Third Circuit holds that misrepresentation of safety isn’t actionable false advertising for consumables that didn’t cause individual harm

In re: Johnson & Johnson Talcum Powder Products
Marketing, Sales Practices & Liability Litig., 903 F.3d 278 (3d Cir. 2018)
Plaintiff Estrada alleged that perineal use of Johnson &
Johnson’s Baby Powder can lead to an increased risk of developing ovarian
cancer.  Over a dissent, the court of appeals held
that a plaintiff suffered no Article III injury when she bought a product that
she now believes she should never have bought: buyer’s remorse is not
cognizable, and a purchase is itself not an economic injury where the buyer got
the benefit of the bargain.
Estrada didn’t allege even an increased risk of cancer, or
emotional injury from the fear of developing cancer, or medical monitoring
costs.  Nor did she allege that the
product didn’t live up to its claims: “designed to gently absorb excess
moisture,” “keep[ ] skin feeling soft, fresh and comfortable,” and “reduce the
irritation caused by friction.” Nor did she allege that she still possessed a
durable but now-useless product; she’d consumed what she’d bought, so she also
didn’t allege transaction costs associated with reselling or returning Baby
Powder. The core allegation was that, if she’d known of the risk, she wouldn’t
have bought the powder in the first place.
She might have successfully pled economic injury by pleading
that she’d have bought a less expensive alternative, and her complaint did
suggest that alternative cornstarch-based products existed that didn’t pose the
same risk. But she failed to allege that cornstarch-based products would have
been cheaper, or that there was a price premium associated with J&J’s
superiority claims for its products.
On appeal, she argued that she hadn’t received the benefit
of the bargain: she paid for a product that didn’t increase the risk of ovarian
cancer but received one that did, which was worth less than what she paid. But
she got baby powder that “successfully did what the parties had bargained for
and expected it to do: eliminate friction on the skin, absorb excess moisture,
and maintain freshness.” But wasn’t she also, at least implicitly, promised
that the product would do that safely?
 To have Article III standing, a
plaintiff has to allege “facts that would permit a factfinder to value the
purported injury at something more than zero dollars without resorting to mere
conjecture.”
Although courts often “credit allegations of injury that
involve no more than ‘application of basic economic logic,’ … there is a
difference between allegations that stand on well-pleaded facts and allegations
that stand on nothing more than supposition.” References to future expert
opinions weren’t enough to establish constitutional standing, even though the majority
also said that “a plaintiff need not develop detailed economic models at the
pleading stage to establish that she has standing.”  Here, all Estrada alleged was that, although she
bought the product at a given price, she later wished that she hadn’t.
But what about that implied promise of safety? Why not
presume that Estrada would pay more for safe than unsafe powder?  First, to presume that “would turn the
standing question on its head” because federal courts lack jurisdiction unless
the record shows that it exists. [That’s a weird move. Not all allegedly
implied promises are promises of safety; especially since we can rely on other
economic theories in the standing inquiry, it seems very commonsensical to
infer the relevance of safety, which wouldn’t provide standing in every case even if it would provide
standing in every case about safety.] “[O]ur refusal to leap to such a
conclusion is supported by Estrada’s apparent desire to continue purchasing
Baby Powder in the future despite being aware of its alleged health risks.” That
desire apparently wasn’t conditioned on receiving a price discount in the
future.
Second, Estrada’s own allegations indicated that the powder
she received was safe for her, given
the absence of allegations about risk to her.
The majority clarified that there was no conflict with its
reading of Kwikset Corp. v. Superior Court, 51 Cal.4th 310, 120 Cal.Rptr.3d
741, 246 P.3d 877 (2011), which held that, “[f]or each consumer who relies on
the truth and accuracy of a label … the economic harm is the same: the
consumer has purchased a product that he or she paid more for than he or she
otherwise might have been willing to pay if the product had been labeled
accurately.” The key language was “paid more”: in Kwikset, there was a sufficient pleading that the plaintiffs didn’t
receive the benefit of their bargain.
Thus, Estrada’s claim for restitution also failed.  And her claims were “further weakened by her
alleged desire to purchase Baby Powder in the future despite knowing of its
alleged health risks,” which suggested that other consumers might want to do so
too. Also, “consumers are already highly informed of the alleged health risks
associated with Baby Powder given the numerous publicly available studies and
publications that she cites in her complaint. Estrada’s complaint refers to,
inter alia, … a pamphlet allegedly distributed ‘to all ovarian cancer patients
at nearly every medical facility in the United States.’ Wouldn’t such
widespread knowledge already have been factored into the current market price
of Baby Powder? And if so, how did Johnson & Johnson earn unlawful profits
by withholding information that the market might have already taken account of?”
[This argument is unworthy of a circuit court. 
As far as I can tell, Estrada never alleged that consumers of baby
powder are “highly informed” of the health risks, even if other people know
(ovarian cancer patients strike me as finding out too late, for example).]
And for injunctive relief, Estrada’s knowledge of the risks
made her unlikely to suffer future injury; the court wouldn’t allow a “stop me
before I buy again” claim.  “The law
affords Estrada the dignity of assuming that she acts rationally, and that she
will not act in such a way that she will again suffer the same alleged ‘injury.’”
Judge Fuentes dissented, beginning with the possibly relevant
fact that juries around the country have found J&J liable for its powder’s
propensity to increase ovarian cancer risks. Estrada alleged that, if she’d
known that, she wouldn’t have bought the powder. In the abstract, it was
correct that a plaintiff who gets the benefit of her bargain can’t claim injury
in fact. But the majority ignored key terms in that bargain, in the dissent’s
view, specifically safety. Estrada alleged that J&J held the product out as
safe.
The powder need not be unsafe as to Estrada in order for
safety to be part of her bargain. Her economic harm wasn’t an increased risk of
cancer. Her harm was the economic harm caused by purchasing a product due to
J&J’s misrepresentation about safety. 
She alleged that she wouldn’t have bought the product had she known the
truth, and that’s an Article III injury in fact.  Its actual safety as to her was non-economic
harm, not at issue.
The dissent addressed the majority’s hypothetical—what if
J&J had been able to go back in time 50 years, when Estrada first started
buying the product, and reassure her (based on what we know from her
allegations) that she personally wouldn’t be among the people harmed by the
product? The majority concluded that this “legal fiction” proved that she hadn’t
been harmed. 
But safety representations have two related meanings: First,
“is this going to hurt and/or kill me?” That was the realm of products
liability.  Second, “is this product safe
in general?”  Consumers might want to
know this because, among other things, they might be buying the product for
others’ use.  And they also might want to
know this simply because it’s among the reasons to choose one product over
others.  Kwikset showed why Estrada did suffer injury: she wanted something
that she didn’t get, despite the alleged misrepresentation that she would get
it. “I see no reason we should devote ourselves to understanding why a
plaintiff values what she values.”  We
don’t ask whether an observant Jew’s preference for kosher meat represents
anything real, or a Rolex consumer’s preference for a real Rolex over a
substantively identical counterfeit. All they had to do was plausibly allege
that they wouldn’t have bought a properly labeled product, or wouldn’t have
paid as much for it.  So too here.
Estrada alleged that she valued “safety.” That should be enough. [There is a
real basis for this preference, too.  Time-travel
fantasies aside, I want to know what general risks products pose when I buy
them. I don’t expect Dr. Who or J&J to pop out and reassure me that I’ll dodge a bullet, and
I doubt I’d believe them if they did.] 
There was no attenuated causal chain here; she alleged that she wouldn’t
have bought the product had she known the truth, making the injury the total
sum she paid.
The dissent would further hold that injury was “no more than
application of basic economic logic.”  “Dealing
only with the allegations of the pleadings, it seems sufficiently elementary
that a product held out as safe will command a higher price than a product held
out as markedly increasing a woman’s risk of developing ovarian cancer.”  As for allegations about willingness to
purchase again, the majority read her pleadings to state that she was willing to
buy the product as-is, but it made more sense that her pleaded desire to buy
baby powder in the future was contingent on J&J credibly offering a product
that met the terms of her bargain.  “She
is only unlikely to suffer future economic injury if we presume that Johnson
& Johnson has lied and will continue to lie in its labeling, or that
Estrada will assume that any label offered by Johnson & Johnson is
untruthful.”
Plus, the majority’s interpretation of lack of standing to
seek injunctive relief essentially struck down a part of California’s UCL,
which was not a good idea.

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