By Lucía Roibal, an Associate with Morrison & Foerster LLP in the firm’s San Francisco, CA office. This commentary is reposted with permission, originally appearing on November 30, 2018 in the firm’s Class Dismissed blog.
On September 6, 2018, Kimberly-Clark and affiliates filed a petition for writ of certiorari in Kimberly-Clark, et al. v. Davidson, No. 18-304, following a decision in the Ninth Circuit denying Kimberly-Clark’s motion to dismiss. As noted in previous posts (here and here), the Ninth Circuit had resolved a split among district courts in the circuit and held that a previously deceived consumer may have standing to seek an injunction against false advertising or labeling if he or she sufficiently alleges intent to repurchase the product in the future. In Kimberly-Clark’s petition, the companies ask the Supreme Court to resolve the issue of whether a consumer, who after using a product and determining that a representation concerning that product is allegedly misleading, can plausibly allege a “real and immediate threat” that she will be deceived by the same representation in the future so as to establish standing to seek an injunction.
Plaintiff Jennifer Davidson in this case alleged that Kimberly-Clark’s and its affiliates’ pre-moistened wipes were misleadingly labeled as “flushable.” Plaintiff Jennifer Davidson alleged that that this “flushable” label was false and misleading, and she sued Kimberly-Clark for violations of California consumer protection laws. Plaintiff sought restitution and damages based on the price premium resulting from the label, as well as an injunction requiring Kimberly-Clark to discontinue labeling the wipes as “flushable.” Kimberly-Clark moved to dismiss plaintiff’s first amended complaint and the district court granted the motion. Davidson appealed.
The Ninth Circuit reversed, finding 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. Kimberly-Clark then petitioned for rehearing en banc. The Ninth Circuit denied the petition and instead amended its opinion, making clear that intent to purchase is a necessary element of injunctive standing.
Kimberly-Clark’s Petition for Certiorari
In its petition, Kimberly-Clark proffers three main arguments as to why the Supreme Court should review the Ninth Circuit’s decision. First, Kimberly-Clark argues that the Ninth Circuit decision conflicts with decision of every other federal circuit to consider this issue, including the Seventh Circuit, Third Circuit, and Second Circuit. The company explains that each of these courts refused to find standing in similar circumstances.
Second, Kimberly-Clark contends that the Ninth Circuit’s decision conflicts with the Supreme Court’s standing jurisprudence by diluting the injury-in-fact requirement in two ways. First, the decision conflicts with the requirement that a plaintiff must allege a future injury that is similar to the injury she has already suffered. Here, the alleged past and future injuries were different. Plaintiff’s first injury occurred when she purchased the product based on allegedly false information, which caused the product to be sold at a higher price, and which she would not have purchased absent this misrepresentation.
Her alleged future injury, by contrast, was the exact opposite. If she saw Kimberly-Clark’s “flushable” wipes, she would not purchase them because she would not know what to believe about the meaning of “flushable.” Second, even if her alleged future injuries were similar to her past injury, they would not be concrete and imminent. Under this requirement, the injury must be “real” and not “abstract.” And it must be certainly impending. Here, however, Davidson’s decision not to purchase the product could constitute harm only if the wipes were somehow reengineered to meet her criteria for flushability. But Davidson had not alleged (and could not allege) that it was likely the wipes would be modified to satisfy her standards in the future.
Finally, Kimberly-Clark argues that the decision would have sweeping, adverse, and nationwide effects. Here, an injunction would result in a prior restraint prohibited by the First Amendment. It would also require, in effect, a nationwide injunction against Kimberly-Clark’s use of the term “flushable,” which would be “infeasible” given the realities of the national marketplace.
In her opposition to Kimberly-Clark’s petition, filed on November 5, 2018, Davidson begins her argument by reframing her injury as denial of accurate information to inform her decision whether to purchase Kimberly-Clark’s or others’ wipes. She also points to the fact-driven conclusion of the Ninth Circuit to attack each of Kimberly-Clark’s arguments.
First, Davidson argues that the Ninth Circuit’s decision does not conflict with decisions in other circuits, which she argues all apply the same precedents, state the same principles, and reach consistent conclusions. Instead, other circuit court decisions were cabined to facts and none of them addressed the scenario presented in this case, where the plaintiff specifically alleged ongoing uncertainty over whether to purchase the product in the absence of an injunction requiring truthful advertising.
Next, Davidson argues that her alleged injury easily satisfies injunctive-relief standing requirements. First, her alleged future injury is sufficiently similar to her past injury: just as Davidson could not rely on Kimberly-Clark’s representation when she previously bought the wipes, she cannot rely on it in the future, absent an injunction. Davidson further argues that, contrary to Kimberly-Clark’s argument that she has failed to allege a future injury, she has sufficiently alleged that she wants to purchase flushable wipes but is unable to rely on the information advertised by Kimberly-Clark. Deprivation of information, she argues, is an injury sufficient to establish Article III standing.
Davidson also argues that the consequences Kimberly-Clark envisions are exaggerated and there is no actual First Amendment issue presented in the case. Even more, the only speech at issue is false commercial speech, which receives no First Amendment protection. And on a motion to dismiss, where the facts alleged in the complaint are taken as true, Kimberly-Clark cannot contest falsity of the claim. Finally, Kimberly-Clark’s concerns about the “realities of the marketplace” are inapposite because the claim for injunctive relief would proceed in state court if plaintiff is held to lack Article III standing.
In its reply, Kimberly-Clark rebuts Davidson’s argument that the Ninth Circuit’s decision below was “fact-bound” and does not conflict with other circuits. Instead, the company argues, every other court of appeals to consider whether a consumer has standing to seek to enjoin an allegedly misleading representation—despite already knowing the allegedly misleading nature of the representation—has answered in the negative.
In In re Johnson & Johnson Talcum Powder Products Mktg., Sales Practices and Liability Litig., 903 F.3d 278, 292 (3d Cir. 2018), for instance, the Third Circuit explained that because plaintiff was well aware of health risks associated with using Baby Powder, she was not likely to suffer future economic injury. As Kimberly-Clark notes, the Ninth Circuit clearly rejects that proposition. Kimberly-Clark also challenges Davidson’s “reframing” of her injury and argues that Davidson’s past and future harms are distinct. Nor could Davidson be misled when she seeks Kimberly-Clark’s “flushable” label when Davidson knows exactly what that term means when it appears on a Kimberly-Clark label.
To Grant or Not to Grant?
The Court will consider Kimberly-Clark’s petition at its conference this Friday, December 7.
Will the Supreme Court grant certiorari? It is hard to predict, but the Supreme Court denies the vast majority of petitions. Whether the Supreme Court grants certiorari may turn on whether Kimberly-Clark has sufficiently demonstrated a circuit-wide split or whether at least four of the Supreme Court justices will agree with Davidson that the Ninth Circuit’s decision is cabined to the facts and does not actually conflict with the three other circuits. The result could also turn on Kimberly-Clark’s arguments regarding injury.
In fact, the Supreme Court’s most recent decision on Article III standing and immediate threat of injury was five years ago in Clapper v. Amnesty Int’l USA, 568 U.S. 398. There, Justices Alito, Roberts, Scalia, Kennedy, and Thomas held that respondents lacked Article III standing to seek prospective relief because they proffered no evidence of imminent injury and did not show that an injunction would redress their injuries. Justices Breyer, Ginsburg, Sotomayor, and Kagan dissented. Given the current makeup of the Supreme Court, if Kimberly-Clark is able to get in front of the Supreme Court, it may have a chance of prevailing.
We will provide relevant updates when the decision on the petition is announced.