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$13.5M false advertising verdict affirmed

The 4th U.S. Circuit Court of Appeals affirmed today the largest jury verdict in Virginia in 2009, a $13.5 million false advertising judgment for PBM Products LLC, the Virginia-based manufacturer of store-brand baby formula.

The verdict was against Mead Johnson & Company, the manufacturer of Enfamil baby formula.

PBM contended that Mead Johnson had engaged in a pattern of false advertising over seven years as it had seen the market share for Enfamil drop in the face of competition from cheaper store brands.

The companies had settled two earlier false advertising claims by PBM before it filed suit in 2008, alleging that a mailer falsely contended that ingredients in the Mead Johnson formula improved eye and brain development over store brands. PBM contended that its formula contained the same ingredients, so that any suggestion that Enfamil was superior in that regard was deceptive.

A federal jury in Richmond agreed, and U.S. District Judge James R. Spencer upheld the verdict and issued an injunction barring similar misleading advertising.

A three-judge panel of the Richmond-based appeals court affirmed Spencer’s rulings on all points.

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