State of California v. IntelliGender

IntelliGender sold and advertised the IntelliGender Prediction Test as an accurate predictor of a fetus's gender using the mother's urine sample. The district court approved a Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d), settlement between a nationwide certified class of purchasers of the Test and IntelliGender. The State subsequently filed an enforcement action against IntelliGender under the State's Unfair Competition and False Advertising Laws, largely based on the same claims as the class action. The court concluded that the district court correctly denied IntelliGender's motion to enjoin the State's enforcement action in its entirety where IntelliGender had not met its burden of showing that the CAFA class action settlement could bind the State in its sovereign capacity, where it asserted both public and private interests. The court agreed that a CAFA class action settlement, though approved by the district court, does not act as res judicata against the State in its sovereign capacity, even though many of the same claims are included in both actions. Because the State action is brought on behalf of the people, it implicates the public's interests as well as private interests, and therefore the remedial provisions sweep much more broadly. The court concluded, however, that the State is precluded from seeking the same relief sought in the CAFA class action where IntelliGender provided notice to the appropriate parties of the class action and the State chose not to participate. Therefore, the district court erred in denying IntelliGender's motion to enjoin the State's claims for restitution. Accordingly, the court affirmed in part and reversed in part. View "State of California v. IntelliGender" on Justia Law