offered any testimony that the product actually worked," he said. "Class action is the superior mechanism for this type of action."
Carter-Reed's lawyer, Gary Bendinger, told the court it should not bend the rules for granting class status.
"Plaintiff conceded below that two essential elements, causal nexus and loss, could not be proven class-wide," said Bendinger, of Howrey in New York.
Relacore, he said, had "multi-faceted purposes" that make it impossible for there to be one class of plaintiffs with a common complaint.
"Plaintiff is asking ... for a presumption to be substituted for causal nexus and loss," said Bendinger. Nothing in the CFA ... permits an expedient presumption," he said.
Justice Barry Albin said that if people are taken in by an "unconscionable" ad campaign that violated the CFA, they are entitled to compensation.
That would be the case only if everyone in the case took the product for the same reason, Bendinger said.
Rivera-Soto asked what remedies the plaintiffs would have, considering that their individual financial losses make it unlikely that they would go to court individually.
"You have the Attorney General, the [Federal Trade Commission]," Bendinger said. "There are other government agencies whose responsibility it is to protect consumers from deceptive advertising."
"So you're better off having multiple misrepresentations. Would that be right?" asked Chief Justice Stuart Rabner.
"Companies are allowed to market their products as they see fit," Bendinger replied.
