In a unanimous, published decision, a three-judge panel of the Ninth Circuit affirmed the dismissal of a a putative class action brought by a plaintiff-consumer who alleged claims arising when Diamond Foods allegedly included partially hydrogenated oils as an ingredient in Pop Secret popcorn. See McGee v. S-L Snacks Nat’l, 982 F.3d 700 (9th Cir. Dec. 5, 2020).
In sum, the panel affirmed the district court’s dismissal for lack of constitutional Article III standing as the plaintiff did not plausibly allege that, as a result of her purchase and consumption of Pop Secret, she suffered economic or immediate physical injury, or that she was placed at substantial risk of adverse consequences. Concerning plaintiff’s alleged economic injury, the panel held that plaintiff had not alleged that she was denied the benefit of her bargain, particularly given the labeling disclosure that the product contained artificial trans fat.
The panel also held that plaintiff failed to allege an economic injury based on an overpayment theory.
Plaintiff did not allege that Pop Secret contained a hidden defect, or that Pop Secret was worth objectively less than what she paid for it. Concerning plaintiff’s alleged present physical injury, the panel held that plaintiff had not plausibly alleged that she suffered physical injuries due to her consumption of Pop Secret. Concerning plaintiff’s alleged future physical injury, the panel held that plaintiff had not plausibly alleged that her consumption of Pop Secret substantially increased her risk of disease.
To have Article III standing, a plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision. Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016)). To establish an injury in fact, a plaintiff must show that he or she suffered an invasion of a legally protected interest that is concrete and particularized. In turn, a particularized injury is one that affects the plaintiff in a personal and
individual way. When a case is at the pleading stage, the plaintiff must clearly allege facts demonstrating each element of standing. Warth v. Seldin, 422 U.S. 490, 518 (1975).
The plaintiff alleged three types of injuries—economic injury, present physical injury, and future physical injury (i.e., increased risk of disease). As for the benefit of the bargain economic injury claim, the Court noted that a plaintiff must do more than allege that she did not receive the benefit she thought she was obtaining. The plaintiff must show that she did not receive a benefit for which she actually bargained.
Although the plaintiff may have assumed that Pop Secret contained only safe and healthy ingredients, her assumptions were not included in the bargain, particularly given the labeling disclosure that the product contained artificial trans fat. Thus, even if those expectations were not met, she had not alleged that she was denied the benefit of her bargain.
As to the overpayment theory, this was not a case in which the plaintiff alleged that she paid more for a product due to deceptive conduct. She did not allege that Diamond made false representations—or actionable non-disclosures—about Pop Secret. Thus, a key element of alleged overpayment cases—a
defendant’s misrepresentations about a product—was absent here. So plaintiff tried what the Court said was a novel theory involving alleged economic injury absent misrepresentations; even if that theory was viable, she failed to allege injury on that basis here. She did not allege that Pop Secret contained a hidden defect, or that Pop Secret was worth objectively less than what she paid for it, and had to admit that Pop Secret’s nutritional label disclosed the presence of artificial trans fat, and the health risks of consuming artificial trans fat were firmly established by the time of her alleged purchases. As the complaint acknowledged, the evidence of trans fat’s potential impact on the health of Americans is more than 20 years old. Given that any alleged health risks of consuming Pop Secret were established by 2008, there was no way the products as purchased was worth objectively less than what one could reasonably expect.
While physical injury can confer standing, plaintiff had not plausibly alleged that she suffered
these injuries. She did not allege that she has undergone medical testing or examination to confirm that she suffers from conditions or that they were caused by her consumption of Pop Secret. The studies she cited did not support the notion that any level of consumption causes physical injury. (Indeed that is a fundamental principle of toxicology- dose matters.) Similarly, the panel rejected her argument that eating Pop Secret increased her risk of disease in any relevant way.