No injunction, no cause of action under private AG statute

Buetow v. A.L.S. Enterprises, Inc., 2012 WL 3568874 (D. Minn.)

After remand from the court of appeals, the court granted defendants’ motion to dismiss.  The district court initially enjoined certain advertising by defendants (claims to have “odor eliminating technology” for hunting clothing), but the court of appeals held that the claims for equitable relief had to be dismissed.  The only remaining claims were for damages under the Minnesota Consumer Fraud Act (“CFA”) and the Minnesota Unfair Trade Practices Act (“UTPA”).  Under the state’s private AG statute, individuals can bring consumer fraud claims, but must show a benefit to the public.  The Minnesota Supreme Court previously held that a case about a fraudulent one-on-one transaction didn’t meet the public benefit requirement.

Defendants argued that, at this point, there was no remaining public benefit, just small claims for nominal damages.  The court agreed, finding that it had to evaluate the claims as they stood, not as originally pleaded. 

Plaintiffs argued that the UTPA wasn’t subject to the same public benefit requirement.  And it was true, the court conceded, that the UTPA, unlike the CFA, expressly authorized a private cause of action for damages.  But that didn’t help plaintiffs, because they pursued remedies under the private AG statute, not under the UTPA directly, which they did because the UTPA doesn’t provide for attorneys’ fees and the private AG statute does.

Plaintiffs argued that they satisfied the public benefit requirement because the misleading ads were distributed to the public at large.  The case law was not clear on this; some cases concluded that public benefit was lacking despite the allegedly false/misleading statements being disseminated to the public.  The court didn’t think that an individual bringing a small claim for the amount he lost on a deceptively advertised product would benefit the public, even if the ad had been broadly disseminated.  (The court couched this as a hypothetical, but since it’s the exact same facts as the current case minus a few individual plaintiffs, I don’t see what’s hypothetical about it.)  Public benefit requires examination of the relief sought by the plaintiff.  “[A] public benefit typically will be found when the plaintiff seeks relief primarily aimed at altering the defendant's conduct (usually, but not always, through an injunction) rather than seeking remedies for past wrongs (typically through damages). This is because individual damages, generally speaking, merely enrich (or reimburse) the plaintiff to the defendant's detriment; they do not advance a public interest.”  Thus, whatever public benefit existed at the outset of the case no longer existed, since injunctive relief was out and plaintiffs failed to get class certification.  Nor would a potential fee award alter the analysis, since it would likely be de minimis in this case. 

Plaintiffs argued that an award would benefit the public through deterrence, but that would allow every “dog bite” case to come within the statute’s ambit and was too remote a possibility to suffice.  Anyway, even assuming that damages can sometimes achieve a public benefit, they’d have to be adequate to deter, but here the only possible award was in the tens or hundreds of dollars.  The litigation was “‘so feeble that it is best to end it immediately’” and was only ongoing because of the potential fees.  Anyway, even if this motion hadn’t been granted, the court of appeals “strongly suggested” that the ads were nonactionable puffery, and the district court likely would have felt “constrained” to agree.