First COVID-19-Related Consumer Protection Action Filed in California Federal Court | Practical Law

First COVID-19-Related Consumer Protection Action Filed in California Federal Court | Practical Law

On March 5, 2020, a group of plaintiffs filed the first consumer protection lawsuit in the US relating to COVID-19. The lawsuit alleged that a company deceived the plaintiffs with claims that its hand sanitizer would prevent them from contracting COVID-19. The case, Geraldine David, Susan Lara, and Theresa Haas, Individually and On Behalf of All Others Similarly Situated v. Vi-Jon Inc. d/b/a Germ-X, Case No. 3:20-cv-00424 (S.D. Cal.), was filed in the US District Court for the Southern District of California.

First COVID-19-Related Consumer Protection Action Filed in California Federal Court

Practical Law Legal Update w-024-5617 (Approx. 4 pages)

First COVID-19-Related Consumer Protection Action Filed in California Federal Court

by Practical Law Commercial Transactions
Published on 19 Mar 2020 • California, USA (National/Federal)
On March 5, 2020, a group of plaintiffs filed the first consumer protection lawsuit in the US relating to COVID-19. The lawsuit alleged that a company deceived the plaintiffs with claims that its hand sanitizer would prevent them from contracting COVID-19. The case, Geraldine David, Susan Lara, and Theresa Haas, Individually and On Behalf of All Others Similarly Situated v. Vi-Jon Inc. d/b/a Germ-X, Case No. 3:20-cv-00424 (S.D. Cal.), was filed in the US District Court for the Southern District of California.
The FDA recently warned that some US merchants are exploiting heightened public anxiety about the spread of the 2019 novel coronavirus disease (COVID-19) by falsely claiming or exaggerating their products' ability to treat, prevent, or cure COVID-19. Now, a group of plaintiffs has filed the first consumer protection lawsuit relating to COVID-19 against Vi-Jon, Inc., the manufacturer of Germ-X hand sanitizer. The plaintiffs allege that Vi-Jon deceived them with claims that Germ-X would prevent them from contracting viruses, including COVID-19. The case, Geraldine David, Susan Lara, and Theresa Haas, Individually and On Behalf of All Others Similarly Situated v. Vi-Jon Inc. d/b/a Germ-X, Case No. 3:20-cv-00424 (S.D. Cal.), was filed in the U.S. District Court for the Southern District of California on March 5, 2020.

Allegations

The complaint alleges that Vi-Jon made misleading claims about Germ-X to deceive the plaintiffs into buying hand sanitizer through various Germ-X marketing channels, including social media, advertisements, and third-party retail websites. Specifically, the plaintiffs allege that:
  • Vi-Jon's misleading claims about Germ-X:
    • caused customers to buy as many as hundreds of thousands of Germ-X hand sanitizer within the last four years;
    • caused customers to pay more than they otherwise would have for Germ-X hand sanitizer;
    • have allowed Vi-Jon to unlawfully increase its sales and unfairly capture market share from its competitors; and
    • violate various California consumer protection statutes and constitute negligent misrepresentation and intentional misrepresentation (for more information on California consumer and business protection laws, see Practice Note, California's Unfair Competition Law: Overview).
  • The Germ-X website gives the false impression that the CDC and US government recommend the use of Germ-X to avoid getting sick.
  • Germ-X’s unsubstantiated claims prey on vulnerable consumers.
  • Germ-X is taking advantage of public anxiety around COVID-19.

Other Arguments

The plaintiffs also argue that a January 17, 2020 FDA warning letter to Purell should apply equally to Germ-X, because both Purell and Germ-X use between 60 and 70 percent ethyl alcohol in their hand sanitizer products. The FDA letter warned Purell against deceptively advertising its hand sanitizer as being able to prevent viruses without substantiating its claims. Purell is defending a similar class action lawsuit in the Southern District of New York alleging that Purell falsely claimed that its Healthcare Advanced Hand Sanitizer can prevent the flu and potentially the Ebola virus.
This action is likely the first of many that will be filed as companies attempt to capitalize on public demand for cleansing and sanitizing products as COVID-19 continues to spread. To reduce the risk of liability and reputational issues, companies should avoid:
For information on making and substantiating advertising claims, see Practice Notes, Advertising Claim Fundamentals and Substantiation of Advertising Claims. For more information on FDA labeling laws, see Practice Note, Product Labeling: Food, Drugs, Medical Devices, and Cosmetics.
For a collection of resources to assist counsel with managing the evolving COVID-19 pandemic, please see Practical Law's Global Coronavirus Toolkit. For a broad overview of consumer protection statutes and regulations, see Practice Note, Consumer Protection: Overview.