A common battle in consumer class actions is whether the named plaintiff has standing to seek injunctive relief in connection with a false advertising or unfair competition claim. To satisfy Article III standing for injunctive relief in federal court, plaintiffs must show a realistic threat they will be harmed again by the same practice. On the other hand, this showing is not always necessary to establish standing in California state court.
When a named plaintiff in a false advertising case argues he or she is likely to be injured again (and so the challenged practice must be stopped), this rightly begs the question: if you now know that the advertising is false, how can you possibly be “fooled” again in the future?
Attempting to get around this problem, consumer plaintiffs claim they act on behalf of consumers who continue to be misled by a defendant’s unlawful advertising practices. Federal courts are split on whether a named plaintiff has standing to seek injunctive relief under these circumstances (often depending on the specific facts of the case). Those that do not allow the claims to proceed typically dismiss the prayer for injunctive relief altogether.
Remand Of Injunctive Relief Only
However, one court has recently found a new way to deal with this sticky federal standing issue. On January 7, 2015, Judge James Donato of the Northern District of California reached a novel decision by remanding a class action plaintiff’s prayer for injunctive relief only, while allowing the remainder of the causes of action and remedies to proceed in federal court.
In the case, plaintiff brought claims for violations of California consumer protection statutes based on the alleged misrepresentation that defendant’s flushable wipes did not damage the plumbing systems. Defendants removed the case under the Class Action Fairness Act and moved to dismiss the complaint, in part, because plaintiff lacked standing to pursue injunctive relief because there was no threat of a repeat injury.
The court agreed that plaintiff lacked Article III standing to pursue injunctive relief but then held (on its own motion) that because standing existed in California state court, the injunctive relief claim was remanded. The court rationalized this results based on a fear that dismissing the injunctive relief claim meant a named plaintiff whose false advertising class action was removed to federal court under CAFA would almost never be able to bring claims for injunctive relief.
Potential Violation Of California’s Prohibition Against Claim Splitting
However, an issue not considered by the court was whether remanding a prayer for injunctive relief to state court (while allowing the remainder of the claims and remedies to proceed simultaneously in federal court) violates California’s prohibition on splitting causes of action under the primary rights theory.
According to this theory, every cause of action is comprised of a primary right, such as the right to be free of personal injury or the right to performance of a contractual obligation, and a breach of this primary right gives rise to a claim. A violation of a primary right can only give rise to one claim for relief and a plaintiff cannot file more than one lawsuit for a violation of a single primary right.
California law is also clear that a prayer for injunctive relief is not a stand-alone cause of action, but a remedy tied to a cause of action. Remanding a prayer for relief by itself, and not the cause of action tied to that remedy, could therefore violate California’s primary rights theory.
While the decision was not appealed, the question remains whether a remand of a prayer for injunctive relief only is a valid and available tactic for class action plaintiffs.
The practical effects of this decision could be staggering and may implicate the class action jurisdiction as of right granted to federal courts pursuant to CAFA. Defendants that would otherwise seek to remove a consumer class action may think twice about removal in fear of potentially creating dual litigation in separate venues. Plaintiffs may also use the threat of duplicative litigation to prevent defendants from moving to dismiss the complaint once removed to federal court (as separate actions almost certainly would lead to duplicative costs and manageability issues, not to mention each party racing to obtain a judgment in the venue they believe is more advantageous to use as res judicata).
While the decision has yet to be formally challenged, it is likely this issue will require the Ninth Circuit (and possibly the U.S. Supreme Court) to weigh in to determine the proper bounds of what can – and cannot – be remanded.