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

Articles Posted in Consumer Law
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The case involves a putative class action brought by the plaintiff against Kimberly Clark Corp., alleging that the labeling of the defendant's baby wipes was misleading under California's false advertising laws. The plaintiff claimed that the terms "plant-based wipes" and "natural care®" on the front label, along with nature-themed imagery, suggested that the wipes contained only natural ingredients without chemical modifications. However, the wipes contained synthetic ingredients.The United States District Court for the Central District of California separated the product labels into two categories: those with an asterisk and a qualifying statement ("Asterisked Products") and those without ("Unasterisked Products"). The district court dismissed the plaintiff's claims, concluding that both categories were not misleading as a matter of law. The court reasoned that the asterisk and qualifying statement on the Asterisked Products clarified that the wipes were not entirely plant-based, and the back label's disclaimer about synthetic ingredients dispelled any potential misrepresentation for both categories.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court reversed the district court's dismissal of the plaintiff's claims regarding the Unasterisked Products, holding that the front label could plausibly mislead a reasonable consumer to believe the wipes contained only natural ingredients, precluding reliance on the back label at the pleadings stage. However, the court affirmed the dismissal of claims regarding the Asterisked Products, finding that the asterisk and qualifying statement, along with the back label, made it impossible for the plaintiff to prove that a reasonable consumer would be deceived. The court also rejected the defendant's argument that the complaint failed to meet the particularity requirements of Rule 9(b). The case was remanded for further proceedings consistent with the court's opinion. View "WHITESIDE V. KIMBERLY CLARK CORP." on Justia Law

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The case involves trade associations representing manufacturers of children's products challenging Oregon's Toxic-Free Kids Act (TFKA) and its implementing regulations. The TFKA requires the Oregon Health Authority (OHA) to maintain a list of high priority chemicals of concern for children's health and imposes reporting and removal requirements for these chemicals. The trade associations argued that these state requirements are preempted by the Federal Hazardous Substances Act (FHSA) and the Consumer Product Safety Act (CPSA).The United States District Court for the District of Oregon partially dismissed the trade associations' claims and granted partial summary judgment in favor of the defendants. The district court concluded that the federal Consumer Product Safety Commission (CPSC) had not exercised independent judgment or expertise to trigger the express preemption provisions of the FHSA or CPSA for all 73 chemicals listed by the OHA. Therefore, the trade associations' facial challenges failed because they could not show that the Oregon statute and its regulations were invalid in all their applications.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court's decision. The Ninth Circuit held that the FHSA and CPSA did not expressly preempt the TFKA and its regulations because the CPSC had not promulgated regulations for all the chemicals at issue. The court also found that the CPSA did not impliedly preempt the TFKA through principles of conflict preemption. The court concluded that the state law did not interfere with the federal regulatory scheme and upheld the district court's judgment. The decision was affirmed. View "AMERICAN APPAREL & FOOTWEAR ASSOCIATION, INC. V. BADEN" on Justia Law

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The case involves Gillian and Samuel Davidson, who filed a class action lawsuit against Sprout Foods, Inc., alleging that the labels on Sprout's baby food pouches violated California's Sherman Law, which incorporates all federal food labeling standards. The Davidsons claimed that Sprout's labels, which stated the amount of nutrients the pouches contained, were misleading and harmful to consumers.The district court dismissed the Davidsons' claims. It ruled that the Sherman Law claim was preempted by federal law, which only allows the federal government to enforce food labeling standards. The court also dismissed the Davidsons' fraud-based claims, stating that they failed to specifically allege why Sprout's products were harmful.On appeal, the United States Court of Appeals for the Ninth Circuit affirmed in part and reversed in part. The court held that federal law did not preempt private enforcement of the Sherman Law's labeling requirements. The court reasoned that the federal food labeling statute permits states to enact labeling standards identical to the federal standards, which California has done through the Sherman Law. Therefore, the district court should not have dismissed the Sherman Law claims. However, the court affirmed the dismissal of the Davidsons' fraud-based claims, agreeing with the lower court that the Davidsons failed to meet the heightened pleading requirements for fraud. The court also reversed the dismissal of an unjust enrichment claim, which survived due to the reversal on the Sherman Law claim. View "Davidson v. Sprout Foods, Inc." on Justia Law

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A group of individuals, including a minor, filed a class action lawsuit against Warner Bros. Entertainment, Inc. for alleged misrepresentations related to the mobile application Game of Thrones: Conquest (GOTC). The plaintiffs claimed that Warner Bros. engaged in false and misleading advertising within the game. In response, Warner Bros. moved to compel arbitration of all claims based on the GOTC Terms of Service, which users agree to by tapping a “Play” button located on the app’s sign-in screen. The district court denied Warner Bros.' motion, finding that the notice of the Terms of Service was insufficiently conspicuous to bind users to them.The case was appealed to the United States Court of Appeals for the Ninth Circuit. The lower court had found that Warner Bros. failed to provide reasonably conspicuous notice of its Terms of Service, thus denying the motion to compel arbitration. The district court focused on whether the context of the transaction put the plaintiffs on notice that they were agreeing to the Terms of Service, concluding that the app did not involve a continuing relationship that would require some terms and conditions.The Ninth Circuit Court of Appeals reversed the district court's decision. The appellate court held that the district court erred in finding that Warner Bros. failed to provide reasonably conspicuous notice. The court found that the context of the transaction and the placement of the notice were both sufficient to provide reasonably conspicuous notice. The court also rejected the plaintiffs' argument that the arbitration agreement was unconscionable due to its ban on public injunctive relief. The court concluded that the unenforceability of the waiver of one’s right to seek public injunctive relief did not make either this provision or the arbitration agreement unconscionable or otherwise unenforceable. The case was remanded for further proceedings. View "KEEBAUGH V. WARNER BROS. ENTERTAINMENT INC." on Justia Law

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The case involves a consumer class action against Nutramax Laboratories, Inc. and Nutramax Laboratories Veterinary Sciences, Inc. (collectively, “Nutramax”), alleging that Nutramax violated the California Consumers Legal Remedies Act by falsely marketing its pet health product, Cosequin, as promoting healthy joints in dogs. The plaintiffs, Justin Lytle and Christine Musthaler, claimed that Cosequin provided no such health benefits. The district court certified a class of California purchasers of certain Cosequin products who were exposed to the allegedly misleading statements.The district court had certified the class based on the proposed damages model of Plaintiffs’ expert, Dr. Jean-Pierre Dubé, to find that common questions predominated as to injury. Nutramax appealed, arguing that the district court erred in relying on an unexecuted damages model to certify the class and that the element of reliance was not susceptible to common proof.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s decision. The appellate court held that there was no general requirement that an expert actually apply to the proposed class an otherwise reliable damages model in order to demonstrate that damages are susceptible to common proof at the class certification stage. The court also rejected Nutramax’s contention that the district court incorrectly concluded that the element of reliance was susceptible to common proof. The district court properly found that classwide reliance may be established under the CLRA through proof that a misrepresentation is material. View "LYTLE V. NUTRAMAX LABORATORIES, INC." on Justia Law

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The case at hand involves a putative class action brought against RAC Acceptance East, LLC, by Shannon McBurnie and April Spruell. The plaintiffs argue that two fees imposed by RAC, operators of retail stores that lease household and electronic items through rent-to-own contracts, violated California consumer protection laws. RAC sought to compel arbitration, citing an arbitration agreement with the plaintiffs. The district court denied RAC's motion, and RAC appealed the decision.RAC argued that a recent Supreme Court decision, Viking River Cruises, Inc. v. Moriana, implicitly abrogated a prior Ninth Circuit decision, Blair v. Rent-A-Center, Inc., which held that RAC's arbitration agreement was unenforceable under California law. The Ninth Circuit disagreed, stating that Viking River was not irreconcilable with Blair, and that Viking River dealt with different claims from those at issue in this case. Therefore, Blair remained binding.RAC also argued that the plaintiffs' claim for public injunctive relief was mooted by a Consent Decree it entered into with the California Attorney General. The court disagreed, stating that the Consent Decree did not address whether the $45 processing fee in this case violates the law, and therefore, the challenge to the fee was not moot.However, RAC contended that the plaintiffs lacked standing to challenge a $1.99 expedited payment fee because Spruell did not actually pay the fee. The court remanded this issue to the district court for further consideration. As a result, the Ninth Circuit affirmed the district court's denial of RAC's motion to compel arbitration in part and remanded the case for further proceedings on the issue of the standing of the plaintiffs to challenge the $1.99 expedited payment fee. View "McBurnie v. RAC Acceptance East, LLC" on Justia Law

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The United States Court of Appeals for the Ninth Circuit affirmed the lower court's order to compel arbitration and dismiss without prejudice a series of lawsuits against several sports goods e-commerce companies (the defendants). The lawsuits were brought by several plaintiffs, who were consumers that purchased goods online from the defendants and had their personal information stolen during a data breach on the defendants' websites. The defendants moved to compel arbitration based on the arbitration provision in their terms of use. The appellate court held that the plaintiffs had sufficient notice of the arbitration provision and that the arbitration clause was not invalid under California law, was not unconscionable, and did not prohibit public injunctive relief. Furthermore, the parties agreed to delegate the question of arbitrability to an arbitrator according to the commercial rules and procedures of JAMS, a private alternative dispute resolution provider. View "PATRICK V. RUNNING WAREHOUSE, LLC" on Justia Law

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In a class action lawsuit, plaintiffs accused Eden Creamery, LLC of underfilling its pints of Halo Top ice cream. After the discovery period, the plaintiffs attempted to amend their complaint to include a new theory of liability (fraud by omission) and a new defendant (Wells Enterprises). The district court denied this motion, stating that plaintiffs failed to show good cause for amending their complaint. The plaintiffs then moved to voluntarily dismiss their claims without prejudice, which the district court also denied, instead dismissing the individual claims with prejudice and the class claims without prejudice.On appeal, the United States Court of Appeals for the Ninth Circuit found that the district court did not abuse its discretion in denying the motion to amend the complaint, as the plaintiffs failed to show good cause for amending after the deadline to do so had passed. However, the court found that the district court had abused its discretion by denying the plaintiffs' motion for voluntary dismissal without prejudice, as the defendants did not demonstrate that they would suffer legal prejudice if the case were dismissed without prejudice. The court held that a defendant must show legal prejudice to prevent a dismissal without prejudice. Uncertainty from unresolved disputes or inconvenience of defending another lawsuit does not constitute legal prejudice. The case was remanded with instructions to dismiss the action without prejudice, and the district court was instructed to consider whether any conditions should be imposed on the dismissal, such as an appropriate amount of costs and fees. View "KAMAL V. EDEN CREAMERY, LLC" on Justia Law

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Plaintiff is a resident of California. While present in California, Plaintiff used his iPhone’s Safari browser to navigate to the website of California-based retailer IABMFG to purchase fitness apparel. Although Plaintiff claims he did not know it at the time, IABMFG’s website used software and code from Shopify, Inc. to process customer orders and payments. Shopify, Inc. is a Canadian corporation with its headquarters in Ottawa, Canada. Plaintiff filed a putative class action lawsuit in California alleging that Shopify violated various California privacy and unfair competition laws because it deliberately concealed its involvement in consumer transactions. The district court agreed, dismissing the second amended complaint without leave to amend. Plaintiff timely appealed.   The Ninth Circuit affirmed. For specific jurisdiction to exist over Shopify, Plaintiff’s claim must arise out of or relate to Shopify’s forum-related activities. The panel held that there was no causal relationship between Shopify’s broader business contacts in California and Plaintiff’s claims because these contacts did not cause Plaintiff’s harm. Nor did Plaintiff’s claims “relate to” Shopify’s broader business activities in California outside of its extraction and retention of plaintiff’s data. Because there was an insufficient relationship between plaintiff's claims and Shopify’s broader business contacts in California, the activities relevant to the specific jurisdiction analysis were those that caused Plaintiff’s injuries: Shopify’s collection, retention, and use of consumer data obtained from persons who made online purchases while in California. The panel held that Shopify, which provides nationwide web-based payment processing services to online merchants, did not expressly aim its conduct toward California. View "BRANDON BRISKIN V. SHOPIFY, INC., ET AL" on Justia Law

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Plaintiff asserted that ZoomInfo did not obtain her permission or compensate her when it used her name and likeness in its online directory to promote its product, in violation of California’s Right of Publicity statute and her common-law privacy and intellectual property rights. ZoomInfo moved to strike the complaint under the California anti-SLAPP statute. In the district court, ZoomInfo moved to dismiss the complaint and to cut off the claims at the pleading stage. The district court denied the motion to dismiss and rejected ZoomInfo’s special motion to strike the complaint under California anti-SLAPP statute.   The Ninth Circuit affirmed. The panel held that it had appellate jurisdiction under the collateral order doctrine to review the denial of ZoomInfo’s anti-SLAPP motion. The panel also held that, at this stage, Martinez has plausibly pleaded that she suffered sufficient injury to establish constitutional standing to sue. The panel wrote that although the district court did not address the exemptions, Plaintiff’s case fell within the public interest exemption to the anti-SLAPP law. Plaintiff met the three conditions for the public interest exemption: Plaintiff requests all relief on behalf of the alleged class of which she is a member and does not seek any additional relief for herself; Plaintiff’s lawsuit seeks to enforce the public interest of the right to control one’s name and likeness; and private enforcement is necessary and disproportionately burdensome. View "KIM MARTINEZ V. ZOOMINFO TECHNOLOGIES, INC." on Justia Law