Today, the U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal of a lawsuit brought under the California Unfair Competition Law by Friends of Animals and two other advocacy groups challenging the "100% natural" language in the advertising of the defendant poultry producer. Friends of the Earth v. Sanderson Farms, Inc., No. 19-16696 (9th Cir. Mar. 31, 2021). The appellate court agreed with the district court that plaintiffs had failed to prove organizational standing.
Plaintiffs sought to establish the "injury in fact" component of standing by alleging that the organizations had devoted additional time and resources to counteract the defendant's alleged misrepresentations or that they had been required to divert resources away from "watchdog work" to respond to defendant's advertising. As the court noted, however, "[o]rganizations divert resources when they alter their resource allocation to combat the challenged practices, but not when they go about their business as usual." Slip op. at 6 (cleaned up).
After extensive discovery into the allegedly diverted resources, the district court determined, and the Ninth Circuit agreed, that this case fell into the "business as usual" category:
After nearly two years and mountains of discovery, the Advocacy Groups could meaningfully offer only a single conclusory, contradictory, and uncorroborated statement as evidence of diverted resources. The district court weighed the evidence and concluded that the various activities proffered by the Advocacy Groups "were continuations of non-Sanderson-specific initiatives [the Advocacy Groups] were undertaking in furtherance of their missions to address antibiotic use generally." We discern no error in that conclusion.
Slip op. at 11-12.
Plaintiffs tried to salvage their UCL claim on the ground that they were also challenging the defendant's animal husbandry practices, but the Ninth Circuit ruled that "the UCL claim is entirely tethered to the representations. Consequently, no claim survives dismissal." Slip. op. at 12.
This case is an important precedent for businesses who must defend lawsuits brought by organizations claiming that their "injury in fact" stems from the resources that they claim the defendant's conduct forces them to divert from their normal activities. For the most part, many animal rights groups' main mission in life is to make it difficult for animal protein producers to function so, in many cases, attacking an industry defendant will fall into the business as usual category.
This case also shows the importance of challenging standing (which some lawyers overlook as a "technicality") and seeking discovery into the plaintiff's claims of "injury in fact" - in this case the resource drain theory. One of the more significant aspects of the lower court's ruling was that the declarations that the plaintiffs offered to defend their standing claims did not line up with what had been testified to in their depositions. The depositions contained the "damaging" testimony that showed that the groups would have engaged in the same advocacy activities even if the defendant had never aired the challenged advertisements. Slip op. at 9.
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