In 2024, courts of appeal issued several opinions relating to consumer protection including cases involving exposure to asbestos, cases alleging injuries caused by pharmaceuticals, and claims involving alleged false advertising.

Court of Appeal holds that consumers injured by a pharmaceutical were entitled to pursue a claim of negligence rather than strict products liability and did not need to prove the drug was defective to pursue that claim

In Gilead Tenofovir Cases approximately 24,000 plaintiffs filed a lawsuit against a pharmaceutical maker, Gilead Life Sciences (“Gilead”), alleging that they suffered adverse effects, including skeletal and kidney damage, from a drug, tenofovir disoproxil fumarate (“TDF”) used to treat HIV/AIDS. Gilead developed a similar but chemically distinct drug, tenofovir alafenamide fumarate (“TAF”), which could potentially treat HIV/AIDS with fewer side effects. The plaintiffs claim that Gilead delayed the development of TAF to maximize profits from TDF. The plaintiffs do not claim that TDF is “defective.” Instead, they assert a claim for ordinary negligence, arguing that Gilead’s decision to delay the development of TAF breached its duty of reasonable care to users of TDF. They also assert a claim for fraudulent concealment, arguing that Gilead had a duty to disclose information about TAF to users of TDF.

Gilead moved for summary judgment or adjudication. With respect to plaintiffs’ claim for negligence, Gilead argued that a plaintiff seeking to recover for harm caused by a manufactured product must prove that the product was defective. Given plaintiffs’ decision not to prove a defect, Gilead contended, they cannot recover for harm caused by their use of TDF. With respect to fraudulent concealment, Gilead argued that it had no duty to disclose facts relating to TAF when it had not been approved as an alternative to TDF for the treatment of HIV/AIDS. The trial court denied the motion in its entirety.

The Court of Appeal reversed. In reversing the ruling as to the negligence claim, the Court held that the plaintiffs could proceed with their claim since a manufacturer’s legal duty of reasonable care can extend beyond the duty not to market a defective product. Furthermore, the Court reversed the trial court’s decision as to the fraudulent concealment finding that Gilead had no duty to disclose information about TAF to users of TDF, as TAF was not available as an alternative treatment at the time.

Plaintiff filed a petition for review with the California Supreme Court. Review was granted on May 2, 2024 however the order granting review noted that the opinion of the Court of Appeal, may be cited, not only for its persuasive value, but also for the limited purpose of establishing the existence of a conflict in authority that would in turn allow trial courts to exercise discretion under Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 456, to choose between sides of any such conflict.”

Court of Appeal holds that the Department of Toxic Substances Control could find a Class I hazardous waste violation without finding the waste represented a significant threat to human health or the environment

In Safety-Kleen of California, Inc. v. DTSC Safety-Kleen of California, Inc. (“Safety-Kleen”) filed a petition for a writ of mandate to compel the Department of Toxic Substances Control (“DTSC”) to set aside final inspection violation scores concerning Safety-Kleen’s oil and hazardous waste treatment facility. DTSC had classified certain violations at Safety-Kleen’s facility as Class I violations, which Safety-Kleen argued was an abuse of discretion under the Hazardous Waste Control Law (“HWCL”), as these violations did not pose a “significant threat to human health or safety or the environment.” The trial court denied the petition.

The Court of Appeal disagreed with Safety-Kleen, interpreting the HWCL to permit classification of a violation as Class I under “independent statutory bases,” including those that do not pose a significant threat to human health or safety or the environment. The Court held that the DTSC did not abuse its discretion in determining Safety-Kleen’s final inspection violation scores. It also rejected Safety-Kleen’s argument that a Class II violation can only be reclassified as a Class I violation if the violation is chronic or the violator is recalcitrant.

Court of Appeal holds that trial court did not abuse discretion in counting each misleading call made by online university as separate false advertising violations

In People v. Ashford University, LLC Zovio, Inc. and Ashford University, LLC (“defendants”) are the former owners and operators of an online university called Ashford University. The Attorney General filed an enforcement action against defendants on behalf of the People of the State of California. In the operative complaint, the People alleged defendants had violated the Unfair Competition Law (“UCL”) and False Advertising Law (“FAL”) by making myriad misrepresentations to prospective Ashford students regarding the costs of attending Ashford, the availability of financial aid, the ability of Ashford programs to prepare students for careers in certain professions, and the likelihood that academic credits would transfer into and out of Ashford. They also alleged that defendants had employed unfair, unlawful, and fraudulent billing and collections practices in violation of the FAL and UCL. They sought injunctive relief, restitution, and civil penalties of $2,500 for each UCL violation and $2,500 for each FAL violation.

Following a bench trial, the trial court found that for more than a decade, defendants violated the UCL and FAL by making false and misleading statements to prospective students. The court determined defendants committed 1,243,099 UCL and FAL violations and imposed $22,375,782 in civil penalties. Defendants appealed on the grounds that the award was excessive.

The Court of Appeal agreed with the defendants that the trial court inadvertently included violations outside the FAL’s statute of limitations in the penalty calculation. The Court reduced the penalty by $933,453. However, the Court rejected the defendants’ other arguments, including that the penalty should be further reduced because it did not bear a reasonable relationship to the harm proven at trial, violated extraterritoriality principles, and was excessive given the defendants' financial status. The Court found the penalty was reasonably related to the harm caused, the defendants could pay the penalty, and the defendants’ misconduct emanated from California, so principles of extraterritoriality were not violated.

In a class action lawsuit, the Ninth Circuit holds that Meta’s alleged misrepresentations about the potential advertising reach of its platform constituted a common course of conduct for the alleged consumer class

In DZ Reserve v. Meta Platforms, Inc. a group of advertisers filed a class action suit against Meta Platforms, Inc. (formerly known as Facebook) claiming that Meta misrepresented the “Potential Reach” of advertisements on its platforms. The plaintiffs alleged that Meta falsely claimed that Potential Reach was an estimate of people, when in fact, it was an estimate of accounts. The district court certified one class of advertisers (the damages class) who sought compensation for fraudulent misrepresentation and concealment. The district court also certified another class of advertisers (the injunction class) who sought injunctive relief. Meta appealed.

The Ninth Circuit affirmed the district court’s order certifying the damages class. The Court stated that the misrepresentation was a common issue for the class and that the district court properly determined that the element of justifiable reliance was capable of class-wide resolution.

However, the Court vacated the district court’s order certifying the injunction class. Rather, the court asked the lower court to reconsider whether the named plaintiff, Cain Maxwell, had Article III standing to seek an injunction. As such, the case was remanded for further proceedings.

Court of Appeal holds that Apple’s alleged wrongful conduct towards software developers on its App Store was neither a violation of antitrust law nor unfair competition law

In Beverage v. Apple, Inc. plaintiffs filed a class action complaint alleging that Apple’s restrictive contractual terms and coercive conduct towards software developers on its App Store constituted unlawful and unfair practices that violated the Cartwright Act and the Unfair Competition Law (“UCL”). The plaintiffs specifically focused on Apple’s treatment of one developer, Epic Games, Inc., and its gaming application, Fortnite. The trial court sustained a demurrer brought by Apple without leave to amend, applying the Colgate doctrine and the holding of Chavez v. Whirlpool Corporation. In Colgate, “the Supreme Court recognized that, subject to antitrust laws such as the Sherman Act, there is a ‘long recognized right of [a] trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal.’” In Chavez, a court applied the Colgate doctrine to preclude a UCL cause of action. The court determined that the plaintiffs did not and could not state causes of action under either the Cartwright Act or the UCL as a matter of law.

The plaintiffs appealed only one aspect of the trial court’s ruling, arguing that the court erred by relying on Chavez to sustain the demurrer to their UCL cause of action alleging unfair practices by Apple towards Epic Games.

The Court of Appeal affirmed finding that reliance on Chavez was consistent with the California Supreme Court’s decision in Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Company. The Court found that the trial court correctly relied on Chavez to sustain the demurrer without leave to amend. The court held that the plaintiffs did not state a claim as a matter of law under the “unfair” prong of the UCL, considering the trial court’s ruling that Apple’s practices constituted permissible unilateral conduct.

Ninth Circuit holds that consumers can pursue their private enforcement of state food labeling laws because the state standard was identical to and did not conflict with the equivalent federal labeling standards

In Davidson v. Sprout Foods, Inc. Gillian and Samuel Davidson filed a class action lawsuit against Sprout Foods, Inc. (“Sprout”) alleging that the labels on Sprout’s baby food pouches violated California’s Sherman Law, which incorporates all federal food labeling standards. The Davidsons claimed that Sprout’s labels, which stated the amount of nutrients the pouches contained, were misleading and harmful to consumers.

The district court dismissed the Davidsons’ claims ruling that the Sherman Law claim was preempted by federal law, which only allows the federal government to enforce food labeling standards. The court also dismissed the Davidsons’ fraud-based claims, stating that they failed to specifically allege why Sprout’s products were harmful.

The Ninth Circuit affirmed in part and reversed in part. The Court held that federal law did not preempt private enforcement of the Sherman Law’s labeling requirements because the federal food labeling statute permits states to enact labeling standards identical to the federal standards, which California has done through the Sherman Law. Therefore, the district court should not have dismissed the Sherman Law claims. However, the Court affirmed the dismissal of the Davidsons’ fraud-based claims, agreeing with the lower court that the Davidsons failed to meet the heightened pleading requirements for fraud.

Ninth Circuit holds that Oregon’s Toxic-Free Kids Act is not preempted by the Federal Hazardous Substances Act or the Consumer Product Safety Act

In American Apparel & Footwear Association v. Baden trade associations representing manufacturers of children’s products filed a lawsuit challenging Oregon’s Toxic-Free Kids Act (“TFKA”) and its implementing regulations. The TFKA requires the Oregon Health Authority (“OHA”) to maintain a list of high priority chemicals of concern for children’s health and imposes reporting and removal requirements for these chemicals. The trade associations argued that these state requirements are preempted by the Federal Hazardous Substances Act (“FHSA”) and the Consumer Product Safety Act (“CPSA”).

The district court partially dismissed the trade associations’ claims and granted partial summary judgment in favor of the defendants. The district court concluded that the federal Consumer Product Safety Commission (“CPSC”) had not exercised independent judgment or expertise to trigger the express preemption provisions of the FHSA or CPSA for all 73 chemicals listed by the OHA. Therefore, the trade associations’ facial challenges failed because they could not show that the Oregon statute and its regulations were invalid in all their applications.

The Ninth Circuit affirmed holding that the FHSA and CPSA did not expressly preempt the TFKA and its regulations because the CPSC had not promulgated regulations for all the chemicals at issue. The Court also found that the CPSA did not impliedly preempt the TFKA through principles of conflict preemption. The Court concluded that the state law did not interfere with the federal regulatory scheme and upheld the district court’s judgment.

Ninth Circuit holds that district court erred in granting manufacturer’s motion to dismiss false advertising claim by relying on product’s back label to determine whether the product’s “plant-based” claim was ambiguous

In Whiteside v. Kimberly Clark Corp. plaintiffs brought a class action against Kimberly Clark Corp., alleging that the labeling of its baby wipes was misleading under California’s false advertising laws. The plaintiff claimed that the terms “plant-based wipes” and “natural care®” on the front label, along with nature-themed imagery, suggested that the wipes contained only natural ingredients without chemical modifications. However, plaintiff claimed the wipes contained synthetic ingredients.

The district court separated the product labels into two categories: those with an asterisk and a qualifying statement (“Asterisked Products”) and those without (“Unasterisked Products”). The district court granted defendant’s motion to dismiss concluding that both categories were not misleading as a matter of law. The court reasoned that the asterisk and qualifying statement on the Asterisked Products clarified that the wipes were not entirely plant-based, and the back label’s disclaimer about synthetic ingredients dispelled any potential misrepresentation for both categories. Plaintiff appealed.

The Ninth Circuit reversed the district court’s dismissal of the plaintiff’s claims regarding the Unasterisked Products, holding that the front label could plausibly mislead a reasonable consumer to believe the wipes contained only natural ingredients, precluding reliance on the back label at the pleadings stage. However, the Court affirmed the dismissal of claims regarding the Asterisked Products, finding that the asterisk and qualifying statement, along with the back label, made it impossible for the plaintiff to prove that a reasonable consumer would be deceived.

Ninth Circuit affirms consumer’s false advertising claim under New York law against dietary supplement company whose packaging stated that the supplement urported to relieve joint pain

Montera v. Premier Nutrition Corp. involved a consumer class action filed in the United States District Court for the Northern District of California against Premier Nutrition Corporation (“Premier”) which marketed Joint Juice, a dietary supplement drink, as effective for relieving joint pain. Mary Beth Montera, representing a class of New York consumers, alleged that Premier’s advertising was deceptive and violated New York General Business Law (“GBL”) §§ 349 and 350. These laws require proof that the defendant engaged in consumer-oriented conduct that was materially misleading and caused injury to the plaintiff.

The district court certified the class and the case proceeded to trial. Montera presented evidence, including studies showing that Joint Juice’s key ingredients, glucosamine and chondroitin, were ineffective for joint health. Premier countered with industry-funded studies supporting the product’s efficacy. The jury found Premier’s statements deceptive and awarded statutory damages based on the number of units sold in New York during the class period. Premier’s post-trial motions to decertify the class and for judgment as a matter of law were denied.

The Ninth Circuit affirmed the district court’s rulings on class certification, liability under GBL sections 349 and 350, and the initial calculation of statutory damages. The Court rejected Premier’s arguments that its statements were not materially misleading and that Montera’s injury was not cognizable under New York law. The Court also upheld the jury’s finding that the class members’ injuries were caused by Premier’s misrepresentations.

However, the Ninth Circuit vacated the district court’s award of prejudgment interest, ruling that statutory damages under GBL sections 349 and 350 are not compensatory and thus do not warrant prejudgment interest. The Court also remanded the case for the district court to reconsider the statutory damages award in light of the factors identified in Wakefield v. ViSalus, Inc., which addresses the substantive due process limits on aggregate statutory damages.

Ninth Circuit holds that a district court erroneously failed to conduct a “reasonable person” analysis in determining whether plaintiff consumers had consented to Google’s collection and use of their data

In Calhoun v. Google, LLC plaintiffs were a group of Google Chrome users who chose not to sync their Chrome browsers with their Google accounts. Chrome offered a feature called “sync” which, when turned on, saves personal information in the user’s Google account which may then be accessed by the user on other computers and devices. Plaintiffs alleged certain personal information (the “at-issue” data) was sent to Google despite the Chrome Privacy Notice’s promise that Chrome would not send Google personal information if sync were turned off.

The district court granted Google’s motion for summary judgment on the grounds that since any browser, and not just the Chrome browser, sends the at-issue data to Google, the company’s general privacy policies governed, and not the Chrome Privacy Notice. In other words, the data collection was “browser agnostic,” and the general privacy policies informed consumers that “Google maintains the practices of (a) collecting its users’ data when users use Google services or third party sites that use Google’s services and (b) that Google uses the data for advertising purposes.” In essence, the trial court ruled that plaintiffs consented to Google’s activity.

The Ninth Circuit reversed concluding the district court had erred by focusing “on ‘browser agnosticism’ instead of conducting the reasonable person inquiry.” For Google to prevail on its consent defense, it bore the burden of proving “whether the circumstances, considered as a whole, demonstrate that a reasonable person understood that an action would be carried out so that their acquiescence demonstrates knowing authorization.” According to the Ninth Circuit, the “governing standard is what a ‘reasonable user’ of a service would understand they were consenting to, not what a technical expert would.”

Ninth Circuit holds that the Communications Decency Act does not shield an anonymous messaging app from plaintiffs’ misrepresentation claims

In Estate of Bride v. Yolo Technologies, Inc. a coalition of children’s rights organizations and parents of children who were cyberbullied online, many of whom killed themselves as a result of their abuse, filed a class action complaint against social media companies, Snap, the creator of Snapchat, as well as two anonymous messaging app companies whose apps integrated into Snapchat called Yolo (“Yolo”) and LMK (“LMK”). Snap was dismissed as a defendant in the district court. The plaintiffs brought their lawsuit because they believe the defendants’ wrongful behavior enabled rampant cyberbullying on their apps to the detriment of children. The plaintiffs’ claims can be grouped into two major categories: misrepresentation and products liability.

The plaintiffs’ misrepresentation claims allege that the defendants are liable because they declared in their terms of service that they would protect users by banning and/or revealing the identity of people using the apps to bully or abuse others, but they refused to do so when users tried to report abuse. The plaintiffs’ product liability claims allege that the defendants’ apps were unreasonably dangerous products because they knew or should have known that one-sided anonymity would be used for widespread bullying and abuse.

The district court dismissed all of the plaintiffs’ claims, ruling that Section 230 of the Communications Decency Act (“Act”) barred the claims. Section 230 protects apps and websites which receive content posted by third-party users (i.e., Facebook, Instagram, Snapchat, LinkedIn, etc.) from liability for any of the content posted on their services, even if they take it upon themselves to establish a moderation or filtering system, however imperfect it proves to be. This immunity persists unless the service is itself “‘responsible, in whole or in part, for the creation or development of’ the offending content.”

The court lumped most of the claims together and ruled they were all prohibited because they treated the defendants as the publishers of third-party content. Specifically, the court ruled that the plaintiffs would not have brought their claims if the defendants’ platforms had not hosted harmful third-party content (bullying and abuse). In other words, Section 230 applied because harmful third-party content was a but-for cause of the lawsuit. Plaintiffs appealed to the Ninth Circuit.

The Ninth Circuit reversed the district court’s dismissal of plaintiffs’ misrepresentation claims and affirmed the district court’s dismissal of plaintiffs’ products liability claims. As to the misrepresentation claims, the Court held that the claims survived because plaintiffs seek to hold Yolo accountable for its promise to unmask or ban users who violated the terms of service, and not for a failure to take certain moderation actions. In Affirming the district court’s dismissal of plaintiffs’ products liability claims, the Court held that section 230 precludes liability because plaintiffs’ product liability theories attempt to hold Yolo liable as a publisher of third-party content.

Ninth Circuit holds that district court erred in determining consumer lacked standing to pursue false advertising claim against sunscreen company where merits and jurisdictional issues were intertwined

In Bowen v. Energizer Holdings, Inc. plaintiff purchased several bottles of Banana Boat sunscreen between 2017 and 2020, including Ultra Sport SPF 100, SPF 50, and SPF 30. She later discovered that the SPF 50 bottle contained 0.29 parts per million (“ppm”) of benzene, a known carcinogen. She filed a complaint against the manufacturer, Energizer Holdings (“Energizer”) alleging that the products were falsely advertised as safe and that the presence of benzene was not disclosed on the labels. Plaintiff claimed she would not have purchased the products, or would have paid less for them, had she known about the benzene contamination.

The district court dismissed the plaintiff’s suit for lack of Article III standing, concluding that she did not demonstrate a non-speculative increased health risk or actual economic harm. The court relied on FDA guidelines permitting up to 2 ppm of benzene in sunscreen, determining that the plaintiff’s allegations did not establish that 0.29 ppm of benzene posed a credible risk of harm or economic injury. Plaintiff appealed.

The Ninth Circuit reversed holding that the district court erred by resolving disputed facts in favor of the defendants and prematurely addressing the merits of the case intertwined with the jurisdictional question of standing. The Ninth Circuit found that the plaintiff adequately established an injury in fact for purposes of Article III standing, as she alleged economic harm from purchasing a product she would not have bought, or would have paid less for, absent the defendants’ misrepresentations. The Court also determined that the plaintiff met the causation and redressability elements of standing, as her injury was likely caused by the defendants’ alleged misrepresentations and could be redressed by judicial relief.

Court of Appeal holds that plaintiffs lacked standing to sue under the Fair Credit Reporting Act because they did not allege a concrete injury

In Muha v. Experian Information Solutions plaintiffs, residents of Wisconsin, filed two class action complaints against Experian Information Solutions, Inc. (“Experian”) under the Fair Credit Reporting Act (“FCRA”). Plaintiffs alleged that Experian failed to include a required statement in the “Summary of Rights” portion of their consumer reports, violating 15 U.S.C. section 1681g(c)(2)(D). Plaintiffs sought actual, statutory, and punitive damages. Experian removed the cases to federal court, but the case was remanded back to the state court.

Once back in state court, Experian moved for judgment on the pleadings, arguing plaintiffs lacked standing under Wisconsin law and that their FCRA claim did not fall within the statute’s “zone of interests.” In opposition, plaintiffs contended California law should apply and that they had standing under it. The trial court, referencing the recent decision in Limon v. Circle K Stores Inc., which required a “concrete injury” for standing in California state courts, granted Experian's motion. Plaintiffs appealed, arguing Limon was wrongly decided.

The Court of Appeal affirmed finding Limon persuasive and holding that Plaintiffs lacked standing because they did not allege a concrete or particularized injury. The Court noted that under both California and federal law, an “informational injury” alone without adverse effects is insufficient to confer standing.

Court of Appeal holds that trial court erred in directing verdict against brake manufacturer’s “sophisticated user defense” as substantial evidence plainly demonstrated the plaintiff, an automotive shop operator, was aware of the asbestos risk

In Watt v. Pneumo Abex Steven Watts, an automotive repair shop owner, was diagnosed with mesothelioma in 2019, a disease linked to asbestos exposure. He and his wife, Cindy Watts, filed a lawsuit against 28 defendants, later adding eight more. By the time of trial, only one defendant, Pneumo Abex, LLC (“Abex”), remained. The jury awarded the plaintiffs $2,943,653 in economic damages, $6.75 million in noneconomic damages, and $1 million for loss of consortium, attributing 60% fault to Abex, 25% to other brake manufacturers, and 15% to Watts.

Prior to the verdict, the trial court granted plaintiffs’ motion for a directed verdict against Abex on its sophisticated user defense, which argued that Watts, as a trained mechanic and business owner, should have known about the dangers of asbestos.

The Court of Appeal reversed holding that the trial court erred in directing the verdict against Abex on the sophisticated user defense, as there was substantial evidence that Watts should have known about the asbestos risks. Thus, the case was remanded for a new trial allowing Abex to present its sophisticated user defense.