consumer's bid to enjoin Redbubble's sale of "counterfeits" fails

Vinluan-Jularbal v. Redbubble, Inc., No. 2:21-cv-00573-JAM-JDP, 2021 WL 4286539 (E.D. Cal. Sept. 21, 2021)

Plaintiff thinks Redbubble sells a lot of “counterfeits” and wants that enjoined under the UCL and CLRA. Despite ruling in her favor on a lot of predicate issues, the court nonetheless declines.

Vinluan-Jularbal bought two sweatshirts from Redbubble, one with a UN symbol and the other with “the Dadalorian,” which she alleges are counterfeit. (There are two pending applications for “Dadalorian,” both filed by non-Disney entities, and no registrations, if you are wondering.)

Raising larger issues of conflict preemption that will presumably be mentioned by Redbubble at some point, plaintiff believes that there are a lot of counterfeits on Redbubble’s site because it doesn’t proactively police against counterfeit or infringing items.

Plaintiff had Article III standing to seek injunctive relief despite her statement that she “would never knowingly support a company selling illegal products in violation of federal law.” “Because Plaintiff states that she would make further purchases from Redbubble in the future if she could be assured the products were not counterfeits, Plaintiff suffers a threat of future harm of being ‘unable to rely on the product’s [authenticity], and so will not purchase the product although she would like to.’”  (Compare the recent 9^th Circuit Coca-Cola case, uncited here: “such an abstract interest in compliance with labeling requirements is insufficient, standing alone, to establish Article III standing,” and plaintiffs’ “desire for Coca-Cola to truthfully label its products, without more, is insufficient to demonstrate that they have suffered any particularized adverse effects.” The difference, if there is one, is perhaps that plaintiff here claims she’d patronize Redbubble if she were sure it didn’t have any counterfeit products, so she’s not asking for truthful labeling but rather for fundamental changes in its business model.)

What about UCL/CLRA standing? Plaintiff argued that she showed economic injury because she alleged that she paid more for the sweatshirts than she would have if she had known they were counterfeit. But Redbubble was making a different argument: she didn’t prove the items she bought were counterfeit. “The Court refuses to reach any such conclusion or finding regarding the items purchased by Plaintiff at this early stage of the litigation.” Despite that, the court went on to consider other aspects of a preliminary injunction.

She was asking for a mandatory injunction, not a prohibitory injunction, because she wasn’t just seeking the removal of the two sweatshirts but rather seeking to have Redbubble change its business model and sort through 51 million listings. “[B]ecause Plaintiff has not identified all the items that are allegedly counterfeit, this would require Defendant to take on the affirmative task of identifying which of its third-party product listings may be counterfeit and ensure they are removed.” This was a mandatory injunction and put a greater burden of justification on the plaintiff.

So, was there likely success on the merits (notwithstanding that we don’t yet know whether the sweatshirts were actually counterfeit [actually we do know that the Dadalorian wasn’t, but whatever]).

The CLRA prohibits the “[passing] off goods or services as those of another,” and the UCL’s unlawfulness provision borrows violations of other laws, including the Lanham Act, even if plaintiff wouldn’t have Lanham Act standing. California courts have found that “[t]o forestall an action under the unfair competition law, another provision must actually ‘bar’ the action,” by providing for exclusive enforcement authority in someone else. [I don’t think that can substitute for conflict preemption, but that’s not discussed here.]

So was she likely to show a violation of the Lanham Act? “Plaintiff asks the Court to conclude at this early stage of the litigation that these items are in fact counterfeit without offering much to support this contention.” Though she offered evidence that the UN had an active registration, she did not provide evidence that the mark on the sweatshirt wasn’t genuine, that the mark was registered for sweatshirts as required for counterfeiting, or that defendant was not authorized to use the mark.