A federal judge in the Northern District of California recently dismissed a false advertising case brought by two non-profit groups, finding that their own testimony sunk their claims.<\/p>\n
The two plaintiffs, the Center for Food Safety and Friends of the Earth, sued Sanderson Farms Inc. (\u201cSanderson\u201d), alleging that Sanderson\u2019s advertisements of its chicken as \u201c100 percent natural\u201d was misleading in violation of California\u2019s Unfair Competition Law (\u201cUCL\u201d) and False Advertising Law (\u201cFAL\u201d). The organizations alleged that reasonable consumers would interpret the statement \u201c100 percent natural\u201d to mean that the chicken was raised without any antibiotics ever<\/em>, whereas Sanderson\u2019s chicken products are raised<\/em> with antibiotics, but such antibiotics have cleared<\/em> prior to sale. In December 2018, the judge denied Sanderson\u2019s motion to dismiss, finding that the organizations had adequately alleged violations of the UCL and FAL. The case then proceeded into discovery.<\/p>\n On July 31, 2019, however, the judge granted Sanderson\u2019s new motion to dismiss, holding that the organizations lacked standing to bring the case. Friends of the Earth, et al. v. Sanderson Farms, Inc.<\/em>, No. 3:17-cv-03592-RS (N.D. Cal. July 31, 2019) (ECF 221). While the organizations alleged in their complaint that they had diverted resources to combat Sanderson\u2019s allegedly misleading advertising, the evidence produced in discovery revealed that to be false. The judge found that the activities the organizations undertook were related to antibiotic use generally, and were not in reaction to Sanderson\u2019s advertising. \u201cPerhaps most damaging,\u201d the judge found, were the organizations\u2019 own depositions, in which they admitted \u201cthey did not divert resources because of Sanderson\u2019s advertising\u201d and stated that \u201cthey would have undertaken the same advocacy activities\u2014including advocating against the use of antibiotics in animal agriculture and discouraging consumers from purchasing meat raised with routine antibiotics\u2014even if Sanderson had never aired the challenged advertisements,\u201d and that \u201cthey would have encouraged Sanderson\u2019s customers to avoid Sanderson and other products that used routine antibiotics regardless of the existence of the advertising.\u201d Id. <\/em>at 5-6. In other words, the organizations\u2019 real issue was with Sanderson\u2019s practices<\/em>, not its advertising<\/em>. But, as the judge found, \u201cThis is a false advertising case, and Plaintiffs must establish that their alleged injury is traceable to the challenged ads at issue.\u201d Id.<\/em> at 6. Because the organizations fatally undercut their own claim that any \u201cinjury\u201d they had was caused by Sanderson\u2019s advertising, the judge dismissed their case.<\/p>\n This case is a good reminder of two points for companies who might find themselves on the defense side of a federal case brought by an advocacy group—<\/p>\n First, for a plaintiff to have a successful case, not only must they have a substantive claim (here, alleged violation of false advertising statutes), but they also must have a valid theory of standing. In federal court, to have standing a plaintiff must have an injury that is caused by the action of the defendant and redressable by a favorable ruling. See Lujan v. Defs. of Wildlife<\/em>, 504 U.S. 555, 560-61 (1992). For cases involving individual plaintiffs, standing theories can often be straightforward (e.g., \u201cI sustained a physical injury when the defendant ran the red light and hit me\u201d or \u201cI spent money on this product that was falsely advertised that I wouldn\u2019t have spent if it was truthfully advertised\u201d). When organizations decide to become plaintiffs, they often have to use other standing theories. Some common theories: informational injury<\/strong> standing (a statute requires that the organization be provided certain information that was withheld). See<\/em>, e.g.<\/em>, Federal Election Commission v. Akins<\/em>, 524 U.S. 11 (1998)); organizational injury<\/strong> standing (defendant\u2019s conduct frustrates the organization\u2019s mission and caused it to divert resources away from programmatic activities towards combatting the defendant\u2019s conduct). See<\/em>, e.g.<\/em>, La Asociacion de Trabajadores de Lake Forest v. City of Lake Forest<\/em>, 624 F.3d 1083 (9th Cir. 2010)); and associational <\/strong>standing (at least one of the organization\u2019s members has standing to sue in their own right; the interests at stake are germane to the organization\u2019s purpose, and neither the claim asserted nor the relief requested requires the participation of individual members). See<\/em>, e.g.<\/em>, Friends of the Earth v. Laidlaw Envtl. Servs., (TOC), Inc.<\/em>, 528 U.S. 167 (2000).<\/p>\n It is important for defendants to think not just about how to defend themselves on the substance\/merits of the claims in a lawsuit, but also to think about whether the person\/entity bringing the lawsuit actually has the right to do so. If the plaintiff does not have standing, the case should be dismissed regardless of the strength of the underlying claim. In the Sanderson <\/em>case, the judge previously found that the plaintiff organizations had adequately alleged their substantive UCL and FAL claims, but ultimately dismissed the entire case because the organizations could not establish the organizational injury standing they pled\u2014they could not show that they had diverted organizational resources as a result of the alleged false advertising.<\/p>\n Second, a defendant can raise a plaintiff\u2019s lack of standing at any point in the case. Defendants often want to bring such a challenge in a motion to dismiss at the beginning of a case before expending resources on discovery. However, on a motion to dismiss, the judge is required to assume that the allegations in the complaint are true. For example, if an organizational plaintiff alleges that it diverted funds from one of its activities to combatting a defendant\u2019s false advertising, the judge must assume that is true, making it difficult for a defendant to succeed in getting a well-pleaded case dismissed for lack of standing at the motion to dismiss stage. However, defendants should take heart that if forced to go into discovery on the merits, they should take the opportunity to get discovery on the plaintiff\u2019s standing theory. The deposition testimony given by the plaintiffs in the Sanderson <\/em>case is ultimately what led to their demise and the dismissal of the case. Defendants should remember that even if they fail at getting a case dismissed for lack of standing early in the case, that they should try, try again. The burden to prove standing is on the plaintiffs throughout a case, and the bar for what they must demonstrate gets raised at each stage. Adequately alleging standing is not the same thing as proving it. Sometimes, as in the Sanderson <\/em>case, discovery can reveal that it is a plaintiff\u2019s standing theory (not the defendant\u2019s advertising) that is false.<\/p>\n","protected":false},"excerpt":{"rendered":" A federal judge in the Northern District of California recently dismissed a false advertising case brought by two non-profit groups, finding that their own testimony sunk their claims. The two plaintiffs, the Center for Food Safety and Friends of the Earth, sued Sanderson Farms Inc. (\u201cSanderson\u201d), alleging that Sanderson\u2019s advertisements of its chicken as \u201c100 … <\/p>\n