The California Court of Appeal has held that a plaintiff must establish a causal link between a defendant’s alleged misconduct and plaintiff’s injury in order to recover under the Unfair Competition Law (“UCL”) and the False Advertising Law (“FAL”). In O'Brien v. Camisasca Automotive Manufacturing, Inc. (March 27, 2008) __ Cal.App.4th __, the Court of Appeal affirmed summary judgment in favor of the defendant, holding that the plaintiff had no standing to bring UCL or FAL claims because he suffered no injuries due to any misrepresentation by the defendant.
In O'Brien v. Camisasca Automotive Manufacturing, Inc., the plaintiff purchased a license plate frame through the defendant’s website. Prior to the purchase, the plaintiff reviewed the defendant’s catalogue, which reflected that some goods were “imported” while others were not. Plaintiff conceded that he did not see a “Made in USA” designation for the license plate frame that he purchased. Plaintiff claimed, however, that because the description of the license plate frame did not contain an “imported” designation, he assumed that it was made in the USA.
When he received the license plate frame, the plaintiff saw for the first time that it bore a “Made in USA” designation. Plaintiff claimed that this was in fact a misrepresentation, and he joined a pending class action. The defendant challenged plaintiff’s standing to pursue a UCL or FAL claim, on the basis that the plaintiff did not rely on the allegedly false advertising or unfair business practices in making his purchase.
In reaching its decision, the Court of Appeal recognized that the UCL provides that a person may initiate a lawsuit only where he “has suffered injury in fact and has lost money or property as a result of unfair competition”. (Californians For Disability Rights v. Mervyn’s, LLC (2006) 39 Cal.4th 223, 228; California Business & Professions Code § 17203.) Similarly, the FAL authorizes lawsuits by a person who “has suffered injury in fact and has lost money or property as a result of a violation of this chapter.” (California Business & Professions Code § 17535). The key phrase in both of these laws is “as a result of.” These statutory requirements are the result of the enactment of Proposition 64, which was designed to prevent abuse of the UCL and FAL by individuals who had never used a defendant’s products, or had never even seen its advertisements.
The Court of Appeal held that the plaintiff could not have suffered injury “as a result of” any alleged mislabeling, because he purchased the license plate frame before he saw any representation about where the product was made. Since the plaintiff did not see a “Made in USA” designation prior to deciding to purchase the product, he could not have relied on that designation. The Court concluded that the plaintiff therefore did not suffer any injury “as a result of” the designation, and therefore, that he lacked standing to recover under the UCL and FAL.
The O’Brien ruling is significant because it requires a plaintiff to show a casual link between the defendant’s alleged misconduct and the Plaintiff’s injury in order to have standing to pursue a claim under the UCL and FAL. As such, this decision is expected to significantly reduce the number of lawsuits filed under these particular statutes.
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