9th Circuit rules inability to trust future representations provides standing for injunctive relief

Davidson v. Kimberly-Clark Corp., 2017 WL 4700093, — F.3d
–, No. 15-16173 (9th Cir. Oct. 20, 2017)
Rejecting a number of district court decisions, the Ninth
Circuit finds standing to seek injunctive relief under California consumer
protection laws even when the named plaintiff now knows the truth: “A
consumer’s inability to rely in the future upon a representation made on a
package, even if the consumer knew or continued to believe the same
representation was false in the past, is an ongoing injury that may justify an
order barring the false advertising.” 
This case involves wipes advertised as “flushable” which allegedly are
not. Davidson would like to buy truly flushable wipes, if such actually exist.
The district court dismissed the complaint under Rule 9(b))
because it concluded that Davidson failed to adequately allege “why” the
representation that the wipes were flushable was false; she didn’t allege that
she personally experienced problems with her home plumbing or the relevant
water treatment plant.  The court of
appeals reversed, finding her allegations sufficient and plausible.  Davidson alleged that flushable means
“suitable for being flushed,” requiring an item to be capable of dispersing
within a short amount of time. This definition of flushable was supported by
dictionary definitions and Kimberly–Clark’s own statement on its website that
its flushable wipes “are flushable due to patented technology that allows them
to lose strength and break up when moving through the system after flushing.”  Davidson alleged that the actual wipes she
purchased failed to “disperse and disintegrate within seconds or minutes” and “did
not break up in the toilet bowl like toilet paper but rather remained in one
piece.”  To the extent the district court
dismissed the original complaint because Davidson failed to allege facts
“showing how she came to believe that the [Scott Wipes] were not ‘flushable,’ ”
that was wrong, because the complaint otherwise satisfied Rule 9(b).
The district court also held that Davidson didn’t allege
damages, in that she hadn’t pled “facts showing that her use of the wipes
damaged her plumping, pipes, or septic system.” But that wasn’t required—paying
a premium for a falsely advertised product is sufficient harm to maintain a
cause of action.  Davidson alleged that,
without the misrepresentation, she wouldn’t have bought the wipes or would have
paid less for them; that was enough.
Article III standing for injunctive relief: A plaintiff must
demonstrate constitutional standing separately for each form of relief
requested. The courts that have found no standing to seek injunctive relief generally
reason that “plaintiffs who are already aware of the deceptive nature of an
advertisement are not likely to be misled into buying the relevant product in
the future and, therefore, are not capable of being harmed again in the same
way.” The court of appeals disagreed:
Knowledge that the advertisement or
label was false in the past does not equate to knowledge that it will remain
false in the future. In some cases, the threat of future harm may be the
consumer’s plausible allegations that she will be unable to rely on the
product’s advertising or labeling in the future, and so will not purchase the
product although she would like to. In other cases, the threat of future harm
may be the consumer’s plausible allegations that she might purchase the product
in the future, despite the fact it was once marred by false advertising or
labeling, as she may reasonably, but incorrectly, assume the product was improved.
This result also prevents the untoward result that,
otherwise, removing a case from state to federal court—as happened here—would
enable a defendant to get rid of a remedy otherwise available.  After all, “the primary form of relief
available under the UCL to protect consumers from unfair business practices is
an injunction.” Without injunctive relief, “California’s consumer protection
laws would be effectively gutted.”  Or
there could be a “perpetual loop” of “plaintiffs filing their state law consumer
protection claims in California state court, defendants removing the case to
federal court, and the federal court dismissing the injunctive relief claims
for failure to meet Article III’s standing requirements.”
Given Davidson’s allegations, she adequately alleged a
desire to buy flushable wipes and an inability to rely on Kimberly-Clark’s
representation of flushability, which was enough to constitute a “threatened
injury [that is] certainly impending,” thereby establishing Article III
standing to assert a claim for injunctive relief.
Judge Berzon concurred, noting that the majority assumed
that it was required to perform a separate standing analysis for each “form of
relief.”  She disagreed that this
assumption was a requirement of the “case or controversy” requirement of
Article III, and argued that it was instead “an artifact of the discredited
practice of conflating the prerequisites for injunctive relief with the Article
III prerequisites for entry into federal court.” Instead, “we have a single
dispute—a single case, a single controversy—giving rise to multiple forms of
relief.”  Where “state law clearly
envisions those remedies as the product of a single adjudication of a single
issue,” to proceed otherwise in federal court “fundamentally undermines,
substantively, the enforcement of state laws in federal court.”  A remand to state court on injunctive relief
alone was motivated by the same desire not to let defendants strip plaintiffs
of their state-law remedies through removing a case over which there is clearly
Article III jurisdiction, but was not an acceptable solution. 
Citing Lexmark,
she contended that federal courts “have a history of improperly elevating the
prerequisites for relief to the status of jurisdictional hurdles.” In Judge
Berzon’s reading, the Supreme Court case on which the 9th Circuit
relied to require separate Article III analysis of each remedy in previous
cases, Lyons, did not actually make
the jurisdiction/remedy mistake, but rather inquired into whether the
nonjurisdictional requirements for equitable prospective relief were met, and
concluded they were not because of the absence of irreparable harm. This is of
little consequence in most cases following Lyons,
because where the availability of injunctive relief is governed by federal law,
the common-law prerequisites for injunctive relief “must eventually be
satisfied, and largely mirror the standing prerequisites.” But that’s not good
enough when this interpretation “imposes substantive limits on the availability
of relief under state law, in the service of constitutional interests that
aren’t actually under threat.” 

Still, Judge Berzon concurred fully, recognizing that the 9th
Circuit en banc opinion interpreting Lyons
the other way does require a separate standing analysis with regard to
prospective relief. 

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