Justia U.S. 9th Circuit Court of Appeals Opinion Summaries

A consumer purchased a licorice product manufactured by a Minnesota company, relying on packaging that stated the product was “Naturally Flavored,” “Natural Strawberry & Raspberry Flavored Licorice,” and “Free of . . . Artificial Colors & Flavors.” The consumer later learned, through laboratory testing, that the product contained DL malic acid, which is an artificial flavor created from petrochemical sources. The consumer alleged that this ingredient rendered the product’s labeling false or misleading, and filed a putative class action in California, asserting claims for violation of the California Consumers Legal Remedies Act, unjust enrichment, and breach of express warranty.The United States District Court for the Southern District of California dismissed the complaint with prejudice. The court found that the complaint failed to plead with sufficient particularity that the malic acid was artificial, thus not meeting the heightened pleading standard of Federal Rule of Civil Procedure 9(b). The district court also held that the plaintiff did not plausibly allege that a reasonable consumer would be misled by the product’s labeling, reasoning that the labels did not explicitly state the product was “all natural” or “100% natural,” and that the ingredients list disclosed both natural and artificial ingredients.On appeal, the United States Court of Appeals for the Ninth Circuit reversed the district court’s dismissal. The appellate court held that the complaint satisfied Rule 9(b) because it identified the specifics of the alleged fraud and provided details about the laboratory testing. The court also held that the plaintiff plausibly alleged that a reasonable consumer could be misled by the product’s claim to be free of artificial flavors when it allegedly contained an artificial flavor. The case was remanded for further proceedings. View "TRAMMELL V. KLN ENTERPRISES, INC." on Justia Law

A manufacturer of biodegradable coolers developed and released its product several years before a competing company launched a similar cooler. The first manufacturer’s early product was initially not available in retail stores but was later marketed directly to consumers. The competing company’s cooler, introduced later, was sold in major retail chains. The dispute arose when the second company advertised its cooler as the “world’s first eco sensitive cooler, made from 100% biodegradable materials.” The first manufacturer objected, asserting that these statements were false because it had marketed a biodegradable cooler before its competitor.The first manufacturer sued in the United States District Court for the Northern District of California, alleging false advertising under the Lanham Act and unfair competition under California law. The claim was that the competitor’s statements about being “first” deprived it of recognition, market cachet, and associated goodwill, causing harm to its reputation and marketing opportunities. The district court held that the Lanham Act does not provide a cause of action for claims based on inventorship or being “first to market” and granted summary judgment to the defendant. The court found the state law claim derivative and dismissed it as well.On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s decision. The Ninth Circuit held that, under the Lanham Act, actionable false advertising must concern observable characteristics of the tangible product, not the origin of ideas or claims of market primacy. It concluded that statements about which company was first to market refer to the origin of a concept, not the qualities or characteristics of the product itself, and thus are not cognizable under the Lanham Act. The court also found that the plaintiff had waived any argument that consumers were confused about whether its product was biodegradable. The judgment for the defendant was affirmed. View "VERICOOL WORLD, LLC V. IGLOO PRODUCTS CORP." on Justia Law

Several individuals alleged that Google collected and misused the private browsing data of Chrome users who utilized Incognito mode, despite Google’s representations about the privacy of this feature. In June 2020, five plaintiffs brought a putative class action on behalf of these users, seeking both injunctive relief and damages. After extensive discovery, the United States District Court for the Northern District of California certified a class for injunctive relief but denied certification for a damages class, finding the plaintiffs had not shown that common issues predominated over individual ones.Following the denial of damages class certification, the named plaintiffs sought review in the United States Court of Appeals for the Ninth Circuit under Rule 23(f), but the petition was denied. The case proceeded, and as trial approached, the parties settled: Google agreed to change its policies, the named plaintiffs would arbitrate their individual damages claims, and they waived their rights to appeal the denial of damages class certification. The settlement explicitly stated that absent class members were not releasing damages claims or appellate rights. Several months after the settlement, a group of 185 Chrome users, referred to as the Salcido plaintiffs, moved to intervene to preserve absent class members’ appellate rights regarding damages.The United States Court of Appeals for the Ninth Circuit reviewed the district court’s denial of the intervention motion. The Ninth Circuit held that the district court did not abuse its discretion in finding the intervention motion untimely. Applying the circuit’s traditional three-part test for intervention—considering the stage of the proceedings, prejudice to other parties, and the reason for and length of delay—the court found that intervention at this late stage would prejudice the existing parties, that the delay was unjustified, and that the timing weighed against intervention. The denial of the motion to intervene was therefore affirmed. View "BROWN V. SALCIDO" on Justia Law

A consumer purchased a set of bed sheets from a major retailer, choosing a more expensive option because the packaging stated the sheets were made of “100% cotton” and had an “800 Thread Count.” After using the sheets, he believed the quality did not match the advertised thread count. He later had the sheets tested by an expert, who determined the actual thread count was much lower. The consumer alleged that it is physically impossible for 100% cotton fabric to reach the advertised thread counts and claimed that the retailer’s labeling was false and misleading.The consumer initially brought a class action in California state court, alleging violations of California’s Unfair Competition Law and Consumer Legal Remedies Act. The retailer removed the suit to the United States District Court for the Southern District of California. The retailer moved to dismiss the complaint, arguing that the consumer failed to adequately plead his claims and that the impossibility of the claimed thread count meant no reasonable consumer would be misled. The district court agreed and dismissed the case with prejudice, relying on the Ninth Circuit’s decision in Moore v. Trader Joe’s Co., interpreting it to mean that literally impossible claims cannot deceive reasonable consumers as a matter of law.The United States Court of Appeals for the Ninth Circuit reviewed the dismissal de novo. The court held that the district court erred in its interpretation of Moore. The appellate court clarified that claims of literal falsity are actionable under California consumer protection laws and that even physically impossible claims may deceive reasonable consumers. The court reversed the district court’s dismissal and remanded the case for further proceedings, holding that the consumer’s allegations were sufficient to survive a motion to dismiss. View "PANELLI V. TARGET CORPORATION" on Justia Law

A consumer purchased a Brita water filter product, alleging that the product’s labeling and packaging led him to believe it would remove or reduce hazardous contaminants in tap water to below laboratory-detectable levels. He contended that the packaging conveyed the impression that the product would eliminate a broad range of harmful substances, but did not clearly or conspicuously state that it would not do so. The consumer claimed that he would not have purchased the product or would have paid less if he had known its actual capabilities, and asserted that reasonable consumers would have similar expectations based on the labeling.After Brita removed the lawsuit to the United States District Court for the Central District of California, the district court dismissed the complaint in its entirety without leave to amend. The district court found that the plaintiff’s claims for affirmative misrepresentation and material omission failed, applying the reasonable consumer standard and concluding that no reasonable consumer would interpret Brita’s packaging as promising removal of all hazardous contaminants to below lab-detectable limits. The district court also found the plaintiff lacked standing for certain statutory claims and determined that amendment would be futile.The United States Court of Appeals for the Ninth Circuit reviewed the district court’s dismissal and affirmed the decision. The appellate court held that no reasonable consumer would expect Brita’s water filter products to remove or reduce all hazardous contaminants to below laboratory-detectable levels, especially in light of Brita’s disclosures about the products’ capabilities and limitations. The court further held that the omission claim failed as a matter of law under the reasonable consumer standard. Finally, the appellate court concluded that the district court did not abuse its discretion by denying leave to amend, as amendment would not cure the defect. Judgment was affirmed. View "BROWN V. THE BRITA PRODUCTS COMPANY" on Justia Law

An Iranian citizen, living in the United States, held a credit card account with a large financial institution. Due to United States sanctions against Iran, federal regulations prohibit U.S. banks from providing services to accounts of individuals ordinarily resident in Iran, unless those individuals are not located in Iran. The bank had a compliance policy requiring account holders from such sanctioned countries to regularly provide documents showing they were not residing in those countries. The plaintiff, subject to this policy, submitted various documents as proof of U.S. residency. After the bank mistakenly treated one of his residency documents as temporary rather than permanent, it closed his account when he failed to submit additional documentation.The plaintiff sued in state court, alleging violations of federal and state anti-discrimination and consumer protection statutes, including 42 U.S.C. § 1981, the Equal Credit Opportunity Act, the California Unruh Civil Rights Act, and the California Unfair Competition Law. The defendant bank removed the case to the United States District Court for the Southern District of California. The district court granted summary judgment for the bank on all claims except for an ECOA notice claim and a related UCL claim, both of which the plaintiff later voluntarily dismissed. The plaintiff then appealed.The United States Court of Appeals for the Ninth Circuit held that the International Emergency Economic Powers Act’s liability shield provision immunizes the bank from liability for good faith actions taken in connection with compliance with sanctions regulations, even if such actions are not strictly compelled by the regulations. The court found that the bank’s policy was consistent with federal guidance and that the plaintiff failed to show a genuine dispute of material fact regarding the bank’s good faith. The Ninth Circuit affirmed the district court’s judgment in favor of the bank. View "NIA V. BANK OF AMERICA, N.A." on Justia Law

A national trade association representing large online businesses challenged a recently enacted California statute designed to protect minors’ privacy and well-being online. The law imposes specific requirements on businesses whose online services are likely to be accessed by children under eighteen, including obligations regarding data use, age estimation, and restrictions on certain user interface designs known as “dark patterns.” Before the law took effect, the association brought suit in the United States District Court for the Northern District of California, arguing that several provisions were unconstitutional on First Amendment and vagueness grounds, and sought a preliminary injunction to prevent enforcement.The district court initially enjoined the entire statute, finding the association was likely to succeed on its facial First Amendment challenge. On the State’s appeal, the United States Court of Appeals for the Ninth Circuit vacated most of the injunction, affirming only as to a specific requirement regarding Data Protection Impact Assessments and related inseverable provisions, and remanded for the district court to analyze the association’s other facial challenges and the issue of severability under the Supreme Court’s clarified standards in Moody v. NetChoice, LLC. On remand, the district court again enjoined the entire statute and, in the alternative, seven specific provisions.On further appeal, the United States Court of Appeals for the Ninth Circuit held that the association did not meet its burden for a facial challenge to the law’s coverage definition or its age estimation requirement, vacating the injunction as to those. However, the court affirmed the preliminary injunction as to the law’s data use and dark patterns restrictions on vagueness grounds, finding the provisions failed to clearly delineate prohibited conduct. The court vacated the injunction as to the statute’s remainder and remanded for further proceedings on severability. View "NETCHOICE, LLC V. BONTA" on Justia Law

The case involves an Arizona resident who received an unsolicited text message on his cell phone during the 2020 presidential election campaign. The message, sent by the Republican National Committee, included written text and an automatically downloaded video file featuring a still image of Ivanka Trump with a play button overlay. The plaintiff alleged the video contained an artificial or prerecorded voice and stated he never gave prior express consent to receive such messages. He claimed the message was part of a broader campaign targeting Arizona residents.In the United States District Court for the District of Arizona, the plaintiff filed a putative class action, alleging violations of two provisions of the Telephone Consumer Protection Act (TCPA): 47 U.S.C. § 227(b)(1)(A)(iii) and § 227(b)(1)(B), both prohibiting calls using an artificial or prerecorded voice without prior consent. The district court dismissed the complaint with prejudice under Rule 12(b)(6), holding that the statute did not apply because the recipient had to actively press play to hear the video’s audio, and, for the § 227(b)(1)(B) claim, because the message was exempted under FCC regulations for certain nonprofit organizations.On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal. The Ninth Circuit held that the TCPA’s prohibitions apply only to the use of artificial or prerecorded voices in the manner in which a call is begun. Because the text message was made and initiated without the automatic playing of a prerecorded voice—the recipient had to affirmatively choose to play the video—the conduct did not violate the statutory provisions. The court concluded that sending a text message containing a video file that requires recipient interaction to play does not constitute “making” or “initiating” a call “using” a prerecorded voice under the TCPA. View "HOWARD V. REPUBLICAN NATIONAL COMMITTEE" on Justia Law

Milliman, Inc. operates a service that compiles consumer medical and prescription reports, which are then sold to insurers for underwriting decisions. The named plaintiff, James Healy, applied for life insurance, but Milliman provided a report to the insurer containing another person's medical records and social security number. This erroneous report flagged Healy as high risk for several serious medical conditions he did not actually have, resulting in the denial of his insurance application. Healy attempted to correct the report, but Milliman did not timely investigate or remedy the errors.Healy filed a class action in the United States District Court for the Western District of Washington, alleging that Milliman’s procedures violated the Fair Credit Reporting Act by failing to ensure maximum possible accuracy. The district court certified an “inaccuracy class” for those whose reports included mismatched social security numbers and risk flags. Milliman moved for partial summary judgment, arguing that Healy needed to show class-wide standing at this stage. The district court agreed, finding under TransUnion LLC v. Ramirez, 594 U.S. 413 (2021), that Healy had failed to present direct evidence of concrete injury on a class-wide basis, and dismissed the inaccuracy class.On interlocutory appeal, the United States Court of Appeals for the Ninth Circuit held that, following class certification in damages actions, both named and unnamed class members must present evidence of standing at summary judgment. However, the court clarified that plaintiffs may rely on either direct or circumstantial evidence, and need only show that a rational trier of fact could infer standing, not that standing is conclusively established. The panel reversed the district court’s partial summary judgment and remanded for reconsideration under the correct summary judgment standard. View "HEALY V. MILLIMAN, INC." on Justia Law

Joneca Company, LLC, and InSinkErator, LLC, are direct competitors in the garbage disposal market. InSinkErator alleged that Joneca marketed its disposals using horsepower designations that misrepresented the actual output power of the motors, thereby misleading consumers. InSinkErator claimed that industry and consumer standards understood horsepower to refer to the motor’s mechanical output, not merely the electrical input, and that Joneca’s advertising was causing it to lose sales and goodwill. InSinkErator tested Joneca’s products and found the output horsepower to be substantially less than advertised, prompting it to seek injunctive relief.The United States District Court for the Central District of California reviewed these allegations in the context of a motion for a preliminary injunction. After considering expert declarations and industry standards, the district court found that Joneca’s horsepower claims were literally false by necessary implication, as consumers would interpret horsepower designations as referring to output. The court also found that these claims were material to consumer purchasing decisions and that InSinkErator was likely to suffer irreparable harm absent an injunction. As a result, the court ordered Joneca to place disclaimers on its packaging and sales materials and required InSinkErator to post a $500,000 bond. Joneca appealed, challenging the district court’s findings on falsity, materiality, irreparable harm, balancing of hardships, and public interest.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s preliminary injunction. The court held that the district court did not err in finding that InSinkErator was likely to succeed on the merits of its Lanham Act false advertising claim, that Joneca’s horsepower claims were materially misleading, and that InSinkErator faced irreparable harm. The Ninth Circuit found no abuse of discretion in the district court’s balancing of equities, bond requirement, or determination that the injunction served the public interest. View "INSINKERATOR, LLC V. JONECA COMPANY, LLC" on Justia Law