Case: Buckland v. Threshold Enterprises, Ltd., Case No. B192832 (Cal. Ct. App. 9/25/2007)

The One Sentence Summary:
A consumer who buys a product through her attorney for the sole purpose of litigation arising out of deceptive packaging or advertising lacks standing to bring a claim under the Consumers Legal Remedies Act, unfair competition law or false advertising law, and cannot state a claim for fraudulent concealment or negligent misrepresentation because the consumer did not rely on the statements or representations of the defendant and the consumer did not suffer an injury in fact or lose money or property.

What They Were Fighting About:
Katherine Lee Buckland, the Director of the California Women’s Center (the “Center”), and the Center filed a complaint against 30 defendants that market skin lotions and creams, including Threshold Enterprises, Ltd. (“Threshold”). In the Complaint, Buckland brought nine claims as an individual, including fraudulent concealment, negligent misrepresentation, and violation of unfair competition law (Cal. Bus. & Prof. Code § 17200 et seq.), false advertising law (Bus. & Prof. Code § 17500), and the Consumers Legal Remedies Act (Cal. Civil Code § 1750). Buckland alleged that defendants, including Threshold, had not complied with FDA regulations in marketing skin cream products and that the packaging and advertising for the products lacked adequate warnings about the chemicals in the skin creams. Buckland conceded that she had suspected Threshold’s packaging and marketing were false or misleading, and she had purchased Threshold’s skin product for $14.99 through her attorney for purposes of the litigation. The trial court dismissed Buckland’s claims against Threshold on the ground that Buckland lacked standing and failed to allege fraud with specificity, and denied Buckland’s motion for an injunction against Threshold. The claims of the Center were not at issue in the Opinion.

Court Holdings:
The Court of Appeal affirmed the trial court’s order dismissing Buckland’s claims against Threshold and denying injunctive relief, and held:

  • Buckland failed to state a claim under the Consumers Legal Remedies Act for misrepresenting “characteristics, ingredients, uses, benefits, or quantities” or misrepresenting the products as “of a particular standard, quality, or grade” on the ground that she had not suffered actual damages caused by Threshold’s conduct. Since Buckland conceded that she suspected Threshold’s packaging and marketing were false or misleading and she bought the products solely to pursue litigation, she did not actually rely on the truth or completeness of Threshold’s representations.
  • Buckland lacked standing to state a claim under unfair competition law or false advertising law because she did not suffer the requisite injury in fact or loss of money or property. The amount she paid to purchase Threshold’s product was incurred solely to facilitate the litigation, and thus did not constitute an “injury in fact” or “lost” money or property.
  • Buckland failed to state a claim for fraudulent concealment or negligent misrepresentation because Buckland did not actually rely on any false statements or omissions of Threshold. Buckland conceded that she suspected Threshold’s packaging and marketing were false or misleading and she bought the products through her attorney solely to pursue litigation.