Premium-Price and Illegal-Product UTPA Theories Free from Reliance Requirement – Bohr v. Tillamook County Creamery

Introduction

In Bohr v. Tillamook County Creamery Assn., 373 Or 343 (2025), the Oregon Supreme Court considered a narrow but important question under the Unlawful Trade Practices Act (UTPA), ORS 646.608 et seq. Four Oregon consumers filed a putative class action against Tillamook County Creamery, alleging that the cooperative’s marketing falsely suggested its dairy products came from small family farms in coastal Tillamook County and that its cows received personalized, humane care. In truth, they alleged, most of Tillamook’s milk comes from a large, industrial facility in eastern Oregon. The plaintiffs claimed three theories of loss: (1) a “premium-price” theory—that Tillamook’s market-wide misrepresentations allowed it to charge higher prices, which all consumers paid; (2) an “inducement” theory—that individual purchasers paid more or would not have bought at all but for the misleading marketing; and (3) an “illegal-product” or “prohibited-transaction” theory—that Tillamook’s products were “misbranded” or falsely advertised under federal and state law, and so it was unlawful to sell them at all, giving rise to a refund of the purchase price.

The sole issue before the Supreme Court was whether the UTPA claim, as to all three theories, requires plaintiffs to plead that each consumer “observed and relied upon” Tillamook’s representations. The trial court and Oregon Court of Appeals held that reliance was necessary for the putative class members and dismissed those claims. The Supreme Court reversed.

Summary of the Judgment

The Supreme Court unanimously held that plaintiffs’ “premium-price” and “illegal-product” theories of ascertainable loss do not logically require plaintiffs—and the class—to plead individual reliance on Tillamook’s marketing. Although reliance on a misrepresentation may be necessary for an “inducement” or typical “purchase-price”‐refund theory (as recognized in Pearson v. Philip Morris, 358 Or 88 (2015)), it is not a prerequisite whenever the theory of loss does not rest on an individual purchaser’s belief or decision being directly caused by the misrepresentation.

Key holdings:

Under ORS 646.638(1), a private UTPA plaintiff must show (1) an unlawful trade practice, (2) an ascertainable loss of money or property, and (3) that the loss was caused by the unlawful practice.
Whether the causation element requires proof of reliance depends on the nature of the unlawful practice and the kind of loss alleged.
A “premium-price” theory—whereby misleading marketing inflates a product’s market value and price for all consumers—does not require each consumer to have observed or relied on the misrepresentation.
An “illegal-product” or “prohibited-transaction” theory—where the very sale of misbranded or falsely advertised goods is unlawful—also does not hinge on individual reliance.
The decision of the Court of Appeals was reversed, and the case was remanded for further proceedings, including consideration of class certification issues under the correct legal standard.

Analysis

Precedents Cited

The Court of Appeals and the parties relied heavily on several Oregon decisions and one erroneous Court of Appeals formulation:

Sanders v. Francis, 277 Or 593, 561 P.2d 1003 (1977) • Held reliance may not be required when the unlawful practice is a failure to disclose.
Discount Fabrics, 289 Or 375, 615 P.2d 1034 (1980) • Recognized that whether reliance is required “depends on the conduct involved and the loss alleged.”
Pearson v. Philip Morris, 358 Or 88, 361 P.3d 3 (2015) • At class certification, held that a purchase-price refund theory based on misrepresentations of a product’s inherent qualities logically requires proof that the misrepresentation caused the individual decision to buy.
Scharfstein v. BP West Coast Products, 292 Or App 69, 423 P.3d 757 (2018) • Held that an “illegal‐charge” theory—where a hidden 35¢ fee was unlawful in itself—did not require buyer reliance to prove causation.
Feitler v. The Animation Collection, Inc., 170 Or App 702, 13 P.3d 1044 (2000) • Misconstrued Sanders to suggest that any affirmative misrepresentation requires reliance; disapproved.

Legal Reasoning

1. UTPA Framework
The UTPA (ORS 646.608) lists numerous unlawful trade practices (e.g., misleading geographic origin claims, false representations of quality). ORS 646.638(1) provides a private right of action for “any person who suffers an ascertainable loss of money or property as a result of another person’s willful use” of an unlawful practice.

2. Causation and Reliance
The phrase “as a result of” in ORS 646.638(1) requires the unlawful practice to cause the loss. Reliance on a misrepresentation is not a statutory element of every UTPA claim, but it may be logically necessary to show causation in some contexts, depending on (a) the type of unlawful practice and (b) the nature of the loss alleged.

3. Distinct Theories of Ascertainable Loss
• Inducement or Purchase-Price Refund Theory (Pearson-type): Plaintiffs purchased because of an express misrepresentation about the product’s qualities, and so must show reliance to “connect the dots” between the misrepresentation and the purchase price. (Reliance required.)
• Premium-Price or Price-Inflation Theory: Misleading marketing increases the objective market price for all products in the line, causing every purchaser to pay more. The loss is the premium paid, not the difference between expected and actual product qualities. (Reliance not required.)
• Illegal-Product or Prohibited-Transaction Theory: The very sale of misbranded or falsely advertised goods is unlawful. Every transaction in those goods is “prohibited,” and the loss is the purchase price. (Reliance not required.)

4. Premium-Price Theory Applied
The Court of Appeals erred by analogizing plaintiffs’ premium-price claim to the federal securities “fraud-on-the-market” theory— an analogy that presumes an efficient market and a collective reliance inference. The Supreme Court explained that, for consumer goods, a misrepresentation that inflates market value may harm even those purchasers who did not directly see or rely on the ads. If plaintiffs can prove that misleading marketing raised the product’s market price, causation is established without pleading individual reliance on the ads.

5. Illegal-Product Theory Applied
The Supreme Court clarified that, just as in Scharfstein’s illegal-charge context, plaintiffs here allege that federal and state law independently prohibited the sale of misbranded or falsely advertised products. The loss is the purchase price of a product that—by operation of law—should not have been sold at all. That theory neither depends on a purchaser’s subjective belief nor requires proof of reliance on any specific representation.

Impact

This decision reshapes the contours of private UTPA litigation in Oregon:

Plaintiffs can pursue market-wide “premium-price” claims without individualized reliance allegations.
“Illegal-product” claims based on violations of parallel federal or state labeling statutes survive without proving reliance.
Lower courts must apply a fact-and-theory specific analysis of causation, not a blanket rule requiring reliance for all misrepresentation-based claims.
The decision may broaden the scope for class certification where common proof of aggregate price inflation or statutory prohibition exists.
Defendants will need to challenge such theories at class certification and on the merits—e.g., by disputing aggregate price effects or the legal characterization of their conduct—rather than by motion to dismiss for lack of pleaded reliance.

Complex Concepts Simplified

UTPA (ORS 646.608–646.638) A broad consumer protection statute listing prohibited business practices (false advertising, deceptive geographic claims, etc.) and allowing private lawsuits for money or property losses caused by willful violations.
Ascertainable Loss Any measurable financial harm—out-of-pocket expenses, inflated prices, refunds—capable of being observed or established, even if the exact amount is not known at filing.
Reliance vs. Causation Reliance means a buyer saw or believed a specific representation. Causation under the UTPA requires that the unlawful practice produce the loss, but reliance is only sometimes the way to show causation.
Premium-Price Theory When a company’s false marketing raises the objective market price of all its products, the resulting higher prices paid by all consumers—regardless of who saw the ads—constitute a “premium” loss.
Illegal-Product Theory If the sale of a misbranded or improperly advertised product is independently barred by federal or state law, then every sale is a “prohibited transaction,” and the purchase price is an ascertainable loss.
ORCP 21(A) Motion to Dismiss Tests whether the complaint, as pleaded and with all reasonable inferences to the plaintiff, states ultimate facts sufficient to constitute a claim. Assumes truth of well-pleaded allegations.

Conclusion

Bohr v. Tillamook County Creamery clarifies that reliance is not per se required in Oregon private UTPA claims based on (1) aggregate price inflation caused by false marketing or (2) the sale of products barred by parallel statutory schemes. The decision underscores that whether reliance is necessary must turn on the relationship between the pleaded unlawful trade practice and the specific kind of loss alleged. Going forward, litigants and courts will need to undertake a tailored, fact-driven analysis of causation under ORS 646.638(1) rather than applying a rote reliance requirement to all misrepresentation-based claims.