Plaintiff Who Bought Product Only to Sue Lacks Standing—C.A.
By KENNETH OFGANG, Staff Writer
A plaintiff who purchases a product in the belief it is being deceptively marketed and with the intent of bringing suit to challenge that deception lacks standing to sue the manufacturers, the Court of Appeal for this district ruled yesterday.
Div. Four affirmed a judgment rejecting a suit by the executive director of the California Women’s Law Center, who admittedly purchased certain skin care products through her attorney in the belief that they were being deceptively sold and packaged and with the intent of suing.
Katherine Lee Buckland cannot sue for fraud, or under consumer statutes, because she did not rely on the alleged misrepresentations in choosing to purchase the products and did not suffer any “injury-in-fact,” Justice Nora Manella wrote for the Court of Appeal.
The panel affirmed a ruling by Los Angeles Superior Court Judge Robert Hess, who sustained a demurrer joined by several of the more than 30 defendants whom Buckland sued for fraudulent concealment, negligent misrepresentation and violations of the unfair competition and false advertising laws as well as the Consumer Legal Remedies Act. Hess also denied Buckland’s motion for a preliminary injunction.
The defendants are members of the American Herbal Products Association, and they make creams or lotions that contain progesterone and other chemicals that are regulated by the FDA. Buckland contended that the defendants market their products, which are not FDA-regulated, as safe and healthful when in fact the chemicals in them are potentially dangerous.
Buckland alleged in a declaration accompanying her motion for preliminary injunction that she was “acting in this matter on my own behalf and as a consumer in the public interest, in light of my own personal desire to evaluate the claims of the products at issue in this case.”
“I believe that a woman who advocates professionally for women’s rights must be especially sensitive as an individual woman to the claims of products that purport to address women’s health. I am acting in this litigation to evaluate, as an individual consumer, these defendants’ respective products, incurring the cost of purchasing each of these products in order to meet the letter of the law to have standing to make appropriate claims regarding these products where the facts and law warrant, and thereby incurring the economic damages that provide standing under the statutes by which I am proceeding in the case.”
No ‘Actual Reliance’
Both the trial judge and the Court of Appeal rejected Buckland’s claim that her purchase of the products constituted the “actual reliance” that is an element of a cause of action for fraudulent misrepresentation.
Manella explained that under the Restatement Second of Torts, “actual reliance occurs only when the plaintiff reposes confidence in the truth of the relevant representation, and acts upon this confidence,” and the maker of the misrepresentation is liable “for pecuniary loss suffered by one who justifiably relies upon the truth of the matter misrepresented, if his reliance is a substantial factor in determining the course of conduct that results in his loss.”
Nor can Buckland claim fraud by omission, the justice said, because she concededly “lacked the requisite confidence in the truth and material completeness of [defendants’] representations, and cannot establish actual reliance for the purpose of her fraud claims.”
Manella also rejected the contention that a plaintiff who did not personally rely on a misrepresentation that was likely to mislead the public may sue under the CLRA. Prior Court of Appeal cases have held that actual reliance is an element of a fraud action brought under the statute, the justice explained.
Buckland’s unfair competition and false advertising claims, the justice went on to say, are barred by Proposition 64, the 2004 initiative that repealed the prior law allowing a private person not injured by an allegedly unfair or illegal business practice or by false advertising to seek equitable relief on behalf of the general public.
While some courts have held otherwise, Manella explained, the weight of authority holds that one who expends funds solely for purposes of litigation lacks the “injury-in-fact” required to confer standing.
Proposition 64’s language authorizing an individual who has lost “money or property” as a result of the unfair or illegal practice to sue, the justice explained, does not authorize what is essentially an action on behalf of the general public, since the initiative intentionally and expressly limits the authority to bring such suits to public officials.
Buckland, who was represented by Roger L. Carrick of the Carrick Law Group, did not return a phone call seeking comment. Trenton H. Norris and Mark P. Pifko of Bingham McCutcheon represented the defendants.
The case is Buckland v. Threshold Enterprises, Inc., B192832.
Copyright 2007, Metropolitan News Company