Tuesday, October 05, 2021

No organizational standing from mere conflict with consumer protection mission

In Defense of Animals v. Sanderson Farms, Inc., 2021 WL 4243391, No. 20-cv-05293-RS (N.D. Cal. Sept. 17, 2021)

Let’s play the fun game “which of these statements about standing should make IP people nervous?”

Previously, Friends of the Earth and the Center for Food Safety sued Sanderson Farms on the claim its advertisements for chicken were misleading. Ultimately, the Ninth Circuit agreed that they lacked organizational standing because they hadn’t diverted resources to combat the challenged conduct. FoE sued Sanderson again, but the court found that it was just trying to work around the infirmities of that first case. The plaintiffs here “followed what [they] understood to be the Ninth Circuit’s implicit commands to publish action alerts, address Sanderson’s advertising in blog posts, and petition Sanderson.” But none of that meant they’d diverted resources.

More fundamentally,

organizational standing requires an injury to the organization itself, not merely its interests. An organization’s entirely voluntary action cannot confer standing, no matter its quality or quantity. The organization must be forced to respond to prevent injury …. Even if the Plaintiffs had transformed themselves entirely into anti-Sanderson advocates, they would not have standing because it would not have been due to any injury by Sanderson.

[Now ask: is unfair advantage to the defendant the same thing as injury to the plaintiff?]

For organizational standing, it is not enough for there to be “a setback to an organization’s values or interests.” Defendant’s conduct must result in “an actual impediment to the organization’s real world efforts on behalf of such principles.” And the organization must divert resources, not go about business as usual, in repsonse. “Crucially, plaintiffs must show they would have suffered some other injury if they had not diverted resources to fix the problem,” such as losing members. “An organization cannot manufacture standing by choosing to fix problems if they otherwise would not have affected it. Resources must be spent differently than they would have been otherwise.”

This is merely an application of the same rules that apply to individual standing. “If the defendant’s conduct did not force the plaintiff to divert resources, the only injury comes from the plaintiff’s own actions. This self-inflicted injury would not be fairly traceable to the defendant.” Neither organizations nor individuals have standing “by virtue of investigating conduct or starting a new campaign against someone who frustrates its general mission…. Just as an individual cannot gin up standing by researching and tweeting about something that indirectly makes his or her life harder, neither can an organization.” [See also dilution.]

Here, plaintiff IDA didn’t adequately plead any concrete way in which its mission had been frustrated; it wasn’t enough to plead facts showing that “the abstract interests it fights for have been set back by Sanderson’s misleading advertising.” Nor did the complaint plead facts permitting the conclusion that its diversion of resources was required to prevent some other injury to its activities. It alleged 200 hours of work through various activities such as publicity and petitioning the Better Business Bureau’s National Advertising Division. “Even a large new campaign is not enough if the organization is not forced to undertake it.” Most of the activities were voluntary continuations of previous activities, and even petitioning Sanderson or submitting a complaint to NAD “are at root typical of IDA’s advocacy”; they were also fairly traceable to IDA, not to Sanderson. IDA also didn’t explain what it would have done with its time and money otherwise.

Possibly offering some TM hope, the court distinguished cases in which an organizational plaintiff “was forced to respond to constituents.” But note that a lot of times TM plaintiffs don’t or can’t plead more than facts analogous to IDA’s pleading that it “reasonably believed that […] IDA members relied on Sanderson’s misrepresentations,” without alleging that “any members actually sought its guidance, let alone on a scale sufficient to justify diversion of resources.” Plus, in those cases bad things actually happened to the constituents, creating “obvious harm” to the organizations themselves as they struggled to represent their clients.

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