Consumer Fraud and Product Liability

Cornerstone Research has addressed issues of certification, exposure, reliance, impact, and damages in class actions. Key questions in these cases may include whether common evidence can prove that certain challenged conduct caused each member of the proposed class to make a purchase and whether the challenged conduct injured each member of the proposed class. An additional consideration is whether each proposed class member’s damages, if any, can be determined by common proof. We have worked on class actions involving allegations of:

• The benefit of the bargain harm, where plaintiffs claim that consumers would have allegedly paid less or not purchased the product at issue had they not allegedly been misled or had defendants not acted in in bad faith, because of improper labeling, advertising, or disclosure
• Diminished resale value of a durable good due to the challenged conduct
• Demand and price inflation claims that plaintiffs argue caused class-wide impact, even for consumers who were not influenced by the challenged conduct

Class certification in these cases frequently turns on the particulars of the challenged conduct, the overall structure of the industry and the market, and the characteristics of individual transactions. We evaluate these issues through empirical research within a framework of sound economic concepts.

Individual actions involving allegations of fraud and misrepresentation are often brought by a defendant’s competitors. These cases may require a focus on the relevant market, quantification of the effect of the challenged conduct on demand and prices for competing products, and estimation of damages suffered by competitors due to the defendant’s alleged fraud or misrepresentation.

In addition to lost sales and price erosion, some plaintiffs may also seek reputational damages and punitive damages. We have substantial experience analyzing these specific types of claims, applying our expertise in economics, marketing, finance, econometrics, and accounting.

Our experience in individual actions includes allegations of fraud and misrepresentation in matters involving a broad array of industries and consumer products.

Cornerstone Research staff and experts have significant experience in survey design, including analyzing and implementing reliable sampling techniques. We regularly conduct and critique surveys of market participants to assess consumer behavior, attitudes, and preferences, and to address issues relating to exposure, reliance, and materiality. In some cases, we supplemented these empirical findings with analysis of data originally collected over the course of business as well as from publicly available data sources.

Cornerstone Research regularly formulates and implements empirical analyses to respond to economic and financial issues. We have specialized staff with expertise in advanced modeling and statistical techniques, including difference-in-differences, hedonic regression, and synthetic control methods, among others. We frequently use real-world, large datasets with sophisticated statistical and econometric methods.

We have experience working with experts to develop and implement rigorous, state-of-the-art content analysis techniques—including artificial intelligence and machine learning—to assess marketing messages (such as advertisements), social media and user-generated online content, and other content involving extensive textual data, such as public press spanning many years.

Conjoint analysis is a survey-based marketing research tool developed by academics to understand and estimate consumer preferences. It has been adopted by businesses and industry practitioners to help make decisions on new product development and market segmentation analysis, among other uses. Over the last several years, conjoint analysis has been increasingly proposed as a method to estimate class-wide damages in a variety of consumer class actions including product liability, false advertising, product labeling, and data privacy and data breach matters. However, the technique’s underlying assumptions and limitations render it unsuitable for calculating damages in a class action setting.

Automobile
Cornerstone Research has rich experience in analyzing causation, impact, and damages issues in the automobile industry. We have addressed allegations of benefit of the bargain harm and diminished resale value in these cases.

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Consumer Finance
We have worked on consumer finance cases involving credit cards, checking accounts, and pension plan choices. Our experience encompasses fraud and misrepresentation allegations as well as deceptive advertising and inadequate disclosure claims.

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Food, Beverage, and Dietary Supplements
In the food, beverage, and dietary supplements industries, Cornerstone Research has applied economic and statistical methods and marketing research techniques such as surveys to cases involving allegations of false advertising, omissions of material information, and product misrepresentation. We have worked on matters involving “All Natural” claims on product labels, health-related claims on product packaging and advertising, the amount of “slack-fill” in product packaging, the amounts of ingredients included in a product, and comparative advertising between competing products, among others.

Life Sciences and Healthcare
We have worked on several cases involving allegations of fraud and misrepresentation in life sciences and healthcare matters.

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Technology
In several technology and manufacturing cases, attorneys have retained Cornerstone Research to analyze issues related to alleged false advertising, deception, product liability, and demand and price inflation.

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Other Consumer Products
Our staff have assessed allegations of false advertising, deception, and product liability in many consumer products.