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Kwikset Corp. v. Superior Court

Supreme Court of California

January 27, 2011, Filed

S171845

Opinion

 [***746]  [**881]   WERDEGAR, J.—This case arises from Kwikset Corporation's (Kwikset) manufacturing of locksets it labeled as “Made in U.S.A.” James Benson brought suit under the unfair competition and false advertising laws to challenge the labels' veracity. After a bench trial, the trial court entered judgment for Benson.

While the case was pending on appeal, the electorate enacted Proposition 64 (Gen. Elec. (Nov. 2, 2004)), which called into question Benson's standing to challenge Kwikset's country of origin representations. Benson then filed an amended complaint in which he alleged he purchased Kwikset's locksets and would not have done so but for the “Made in U.S.A.” labeling. The Court of Appeal concluded this allegation was insufficient to establish standing because it did not satisfy Proposition 64's requirement that a plaintiff have “lost  [****4] money or property.” (See Prop. 64, §§ 3, 5.)

 [*317] 

CA(1)(1) We granted review to address the standing requirements of the unfair competition and false advertising laws in the wake of Proposition 64. We conclude ] Proposition 64 should be read in light of its apparent purposes, i.e., to eliminate standing for those who have not engaged in any business dealings with would-be defendants and thereby strip such unaffected parties of the ability to file “shakedown lawsuits,” while preserving for actual victims of deception and other acts of unfair competition the ability to sue and enjoin such practices. (Voter Information Guide, Gen. Elec. (Nov. 2, 2004) argument in favor of Prop. 64, p. 40; see also Prop. 64, § 1.) Accordingly, plaintiffs who can truthfully allege they were deceived by a product's label into spending money to purchase the product, and would not have purchased it otherwise, have “lost money or property” within the meaning of Proposition 64 and have standing to sue. Because plaintiffs here have so alleged, we reverse.

Factual and Procedural Background

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51 Cal. 4th 310 *; 246 P.3d 877 **; 120 Cal. Rptr. 3d 741 ***; 2011 Cal. LEXIS 532 ****

KWIKSET CORPORATION et al., Petitioners, v. THE SUPERIOR COURT OF ORANGE COUNTY, Respondent; JAMES BENSON et al., Real Parties in Interest.

Subsequent History: Reported at Kwikset Corporation v. S.C. (Benson), 2011 Cal. LEXIS 993 (Cal., Jan. 27, 2011)

Prior History:  [****1] Superior Court of Orange County, No. 00CC01275, David C. Velasquez, Judge. Court of Appeal, Fourth Appellate District, Division Three, No. G040675.

Kwikset Corp. v. Superior Court, 171 Cal. App. 4th 645, 90 Cal. Rptr.3d 123, 2009 Cal. App. LEXIS 213 (Cal. App. 4th Dist., 2009)

CORE TERMS

consumer, lose money, misrepresentation, label, economic injury, locksets, injury in fact, voters, false advertising, products, Cases, restitution, standing requirement, unfair competition, allegations, lawsuits, mislabeled, bargain, representations, purchasing, deception, suffer injury, food, deceived, standing to sue, buy, unfair business practice, business dealings, private plaintiff, trial court

Antitrust & Trade Law, Consumer Protection, Deceptive & Unfair Trade Practices, State Regulation, Civil Procedure, Justiciability, Standing, Injury in Fact, Torts, Business Torts, Unfair Business Practices, Elements, False Advertising, Deceptive Labeling & Packaging, Remedies, Governments, Legislation, Initiative & Referendum, Interpretation, General Overview, Evidence, Burdens of Proof, Responses, Defenses, Demurrers & Objections, Motions to Dismiss, Pleadings, Complaints, Requirements for Complaint, Dismissal, Involuntary Dismissals, Motions, Fraud & Misrepresentation, Actual Fraud, Remedies, Injunctions, Contracts Law, Restitution