Kwan v. SanMedica Int’l, LLC

To state a claim under California’s Unfair Competition Law, False Advertising Law, or Consumer Legal Remedies Act, a private plaintiff must allege facts showing that the defendant’s advertising is actually false, not merely that that the defendant has not or cannot substantiate its advertising claims.  “We do not overrule a district judge on a question of state law unless the district judge’s findings are clearly wrong.  While a district judge’s presumed expertise in the law of his or her own state is not infallible, we regard the standard of review on this issue as one that does restrict our scrutiny of the district judge’s determination.”  Following National Council Against Health Fraud, Inc. v. King Bio Pharmaceuticals, Inc. (2003) 107 Cal.App.4th 1336, this decision holds that in a suit under the UCL, FAL or CLRA, a private plaintiff must allege facts showing that the defendant’s advertising is actually false.  Alleging that the defendant has not or cannot substantiate its advertising claims is insufficient to state a claim in private litigation, although it may suffice in a public prosecution by the AG or a DA under B&P Code 17508.  Plaintiff did not allege actually falsity by averring that the advertiser’s claim its product was “clinically tested” and associated with various health benefits implied the advertising was backed by credible scientific evidence.  Both allegations merely restated the lack of substantiation contention.  California law does not incorporate the Lanham Act’s distinction between “establishment” and “non-establishment” claims as a means of shifting the burden of proof to the defendant.  Under California law, the plaintiff always bears the burden of proof.

Ninth Circuit Court of Appeals (Erickson, J.); April 21, 2017; 2017 WL 1416483

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