Product manufacturers and retailers have recently faced a flurry of mislabeling and false advertising class actions advancing a theory known as “price premium.” Rather than asserting that they would not have purchased the product without the challenged labeling or advertising claim, or that they sustained property damage by using the product in line with that claim, price premium plaintiffs contend that they were harmed because the claim’s existence inflated the product’s purchase price. In other words, these plaintiffs argue that they had to pay a “premium” for a product because of the challenged claim and seek to recover the difference between the purchase price that they paid and the hypothetical purchase price that would have been charged without the claim. Even if this difference amounts to just pennies per unit sold, a manufacturer’s or retailer’s exposure can easily cross the seven- or eight-figure threshold. This is because, under the price premium theory, a consumer is harmed simply by virtue of purchasing a product when the challenged claim was being used. Therefore, price premium classes are extraordinarily broad and can embrace any consumer who purchased the product during the years in which the challenged claim was made.

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