Antitrust Law Daily Wrap Up, ADVERTISING—9th Cir.: Rulings that class plaintiffs lacked standing, future injury upheld, (Apr 11, 2016)

By Edward L. Puzzo, J.D.

The U.S. Court of Appeals in San Francisco has partially affirmed a lower court's ruling, dismissing a consumer class action against the marketers of a benign prostate hyperplasia (BPH) treatment for lack of standing and a lack of likelihood of future injury. However, the appeals court overturned the dismissal of one named plaintiff’s claim on the ground that he had received a refund (Luman v. Theismann, April 8, 2016, Per Curiam).

Super Beta Prostate (SBP) was marketed by NAC Marketing as a treatment for symptoms of BPH. Former National Football League quarterback Joe Theismann was the celebrity endorser of the product in advertising.

Plaintiffs Floyd Luman and Joel Amkraut brought a putative class action against both NAC Marketing and Theismann, alleging that the advertising for the product violated California's False Advertising Law (FAL), Consumers Legal Remedies Act (CLRA) and Unfair Competition Law (UCL). They requested declaratory and injunctive relief, compensatory and punitive damages, and restitution. The defendants moved to dismiss, the district agreed, and plaintiffs appealed the dismissal.

Monetary relief. The district court dismissed Floyd Luman's individual claim for relief, finding that Luman filed his complaint two months after he received a monetary refund from NAC Marketing, and therefore no longer met the injury-in-fact requirement for standing at the time he filed his complaint. The appellate court ruled that the district court did not err in dismissing Luman’s individual claim for monetary relief because Luman never had standing to pursue monetary relief.

The other named plaintiff, Joel Amkraut, had not received a refund at the time the lawsuit was filed, so he met the injury-in-fact requirement for standing. The district court, however, had also dismissed Amkraut's claim, reasoning that his claim became moot when NAC issued him a refund. Subsequently, the U.S. Supreme Court ruled in Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016) that an unaccepted settlement offer or offer of judgment does not moot a plaintiff’s case. Due to this change in the law, the appellate court vacated the portion of the district court's decision dismissing Amkraut’s individual claim as moot, and remanded it for reconsideration in light of Campbell-Ewald.

Injunctive relief. The appellate court affirmed the district court's ruling that the plaintiffs lacked standing to pursue injunctive relief. Since the plaintiffs did not allege that they intended to purchase the SBP product in the future, they were unable to show a sufficient likelihood that they would be injured by NAC again in a similar way. Thus, they lacked standing to maintain that they required injunctive relief in order to prevent a future injury.

Spokesman. The appellate court also affirmed the district court's ruling that since Theismann never held title to SBP and was merely NAC's celebrity spokesman, the claims against him were properly dismissed.

The case is Civil Action No. 14-15385.

Attorneys: Scott Bursor (Bursor & Fisher, PA) for Floyd Luman. Norman C. Hile (Orrick, Herrington & Sutcliffe LLP) for Joe Theismann.

Companies: NAC Marketing Company, LLC

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