Back in May, we wrote about a package of “extreme pro-plaintiff changes” that legislators had proposed to New York’s main consumer-protection statute, Gen. Bus. Law § 349. There have been some significant developments on this front, so we figured an update was in order.
It’s hard to argue that New York’s consumer-protection laws (Gen. Bus. Law §§ 349–350) are being underutilized by private plaintiffs. But, on that claimed basis, the state’s Legislature is considering a multifaceted amendment that would make those laws vastly more plaintiff-friendly—and business-unfriendly—than they already are. It’s hard to understate the impact these changes would have on the business community. We’re not sure what the bill’s odds of passage are, but given the extremity of the amendments, we’re a bit surprised they haven’t attracted more public attention.
Last Friday, the Third Circuit held that a J. Crew customer lacked standing to sue the company for printing ten digits of his credit card on a receipt, in violation of the Fair and Accurate Credit Transaction Act (which provides that companies should print only the last four digits). Relying on the Supreme Court’s decision in Spokeo v. Robins, the court held that the plaintiff’s alleged injuries—a violation of the statute and the “risk of identity theft”—were merely “procedural,” and thus insufficiently “concrete” to confer standing under Article III. The Third Circuit’s rigorous application of Article III standing requirements is good news for defendants in mislabeling cases, some of which are “gotcha”-type suits arising from highly technical labeling violations.
In consumer cases alleging product mislabeling, one frequently litigated question is whether the plaintiff has standing to seek an injunction of the labeling practice that he or she claims is misleading. Over the past decade, consumer protection defendants have often won on this issue by demonstrating that the plaintiff is at no risk of future injury. But last year, in Davidson v. Kimberly-Clark Corp., 889 F.3d 956 (9th Cir. 2018), the Ninth Circuit made this issue tougher for defendants, adopting an exceptionally broad view of plaintiffs’ standing to seek injunctive relief in mislabeling cases. Below, we discuss the aberrant holding in Davidson, and how Ninth Circuit defendants may still be able to distinguish its facts to defeat a claim for injunctive relief.