Consumer Law

No organizational standing from mere conflict with consumer protection mission

No organizational standing from mere conflict with consumer protection mission

In Defense of Animals v. Sanderson Farms, Inc., 2021 WL
4243391, No. 20-cv-05293-RS (N.D. Cal. Sept. 17, 2021)

Let’s play the fun game “which of these statements about
standing should make IP people nervous?”

Previously, Friends of the Earth and the Center for Food
Safety sued Sanderson Farms on the claim its advertisements for chicken were
misleading. Ultimately, the Ninth Circuit agreed that they lacked
organizational standing because they hadn’t diverted resources to combat the
challenged conduct. FoE sued Sanderson again, but the court found that it was
just trying to work around the infirmities of that first case. The plaintiffs
here “followed what [they] understood to be the Ninth Circuit’s implicit
commands to publish action alerts, address Sanderson’s advertising in blog
posts, and petition Sanderson.” But none of that meant they’d diverted resources.

More fundamentally,

organizational standing requires an injury to the
organization itself, not merely its interests. An organization’s entirely
voluntary action cannot confer standing, no matter its quality or quantity. The
organization must be forced to respond to prevent injury …. Even if the
Plaintiffs had transformed themselves entirely into anti-Sanderson advocates,
they would not have standing because it would not have been due to any injury
by Sanderson.

[Now ask: is unfair advantage to the defendant the same
thing as injury to the plaintiff?]

For organizational standing, it is not enough for there to
be “a setback to an organization’s values or interests.” Defendant’s conduct
must result in “an actual impediment to the organization’s real world efforts
on behalf of such principles.” And the organization must divert resources, not
go about business as usual, in repsonse. “Crucially, plaintiffs must show they
would have suffered some other injury if they had not diverted resources to fix
the problem,” such as losing members. “An organization cannot manufacture
standing by choosing to fix problems if they otherwise would not have affected
it. Resources must be spent differently than they would have been otherwise.”

This is merely an application of the same rules that apply
to individual standing. “If the defendant’s conduct did not force the plaintiff
to divert resources, the only injury comes from the plaintiff’s own actions.
This self-inflicted injury would not be fairly traceable to the defendant.”
Neither organizations nor individuals have standing “by virtue of investigating
conduct or starting a new campaign against someone who frustrates its general
mission…. Just as an individual cannot gin up standing by researching and
tweeting about something that indirectly makes his or her life harder, neither
can an organization.” [See also dilution.]

Here, plaintiff IDA didn’t adequately plead any concrete way
in which its mission had been frustrated; it wasn’t enough to plead facts
showing that “the abstract interests it fights for have been set back by
Sanderson’s misleading advertising.” Nor did the complaint plead facts
permitting the conclusion that its diversion of resources was required to
prevent some other injury to its activities. It alleged 200 hours of work
through various activities such as publicity and petitioning the Better
Business Bureau’s National Advertising Division. “Even a large new campaign is
not enough if the organization is not forced to undertake it.” Most of the
activities were voluntary continuations of previous activities, and even
petitioning Sanderson or submitting a complaint to NAD “are at root typical of
IDA’s advocacy”; they were also fairly traceable to IDA, not to Sanderson. IDA
also didn’t explain what it would have done with its time and money otherwise.

Possibly offering some TM hope, the court distinguished
cases in which an organizational plaintiff “was forced to respond to
constituents.” But note that a lot of times TM plaintiffs don’t or can’t plead
more than facts analogous to IDA’s pleading that it “reasonably believed that
[…] IDA members relied on Sanderson’s misrepresentations,” without alleging
that “any members actually sought its guidance, let alone on a scale sufficient
to justify diversion of resources.” Plus, in those cases bad things actually
happened to the constituents, creating “obvious harm” to the organizations
themselves as they struggled to represent their clients.

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