New Jersey Appellate Division Finds No Ascertainable Loss Where a Plaintiff Never Used a Product and Made Hypothetical Allegations of Loss
On May 31, 2022, the Appellate Division in Hoffman v. Pure Radiance, Inc. affirmed the trial court’s order granting summary judgment for a defendant and dismissing the plaintiff’s Consumer Fraud Act (CFA) claims because the plaintiff could not show that he suffered an ascertainable loss where he never used the product and his allegations were not supported by facts.
In this putative class action, serial plaintiff Harold Hoffman sued defendant Pure Radiance, Inc., alleging that it falsely marketed a hair growth product. Specifically, Pure Radiance advertised that its product Re-Nourish could help an individual regrow “a thick, full head of hair, even after years of balding” and was “the world’s first and only hair loss solution that revives dead hair follicles” to regrow hair “in just 30 days.” The advertisement also showed a before-and-after picture of a man’s head, with the before picture showing a balding head and the after picture showing a full head of hair. Based on this advertisement, Hoffman purchased the product and then, after researching the product but before ever trying it himself, filed a proposed class action alleging, among other things, that the ad contained material misrepresentations and that he suffered an ascertainable loss by reason of his purchase of the product for $108.90. Significantly, Hoffman did not receive the product until five days after he filed the proposed class action complaint, and he received a full refund for his purchase of the product.
The trial court granted summary judgment for Pure Radiance on several grounds, including that Hoffman had not established an ascertainable loss. The Appellate Division affirmed, finding that the undisputed material facts showed that Hoffman could not demonstrate that the product was harmful or that he used it prior to filing his complaint. These were fatal failures of proof because, as the court explained, under these circumstances, the purchase price could be an ascertainable loss only if Hoffman could show that he used the product and it did not produce the hair growth as advertised. Because Hoffman could not offer evidence to establish either, the Appellate Division found that his allegation of ascertainable loss was merely hypothetical.
While it is not a requirement to have used a product in order to state a claim under the CFA, the ruling in this case makes especially clear that a plaintiff must always show an ascertainable loss that is neither hypothetical nor based on unsupported assumptions. Otherwise, a CFA claim is doomed to fail.