class certification

Shocked, shocked to find that [Yogurt] is going on in here!

False Advertising, Injunctive Relief, , ,

** Purported Class Representative Loses Second Bite at Yoghurt Certification After Court Accuses Him of “Manufacturing” Standing **                                                                                          

By: Brent E. Johnson                                                                                                                                                                                                                                                                         

“I Will Never Buy It Again” . . . “Just Kidding.”  We’ve posted about a recent trend in consumer class action litigation: denying standing for injunctive relief to putative class representatives who claim false advertising due to the fact that these would-be class representatives are now unlikely to be misled in a similar way in the future. In Torrent v. Yakult USA, Plaintiff Nicolas Torrent claimed he bought Yakult’s probiotic yogurt drink due to beneficial digestion claims – which he claims was misleading.  Torrent confirmed his utter disdain for Yakult’s yogurt in interrogatory responses: as a result, on January 7, 2016, the District Court for the Central District of California denied class certification, in part, due to Torrent’s lack of standing for injunctive relief.  Torrent v Yakult U.S.A. Inc., No 8:15-cv-00124-CJC-JCG (C.D. Cal Jan. 27, 2015) (Dkt 52).  “Because Torrent has not even alleged that he intends to buy Yakult in the future, let alone submitted evidence to that effect, the Court concludes that he lacks Article III standing to pursue injunctive relief here.” Id. Ten days later, Torrent bought a couple of bottles of Yakult  and shortly thereafter filed a renewed motion for class certification.  Id. at Dkt. 53.  If brevity is the soul of wit, the motion is Louis C.K.  “Plaintiff intends to purchase Yakult in California in the future.”  The Court was having none of it, observing that Torrent either knew he intended to buy Yakult when he filed his initial motion for certification (but told the court the contrary) or his subsequent purchase of the yogurt and declaration he intended to buy even more (never mind the allegedly false advertising) “appears to be an effort to manufacture standing in direct response to this Court’s prior ruling.”  Id. (March 7, 2015) (Dkt. 65).  Torrent’s claims for injunctive relief – based on his “manufactured” evidence – akin to Captain Renault in Casablanca claiming to be “shocked, shocked to find that gambling is going on in here!” (while the croupier hands him a pile of money] – fell on deaf ears.

The Injunction Conundrum

Article III Standing, Consumer Class Action, False Advertising, , , , ,

** Courts Are Inconsistently Grappling With the Question of Whether a Plaintiff Has Standing for an Injunction Prohibiting Misleading Behavior if They are Aware of the Behavior ** . . .                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

 

By: Brent E. Johnson                                                                                                                        

An interesting catch-22 exists with respect to injunctive relief in purported consumer class actions in federal court.  If a plaintiff discovers misleading conduct (for example a mislabeled product), her basis for an injunction would be – relief from the company misleading her again!  But if the plaintiff is aware of the false advertising, is it plausible that she would be misled in future?  To quote the old chestnut – “fool me once, shame on you – fool me twice, shame on me.”  By affirmatively pleading the elements of the misleading conduct, doesn’t a plaintiff inherently disqualify  herself from the standing required to seek an injunction in federal court?  This is the argument that won the day in the recent Yakult case in the Central District of California.  Plaintiff in that case, Nicolas Torrent, sued on the allegation that Yakult’s probiotic beverages that claim to have beneficial cultures which “balance [the] digestive system” are misleading because (according to Plaintiff) there is no credible scientific evidence that the probiotics do what Yakult says they do.  Torrent v Yakult U.S.A. Inc., No 8:15-cv-00124-CJC-JCG (C.D. Cal Jan. 27, 2015) (“By definition, healthy people already have a stable digestive health balance of trillions of intestinal bacteria. Yakult, contrary to what defendant advertises, cannot make a healthy person more healthy in terms of digestive health or otherwise.”)  Plaintiff claimed that Yakult violated California’s Unfair Competition Law (UCL) (Cal. Bus. & Prof. Code § 17200 et seq.) and that he was entitled to restitution and injunctive relief.  Id. at ECF No. 32, Second Amended Compl. ¶¶ 14 – 16.  Curiously, though, by the time of the motion for class certification, Plaintiff dropped his demand for restitution or money damages and only asserted a claim for injunctive relief.  Id. at ECF No. 41, Pl.’s Mot. for Class Cert. ¶ 4.  With only the injunction at issue, the lawsuit became a test case of sorts.  In answering the question, the district court was clear that plaintiff did not have standing as there was “[in]sufficient likelihood that [he] will be wronged in a similar way.”  Id. at ECF No. 52, Order (January 5, 2016) citing Los Angeles v. Lyons, 461 U.S. 95, 111 (1983); O’Shea v. Littleton, 414 U.S. 488, 495-96 (1974) (“Past exposure to illegal conduct does not in itself show a present case or controversy regarding injunctive relief … if unaccompanied by any continuing, present adverse effects.”)  The court noted the split within the Central District of California on the standing issue (see In re ConAgra, 302 F.R.D. 537, 573 – 76 (C.D. Cal. Aug. 1, 2014) (collecting cases)) and acknowledged the counter-argument that to deny injunctive relief would upset the enforcement of the UCL – but ultimately decided that it was not the courts’ place to carve out Article III standing exceptions for consumers.  Order at 6 – 8.  On that basis, Rule 23 class certification was denied.  Highlighting the split on this standing issue, a district court in Illinois just a few days later held the opposite.  Leiner v. Johnson & Johnson Consumer Co., Inc., No. 15-c-5876, (N.D. Ill. Jan. 12, 2016).  In this case. plaintiff claimed that Johnson & Johnson violated the Illinois Consumer Fraud and Deceptive Business Practices Act by labeling and advertising two “Baby Bedtime Bath products” as “clinically proven” to help babies sleep better – when it  allegedly knew the products hadn’t been clinically proven to have that effect. Plaintiff sought to represent a class of Illinois purchasers.  The Illinois court aligned itself with courts that have held that consumers don’t forfeit standing by knowing the basis of their claims observing that, without an exception, consumers could never avail themselves of injunctive relief.