We’ve frequently criticized the U.S. Court of Appeals for the Ninth Circuit’s “Article III standing” jurisprudence. We explained why standing is such an important constitutional concept in a May 2018 post:
A predictable body of law that confines courts’ jurisdiction to lawsuits alleging actual, redressable harms helps to limit defendants’—especially business defendants’—litigation costs by facilitating early dismissal of questionable claims.
We’ve also criticized the Ninth Circuit’s spotty record on reining in the “Food Court bar’s” novel legal theories. And even when the Ninth Circuit does rule against plaintiffs, the court most often labels those food-labeling class-action decisions “Not for Publication,” and thus mostly unhelpful to defendants.
So we were quite floored to learn of the published December 4, 2020 decision (argued on December 5, 2018) in McGee v. S-L Snacks National. It was a “what to my wondering eyes should appear” moment normally reserved for a sleigh and reindeer this time of year.
Background—Yet Another Trans-Fat Suit
McGee is one of the countless class actions that The Weston Firm has filed involving partially hydrogenated oil (i.e. trans fat). The suits have alleged either that trans fat’s presence in a food or a truthful front-of-label “zero trans fat” claim violate California consumer-protection laws. Ms. McGee claims that the “nearly half [a] pound” of trans fat she consumed from years of eating Pop Secret popcorn caused her economic and physical injuries.
In its motion to dismiss, S-L Snacks argued that the plaintiff lacked Article III standing to sue and that the lawsuit conflicted with the FDA’s regulation of trans fats and was thus preempted. The district court granted the motion to dismiss, reasoning that McGee could not prove a concrete and redressable economic or physical harm.
McGee appealed, and the parties addressed both standing and preemption in their Ninth Circuit briefs. Prior to the December 2018 oral argument, the Ninth Circuit held in two other Weston Firm trans-fat cases that the plaintiffs overcame the constitutional standing hurdle. Posed with those decisions, S-L Snacks informed the court just days before the oral argument in a “28(j) letter” that it “will no longer contest standing.”
Despite that concession, the court dropped a footnote leading into its legal analysis that explained, “we have an independent obligation to inquire into McGee’s Article III standing.” Given the circuit’s general approach to standing, and more specifically the outcome of the aforementioned 2018 decisions, the discussion that followed should not have gone well for S-L Snacks. Except it did.
McGee first argued that because Pop Secret was not the safe, heart-healthy product she thought she was buying, she didn’t receive the benefit of her bargain. The court reasoned that McGee’s subjective assumptions about Pop Secret were not part of the bargain. The product labeling contained no assurances of safety, and absent some false representation about the product’s use of trans fat, McGee could not prevail on this theory of harm.
Next, the court addressed McGee’s argument that she paid more for Pop Secret than the product’s actual worth (which, she claimed, was $0.00 due to the presence of trans fat). McGee’s particular overpayment theory of harm is novel, the court noted, because she doesn’t claim S-L Snacks misled her into excessive payment. Deception has been a key element in Ninth Circuit decisions finding overpayment as a redressable harm.
The court found some support for a no-deception overpayment theory, but ultimately held that it need not decide if her theory is viable. Even if it were viable, the court added, the defendant listed trans fat as an ingredient and, as McGee herself noted in her complaint, scientific studies dating back to 2008, established the substance’s negative health impact.
Though the court found that the studies McGee presented were enough to put her on notice of trans fats’ hazards, the studies did not help her establish a current or future physical-injury claim. She did not undergo medical testing to confirm the harms she claimed, so she had to argue that her years of consumption invariably resulted in physical injury. To make that point, she relied on the studies, which the court concluded “do not support this inference.” Her current physical-injury claims were thus “too speculative to support standing, even at the pleading stage.” The court applied the same reasoning to reject her future physical-injury argument.
The panel’s determination to reject McGee’s complaint on standing grounds is puzzling, especially in light of the two 2018 decisions S-L Snacks’ counsel cited in his 28(j) letter conceding standing. The McGee panel ignored one of the decisions and faintly distinguished the second decision in a footnote.
The McGee panel also went out of its way to exactingly parse the complaint’s allegations, an approach that is quite inconsistent with the Ninth Circuit’s normal hostility toward defendants’ pleading-stage attacks. The panel’s repeated references to the Nutrition Facts panel when rebuffing McGee’s arguments is especially intriguing.
S-L Snacks made a winning preemption argument on appeal, and the McGee panel could have just as easily dismissed the complaint on that ground. Perhaps the panel did not want to credit federal law’s supremacy over California consumer-protection statutes, even in this situation where the FDA considered trans fat “generally recognized as safe” during the plaintiff’s years of Pop Secret consumption.
Whatever the reason, the McGee panel’s standing determination is a positive one for Food Court defendants. Unless it can find a plaintiff with actual, direct physical injuries, The Weston Firm is unlikely to overcome a motion to dismiss any future lawsuit alleging trans fat’s mere presence in a food violates California law. Notably, on December 15, a Weston Firm client dropped her trans-fat-use claim against Tootsie Roll Industries.
Finally, the court’s surprisingly detailed analysis of the plaintiff’s allegations, and its references to the ingredients list, could prove generally supportive of defendants’ motions to dismiss not just in food-related lawsuits, but in other consumer-protection litigation.
Also published by Forbes.com on WLF’s contributor page.