Cornerstone Research worked with a marketing professor to analyze whether the defendant’s everyday discounting of prices allegedly misled consumers.
In a class action against a large manufacturer and retailer of consumer healthcare products and services, the plaintiffs alleged that the defendant’s everyday discounting of prices misled consumers about the magnitude of the “true” discount that members of the proposed class received. In addition, the plaintiffs alleged that some members of the proposed class did not receive the full value of certain discounts that had been negotiated by insurance companies.
Cornerstone Research worked with Professor Dominique Hanssens, a marketing professor at the University of California, Los Angeles, to evaluate whether common evidence could be used to determine if the challenged conduct misled consumers.
Professor Hanssens’s analysis involved examining the different factors that influence consumers’ purchasing decisions and determining whether a common method could be used to evaluate whether the decisions were affected by an everyday discount.
Professor Hanssens analyzed the defendant’s range of promotions and marketing materials used to advertise these programs. He demonstrated that proposed class members were offered different discounts and would have been exposed to different information about these discounts. He also analyzed a wide array of public information on prices and showed the variety of pricing information available to different members of the proposed class.
This analysis showed that most proposed class members were unlikely to have been misled as the plaintiffs had alleged. Professor Hanssens also noted that the level of discount implied by the plaintiffs would result in below-cost pricing.