AARP endorsement of insurer doesn’t inherently represent that AARP chose disinterestedly

Levay v. AARP, Inc.,
2019 WL 2108124, No. 17-09041 DDP (PLAx) (C.D. Cal. May 14, 2019)
Plaintiffs are AARP
members who allege to have “joined and paid to be AARP members” after being allegedly
“induced … through unlawful, misleading and/or unfair representations of
products, services and endorsements by AARP and/or concealment of AARP’s
unlawful ‘for profit’ business activities.” Specifically, they alleged reliance
on “AARP’s misrepresentations that it protected seniors and that it put their
interests first ahead of ‘for profit’ business ventures, and about its
endorsements of insurance products.” Plaintiffs alleged that AARP’s stamp of
approval was only a “stamp indicating the winner of [a] bidding war,” rather
than a true endorsement on the merits. They brought California UCL and FAL
claims.  The court found they failed to
state a claim.
Initially, the court
rejected the argument that the complaint didn’t allege any “statements by AARP,
only advertisements run by United Healthcare and New York Life ….” The
relevant representations were (1) solicitations and ads from AARP in which it
represents its status and role as an advocate for seniors, and (2) AARP
endorsements on United and New York Life insurance advertisements. “AARP does
not dispute that it permits its name to appear on the advertisements and that
AARP in fact endorses these products. Therefore, the endorsements constitute
AARP’s representations even though they appear on United and New York Life
But was there an
actionable misrepresentation?  Plaintiffs
alleged that they “believed that AARP endorsed products and services, such as
insurance products, were products and services that were the best for seniors.”
But “best” was too vague ans subjective a promise of superiority, even if
implied, to be actionable. By contrast, in Hanberry v. Hearst Corp., 276 Cal.
App. 2d 680 (1969), the Hearst Good Housekeeping seal of approval could have
deceived someone who bought defective shoes. The court held that “[i]mplicit in
the seal and certification is the representation [that] respondent has taken
reasonable steps to make an independent examination of the product endorsed,
with some degree of expertise, and found it satisfactory.” But it was key that
Good Housekeeping magazine stated: “ ‘This is Good Housekeeping’s Consumers’
Guaranty’ and ‘We satisfy ourselves that products advertised in Good
Housekeeping are good ones and that the advertising claims made for them in our
magazine are truthful.’ ” “The seal itself contained the promise, ‘If the
product or performance is defective, Good Housekeeping guarantees replacement
or refund to consumer.’ ” These express guarantees “made a consumer’s reliance
on Good Housekeeping’s independent examination reasonable.”  And even if an implied promise of superiority
was actionable, plaintiffs didn’t identify any defects in these insurance
What about an
implied representation that AARP had evaluated the insurance plans for
suitability for seniors, “irrespective of profits”?  AARP wasn’t a fiduciary just because it was a
nonprofit. Plaintiffs allegedly saw “solicitations and ads from AARP … in
which AARP represented its non-profit status and advocacy role for seniors and
that it provide[d] endorsements for products and services as a benefit of
membership, which [Plaintiffs] believed meant that AARP would [ ] make
endorsements and stamps of approval based on what was best for seniors, rather
than based on profits.”
“A representation
that a product is selected irrespective of profits could be an actionable
misrepresentation because it is sufficiently specific and objectively
determinable such that a consumer could reasonably rely on such representation.”
But the complaint didn’t sufficiently allege such a representation. Sample ads
in the complaint said that United Healthcare and New York Life Insurance
Companies “pay[ ] royalty fees to AARP for the use of its intellectual
property.” “Therefore, it would not be reasonable for a consumer to believe
that AARP was not engaged in revenue generating activities,” and there was no
allegation of any representation that revenue concerns played no role in its
endorsement decisions. “It would be foolish indeed for an enterprise,
regardless of its status as a non or for-profit entity, to be blind, all other
factors being substantially equal, to revenue generating opportunities. In
short, there is nothing nefarious about AARP making endorsement decisions, or
any other business decisions, based on generating maximum revenue that will be
used to support its activities, absent some allegation that such decision
resulted in articulable harm to its members.” It wasn’t enough to allege that
AARP benefited.
Separately, the
court found that plaintiffs didn’t plead with particularity the ads they relied
on or when/how they became AARP members.

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