Ninth Circuit Right On Standing For Previously Deceived Consumers'but Uncertainty Remains

• Published date: 22 September 2021
• Subject Matter: Consumer Protection, Litigation, Mediation & Arbitration, Media, Telecoms, IT, Entertainment, Consumer Law, Class Actions, Advertising, Marketing & Branding
• Law Firm: Winston & Strawn LLP
• Author: Jeff Wilkerson and Patrick E. Hogan

Key takeaway

The Ninth Circuit recently held that previously deceived consumers lacked Article III standing to enjoin Coca-Cola from labeling its Coke products as free of artificial flavors and chemical preservatives where they alleged nothing more than an interest in proper labeling. The unpublished decision demonstrates that defendants can prevail on this issue when facing a potential injunction against their advertising or labeling, but leaves uncertainty and potential ammunition for consumer-fraud plaintiffs.

In June, we warned that In re Coca-Cola Products could deepen the divide between the Ninth Circuit and other courts on a recurring issue in consumer class actions-whether plaintiffs have standing to seek injunctions barring allegedly false advertising or labeling. This is an important issue for defendants-even in cases with relatively low potential for monetary exposure, such injunctions threaten expensive and disruptive labeling and advertising changes. Several weeks ago, the Ninth Circuit held (in an unpublished memorandum decision) that plaintiffs alleging mislabeling of Coke had "not demonstrated a threat of future harm sufficient to support their claim for injunctive relief."¹ The Ninth Circuit got it right, but Coca-Cola still leaves some uncertainty about standing for injunctive relief in this circuit.

Several other circuits have correctly held that, because the plaintiffs necessarily know about deceptive advertising or labeling alleged in their own complaints and thus cannot be deceived again, plaintiffs in such cases lack the "imminent risk" of future injury necessary for standing to seek injunctive relief.² The Ninth Circuit is the outlier. In 2018, it held in Davidson that "misled consumers may properly allege a threat of imminent or actual harm" in two situations: where a plaintiff plausibly alleges that she (1) "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," or (2) "might purchase the product in the future . as she may reasonably, but incorrectly, assume the product was improved."³ Although undoubtedly a blow to defendants, several courts-including the Ninth Circuit itself in other unpublished decisions-later distinguished Davidson and held that previously deceived consumers lacked standing for injunctive relief under certain circumstances.⁴

Coca-Cola put the question squarely before the Ninth Circuit again. At issue were allegations...