Monday, January 26, 2015

No standing for injunction-only class

Graiser v. Visionworks of America, 2015 WL 248003, No. 1:14–CV–01641 (N.D. Ohio Jan. 20, 2015)
Graiser sought an injunction on behalf of a putative class based on his false advertising claims, which alleged that Visionworks’s buy one get one free campaign for glasses was deceptive; Visionworks allegedly offered a single pair of glasses at a discounted price to customers who declined the “free” pair, and its disclaimers didn’t work.  Graiser was quoted a price of $410 for the BOGO offer, but then told he could get one pair for $246 if he gave up a claim for the “free” second pair.  He sought only injunctive relief under the Ohio Consumer Sales Practices Act.
Visionworks removed his state court complaint on the basis of diversity jurisdiction.  The court found that Graiser lacked Article III standing to pursue a claim for injunctive relief and remanded.
At least one named plaintiff in a putative class needs Article III standing: injury, caused by the defendant, that can be redressed by a favorable resolution of the lawsuit. Although Graiser didn’t disclaim an intention to purchase the product again, the court still found that he wasn’t likely to suffer future injury—a future injury can’t be conjectural or hypothetical.  He wasn’t at risk of being deceived again. A consumer not at risk of deception might still have standing—if the consumer prefers the product at issue for other reasons anyway, but is forced to pay a higher price because the deception allows the manufacturer to charge more.
The court thought that sort of analysis would provide Article III standing to “many” false advertising claims, when the false claim is about the product itself and the plaintiff intends to buy the product again.  If Visionworks’s ad campaign allowed it to charge a higher price for the single pair without the “free” pair, Graiser would likely have Article III standing, but it was “far from clear” that the BOGO campaign would have any effect on the price of a single pair, or whether it would make the single pair cheaper or more expensive.  (OK, that doesn’t make much sense.  Presumably, if Visionworks had a relatively cheap single-pair offer to tout, it would do so instead. Also, the whole point of regulating bait-and-switch tactics is that they allow the seller to charge more, by interfering with consumers’ search costs.)
Moreover, mere exposure to false advertising isn’t a harm for Article III purposes.  It doesn’t “guarantee the concrete adverseness that Article III standing requirements are meant to ensure.” 
Finally, one could argue that the BOGO campaign compelled Visionworks to offer a free pair when someone bought at the lower price Graiser paid.  This harm rests not on the misleading ad, but on Graiser’s failure to receive two pairs of glasses at the lower price.  Yet Visionworks was under no obligation to sell two pairs at the lower price unless it continues the BOGO campaign and continues to offer a single pair at a lower price, so “an unconditional injunction requiring Visionworks to offer two pairs of glasses at the lower price would be improper.” A conditional injunction against continuing both practices “would have virtually no chance of remedying Graiser’s harm,” since Visionworks could respond in a number of ways: it could discontinue the BOGO offer; it could change it to a permissible volume discount (e.g., 1 pair for $200, 2 pairs for $350), or by discontinuing the lower price single pair. “But Visionworks would certainly not begin offering two pairs of glasses for the discounted price.”  (If true, this seems to establish the misleadingness of the campaign.)
Thus, Graiser lacked standing in federal court.  And he lacked standing to seek an injunction based on likely future harm to unnamed class members. Damages would be available in federal court if sufficient amounts were in controversy, and state courts aren’t bound by Article III so they might still offer relief after remand.

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