We recently discussed the growing conflict in the Northern District of California over whether plaintiffs need to plead reliance to state a claim under the “unlawful prong” of California’s Unfair Competition Law (UCL). Judge Conti recently added his voice to the debate, issuing a strong ruling, in a food labeling case against Frito-Lay, that reliance is required where a plaintiff sues over a particular statement. See Wilson v. Frito-Lay N. Am., Inc., __ F. Supp. 2d __, No. 12-cv-1586 SC, 2013 U.S. Dist. LEXIS 153136 (N.D. Cal. Oct. 24, 2013). He ruled that accepting plaintiffs’ theory that they need only allege a labeling violation and need not have read or relied on the labeling “would be an affront to state and federal standing rules” and an “invitation to shakedown suits.” He continued:
“Federal standing requires injury, and California law requires UCL plaintiffs to plead injury and reliance—a legislative decision based specifically on curtailing lawsuits by plaintiffs who have had no contact with advertising, for example. Kwikset Corp. v. Super. Ct., 51 Cal. 4th 310, 326 (Cal. 2011). Ignoring these basic legal rules would invite lawsuits by all manner of plaintiffs who could simply troll grocery stores and the Internet looking for any food product that might form the basis of a class-action lawsuit. Surely that is not the point of these consumer protection laws.”
Judge Conti also found that Frito-Lay’s website did not constitute “labeling.” These are welcome rulings for the defense as the law on these issues continues to develop.
