morning your honour's may please the court my name is brian penney i represent the appellant's last plaintiffs in this action like to try to reserve three minutes for a reply in this case the court below held  consumer fraud claims in california new york and new jersey are required to allege affirmative false statements about the products attribute and yet that requirement or that element is nowhere to be found in any of those statues and instead of so rigidly requiring such an element to be present the statute speak much more broadly to x or practices quote unquote x or practices of the defendant that have the capacity to mislead consumers and it's not even that those acts are practices are intended to mislead consumers or actually mislead consumers but only that they have the capacity to do so and we believe that we had alleged that the huge price disparity between the migraine pills and the extra strength pills in combination with the alert red packaging of the migraine pills indicated to the market and to reasonable consumers acting reasonably under the circumstances that the product that was three times more actionable fraud there i think the question that you would ask in that case and that hypothetical is is there a deception is the consumer misled to think that one soup is of a higher quality or different last better than the other suit i think in your example because you used flowery more expressive language to describe the one soup and because you charge three times as much for that soup that people would presume a reasonable acting reasonably would think that was a better suit because consumers aren't in the practice of spending more money to get the same product that's not a rational consumer at least we have any cases that say that i think so plaintiff counsel and spend a lot of time briefing in this case i don't think either of us pointed to a case that's directly on point here because this is somewhat of a novel situation i mean oftentimes you will have to almost or identical products but one is a brand name for example and one is a generic but there are reasons why those might be sold at different prices one might think that a migraine headache is a higher class a more difficult disease to clearly  then an ordinary headache and therefore the person who has that is a more exceptional individual and therefore is willing to pay a higher price for medicine now tell me what about that is a fraud well the fraud is that the person that you just described who needs to treat the more severe malady of a migraine thinks that they are buying a pill that specially designed or more effective to treat that more intense no question that it is a pill that does treat migraine right but he's getting what he's getting what he's bargaining for he's getting a migraine but it what he's not being told is you can get the same medicine for three dollars if you if you take the medicine it just says headache that's exactly right and that is the dilemma for that consumer he's not operating with all the information or complete information when he's in the aisle looking at the product saying i've got a migraine i need something  and powerful to alleviate it i'm looking at two boxes one says migraine one says extra strength ones alert red packaging ones that a green packaging once three times the cost of the other the presumption is that pill that i'm paying three times as much for is going to be three times as effective as the cheaper that's a deception so the deception is not in the script of the product it's not in the trade dress of the products deception is in not making the cheaper one available to the person who's willing to pay nine dollars for migraine treatment i was with you until the last part of that the deception wasn't to say that there was a cheaper alternative the deception was in having two products under the same brand that are the same pharmacologically identical pills yet selling one for three times as much as the other changing the color of the packaging from one to the other and it could have been any color it could have been higher priced it's better right and that's not just any different different and better again because i think it's everybody's common sense that consumers don't just readily spend three times as much money for a product they don't think is better than it alternative well the one thing you don't seem to develop much by way of argument is in addition to the color and price difference the mere titling the product as migraine versus extra now is is that part of your argument that by simply providing that this is for migraines which is generally regarded as more severe than your common headache that the concern with stressing that point in this litigation was that it might tread us into preemption type grounds because you're talking about f d a regulations on labeling and the point is that bristol myers squibb the pioneer of abusing this formulation which is essentially  excedrin to treat migraines spent time and effort to go to the f d a to get a separate licensing approval basically to market the same drug for migraine headaches but by getting that approval that's not getting a license to deceive consumers and in fact that's not the way used it when it came out with its migraine and extra strength excedrin products it priced them initially at the very same price point and now only sells them at a very slim less than ten percent price differential that's not necessarily misleading away the e s qualified and also for the f d a because he has seen readings the are you talking about the approval process yes yes the e s is now all because it's because that formulation has been around for so long and is so trusted it is what's called monograph drug you don't need any separate approval anymore to market that for headaches but the migraine label to be able put the migraine label on it required bristol myers squibb back in one thousand nine hundred eighty to go to the f d a and say we want to label the same dr for migraines also there was a strategic marketing reason i'm sure that they did that but they didn't take advantage of that license to deceive consumers into thinking that one was more expensive and thus i'm going to charge them more excuse me one with more effective and that's i'm going to leverage that to charge them more money but that's exactly what wal mart's doing wal mart knows that consumers are being deceived between these two products thinking that the migraine pill is more effective and it is using that to charge three times the price for it again we come back to syllogism why would anybody spend nine dollars plus to get the same pill if you get for less than three dollars from the same manufacturer the oil mart is not withholding the information that the two pills say there's no reason to pay nine dollars when i can buy three the pay three dollars is the same thing why isn't that we're not saying that they're withholding information we're saying they're sending pricing cues and packaging cues to make people think that the one product is more effective the than the other and the effect of that is that they consumers that doesn't isn't even alerted to the fact that it should be comparing labels and even if the consumer compares the ingredients in both they reasonable consumer isn't a pharmacologist they don't know which active ingredients are really doing what in either pill and they don't know whether they're in the or c there and then it is agreed isn't them it's a penny they have the same list ingredient but there's nothing to say that they're in the same amounts in each pill again i'm looking at a product as a reasonable consumer who doesn't know anything about pharmacology other than these pills are going to help alleviate either my headache or my migraine i'm looking at one that's three times as expensive as the other and i see even if i notice the ingredients are the same i might think reasonably that they're in different proportions in the migraine pill than they are in the actual listening reason you might say that because again i think this is a position is that when you see the products one is three times as expensive the other you're led to believe that hundred well this is why the stats you see are very broad to get in the statutes or looking at whether consumers are deceived and that's why the californian supreme in celtic california supreme court said when a scheme is a volved which on its face violates the fundamental rules of honesty and fair dealing a court of equity is not impotent to frustrate its consummation because the scheme is an original one and this is the same mistake that the lower court in the he no hosts versus calls case made when that court tried to create a centrally a very similar test that the statements that issue have to deal with the composition affects origin or substance of the product and this court rightly said no the california consumer protection statutes are not subject to the strict interpretation and that in that case it recognized that case dealt with off the sales prices creating what looked like a very steep sale discount at the register and the court there recognized that pricing in that instance sent a cue to the consumer that it was getting a better deal than it thought here pricing is sending the consumer cue to the consumer that it is getting a more effective more potent product then it is paid for i just want to make  conceding that that any element of mr present taishan is not fulfilled by omission that it we're talking about affirmative act we did specifically say that we're not having we're not proceeding under an omission theory i thought the court might also be interested in this issue of whether we're asking a court to get involved with price regulation because i think when i go back and look at the lower court's ruling i think this might be one of the issues that really swayed judge collins and that she was afraid they were asking her to do was weigh in on pricing issues i want to be clear about what this really means we're not asking the court lower court or a jury to weigh in until wal mart at what price it should be selling it products that rather if you look just below the surface of this price regulation argument you find out that it really doesn't apply here because if you read a police brief and you look at the court's opinion what you see there is the concern is that courts should not be involved in regulating the pricing mechanism that operates in a free and open market in other words and that situation issues like the cost of the product supply and demand factor should be what sets the price in the courts or not get involved but that is not the case we have here because that argument presumes that the markets in which you're discussing are operating free of coersion and free of deception in those instances though courts do step in and regulate the market not the price and that's what they're asking them that's what we're asking the lower court to do here to regulate the market not the price that's what happens in consumer protection cases all the time it happens in price fixing cases all the time when the market misrepresentations did not say anything that was false or misleading they can see that wal mart made no omissions of fact they argue that true words can deceive but true words can deceive when something is hidden or held back when they don't tell the whole story in here they have conceded the wal mart did not make any omissions of material facts and the reason they did i think goes to the fact the underlying that these are not the same product the quaid migrating product is a private label equivalent of excedrin migraine excedrin migraine had to go through the new drug application process the n d a process to get permission to take it to the market scares me the manufacturer of wal mart's version of the equate migraine was a company called pure ago and sometimes it's  perrigo they had to undergo the abbreviated new drug application process in order to take that product to market that meant they had to present clinical trials clinical briefs it's called equate e s can be made pursuant to a recipe in an f d a monograph it doesn't require f d a approval so even though the active ingredients are the same and there's no dispute there were listed on both the packages these are not the same drug or the same medicine in the eyes of the f d a and for that reason wal mart could not have labeled the e f just drink headache product is treating migraines even though it has the same active ingredients supplied by different company it's made pursuant to this recipe in a monograph if wal mart had a label that is treating migraine headaches it would have violated  a market and the market imposes discipline prices are based on a number of factors cost availability demand and competition that there are three cases but first of all no case was found or cited by either of us that imposes liability in a deception based claim under any of the five statutes that issue the new york new jersey statutes and the three california statutes based on on on a product's price or the color of its packaging the words placed on a shelf in the absence of a misrepresentation or in the national material facts but there are three it's reply brief they're all from district courts federal district courts in new jersey they all granted twelve b six motions to dismiss and adamson the claim was that the plane of purchased birth control pills prescription birth control pills brand name pills when a lower priced generic version was available in the crozier case adult it was a it was a case against j and j johnson and johnson the dealt with  neosporin like product was packaged in the same color is neosporin was priced higher but they didn't contain antibiotics which neosporin does and then finally in the yanks case it was a price differential between s or extra strength headache medication in all those cases the district court dismissed the plaintiff's action held that price placement on shelf package color in themselves are not unsufficient to impose liability absent a misrepresentation or absent on a mission a material fact so there is no authority that supports the pla position at least three cases run counter to it but drilling down with this case is plaintiffs presented is that deception is based on the background color of the packages and on price players did cite some literature on the effect of color on consumer perceptions i think being churned up all the who studies are inconclusive at best and ambiguous in terms of price california courts in judge collins the district court judge hears cited these cases california courts have made fairly clear that there is a policy of judicial abstention from dealing with economic issues there's the princess cruises case that was our case and actually the celtic case itself and i think there are good reasons for that when it comes to the price of a product firstly of the market itself the discipline imposed by the market but how would a court approach price it is charging twice as much for a brand name product as a private label or a generic product is is that somehow unconscionable or deceitful what if wal mart and we do have a request for judicial notice we showed that in fact the brand name makes said green migraine wal mart was charging about twice as much for that and it's generic brand the consumer is on to that pretty much says that's a little bit different isn't it than actually having the same product this generic product was made by wal mart identical are are these the same thing it's not made by a woman i think they are the same thing on of the off the the active ingredients are the same a consumer who believe again i'm saying doesn't the consumer going into the store understand that you might as well buy the generic as opposed to the brand label because the consumer generally understands that these are just knock offs where your honor in adamson the consumer obviously didn't understand that because they claim they were deceived into buying the brand name product at a greater price i suppose it depends on the individual consumer but for example would have cost co is selling its knockoff variation of excedrin migraine for less than what walmart is selling because wal mart have it obligation or duty to post a notice to take the customers hey you can get this product cheaper across the street or at the other end of the shopping mall where would that end how what kind of standard would a court set i think it would speedy ad hoc subjective judgments by courts as to what's a fair price notions of the day as to what is fair or as unfair in our economic system we let the market control that at least when there is no misstatement or no a mission a material fact and they concede there is a new are identical that's my understanding the ingredients are the same what what's different for wal mart is the manufactures are not the same of the e s product and the migraine different manufacturers i think that's a matter of some controversy some people prefer the brand name products some doctors only want to prescribe the brand name product i don't know the answer but it think it probably depends on the product some consumers want the brand name product they feel that that gives them some in dish of validity or ethic as say they don't get with the generic product but that varies depending on the consumer so again i in closing no court that we're aware of has imposed liability on the seat base claims in this context where there were no misrepresentations and nothing was hidden and nothing was omitted the three courts that have addressed the issue close to the issue a little bit different factual circumstances have all granted motions to dismiss so the argument is that there was something hidden in the something hidden was that the three dollar package was just as good as nine dollars packages and tell that to the consumer but i don't think we could tell that to the consumer the f d a doesn't consider them the same the active ingredients are listed on the label  the three dollar product has not been approved for treatment of migraine headaches we can't represent that it is good is the other product it's not good tickle decision isn't it to not get that approved so that they can have two different products with the same ingredients one with migraine on one with extra strength i assume the manufacturers of wal mart wal mart what moment has other other manufacturers i suppose assume one felt it was worth the cost of doing the clinical studies to show bio e to go through the new drug application process the actually the abbreviated new drug application process and another decided no we're just going to make this to treat headaches if we can just make it pursuant to or in accord with the recipe in the f d a monograph future business decisions but but nothing was hidden here the active ingredients are on the labels for both products unless you any further questions he argued there are brand loyalists there are reasons some people would pay more for a brand because they trust the brand or something like that and in fact equates packages for migraine and extra strength in bite the consumer says compared to extra strength have with active ingredients it's inviting the comparison between the generic and the name brand drug to show them that they are getting essentially the same product there is no such similar invitation between equate headache and this roughneck might say well we're not allowed to do that but the fact that you invite the consumer to compare the equate brand to its name brand counterpart but there's no similar invitation just the consumer doesn't understand the regulatory regime and he or she is sitting there wondering well if there's the same ingredient on both packages why is one more expensive than the other the only logical the only plausible explanation is that the consumer thinks that the extra the migraine product is more effective and when mr ro argues that the market should be free to come up with its own price the only reason that the migraine product commands three times the price is because the market is deceived into thinking it's more effective that brings me back to the price regulation point the whole purpose of any trust that huge and consumer protection statute is to ensure that markets are free and fair and operating efficiently and rationally and when they're not courts and juries step in to rectify that that's exactly what we're asking you to do in this case and i just remind the panel that we're only at the motion to dismiss stage here so when we allege statements like huge price disparity that can only lead to one