Judge Illston’s recent summary judgment ruling in Rahman v. Mott’s LLP, Case No. CV 13-3482 SI (N.D. Cal. Oct. 14, 2014), highlights courts’ varied approaches to the level of proof required to demonstrate Article III injunctive standing and consumer deception. The court’s opinion also represents a significant win for defendants facing food labeling claims.
In Mott’s, the plaintiff challenged the “No Sugar Added” statement on Mott’s 100% Apple Juice, claiming the statement misled him into believing the product was healthier than other juices and caused him to buy more juice than he would have absent the statement. Plaintiff brought claims for injunctive relief and damages under the unlawful, unfair, and fraudulent prongs of California’s Unfair Competition Law (UCL), California’s False Advertising Law (FAL), California’s Consumers Legal Remedies Act (CRLA), and for negligent misrepresentation, and breach of quasi-contract. Mott’s moved for summary judgment.
Judge Illston granted Mott’s motion as to plaintiff’s claim for injunctive relief and his claims under the CLRA, FAL, and the fraud and unfair prongs of the UCL, and for negligent misrepresentation.
Injunctive Relief – Proof of Future Purchase Insufficient; Proof of Future Deception Required.
In considering Mott’s argument that plaintiff lacked Article III standing for injunctive relief, Judge Illston held that the plaintiff’s knowledge of allegedly unlawful or misleading conduct precludes Article III injunctive standing, as the plaintiff cannot be misled by the statement in the future. Under California’s consumer protection laws, a plaintiff must prove reliance on unlawful or deceptive conduct to suffer a cognizable injury, past or present. In detailing how Mott’s “No Sugar Added” label was deceptive, plaintiff could not plausibly allege that he would be misled by the challenged statement again. His alleged intent to purchase the products again was insufficient:
Absent showing a likelihood of future harm, a plaintiff may not manufacture standing for injunctive relief simply by expressing an intent to purchase the challenged product in the future.
Given that any future deception was implausible, plaintiff could not meet his burden to demonstrate Article III injunctive standing.
Reasonable Consumer Standard – Proof of Individual Deception Insufficient; Survey Evidence Required.
Judge Illston also found that the plaintiff failed to meet his burden in showing that reasonable consumers would likely be deceived by Mott’s “No Sugar Added” label. The court first detailed divergent approaches to the “reasonable consumer” analysis, comparing three courts that required a plaintiff to produce extrinsic evidence, such as a consumer survey, to meet his burden of proof, with three courts adopting “a less data-driven approach,” instead requiring a plaintiff show that “reasonable minds could differ” as to the statement’s deceptiveness.
Although stating she need not resolve the conflict, Judge Illston all but adopted the former position. First, she noted that plaintiff’s evidence that he was deceived failed to raise a triable issue of classwide deception, as “testimony of a single consumer in a putative class of potentially millions is not enough to meet [plaintiff’s] burden.” Second, she found plaintiff’s expert’s report also failed to raise triable issues. The expert did not conduct a consumer survey, but rather stated he could perform one. “A general description of the methodology of a proposed study, standing alone, is not evidence of whether a reasonable consumer is likely to be deceived . . .” Relying only on this evidence, plaintiff failed to raise a triable issue that consumers would be deceived by the “No Sugar Added” statement. The court therefore dismissed plaintiff’s claims under the CLRA, FAL, and unfair and fraud prongs of the UCL, as well as his claim for negligent misrepresentation. The court let stand plaintiff’s claim under the UCL’s “unlawful” prong, however, finding that plaintiff raised a triable issue as to whether he relied on Mott’s “No Sugar Added” statement, which allegedly violated federal regulations.
Judge Illston’s holding represents a major win for companies defending against mislabeling claims, as it requires plaintiffs to offer more proof to keep their claims alive. It remains to be seen whether more courts will follow Judge Illston’s direction, reaching consensus and raising the bar for mislabeling plaintiffs, or whether the dividing lines will only grow deeper.