Morrison Foerster’s Class Dismissed blog provides insights, recommendations, and timely reports on the latest defense news, developments, and trends in the most current class actions lawsuits and product liability issues that affect consumer-facing companies. Through Class Dismissed, attorneys from our nationally recognized Consumer Class Action and Products Liability practices offer a real-time assessment of the developments in matters that are shaping the industry. This blog examines the full spectrum of consumer-related class action and product liability lawsuits ranging from false advertising, privacy, consumer product safety, ADA, food misbranding, TCPA, environment, retail, and government actions as well as nationwide and multidistrict litigation class actions.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Partner

Julie Park protects her clients’ products no matter what kind of product issue they face—whether it is planning for new product development, recalling an existing product, or defending clients against product liability or consumer class actions. Drawing on her deep technical and legal expertise, Julie counsels clients on consumer product safety regulation and pharmaceutical and medical device preemption while also managing complex and multijurisdictional litigation both in state and federal court.

Julie Y. Park

<div class="videoWrapper"><iframe frameborder="0" class="sticky-video" allowfullscreen="1" title="Meet Penny Preovolos, Litigation Partner" src="https://www.youtube-nocookie.com/embed/hv7hYn-Bl7c?rel=0&showinfo=0;vq=hd1080" title="iframe"></iframe></div>Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and product defect matters. Her clients span a range of industries, including consumer electronics, technology, retail, publishing, food and beverage, cosmetics, and household products. According to Chambers USA, Penelope has a “great reputation for antitrust and product liability work” and is a “superb all-around antitrust lawyer.”Penelope was named the 2019 Antitrust Lawyer of the Year by the Antitrust, UCL, and Privacy Section of the California Lawyers Association. She was co-chair of MoFo’s antitrust practice for 14 years. She has served as chair of the Antitrust and Trade Regulation Section of the State Bar of California and as a member of the Ninth Circuit Advisory Committee on Local Rules and Operations. She is an editor of and frequent contributor to Morrison & Foerster’s <a href="https://classdismissed.mofo.com/">Class Dismissed blog</a>, as well as a frequent speaker about class action and antitrust issues.More About PenelopePenelope clerked for the Honorable Charles M. Merrill, United States Court of Appeals for the Ninth Circuit. She graduated cum laude from Harvard Law School, where she was executive editor of the Harvard Civil Rights – Civil Liberties Law Review. Penelope was a member of Phi Beta Kappa at the University of California, Berkeley. She was awarded the University Medal, the highest undergraduate honor at the university, as well as the English Departmental Citation (awarded to the outstanding graduate in that department).

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Senior Counsel

Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and product defect matters. Her clients span a range of industries, including consumer electronics, technology, retail, publishing, food and beverage, cosmetics, and household products.

Penelope A. Preovolos

Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy matters. She is currently representing numerous consumer goods manufacturers and retailers in false advertising and mislabeling class action lawsuits. Claudia also regularly counsels clients in the food, cosmetics, retail, and technology industries. She represents companies in false advertising disputes before the National Advertising Division (NAD) of the Council of Better Business Bureaus, Inc.<h5>More about Claudia</h5>Claudia is active in MoFo’s pro bono efforts, and recently traveled to El Paso, Texas, to work with families separated and detained at the border. She is also supervising a pro bono collaboration with Equal Rights Advocates, a nonprofit fighting for gender justice in work places and schools across the country. The initiative will help students who have been victims of sexual assault, attempted assault, or harassment find support and seek justice. Claudia is also a board member of Bay Area Legal Aid and a former board member of Equal Rights Advocates. Claudia is an editor and frequent contributor to MoFo’s <a href="https://classdismissed.mofo.com/">Class Dismissed</a> blog, which provides reports about the latest defense news, developments, and trends in class action lawsuits and product liability issues that affect consumer-facing companies. Her perspectives are also respected in the larger legal community: Claudia has published articles about class action and false advertising issues, and is a co-author of Chapter 7 — “Unfair Competition in California Business Litigation 2016” — of The Recorder. She also regularly speaks at conferences on class action and advertising trends. Claudia is currently serving as a Lawyer Representative for the Northern District of California. She received her J.D. degree in 2004 from Berkeley Law (Boalt Hall School of Law), where she was an associate editor of the Berkeley Technology Law Journal.

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Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy matters. She is currently representing numerous consumer goods manufacturers and retailers in false advertising and mislabeling class actions.

Claudia M. Vetesi

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office.Alexandra litigates product liability matters involving medical devices, pharmaceuticals, consumer products, automobiles, and AI. Alexandra's litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.Alexandra has significant trial experience. She has first-chaired a one-week jury trial and second-chaired a five‑week jury trial, both involving multiple claims and witnesses. She also has extensive experience in alternative dispute resolution, representing clients at mediations, mandatory settlement conferences, and early neutral evaluations.Alexandra enjoys tracking developments and keeping her clients updated on product liability and personal injury claims, frequently writing or presenting on emerging areas such as autonomous vehicles and smart devices. Alexandra’s experience also extends to professional liability, warranty claims, eminent domain, and construction law.Alexandra earned her J.D. from the University of San Diego School of Law. While in law school, the San Diego Law Review published her comment on the recovery of damages by plaintiffs in a persistent vegetative state, and she also served as a comment editor. She received her B.A. from the University of California, Los Angeles, where she majored in Political Science and minored in Spanish. A San Diego native, she attended a Spanish immersion school through the eighth grade. Alexandra is active in the San Diego community, advising students at a local college. She is also a member of several legal organizations in San Diego, including Lawyer’s Club, the Association of Business Trial Lawyers, and Wallace Inn of Court.

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Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office. Alexandra litigates product liability matters involving medical devices, pharmaceuticals, consumer products, automobiles, and AI. Alexandra’s litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office. Alexandra litigates product liability matters involving medical devices, pharmaceuticals, automobiles, AI, and robotics. Alexandra's litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.

Alexandra Barlow

Adam J. Hunt is a partner in the Litigation Department of Morrison Foerster’s New York office. His practice focuses on complex litigation, with an emphasis on class action and commercial litigation.Mr. Hunt has extensive experience representing consumer products companies, financial institutions, and technology firms in class action cases and complex commercial disputes before state and federal trial courts, as well as in arbitrations. Clients seek Mr. Hunt’s counsel for his creative, strategic thinking in high-stakes, high-profile matters. He has represented clients facing claims under false advertising, antitrust, and privacy laws throughout the country, securing wins at the pleading stage, summary judgment, and trial, in addition to negotiating favorable settlements, often early in the case. Representative experience includes successfully securing rulings dismissing two putative false advertising class action cases against one of the best-known consumer electronics companies in the world; obtaining a complete win on summary judgment for a major shipping and logistics company in a multimillion-dollar commercial dispute; appearing as counsel at trial for a leading financial institution in a $100 million commercial dispute, winning a bench trial verdict; and prevailing on motions to dismiss false advertising class actions against a leading Greek yogurt company.Mr. Hunt is also an editor of the firm’s <a href="https://classdismissed.mofo.com/" target="_self">Class Dismissed blog</a>, which provides insights, recommendations, and timely reports on the latest defense news, developments, and trends in the most current class action lawsuits that affect consumer-facing companies.Mr. Hunt maintains an active pro bono practice and is the recipient of the New York State Bar Association’s 2017 President’s Pro Bono Service Award for the First Judicial Department, the 2018 Public Service Award from New York University School of Law, and Morrison Foerster’s Kathi Pugh Award for Pro Bono Services.Mr. Hunt received his B.A. with honors from Swarthmore College and his J.D. cum laude from New York University.

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Adam Hunt is a partner in the Litigation Department of Morrison Foerster’s New York office. His practice focuses on complex litigation, with an emphasis on class action and commercial litigation.

Adam Hunt

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A New York federal court recently dismissed a putative class action alleging that a line of dog food products was improperly labeled as “natural” where the plaintiff alleged that the products contained only trace amounts of glyphosate, an herbicide. See Parks v. Ainsworth Pet Nutrition, LLC d/b/a Rachael Ray Nutrish, 18 Civ. 6936 (S.D.N.Y. Apr. 18, 2019).Case BackgroundPlaintiff Markeith Parks purchased defendant Rachel Ray Nutrish’s dog food products at BJ’s Wholesale in New York. He then brought suit in the Southern District of New York, alleging that, based on the “natural” representation on the products’ labels, the products would “be free of pesticides and other unnatural chemicals.” (Apr. 18, 2019 Order at 2.) The plaintiff also alleged that he was willing to pay more for such “natural” products. He brought claims for violation of the New York General Business Law (“GBL”) §§ 349 and 350, breach of express warranty, unjust enrichment, and injunctive relief.Court Grants the Defendant’s Motion to Dismiss Judge Stanton granted the defendant’s motion to dismiss as to all of the plaintiff’s claims. The court explained that the plaintiff failed to allege false advertising or deceptive acts or practices under the GBL because “a reasonable consumer would not be so absolutist as to require that ‘natural’ means there is no glyphosate, even an accidental and innocuous amount, in the” dog food products. (Id. at 10.) The court also concluded that the presence of negligible amounts of glyphosate that do not cause harmful, toxic, or carcinogenic effects is not material.The court quickly dispatched with the remainder of the plaintiff’s claims. As no reasonable consumer would interpret the “natural” label as conveying that the dog food products contained no amount of glyphosate, the plaintiff’s express warranty claim failed. The plaintiff’s unjust enrichment claim was duplicative of his other claims. The plaintiff’s allegations that he would consider buying the defendant’s dog food products in the future if they were reformulated so that the representations were “truthful” (i.e., the products contained no glyphosate) were insufficient to grant the plaintiff standing to seek injunctive relief.TakeawayDefendants facing false advertising claims based on a “natural” label claim should ask the court to dismiss such claims where the plaintiffs allege only that the products contain trace, not harmful, amounts of the purportedly unnatural substances. Reasonable consumers are not deceived in such circumstances, and the presence of such substances are not material to consumers relying on the “natural” label.

Nature's Path Foods

Suja Juices

Unilever USA Inc.

Nature’s Path Foods and Sprouts Farmers Market

Iovate Health Sciences, International

Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy mat

Claudia Vetesi

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“Natural” Complaint Barks Up the Wrong Tree

“Natural” Complaint Barks Up the Wrong Tree

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A New York federal court recently dismissed a putative class action alleging that a line of dog food products was improperly labeled as “natural” where the plai

In April, a New York federal court denied certification for a purported class alleging that Johnson & Johnson misled customers by placing the words “no trans fat” on labels for its Benecol buttery spreads. See Bowling v. Johnson & Johnson, et al., 1:17-cv-03892, S.D.N.Y. 2017. The court’s order focused on issues highly specific to the lead plaintiff, showing the benefits of carefully investigating the lead plaintiff in class actions.Case BackgroundIn 2017, Suzanna Bowling brought suit against Johnson & Johnson alleging that the labeling for its Benecol buttery spreads was misleading. According to the complaint, the labeling includes text reading “No Trans Fat” and “No Trans Fatty Acids,” some of which is in “all capitalized, bolded letters.” It was these statements that the complaint alleged misled a New York class of customers to purchase, and overpay for, the product.Court Denies Plaintiff’s Motion for Class CertificationThe United States District Judge Alison J. Nathan denied Ms. Bowling’s motion to certify the New York class, finding that Ms. Bowling was not a suitable class representative for a couple of reasons.First, Ms. Bowling had previously settled with Johnson & Johnson, and as a part of that settlement, there was a “covenant not to sue” in place. This covenant, among other aspects of the settlement, could potentially impede the current case were it to proceed. Judge Nathan stated, “It may be that the covenant not to sue is not binding or is inapplicable to Bowling’s claims here, but … the court concludes she will be required to ‘devote considerable time’ to rebutting its applicability.” As a result of this potentially binding covenant, Ms. Bowling was certainly an atypical—and arguably an inadequate—class representative.Second, Ms. Bowling’s credibility suffered “on key issues.” In fact, key allegations in her complaint were demonstrably false. Ms. Bowling stated in the complaint that she purchased Benecol at a particular location and time, but Johnson & Johnson’s internal records showed that Benecol was never sold at that particular location and time. Ms. Bowling also alleged that, after she came to believe that Benecol actually contained trans fats, she immediately wrote Johnson & Johnson requesting a refund. However, Johnson & Johnson’s customer service department found no record of such a refund request.In conclusion, Judge Nathan stated, “Here, defendants have presented unrebutted evidence that Bowling could not have purchased Benecol Light in the manner in which she has testified; she is therefore ‘vulnerable to serious attacks’ on her credibility.” Accordingly, Ms. Bowling’s motion for class certification was denied.TakeawayThis case reinforces that it is imperative for defendants to always carefully investigate the lead plaintiffs, whether by running a background check or asking questions about their prior litigation history during depositions. All too often, as was the case here, the lead plaintiff is an inadequate class representative for personal reasons that are not apparent at first glance. And while the plaintiff’s unsuitability to represent the class may not end the entire litigation, it can certainly stall the proceedings and create leverage for defendants during settlement negotiations.

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Lead Plaintiff Spreads Her Misleading Butter Case a Little Too Thin

Lead Plaintiff Spreads Her Misleading Butter Case a Little Too Thin

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In April, a New York federal court denied certification for a purported class alleging that Johnson & Johnson misled customers by placing the words “no trans fa

On September 6, 2018, Kimberly-Clark and affiliates filed a petition for writ of certiorari in Kimberly-Clark, et al. v. Davidson, No. 18-304, following a decision in the Ninth Circuit denying Kimberly-Clark’s motion to dismiss.  As we noted in previous posts, the Ninth Circuit had resolved a split among district courts in the circuit and held that a previously deceived consumer may have standing to seek an injunction against false advertising or labeling if he or she sufficiently alleges intent to repurchase the product in the future.  (See <a href="https://classdismissed.mofo.com/consumer-products/ninth-circuit-finds-lower-court-erred-in-flushing-flushable-wipes-false-advertising-claims/">https://classdismissed.mofo.com/consumer-products/ninth-circuit-finds-lower-court-erred-in-flushing-flushable-wipes-false-advertising-claims/</a>; <a href="https://classdismissed.mofo.com/consumer-products/update-ninth-circuit-softens-its-decision-in-flushable-wipes-case/">https://classdismissed.mofo.com/consumer-products/update-ninth-circuit-softens-its-decision-in-flushable-wipes-case/</a>.)  In Kimberly-Clark’s petition, the companies ask the Supreme Court to resolve the issue of whether a consumer, who after using a product and determining that a representation concerning that product is allegedly misleading, can plausibly allege a “real and immediate threat” that she will be deceived by the same representation in the future so as to establish standing to seek an injunction.Case BackgroundAs we noted in our other posts, Plaintiff Jennifer Davidson in this case alleged that Kimberly-Clark’s and its affiliates’ pre-moistened wipes were misleadingly labeled as “flushable.”  Plaintiff Jennifer Davidson alleged that that this “flushable” label was false and misleading, and she sued Kimberly-Clark for violations of California consumer protection laws.  Plaintiff sought restitution and damages based on the price premium resulting from the label, as well as an injunction requiring Kimberly-Clark to discontinue labeling the wipes as “flushable.” Kimberly-Clark moved to dismiss plaintiff’s first amended complaint and the district court granted the motion.  Davidson appealed.The Ninth Circuit reversed, finding that a previously deceived consumer may have standing to seek an injunction against false advertising or labeling, even though the consumer now knows or suspects that the advertising was false at the time of the original purchase. Kimberly-Clark then petitioned for rehearing en banc.  The Ninth Circuit denied the petition and instead amended its opinion, making clear that intent to purchase is a necessary element of injunctive standing.Kimberly-Clark’s Petition for CertiorariIn its petition, Kimberly-Clark proffers three main arguments as to why the Supreme Court should review the Ninth Circuit’s decision. First, Kimberly-Clark argues that the Ninth Circuit decision conflicts with the decision of every other federal circuit to consider this issue, including the Seventh Circuit, Third Circuit, and Second Circuit.  The company explains that each of these courts refused to find standing in similar circumstances.Second, Kimberly-Clark contends that the Ninth Circuit’s decision conflicts with the Supreme Court’s standing jurisprudence by diluting the injury-in-fact requirement in two ways. First, the decision conflicts with the requirement that a plaintiff must allege a future injury that is similar to the injury she has already suffered.  Here, the alleged past and future injuries were different.  Plaintiff’s first injury occurred when she purchased the product based on allegedly false information, which caused the product to be sold at a higher price, and which she would not have purchased absent this misrepresentation.  Her alleged future injury, by contrast, was the exact opposite.  If she saw Kimberly-Clark’s “flushable” wipes, she would not purchase them because she would not know what to believe about the meaning of “flushable.”  Second, even if her alleged future injuries were similar to her past injury, they would not be concrete and imminent.  Under this requirement, the injury must be “real” and not “abstract.” And it must be certainly impending.  Here, however, Davidson’s decision not to purchase the product could constitute harm only if the wipes were somehow reengineered to meet her criteria for flushability.  But Davidson had not alleged (and could not allege) that it was likely the wipes would be modified to satisfy her standards in the future.Finally, Kimberly-Clark argues that the decision would have sweeping, adverse, and nationwide effects. Here, an injunction would result in a prior restraint prohibited by the First Amendment.  It would also require, in effect, a nationwide injunction against Kimberly-Clark’s use of the term “flushable,” which would be “infeasible” given the realities of the national marketplace.Davidson’s OppositionIn her opposition to Kimberly-Clark’s petition, filed on November 5, 2018, Davidson begins her argument by reframing her injury as denial of accurate information to inform her decision whether to purchase Kimberly-Clark’s or others’ wipes. She also points to the fact-driven conclusion of the Ninth Circuit to attack each of Kimberly-Clark’s arguments.First, Davidson argues that the Ninth Circuit’s decision does not conflict with decisions in other circuits, which she argues all apply the same precedents, state the same principles, and reach consistent conclusions. Instead, other circuit court decisions were cabined to facts and none of them addressed the scenario presented in this case, where the plaintiff specifically alleged ongoing uncertainty over whether to purchase the product in the absence of an injunction requiring truthful advertising.Next, Davidson argues that her alleged injury easily satisfies injunctive-relief standing requirements. First, her alleged future injury is sufficiently similar to her past injury: just as Davidson could not rely on Kimberly-Clark’s representation when she previously bought the wipes, she cannot rely on it in the future, absent an injunction. Davidson further argues that, contrary to Kimberly-Clark’s argument that she has failed to allege a future injury, she has sufficiently alleged that she wants to purchase flushable wipes but is unable to rely on the information advertised by Kimberly-Clark.  Deprivation of information, she argues, is an injury sufficient to establish Article III standing.Davidson also argues that the consequences Kimberly-Clark envisions are exaggerated and there is no actual First Amendment issue presented in the case. Even more, the only speech at issue is false commercial speech, which receives no First Amendment protection.  And on a motion to dismiss, where the facts alleged in the complaint are taken as true, Kimberly-Clark cannot contest falsity of the claim.  Finally, Kimberly-Clark’s concerns about the “realities of the marketplace” are inapposite because the claim for injunctive relief would proceed in state court if plaintiff is held to lack Article III standing.Kimberly-Clark’s ReplyIn its reply, Kimberly-Clark rebuts Davidson’s argument that the Ninth Circuit’s decision below was “fact-bound” and does not conflict with other circuits. Instead, the company argues, every other court of appeals to consider whether a consumer has standing to seek to enjoin an allegedly misleading representation—despite already knowing the allegedly misleading nature of the representation—has answered in the negative.  In In re Johnson & Johnson Talcum Powder Products Mktg., Sales Practices and Liability Litig., 903 F.3d 278, 292 (3d Cir. 2018), for instance, the Third Circuit explained that because plaintiff was well aware of health risks associated with using Baby Powder, she was not likely to suffer future economic injury.  As Kimberly-Clark notes, the Ninth Circuit clearly rejects that proposition.  Kimberly-Clark also challenges Davidson’s “reframing” of her injury and argues that Davidson’s past and future harms are distinct.  Nor could Davidson be misled when she seeks Kimberly-Clark’s “flushable” label when Davidson knows exactly what that term means when it appears on a Kimberly-Clark label.To Grant or Not to Grant?Will the Supreme Court grant certiorari? It is hard to predict, but the Supreme Court denies the vast majority of petitions.  Whether the Supreme Court grants certiorari may turn on whether Kimberly-Clark has sufficiently demonstrated a circuit-wide split or whether at least four of the Supreme Court justices will agree with Davidson that the Ninth Circuit’s decision is cabined to the facts and does not actually conflict with the three other circuits.  The result could also turn on Kimberly-Clark’s arguments regarding injury.  In fact, the Supreme Court’s most recent decision on Article III standing and immediate threat of injury was five years ago in Clapper v. Amnesty Int’l USA, 568 U.S. 398.  There, Justices Alito, Roberts, Scalia, Kennedy, and Thomas held that respondents lacked Article III standing to seek prospective relief because they proffered no evidence of imminent injury and did not show that an injunction would redress their injuries. Justices Breyer, Ginsburg, Sotomayor, and Kagan dissented.  Given the current makeup of the Supreme Court, if Kimberly-Clark is able to get in front of the Supreme Court, it may have a chance of prevailing.We will provide relevant updates when the decision on the petition is released.

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Kimberly-Clark Seeks Supreme Court Review in “Flushable” Wipes Case

Kimberly-Clark Seeks Supreme Court Review in “Flushable” Wipes Case

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On September 6, 2018, Kimberly-Clark and affiliates filed a petition for writ of certiorari in Kimberly-Clark, et al. v. Davidson, No. 18-304, following a decis

On July 27, 2018, the Ninth Circuit issued an order granting en banc review of its decision in Hyundai and Kia Fuel Econ. Litig., No. 15-56067, 2018 U.S. App. LEXIS 1626 (Jan. 23, 2018). The Ninth Circuit also set oral argument for the week of September 24, 2018, in a separate ruling.As we noted in our February 12, 2018 post, the Ninth Circuit’s January 23 decision denying certification of a settlement class had provided defendants with a power tool in defending against class certification. While the panel is reviewing the decision, however, the Ninth Circuit made clear that the case may not be cited as precedent in any case before the Ninth Circuit.  We will provide relevant updates following the issuance of an opinion.

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Update: Ninth Circuit to Review Hyundai Pro-Defense Decision

Update: Ninth Circuit to Review Hyundai Pro-Defense Decision

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On July 27, 2018, the Ninth Circuit issued an order granting en banc review of its decision in Hyundai and Kia Fuel Econ. Litig., No. 15-56067, 2018 U.S. App. L

On May 9, 2018, the Ninth Circuit issued an Opinion amending its previous decision in Davidson v. Kimberly-Clark Corp., 873 F.3d 1103 (9th Cir. 2017).  As we noted in our December 4, 2017 post on the 2017 decision, the Ninth Circuit had held that the fact that a plaintiff now knows the “truth” of an allegedly false advertisement does not foreclose injunctive standing.  (See <a href="https://classdismissed.mofo.com/consumer-products/ninth-circuit-finds-lower-court-erred-in-flushing-flushable-wipes-false-advertising-claims/">https://classdismissed.mofo.com/consumer-products/ninth-circuit-finds-lower-court-erred-in-flushing-flushable-wipes-false-advertising-claims/</a>.)In its amended Opinion, the panel clarifies its decision and refines the requirements for injunctive standing in the misbranding context in three ways: (1) it confirms that Article III injunctive standing requires plaintiffs to allege an intent to repurchase the product at issue; (2) it changes its previous stance that consumer protection laws would be gutted without injunctive relief; and (3) it holds that Plaintiff sufficiently alleged a “concrete and particularized” injury as well as redressability.Case Background and the 2017 OpinionAs we noted in our December post, Plaintiff in this case alleged that Kimberly-Clark and affiliate’s pre-moistened wipes were misleadingly labeled as “flushable.”  Plaintiff sought restitution and damages based on the price premium resulting from the “flushable” label, as well as an injunction requiring Kimberly-Clark to discontinue using the “flushable” label.The Court’s opinion addressed the split in district court decisions as to whether understanding the truth of an alleged misrepresentation precludes injunctive standing.  In Davidson I, the Ninth Circuit answered in the negative.  The panel held that even if a consumer is aware that a label is falsely advertised, she or he may still suffer a threat of future harm necessary for Article III standing because, without an injunction, she or he may be unable to rely on the label in the future or might incorrectly believe the product has improved.  Davidson I thus clarified what does not preclude standing.  But it left open the question of what exactly is required.Davidson II Key HoldingsWhile the key holdings in Davidson II remain largely the same, the panel’s decision answers the question left open in Davidson I of what a Plaintiff must allege for Article III injunctive standing.  The panel’s decision also changes course from Davidson I by finding that a plaintiff’s inability to pursue injunctive relief would not gut consumer protection laws because the claims could be remanded to state court.  Finally, the panel expands its Article III Standing analysis and holds that Plaintiff demonstrated a “concrete and particularized” injury as well as redressability.<ul><li>Plaintiff Must Allege an Intention to Repurchase the Product at Issue.</li></ul>Although the majority of the Court’s October 2017 Opinion remains unchanged, the key differences on injunctive standing requirements lie in the footnotes.  In particular, the Court addresses other circuit decisions to assuage concerns that its decision conflicts with other circuits holding a deceived consumer does not have standing to seek injunctive relief.  As the Court notes, the facts in Davidson were distinguishable from these cases because the plaintiffs there had not sufficiently alleged intent to repurchase the product at issue.  One plaintiff, for instance, had alleged they may, one day, purchase the product.  See McNair v. Synapse Grp. Inc., 672 F.2d 213 (3d Cir. 2012).  Plaintiff, on the other hand, alleged that she would purchase truly flushable wipes.  Consistent with the Court’s prior decision in Bigelow (see <a href="https://classdismissed.mofo.com/consumer-products/reading-the-tea-leaves-ninth-circuit-further-clarifies-injunctive-standing-issues-in-bigelow-tea-cases/">https://classdismissed.mofo.com/consumer-products/reading-the-tea-leaves-ninth-circuit-further-clarifies-injunctive-standing-issues-in-bigelow-tea-cases/</a>), the Court’s revisions in Davidson II confirm that intent to purchase is a necessary element of injunctive standing.<ul><li>The Inability to Get Injunctive Relief Does Not Gut Consumer Protection Laws.</li></ul>In its previous decision, the Ninth Circuit expressed concern that California’s consumer protection laws would be effectively gutted if injunctive relief were unavailable to a consumer who learned post-purchase that a product’s label was false.  In its Amended Opinion, the Ninth Circuit notes to the contrary that “risks to plaintiffs . . . are occasionally overstated” because the proper course for a district court confronted with an Article III standing problem in a removed case is to remand for adjudication in state court.  Thus the issue of the “perpetual loop” of plaintiffs filing in California state court, defendants removing the case to federal court, and the federal court dismissing injunctive relief claims “should not occur.”<ul><li>Other Standing Requirements Are Met Based on the Inability to Rely on Advertisements.</li></ul>The Ninth Circuit’s Amended Opinion also adds an analysis on redressability and whether Plaintiff’s injury was “concrete and particularized.”  The Ninth Circuit answered in the affirmative: the alleged injury was concrete based on her allegations that she would purchase truly flushable wipes.  Finally, a favorable ruling would likely provide redress for her alleged injury because the injunction Plaintiff sought would prohibit Kimberly-Clark from using “flushable” until the product was truly flushable.Takeaways The Amended Opinion makes clear that its decision in Davidson is cabined to the facts and does not entirely foreclose the argument that a plaintiff lacks injunctive standing because he or she now knows the truth about an allegedly false advertisement.  Instead, a plaintiff only has standing in this situation if she or he sufficiently alleges intent to repurchase the product in the future.  Even more, a plaintiff’s inability to get injunctive relief due to lack of standing does not spell the end: the court should simply remand to state court.  And a threat of future harm is not enough:  a court must confirm the plaintiff has met each of Article III’s requirements.

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Update: Ninth Circuit Softens Its Decision In Flushable Wipes Case

Update:  Ninth Circuit Softens Its Decision In Flushable Wipes Case

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On May 9, 2018, the Ninth Circuit issued an Opinion amending its previous decision in Davidson v. Kimberly-Clark Corp., 873 F.3d 1103 (9th Cir. 2017).  As we no

On April 17, 2018, the Northern District of New York dismissed a false advertising case against the Hain Celestial Group, Inc. based on the allegedly misleading packaging of Hain’s “Garden Veggie Straws.” Solak v. Hain Celestial Group, Inc., Case No. 3:17-cv-00704 (N.D.N.Y).  In particular, plaintiff took umbrage with depictions on the product’s packaging, including images of fresh vegetables and the use of the words “garden” and “veggie.”  These depictions, plaintiff claimed, misled consumers into believing the straws contained “significant” amounts of whole vegetables and were healthful and nutritious.  Not so, held the court.  The court found that the challenged statements and images were not misrepresentations and would not mislead a reasonable consumer.In its opinion, the court noted that the images of the Straws themselves made it sufficiently clear to consumers the nature of the product they bargained for. As the court described, the images depicted a “processed, unnaturally-colored ‘straw’ snack resembling a chip or crisp.”  A reasonable consumer would be familiar with the “fact of life” that a chip-like snack was not composed primarily of fresh vegetables.  Even more, a reasonable consumer need only refer to the ingredient list on the package to resolve any ambiguity about the vegetable content of the product.The court also dismissed plaintiff’s express warranty claim. The court reasoned that defendant’s representations, even when considered collectively, were insufficient as a matter of law to mislead a reasonable consumer, and therefore could not be relied upon by plaintiff as grounds for asserting a breach of express warranty under New York or California law.

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The Last Straw: Northern District of New York Chucks “Garden Veggie Straws” Case

The Last Straw:  Northern District of New York Chucks “Garden Veggie Straws” Case

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On April 17, 2018, the Northern District of New York dismissed a false advertising case against the Hain Celestial Group, Inc. based on the allegedly misleading

On remand from the Ninth Circuit, Judge Koh nixed a plaintiff’s second attempt to certify a nationwide class of Gerber’s baby food purchasers. Her decision is notable for two reasons.  First, in denying plaintiff’s Rule 23(b)(2) injunctive relief class based on changes to Gerber’s product labels, Judge Koh adds to the factual predicates necessary for injunctive standing.  Second, in denying Plaintiff’s Rule 23(b)(3) damages class, Judge Koh reaffirms that a plaintiff must present a Comcast-complaint damage model to secure certification.Judge Koh’s decision is a win for companies facing putative false advertising class actions. It confirms that, despite some recent Ninth Circuit decisions favorable to plaintiffs, the rigorous standards for class certification have not changed.We review the case background, the court’s decision, and key takeaways below.BackgroundPlaintiff’s Claims. Plaintiff Natalia Bruton sued Gerber Products Company (“Gerber”) in 2012, alleging that Gerber’s baby foods included unlawful and deceptive nutrient content claims and low-sugar added claims. She sought to represent a nationwide class of purchasers of these products that contained the challenged claims and alleged violations of the UCL, CRLA, and FAL.Bruton I. Plaintiff’s lawsuit, which was part of a barrage of “misbranded” food claims filed in the Northern District of California by the same counsel at that time, slowly made its way through the district court and appellate systems. First, in June 2014, the Court denied Plaintiff’s motion for class certification, finding that variations in the challenged label statements rendered the class unascertainable.  Then, in December 2014, Judge Koh granted Gerber’s motion for summary judgment on all of Plaintiff’s claims, finding Plaintiff failed to provide sufficient evidence that the labels were deceptive.Ninth Circuit’s Decision. In July 2017, the Ninth Circuit affirmed in part and reversed in part Judge Koh’s order (see our post on the decision <a href="https://classdismissed.mofo.com/food-misbranding/the-ninth-circuits-food-court-menu-a-status-update/">here</a>).  The panel reversed the district court’s class certification decision, as the Ninth Circuit had previously found in Briseno v. ConAgra Foods, Inc., 844 F.3d 1121 (9th Cir. 2017) that there was no separate ascertainability requirement.  The panel affirmed the district court’s dismissal of deception-based claims under the UCL, CLRA, and FAL, but reversed dismissal of plaintiff’s UCL “unlawful” claim, finding that, because the underlying statutory violation did not require a showing of deception, plaintiff’s particular “unlawful” allegations did not require such a showing either.  The panel also reversed the district court’s earlier decision dismissing the plaintiff’s unjust enrichment/quasi-contract claim, as California law had since confirmed that this claim was viable.  The panel remanded to Judge Koh to consider class certification and the merits of Plaintiff’s remaining unlawful and unjust enrichment claims.Bruton II – Class Certification Denied, AgainOn remand, the plaintiff moved to certify a Rule 23(b)(2) injunctive relief class and a Rule 23(b)(3) damages class. Judge Koh denied both.Injunctive Relief. The Court held that plaintiff lacked standing to seek an injunction because Gerber’s labels no longer included the challenged statements, nor was there evidence that Gerber would use the challenged statements again. Plaintiff therefore had no evidence that she would likely be harmed in the future, and accordingly lacked standing to sue.The plaintiff attempted to rely on Davidson v. Kimberly-Clark Corp., 873 F.3d 1103 (9th Cir. 2017) to claim she had injunctive standing, but the court found the facts distinguishable.  In Davidson, the Ninth Circuit found that the plaintiff alleged a sufficient threat of future harm because the plaintiff intended to buy the product again, but could not be sure if the product was misleading.  That was because the defendant’s labels had not changed, so the plaintiff would either have to refrain from buying the product despite wanting to purchase it, or wrongly assume that the defendant had changed the product to conform to its label.  These scenarios didn’t apply to the plaintiff’s claims, the court held, because all of the labels had changed.  There was accordingly no threat of future harm.Damages. Nor did plaintiff put forth evidence necessary to certify a damages class, the court held. For 23(b)(3) certification, Comcast Corp. v. Behrend, 569 U.S. 27, 33 (2013) requires a plaintiff to put forth a damages model consistent with her theory of liability.  In a mislabeling case such as plaintiff’s, the court confirmed, the correct measure of damages is the price premium:  the difference between the market value of the product and the value without the offending statement.Plaintiff’s expert offered three damages models, but none sufficed. The first model, “full refund,” didn’t attempt to calculate a price premium, but instead wrongly assumed consumers received no value from the product.  The second model, “price premium,” wrongly assumed that the entire difference in price between Gerber and comparable products could be attributed to the challenged statements “when any number of factors—such as brand recognition or loyalty, ingredients, and product quality—might explain all or part of the difference.”  (Bruton II, Slip Op., 15:19-21.)  And the third model, “regression,” did not provide a reliable means for comparing products with and without challenged label statements, nor did it control for the myriad variables that impact products’ prices or sales.  The individual issues were compounded by the variations in the label statements over time and across different products.  Because each of the damages models plaintiff proposed failed Comcast, the court found that the plaintiff failed to show individual issues related to damages predominated over common ones and denied Rule 23(b)(3) certification as a result.Takeaway.  Judge Koh’s decision in Bruton II demonstrates that the bar for class certification in the food misbranding context remains high, even in the wake of appellate decisions favorable to plaintiffs.  To certify an injunctive class, plaintiffs must present actual evidence that they are likely to be harmed in the future, which means they must intend to purchase the product again, and—as Judge Koh confirms here—show that challenged label statements remain on the product.  And to certify a damages class, a plaintiff must present a rigorous damages model that controls for the many variables that impact price and sales for low-cost, everyday products.  This is a tremendous task.  After years of district court and appeals litigation, the road to class certification has only become more formidable for plaintiffs.  Judge Koh’s decision in Bruton II shows why.

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Second Time Is Not the Charm: Judge Koh Slams Plaintiff’s Second Bid for Class Certification in Baby Food Case

Second Time Is Not the Charm: Judge Koh Slams Plaintiff’s Second Bid for Class Certification in Baby Food Case

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On remand from the Ninth Circuit, Judge Koh nixed a plaintiff’s second attempt to certify a nationwide class of Gerber’s baby food purchasers. Her decision is n

Subscription and other automatic renewal offers are heavily regulated at both the federal and state levels. A recent amendment to California’s law provides a good opportunity for businesses to review their practices.[1] As of July 1, 2018, the obligations under California law will expand in two ways that may require businesses to update those practices.The first change relates to the information that businesses must provide to consumers regarding the terms of a subscription offer. The current law already requires a business to provide certain information about the renewal process — such as the amount of the recurring charges, the length of the renewal period, and the cancellation policy — both before the consumer accepts the agreement, and afterwards in an acknowledgement. As of July 1, 2018, if the offer includes any free trial or gift component, the information provided to consumers must also include a “clear and conspicuous explanation of the price that will be charged after the trial ends or the manner in which the subscription or purchasing agreement pricing will change upon conclusion of the trial.”[2]The second change relates to the types of cancelation mechanisms that a business must make available. Under the current law, businesses must provide a cancelation mechanism that may include a toll-free phone number, email address, postal address, or another “cost-effective, timely, and easy-to-use” mechanism. As of July 1, 2018, consumers who accept a subscription offer online must be allowed to terminate it exclusively online (instead of, for example, being required to call a toll-free number or send a written notice by postal mail).[3]Accordingly, businesses that offer consumer subscriptions should take steps before July to ensure that:<ul><li>if the consumer receives a free or discounted trial, the consumer also receives clear and conspicuous notice of the price to be charged, or any changes to the price being charged, after the trial ends; and</li><li>if the consumer originally entered into a subscription online, the consumer also receives an entirely online mechanism for canceling the automatic renewal.</li></ul>Local district attorneys in California have recently sought to enforce California’s automatic renewal law, and plaintiffs’ attorneys have also attempted to bring class actions against companies related to alleged violations of the law, in some cases framed as a violation of California’s unfair competition law.In addition to the obligations under the California law, businesses should also be aware of other legal considerations affecting subscription programs and free-trial offers. For example, certain states require that a business provide a reminder notice to a subscription customer before charging him or her, if the renewal period exceeds a certain length of time — typically six months. The federal Restore Online Shopper’s Confidence Act (ROSCA), which is enforced by the Federal Trade Commission (FTC), also imposes certain obligations. The FTC recently obtained a $1.3 million judgment against an online marketer, AdoreMe Inc., that allegedly failed to provide a simple mechanism to stop recurring charges.[4] The defendant had allegedly made it hard for consumers to cancel memberships, including by limiting the mechanisms for cancelation requests, and inadequately staffing its customer service department.The revisions to the California law, along with the patchwork of other applicable federal and state laws — and the attention from regulators, state attorneys and plaintiffs’ counsel — make it crucial for any business offering consumers a subscription or similar auto-renewal product or service to review its practices to ensure compliance.[1] Calif. Bus. & Prof. Code § 17602 (available at: <a href="https://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=201720180SB313" target="_blank" rel="noopener">https://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml-?bill_id=201720180SB313</a>).[2] Id. at 17602(a)(1).[3] Id. at 17602(c).[4] Federal Trade Commission v. AdoreMe, Inc., 1:17-cv-09083 (S.D.N.Y.). The FTC’s press release is available at: <a href="https://www.ftc.gov/news-events/press-releases/2017/11/online-lingerie-marketer-prohibited-deceiving-shoppers-about" target="_blank" rel="noopener">https://www.ftc.gov/news-events/press-releases/2017/11/online-lingerie-marketer-prohibited-deceiving-shoppers-about</a>.

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Clients seek out Julie because of her practical advice on cutting-edge issues at the intersection of privacy and consumer protection laws. She provides clients with practical solutions to compliance c

Julie O'Neill

Clients seek out Julie because of her practical advice on cutting-edge issues at the intersection of privacy and consumer protection laws. She provides clients with practical solutions to compliance challenges around a wide variety of both online and offline privacy issues, including tracking, interest-based advertising, geo-targeting and other mobile tracking, personalization, and cross-device tracking. Recognized in The Legal 500 US 2014, 2016, 2019, and 2020 and Chambers USA 2021 for her exceptional legal work, her clients praise her saying, “She is really good at giving practical, targeted advice and taking stock of what the risk profile of the client is, so that the advice is holistic.” (Chambers USA 2021).

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Amended California Law Expands Requirements for Consumer Subscriptions

Amended California Law Expands Requirements for Consumer Subscriptions

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Subscription and other automatic renewal offers are heavily regulated at both the federal and state levels. A recent amendment to California’s law provides a go

On December 20, 2017, the Ninth Circuit refined the injunctive standing requirements in the misbranding context in Victor v. Bigelow and Khasin v. Bigelow (collectively, “Bigelow”), finding that injunctive standing is limited and requires a current intent to purchase challenged products in the future. See Victor v. Bigelow, No. 16-16639 (9th Cir. argued Nov. 15, 2017); Khasin v. Bigelow, No. 16-16641 (9th Cir. Argued Nov. 15, 2017).These decisions demonstrate the Ninth Circuit’s evolving standards on injunctive relief since its last decision on the issue in Davidson v. Kimberly-Clark Corp., 873 F.3d 1103 (9th Cir. 2017).  (See <a href="https://classdismissed.mofo.com/consumer-products/ninth-circuit-finds-lower-court-erred-in-flushing-flushable-wipes-false-advertising-claims/">https://classdismissed.mofo.com/consumer-products/ninth-circuit-finds-lower-court-erred-in-flushing-flushable-wipes-false-advertising-claims/</a>.)  As we noted in our December 4, 2017 post on the case, the Ninth Circuit in Davidson found that the fact that a plaintiff now knows the “truth” of an allegedly false advertisement does not foreclose injunctive standing.  In Bigelow, the Ninth Circuit threads the needle to carefully avoid conflict with this decision, thereby further defining the scope of injunctive standing.We discuss the panel’s holding in Bigelow, as well as key takeaways, below.Case Background. Plaintiffs Victor and Khasin both alleged that defendant R.C. Bigelow (“Bigelow”) mislabeled its black tea by including the phrase “healthful antioxidants” on its products’ labels. See Khasin v. R.C. Bigelow, Case No. 12-cv-02204-WHO, 2016 WL 4502500 (N.D. Cal. Aug. 29, 2016); Victor v. R.C. Bigelow, Case No. 13-cv-02976-WHO, 2016 WL 4502528 (N.D. Cal. Aug. 29, 2016).  The district court granted summary judgment to Bigelow on plaintiffs’ injunctive relief claims, concluding that plaintiffs lacked Article III standing to seek an injunction preventing Bigelow from selling “mislabeled” tea.Injunctive Relief Unavailable If No Intent to Purchase. In appealing the district courts’ orders, the plaintiffs relied heavily on Davidson, arguing that the decision means plaintiffs have injunctive standing the moment they allege a labeling is misleading, regardless of whether they intend to purchase products again in the future or if the company changes its labels. See <a href="https://www.ca9.uscourts.gov/media/view_video.php?pk_vid=0000012555">https://www.ca9.uscourts.gov/media/view_video.php?pk_vid=0000012555</a> (Bigelow oral argument).In an unpublished opinion, the three-judge panel — which included Judge Berzon, who had sat on the Davidson panel — disagreed with plaintiffs’ argument, holding that plaintiffs were not entitled to injunctive relief because they did not face a threat of future harm.  While plaintiffs both stated that they would consider buying Bigelow tea again, they testified that they would only do so if they received an injunction first.  Both also stated that they would not consider purchasing the tea with updated and accurate packaging.  “Because they will not consider buying even properly labeled tea until they receive an injunction,” the panel reasoned, “[the plaintiffs] will not be harmed by wondering if the tea is still mislabeled or by buying the tea without knowing if it is still mislabeled.”  The panel accordingly held that the plaintiffs “did not face a real or immediate risk of being harmed again in the same manner and so lack Article III standing to seek injunctive relief.”Takeaway. Davidson and Bigelow demonstrate that injunctive standing is not an “all or nothing” standard.  Instead, whether a plaintiff has standing to pursue an injunction will depend largely on the facts, and particularly on a plaintiff’s deposition testimony.  As the panel noted in Bigelow, this raises concerns that plaintiffs’ attorneys may attempt to influence deposition testimony to ensure their clients testify in accordance with the requirements for injunctive standing.By highlighting testimony that does and does not satisfy these requirements — i.e., the “future intent to purchase and fear of mislabeling” that sufficed in Davidson versus the “intent to purchase only if an injunction is granted” that failed in Bigelow — the decisions also help define the contours of injunctive standing in the misbranding context, and put to rest disagreement in the Ninth Circuit as to the fundamentals of these standing requirements: knowledge that an advertisement is false does not foreclose standing, but a present intent to purchase — coupled with fear that the product will continue to be mislabeled — is required.

Reading the Tea Leaves: Ninth Circuit Further Clarifies Injunctive Standing Issues in Bigelow Tea Cases

On December 20, 2017, the Ninth Circuit refined the injunctive standing requirements in the misbranding context in Victor v. Bigelow and Khasin v. Bigelow (coll

Reading the Tea Leaves: Ninth Circuit Further Clarifies Injunctive Standing Issues in Bigelow Tea Cases

On October 20, 2017, a unanimous Ninth Circuit panel in Davidson v. Kimberly-Clark Corp., 873 F.3d 1103 (9th Cir. 2017), resolved a circuit-wide split on injunctive standing requirements in the misbranding context.  The panel addressed whether a plaintiff allegedly deceived by false advertising has Article III standing to enjoin a false statement despite knowing the statement’s “true” meaning.  The panel answered in the affirmative, reversing the district court’s decision and reviving plaintiff’s “flushable” wipes false advertising claims.  The panel also held that plaintiff had adequately alleged that defendants’ wipes advertisements were false and that she had suffered an economic injury as a result.Case Background.  Kimberly-Clark and affiliates manufacturer pre-moistened wipes, which they market and sell as “flushable.”  Plaintiff Jennifer Davidson alleged that that this “flushable” label was false and misleading, and she sued Kimberly-Clark for violations of California consumer protection laws.  Plaintiff sought restitution and damages in the form of the price premium resulting from the “flushable” label, as well as an injunction requiring Kimberly-Clark to discontinue labeling the wipes as “flushable.”Kimberly-Clark moved to dismiss plaintiff’s first amended complaint.  The district court granted the motion, finding that: (1) plaintiff lacked standing to seek injunctive relief because she was unlikely to purchase defendants’ flushable wipes in the future; (2) plaintiff had failed to adequately allege why the representation “flushable” on the package was false; and (3) plaintiff had failed to allege damage under the UCL, FAL, CLRA, or common law fraud causes of action because she had not alleged that she suffered any harm due to her use of the wipes.  Plaintiff appealed.Knowledge that an Advertisement Is False Does Not Foreclose Injunctive Relief.  The crux of the panel’s decision addressed the split in district court decisions as to whether a plaintiff seeking an injunction requiring a company to cease allegedly deceptive labeling can establish Article III standing once he or she understands the truth of an alleged misrepresentation.  On one side, courts would conclude that a plaintiff lacked standing because, now aware that an advertisement is false, he or she could not be misled by it in the future.  On the other side, courts would conclude that a plaintiff has standing because “the plaintiff may be unable to rely on the defendant’s representations in the future, or because the plaintiff may again purchase the mislabeled product.”The panel resolved the split in favor of plaintiffs seeking injunctive relief, holding that a consumer who is aware that a label is falsely advertised still suffers an actual threat of future harm necessary for Article III standing because, without an injunction, he or she may be unable to rely on the labeling in the future or might reasonably, but incorrectly, believe that the product has improved.  “Either way,” the panel held, “we are ‘not persuaded that injunctive relief is never available for a consumer who learns after purchasing a product that the label is false.’”  (citation omitted).  The panel noted that its decision alleviated concerns that the opposite conclusion would effectively gut California’s consumer protection laws as an injunction is the primary form of relief under those statutes.The First Amended Complaint Adequately Alleged Why the Term “Flushable” Was False and Alleged Sufficient Harm.  The panel also reversed the district court’s holding that plaintiff failed to allege that “flushable” was false and failed to allege sufficient economic harm.  As to the former, the panel found that plaintiff had adequately alleged that the term “flushable” was false by claiming that the wipes did not “disperse and disintegrate within seconds or minutes.”  Dismissal on this basis was therefore inappropriate.  As to the latter, the panel held that plaintiff had sufficiently pled an economic injury by alleging that she was exposed to false information about a product, which caused the product to be sold at a higher price, and that absent the misrepresentation, she would not have purchased the product or would have paid less for it.  This is all that California law requires, the panel confirmed.Takeaway.  Davidson forecloses the argument that a plaintiff lacks injunctive standing because he or she now knows the truth about an allegedly false advertisement.  But the panel’s decision may be cabined to the facts:  a situation where a plaintiff expresses interest in buying a product but cannot rely on the label because the company continues to use the allegedly false statement.  But what if a plaintiff has no interest in purchasing a challenged product again or if a company voluntarily discontinues use of a challenged statement?  Davidson doesn’t speak to whether a plaintiff would have injunctive standing under these circumstances.  In fact, the Ninth Circuit is addressing whether a plaintiff has injunctive standing based on these facts in the Victor v. Bigelow and Khasin v. Bigelow appeals, which were heard on November 15, 2017.  The plaintiff in Bigelow relied heavily on Davidson, but the Bigelow panel suggested that Davidson was distinguishable.  See Victor v. Bigelow, No. 16-16639 (9th Cir. argued Nov. 15, 2017); Khasin v. Bigelow, No. 16-16641 (9th Cir. Argued Nov. 15, 2017).Davidson nevertheless helps define the contours of injunctive standing in the misbranding context and puts to rest disagreement in the Ninth Circuit as to the fundamentals of these standing requirements.  The Ninth Circuit will continue to refine these standards in the Bigelow and similar appeals addressing different factual circumstances.  We will provide relevant updates when these decisions are released.

Ninth Circuit Finds Lower Court Erred in Flushing “Flushable” Wipes False Advertising Claims

On October 20, 2017, a unanimous Ninth Circuit panel in Davidson v. Kimberly-Clark Corp., 873 F.3d 1103 (9th Cir. 2017), resolved a circuit-wide split on injunc

Ninth Circuit Finds Lower Court Erred in Flushing  “Flushable” Wipes False Advertising Claims