Plaintiffs’ lawyers have already started to blow their vuvuzelas, heralding last week’s decision by the California Supreme Court in Kwikset Corp. v. Superior Court. They are calling it the final nail in the coffin of Proposition 64, the tort reform initiative that voters passed in 2004 to end the madness that had been rife in California’s unfair competition law (UCL). Even the business-minded Wall Street Journal called Kwikset a win for plaintiffs and a blow to tort reform. But before companies doing business in California press the panic button, should we hit Reset?
Kwikset Corp. v. Superior Court, No. S171845 (Jan. 27, 2011), was a “gotcha”-style false advertising class action over yet another “Made in USA” label designation—a form of serial litigation that appears to be an “only-in-California” phenomenon. Plaintiffs alleged that the defendant falsely marketed and sold locksets labeled as “Made in USA.” To paraphrase Captain Renault, plaintiffs were “shocked, shocked to find” that a tiny fraction of the overall product was either made in Taiwan (the set screws) or assembled in Mexico (the latch assemblies). Plaintiffs sued, alleging that (i) they purchased locksets, (ii) the representations were false, (iii) plaintiffs relied on the misrepresentations, and (iv) they would not have bought otherwise. In just about every other jurisdiction, this claim would have gotten the boot. Not California.
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