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October 24, 2017

Stroock Special Bulletin

By: Stephen J. Newman, Julia B. Strickland

The Ninth Circuit Court of Appeals recently held that a consumer who brings a false advertising claim may establish Article III standing based on allegations of her inability to rely on the advertising in the future. The Ninth Circuit’s ruling resolves a district court split regarding Article III standing to seek injunctive relief and may have a potentially significant impact in actions seeking injunctive relief under California’s oft-litigated Consumer Legal Remedies Act (“CLRA”), California Civil Code § 1750, et seq.; False Advertising Law (“FAL”), California Business & Professions Code § 17500, et seq.; and Unfair Competition Law (“UCL”), California Business & Professions Code § 17200, et seq.

In Davidson v. Kimberly-Clark Corp., et al., No. 15-16173, 2017 WL 4700093 (9th Cir. Oct. 20, 2017), plaintiff Jennifer Davidson (“Davidson”) alleged that she paid a premium for wipes manufactured by defendant Kimberly-Clark Corporation (“Kimberly-Clark”) and advertised as “flushable” even though they were not flushable. After using the product several times, Davidson became concerned that they were not flushable and stopped using them. Thereafter, she did not purchase the “flushable” wipes again but alleges that she would purchase them in the future “if it were possible to determine prior to purchase if the wipes were suitable to be flushed.” Based on these allegations, Davidson brought California state law claims against Kimberly-Clark for common law fraud and violations of the CLRA, FAL and UCL. In addition to restitution, actual, punitive and statutory damages, Davidson sought injunctive relief on her CLRA, FAL and UCL claims.

The district court granted with prejudice Kimberly-Clark’s motion to dismiss the First Amended Complaint (“FAC”), holding, among other things, that Davidson lacked standing to seek injunctive relief because she was unlikely to purchase Kimberly-Clark’s flushable wipes in the future. The Ninth Circuit reversed, finding that Davidson “properly alleged that she faces a threat of imminent or actual harm by not being able to rely on Kimberly-Clark’s labels in the future, and that this harm is sufficient to confer standing to seek injunctive relief.” Davidson, 2017 WL 4700093 at *7.

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