We ran across a Ninth Circuit decision last week that, while non-precedential, made interesting rulings. See Fisher v. Monster Beverage Corp., 2016 U.S. App. Lexis 12608 (9th Cir. July 8, 2016). It was a class-action filed under California’s trio of plaintiffs-lawyer-attracting statutes, the Consumer Legal Remedies Act (CLRA), the False Advertising Laws (FAL) and the Unfair Competition Law (UCL). While the court allowed portions of these class action claims to move forward under these incredibly plaintiff-friendly statutes, its ruling on off-label promotion and failure to warn claims may be helpful in drug and device product liability litigation.
The three named plaintiffs alleged that the defendant manufacturers made all sorts of misrepresentations about the safety of its products, certain Monster energy drinks. Only one named plaintiff made an off-label claim. But he couldn’t get out of the gate with it. He claimed that the defendants’ marketing of its energy drinks targeted kids. Id. at *2. He claimed to have seen this alleged marketing and to have come away believing that the Monster energy drinks were safe—yet, according to him in his lawsuit, they were not. These allegations may or may not have been true. But they didn’t matter. He failed to allege that he ever relied on this alleged off-label marketing. With no injury caused by a misrepresentation, he lacked standing: “That is not a sufficient allegation of injury-in-fact to support standing.” Id. at *3 (citing Kwikset Corp. v. Superior Court, 246 P.3d 877, 890 (Cal. 2011)). Accordingly, the Ninth Circuit upheld the trial court’s dismissal of this off-label claim with prejudice. Id. at *3, 8.
The other two named plaintiffs made only on-label claims, and the Ninth Circuit held that those claims were sufficiently stated under the CLRA, FAL and UCL triumvirate. At times, it seems almost anything can be properly stated under those statutes. One plaintiff alleged that he relied on advertisements stating that the Monster energy drinks “quench thirst” and “hydrate like a sports drink,” while the other plaintiff alleged that he relied on statements that the drinks had “the ideal combo of the right ingredients in the right proportion to deliver the big bad buzz that only Monster can.” Id. at *3-4. The Ninth Circuit, with a tepid endorsement, found these allegations sufficient: “Although the statements upon which [plaintiffs] relied were not strictly false, it is plausible that they were misleading, which is all that California law requires.” Id. at *4. The court also held that these claims, to the extent they did not seek to alter nutritional labeling, were not preempted or subject to the doctrine of primary jurisdiction. Id. at *6-7. And so this portion of the plaintiffs’ claims survived. It’s heartening to know that a plaintiff still has available to him the right to sue over a big bad buzz promised but not properly delivered.
But, more important, the Ninth Circuit upheld dismissal of the failure to warn aspect of these claims. A portion of the plaintiffs’ claims, if successful, would have required the manufacturers to disclose in the nutritional labeling the amount of caffeine in the energy drinks. But the FDCA preempts any state law that attempts to impose food nutritional labeling requirements that are not identical to federal requirements. And, since federal labeling law does not require the manufacturer of these drinks to list the amount of caffeine, the Ninth Circuit held this aspect of plaintiffs’ claims preempted. Id. at *5-6.
While this decision underscores why so many class actions are filed in California—i.e., it’s hard not to state a claim—it’s still helpful. Even when stared down by these very plaintiff-friendly statutes, defendants have viable defenses available to them, even at the motion to dismiss stage.