The Ninth Circuit’s recent decision in Sonner v. Schwabe N. Am., Inc. et al., resolves a split among district courts evaluating the standard that applies to false labeling claims brought under California’s Unfair Competition Law and Consumer Legal Remedies Act on summary judgment. The Ninth Circuit confirmed that plaintiffs can survive summary judgment by supplying a conflicting expert report, invalidating a line of cases that required plaintiff’s expert to also entirely undermine defendant’s expert.
Plaintiff Sonner sued Schwabe North America, Inc., and Nature’s Way Products, LLC, (collectively, “Schwabe”) in a putative class action alleging that “Ginkgold Advanced Ginkgo Extract” and “Ginkgold Max Advanced Ginkgo Extract Max” were falsely labeled and that labels on both products touting benefits to “mental sharpness,” “memory,” and “concentration” were false. The plaintiff asserted that the operative ingredient in both products, the EGb 761 variety of Ginkgo biloba extract, did not in fact have any of the asserted cognitive benefits and was little more than a placebo. Schwabe moved for summary judgment based on its expert’s testimony and the results of randomized controlled trials. The plaintiff opposed, pointing to the testimony of her own expert who analyzed several clinical studies and meta-analyses to conclude that Ginkgo biloba is ineffective, other than as a placebo.
The district court granted Schwabe’s motion for summary judgment relying on case law that originated out of the Fourth Circuit that treated false labeling claims under the UCL and CLRA specially. That line of cases held that a plaintiff must not only produce affirmative evidence supporting plaintiff’s claims, but must also fatally undermine the defendant’s evidence, in order to defeat a motion for summary judgment.
The Ninth Circuit rejected this more exacting summary judgment standard articulated by the Fourth Circuit that had been adopted by some courts in the Northern District of California and the Southern District of California in the false labeling context. Rejecting these cases, the Ninth Circuit reasoned that the burden on summary judgment should not differ in the false labeling context and reversed the grant of summary judgment. The Court noted that, “[u]nder California law, the plaintiff has the burden of proving by a preponderance of the evidence that a challenged advertisement is false or misleading under the UCL and CLRA.” Since this is the burden at trial, “to defeat summary judgment, [a plaintiff] need only produce evidence of a genuine dispute of material fact that could satisfy the preponderance of the evidence burden at trial.” In short, the Ninth Circuit determined that there was no reason to diverge from “the usual” summary judgment rules for UCL and CLRA claims. If a plaintiff and defendant each come forward with competing, admissible evidence, district courts should conclude that a dispute of fact precludes summary judgment.