Tuesday, May 21, 2013

consumer who knows truth lacks standing for injunctive relief

Mason v. Nature's Innovation, Inc., 2013 WL 1969957 (S.D. Cal.)

Mason sued NI based on his purchase of Naturasil skin tag remover, based on representations on the label and website that Naturasil was an exclusive and 100% natural formula that was FDA registered and was proven to gently and effectively remove skin tags.  He alleged that the representations were false and misleading because the product wasn’t 100% natural; the product was merely listed as an unapproved homeopathic drug with the FDA, despite being marketed next to other FDA-monograph approved OTC drugs; the product isn’t effective because its active ingredient doesn’t remove skin tags, and the active ingredient is not even actually present in the product due to the enormous dilution of the product; and the product did not contain “exclusive” ingredients because the exact same ingredients were used in many of NI’s other products.  He brought California CLRA/UCL/FAL claims and warranty claims.

The court found that Mason lacked standing to seek injunctive relief because, since he knew the truth, he was in no danger of future injury.  There’s a split among district courts on this argument in false advertising cases; courts that reject it note that it vitiates the purpose of California’s consumer protection laws.  But even if California allows plaintiffs to seek injunctive relief on behalf of the public regardless of whether they’re likely to suffer future harm themselves, federal courts have to follow Article III.  “[A] plaintiff does not have standing to seek prospective injunctive relief against a manufacturer or seller engaging in false or misleading advertising unless there is a likelihood that the plaintiff would suffer future harm from the defendant's conduct—i.e ., the plaintiff is still interested in purchasing the product in question.”

In ADA cases, the Ninth Circuit held that injunctive relief is only available when there was likely injury in the future related to the plaintiff’s own disability.  Chapman v. Pier 1 Imports (U.S.) Inc., 631 F.3d 939 (9th Cir. 2011) (not a class action, and dealing with a statute in which injunctive relief is the only remedy available to private plaintiffs, thus making the redressability inquiry a different one). A plaintiff must desire to return to the noncompliant accommodation; plaintiffs lack standing if they don’t really intend to return, or if the barriers at issue don’t pose a real and immediate threat to them given their particular disabilities.  If ADA plaintiffs have to show likely future injury, consumer plaintiffs must too.  There was no likely future injury if a plaintiff had no interest in buying the product again because it didn’t work as advertised.  (I don’t really get this.  If a plaintiff satisfies Article III for a claim, as Mason unquestionably did, why does Article III also govern whether s/he gets to ask for each and every form of remedy that might be available, when a statute makes multiple remedies available?)

The court continued: this result means that injunctive relief won’t be available in federal court in many false advertising cases, though there may be cases in which a consumer would still be interested in purchasing a properly labeled product.  And anyway, Article III trumps California’s consumer protection law.  Consumers who seek injunctive relief can sue in state court. (NB: unless CAFA applies, given that there will be Article III standing for their damages claims!  Sorry ‘bout that.)

So the CLRA claim went in its entirety, since it was just for injunctive relief, as did the injunctive relief claims under the UCL and FAL.

The court declined to dismiss the warranty claims based on Mason’s failure to provide notice to defendant, because he bought the product from CVS, not directly from NI, and thus wasn’t required to give NI notice.  It didn’t have occasion to resolve which, if any, of NI’s representations fit the Magnuson-Moss Warranty Act’s definition of “written warranty.”

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