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The California Supreme Court recently reinforced a trend to dismiss consumer lawsuits unless the plaintiffs are actually harmed rather than simply complaining, a distinction which matters to a business defending a costly class action or representative lawsuit.  Consumers sued a wireless telephone company under the state Consumers Legal Remedies Act (CLRA) claiming that the wireless provider’s standard consumer contract contains allegedly unconscionable and illegal terms in violation of the CLRA, including as to mandatory arbitration, jury trial waiver, class action waiver, disclaimed warranties, and early termination fees (ETFs).  The state Supreme Court has now ruled that because the allegedly unconscionable terms have not actually been enforced against them (instead, plaintiffs or their counsel have simply read them for legal flaws), plaintiffs have suffered no damages, and have no standing to bring suit under the CLRA. Observing that “any rule that would expand the ability of individuals to bring lawsuits has costs as well as benefits,” the Supreme Court holds that “a plaintiff has no standing to sue under the CLRA without some allegation that he or she has been damaged by an alleged unlawful practice.”  (Meyer v. Sprint Spectrum LP, California Supreme Court No. S153846, January 29, 2009)

In another recent case, a California Court of Appeal has found that the alleged mislabeling of products as “Made in U.S.A.” in violation of county of origin labeling laws, is in itself insufficient for a consumer’s standing to sue under California’s false-advertising and unfair-practices laws (Bus. & Profs. Code Sections 17500 and 17200).  According to the Court of Appeal, if a product mislabeled “Made in U.S.A.” is not functionally defective, a plaintiff who wanted an “American” product may indeed have an injury, but has not lost “money or property” as required for standing to sue under those Unfair Practices laws.  Case dismissed.  (Kwikset Corp. v. Superior Court, California Court of Appeal No. GO40675, February 25, 2009)

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