Sonner v. Schwabe N. Am., Inc.

• Decision Date: 26 December 2018
• Docket Number: No. 17-55261,17-55261
• Parties: Kathleen SONNER, on behalf of herself and all others similarly situated, Plaintiff-Appellant, v. SCHWABE NORTH AMERICA, INC.; Nature’s Way Products, LLC, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

911 F.3d 989

Kathleen SONNER, on behalf of herself and all others similarly situated, Plaintiff-Appellant,

v.SCHWABE NORTH AMERICA, INC.; Nature’s Way Products, LLC, Defendants-Appellees.

No. 17-55261

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 16, 2018, Pasadena, California

Filed December 26, 2018

Leslie E. Hurst (argued), Paula R. Brown, Thomas J. O’Reardon II, and Timothy G. Blood, Blood Hurst & O’Reardon LLP, San Diego, California; Todd D. Carpenter, Carlson Lynch Sweet Kilpela & Carpenter LLP, San Diego, California; for Plaintiff-Appellant.

Michael P. Bryant (argued), Gordon & Rees LLP, San Diego, California; Thomas R. Watson, and Kevin W. Alexander, Gordon & Rees LLP, Los Angeles, California; for Defendants-Appellees.

Jeffrey S. Jacobson, Kelley Drye & Warren LLP, New York, New York, for Amicus Curiae Council for Responsible Nutrition.

Before: Kim McLane Wardlaw, Jacqueline H. Nguyen, and John B. Owens, Circuit Judges.

OPINION

PER CURIAM:

Kathleen Sonner filed a consumer class action against the sellers of two Ginkgold nutritional supplements for violations of California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq. ("UCL"), the Consumers Legal Remedies Act, Cal. Civ. Code § 1750, et seq. ("CLRA"), and breach of express warranty. Sonner alleges that these products were falsely labeled as capable of improving various cognitive functions when in fact they provided no such benefits. Although she supported her claims with expert opinion and other scientific evidence, the district court granted summary judgment in favor of the sellers because they produced contrary expert evidence. District courts in our circuit appear to be split on the summary judgment standard that applies to false advertising claims under California’s UCL and CLRA. Compare Korolshteyn v. Costco Wholesale Corp. , No. 3:15-cv-709-CAB-RBB, 2017 WL 3622226, at *5–6, *12–13 (S.D. Cal. Aug. 23, 2017) (holding that where the scientific evidence is equivocal, summary judgment in favor of a defendant is appropriate because the false labeling claims cannot be literally false), with Farar v. Bayer AG , No. 14-cv-04601-WHO, 2017 WL 5952876, at *17–18 (N.D. Cal. Nov. 15, 2017) (holding that where the plaintiffs’ expert testimony supported their claim that the defendants’ products provide no measurable benefit, and the defendants’ expert opined to the contrary, "such conflicting evidence would merely create a genuine issue of material fact inappropriate for summary adjudication"). Today we clarify that UCL and CLRA claims are to be analyzed in the same manner as any other claim, and the usual summary judgment rules apply. We reverse and remand.

I.

Schwabe North America, Inc. and Nature’s Way Products (collectively, "Schwabe") market and sell nutritional supplements, including two products known as "Ginkgold Advanced Ginkgo Extract" and "Ginkgold Max Advanced Ginkgo Extract Max." The labels on both products tout benefits to "mental sharpness," "memory," and "concentration."

On July 7, 2015, Sonner filed a class action complaint against Schwabe for violations of California’s UCL, CLRA, and breach of express warranty.¹ Sonner alleges that the operative ingredient in both products, the EGb 761 variety of Ginkgo biloba extract, does not actually have any of the advertised cognitive benefits. On September 14, 2016, Schwabe moved for summary judgment, supporting its motion with expert testimony from Dr. Alan F. Shatzberg, as well evidence from randomized controlled trials, that Ginkgo biloba benefits cognitive function. In opposition, Sonner produced expert testimony from Dr. Beth E. Snitz, who analyzed several clinical studies and meta-analyses to conclude that "Ginkgo biloba is no more effective than [a] placebo for improving cognitive functioning or preventing cognitive decline." Sonner also proffered independent reviews and meta-analyses, randomized controlled trials, and a scientific review article to support her contention that Ginkgo biloba does not benefit cognitive functions.

On February 2, 2017, the district court granted summary judgment in favor of Schwabe. The district court acknowledged that "both sides have produced expert testimony and scientific research in support of their claims," but it nevertheless granted Schwabe summary judgment on the ground that Sonner failed to critique the expert testimony and each of the scientific studies proffered by Schwabe. The district court reasoned that because Sonner fell short in "challenging the methodology, structure, or independence of [Schwabe’s] studies," her evidence is "insufficient to allow a reasonable juror to conclude that there is no scientific support for [Schwabe’s] claims." Sonner timely appealed.

II.

We have jurisdiction under 28 U.S.C. § 1291. We review the district court’s grant of summary judgment de novo. Southland Sod Farms v. Stover Seed Co. , 108 F.3d 1134, 1138 (9th Cir. 1997).

III.

Summary judgment is appropriate only when "there is no genuine dispute as to any material fact." Fed. R. Civ. P. 56(a). "[T]he determination of whether a given factual dispute requires submission to a jury must be guided by the substantive evidentiary standards that apply to the case." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). To defeat summary judgment, the nonmoving party must produce evidence of a genuine dispute of material fact that could satisfy its burden at trial. See id. at 254–55, 106 S.Ct. 2505 ; see also Celotex Corp. v. Catrett , 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

Under 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.² See Paduano v. Am. Honda Motor Co. , 169 Cal. App. 4th 1453, 1463, 1472, 1473, 88 Cal.Rptr.3d 90 (2009) ; Nat’l Council Against Health Fraud, Inc. v. King Bio Pharms., Inc. , 107 Cal. App. 4th 1336, 1341–42, 133 Cal.Rptr.2d 207 (2003). Therefore, to defeat summary judgment, Sonner need only produce evidence of a genuine dispute of material fact that could satisfy the preponderance of the evidence burden at trial. See Celotex , 477 U.S. at 322–23, 106 S.Ct. 2548. Sonner easily met her burden by producing expert testimony and other scientific data that Ginkgo biloba has no more of an effect on mental sharpness, memory, or concentration than a placebo. See Provenz v. Miller , 102 F.3d 1478, 1490 (9th Cir. 1996) ("As a general rule, summary judgment is inappropriate where an expert’s testimony supports the non-moving party’s case." (quoting In re Worlds of Wonder Sec. Litig. , 35 F.3d 1407, 1425 (9th Cir. 1994) ) ). By requiring Sonner to do more—by not only producing affirmative expert evidence of her own but also "foreclos[ing] any possibility" that Schwabe’s products provided the labeled benefits—the district court elevated Sonner’s burden well beyond what is usually required to defeat summary judgment. Again, a plaintiff need only show a triable issue of material fact to proceed to trial, see Fed. R. Civ. P. 56(a) ; Anderson , 477 U.S. at 255, 106 S.Ct. 2505, not foreclose any possibility of the defendant’s success on the claims. At trial, undoubtedly each party will seek to undermine the scientific bases underlying the opinion of the opposing party’s expert. Those arguments, however, go to the weight that the fact-finder should give to the evidence, an inquiry that is not proper at the summary judgment stage.

Schwabe argues that a more exacting summary judgment standard applies to false advertising claims brought under the UCL and CLRA, relying on a Fourth Circuit decision, In re GNC Corp. , 789 F.3d 505 (4th Cir. 2015). The court in that case affirmed the district court’s dismissal of the plaintiffs’ UCL and other state false advertising claims for failure to state a claim. In re GNC Corp ., 789 F.3d at 518. The court reasoned that because the plaintiffs did "not allege that all scientists agree that [the products] are ineffective at providing the promised [ ] benefits," they failed to show as a matter of law that the advertised claims are false. Id. at 515 ("When litigants...