The Ninth Circuit handed down an excellent decision on October 20, resolving an open question as to whether a class action plaintiff can seek future injunctive relief when she won’t get fooled again. This often arises with retail purchases, where a duped consumer who is on the ball enough to be a class representative is not going to go back to the same company to endure the same fraud.
This is a particular problem in California, where the Cali Unfair Competition Law gives a successful plaintiff the right to get prospective relief on behalf of the class without any standing issue.
Because stopping an ongoing fraud is often more costly to defendants than refunding some of their ill-gotten gains (and continuing the fraud), companies often remove state cases to federal court and then claim lack of Article III jurisdiction.
The Court noted this intentionally ironic act by defendants:
We observe—although our conclusion is not based on this consideration—that our holding alleviates the anomalies the opposite conclusion would create. As [a district] court aptly recognized, “[a]llowing a defendant to undermine California’s consumer protection statutes and defeat injunctive relief simply by removing a case from state court is an unnecessary affront to federal and state comity [and] . . . an unwarranted federal intrusion into California’s interests and laws.”
The Court firmly rejected this maneuver:
We hold that a previously deceived consumer may have standing to seek an injunction against false advertising or labeling, even though the consumer now knows or suspects that the advertising was false at the time of the original purchase, because the consumer may suffer an “actual and imminent, not conjectural or hypothetical” threat of future harm.
I can't wait to see how defendants try to put a spin on this excellent opinion.
(There's also a wonderful concurrence, discussing the anomalous treatment of standing in instances like this.)
