Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Ohio: Consumer must face threat of future harm to seek injunction, (Jan 21, 2015)

By Jody Coultas, J.D.

Because an eyeglasses purchaser lacked standing to pursue an injunction in connection with a false advertising claim filed against Visionworks of America, Inc. in federal court, the federal district court in Cleveland remanded the case to state court (Graiser v. Visionworks of America, Inc., January 20, 2015, Gwin, J.).

The purchaser alleged that Visionworks’s “buy one, get one free” advertising campaign for eyeglasses was deceptive and violated the Ohio Consumer Sales Practices Act because Visionworks offered a single pair of eyeglasses at a discounted price to customers who forgo the “free” pair. Also, the disclaimers such as “restrictions apply” or “See associate for details” were insufficiently clear and conspicuous to be effective.

After the purchaser filed for an injunction on behalf of a putative class in state court, Visionworks removed to the case to federal court based on of diversity jurisdiction. The purchaser sought remand based on the court’s decision in Neuman v. L’Oréal USA S/D, Inc. In Neuman, the court held that a plaintiff who suffers no risk of future injury cannot obtain an injunction. Article III required a case or controversy to have standing. Because there was no risk of future harm to the consumer, there was no case or controversy.

Although the court held that Neuman did not control the case, the lack of any cognizable future harm required the court to remand the case to state court. In Neuman, the plaintiff, seeking to bring an injunction-only class action, lacked standing based on a disclaimer that she had no intention of purchasing the product at issue again. The purchaser in this case made no such disclaimer. However, the purchaser lacked standing because the injunction sought would not remedy or prevent future harm. Mere exposure to the allegedly false advertising did not constitute harm for Article III standing purposes. Any deception in the future to class members could not form the basis for standing because standing cannot rest on the likelihood of future harm to unnamed class members. Also, Visionworks’s advertising campaign did not allow it to charge a higher price for the single pair of glasses without the free pair attached.

The purchaser needed to show that he was harmed based on the inability to receive two pairs of glasses at the lower price. However, Visionworks was under no obligation to sell two pairs of glasses at the lower price unless it continued its “buy one, get one free” campaign and offered a single pair at the cheaper price. Therefore, an unconditional injunction requiring Visionworks to offer two pairs of glasses at the lower price would be improper. An injunction forbidding Visionworks from continuing its “buy one, get one free” campaign while refusing to sell two pairs of glasses at a lower price offered for a single pair would not remedy the harm done to the purchaser. Therefore, the purchaser lacked standing and the court remanded the case to the state court.

The case is No. 1:14-CV-01641.

Attorneys: Mark Schlachet (Attorney at Law) for Elliott Graiser. Ronald D. Holman, II (Taft Stettinius & Hollister – Cleveland) for Visionworks of America, Inc.

Companies: Visionworks of America, Inc.

Cases: Advertising OhioNews