Defendant makes sandals and claims in ads and on package
labels that FitFlops provide health benefits including improved posture,
increased muscle activation and toning, and reduced joint strain as the result
of FitFlop’s patent pending “Microwobbleboard Technology” midsole. As a result, the sandals allegedly command
premium prices of up to $240/pair. The
named plaintiffs bought them, allegedly in reliance on the advertising
claims. Plaintiffs alleged that the
health benefit claims were deceptive.
They brought UCL and CLRA claims.
The court rejected FitFlop’s arguments that plaintiffs
suffered no injury. They sufficiently alleged that FitFlop’s claims allowed it
to charge premium prices and that, had the product been labeled accurately,
plaintiffs wouldn’t have been willing to pay as much for the sandals or
wouldn’t have bought them at all. Thus, they alleged economic injury, giving
them UCL standing.
FitFlop argued that it wasn’t responsible for the statements
in the advertising, so plaintiffs lacked standing for failure to plead
causation (further showing how standing has become a garbage can into which all
arguments are stuffed for purposes of a motion to dismiss). But “causation does not fail simply because
there are several links in the causal chain, so long as they are linked in a
plausible manner.” Plaintiffs alleged
that FitFlop provided and authorized ads for third-party retailers such as
Victoria’s Secret, and that they relied on these ads. This was not so attenuated a chain as to be
implausible.
Then, FitFlop argued that plaintiffs failed to plead the UCL
claim with the requisite particularity.
Plaintiffs responded that UCL claims aren’t fraud claims. This depends on whether a plaintiff pleads
fraudulent conduct, which they did here.
Fortunately, they also pled with particularity: they alleged the
existence of an extensive ad campaign along with product labels and hangtags;
the complaint included reproductions of the ads and attached substantially
similar ads containing the alleged misrepresentations. They identified a relevant time period, which
was sufficiently specific in the context of a long-term ad campaign. They detailed the language on which they
relied and pled that they wouldn’t have bought the products if they’d known the
truth.
Separately, FitFlop argued that the UCL claim wasn’t
plausible, but that was wrong.
Plaintiffs identified several studies supporting the conclusion that the
shoes don’t have any beneficial effect on exercise intensity, improved muscle
strength, or toning. To the degree that
FitFlop was arguing that the studies didn’t apply to FitFlop sandals in
particular, that was premature for a motion to dismiss. (Not all courts think
this way—some courts think that studies on stability shoes, or single
ingredient for which health claims are made, are insufficient for a particular
shoe brand or a product that contains that ingredient and makes claims about
that ingredient; I think this court has the better approach.)
For the same reasons, the CLRA claim survived. And plaintiffs provided 30 days of notice
before amending their complaint to add a damages claim, so that complied with
the notice provision of the CLRA. This
also sustained the breach of express warranty claim, which can be based on ads
or packaging as long as a plaintiff was actually exposed to the ads.
FitFlop moved to strike the class allegations, arguing that
individual issues overwhelmingly predominate and that the proposed class lacks
standing and ascertainability. This was premature and should await a motion for
class certification; a motion to strike shouldn’t be allowed to circumvent Rule
23.
No comments:
Post a Comment