Update on “Standing”: Courts are Tightening Requirements and Dismissing More Cases

In general legal news that is good for San Diego businesses, federal courts here in California continue to tighten up the application of the legal doctrine of “standing” and are dismissing cases more readily. A good recent example is the case of Friends of the Earth v. Sanderson Farms, Inc., Case No. 17-cv-03592-RS (US Dist. N.D. Cal. July 31, 2019). Standing is a legal requirement that must be met before a plaintiff can bring a lawsuit and the plaintiff must prove that standing exists. Tightening up the requirements for standing means that fewer lawsuits will be filed which, as noted, can be good for San Diego businesses.

In Friends of the Earth, a couple of consumer advocacy groups sued Sanderson alleging false advertising and other violations of federal and California law. Sanderson is in the poultry processing business. They grow, process, market, and distribute fresh and frozen chicken products throughout the United States. The two main consumer advocacy groups that brought the lawsuit were the Center for Food Safety, a California non-profit corporation and Friends of the Earth, a Washington, D.C. non-profit corporation. Both organizations have mission statements that provide that they work to safeguard the rights and promote the views and interests of socially responsible consumers and farmers. Both organizations conduct research and undertake lobbying and advocacy to promote sustainable and healthy natural farming practices and food products. Lawsuits brought by these types of organizations are common here in California and are very costly to defend.

With respect to Sanderson, the lawsuit alleged that the Sanderson made misleading statements in various internet and television marketing campaigns. The television advertisements, for example, featured “Bob” and “Dale,” two men wearing Sanderson Farms baseball caps, who made comments such as, “no antibiotics to worry about here” and “good, honest chicken.” However, the Center for Food Safety and Friends of the Earth claimed that such statements — and others — were misleading since testing performed by the U.S. Department of Agriculture found 49 instances in which Sanderson’s products tested positive for antibiotics, pharmaceuticals, and other unnatural substance residues.

Sanderson defended the case and, among other defenses, argued that neither of the organizations had standing to bring the case. Standing is a legal requirement that has its source in the US Constitution. There are three legal requirements to establish standing:

• Injury-in-fact which is concrete, particularized and actual (or imminent)
• Causation, and
• Redressability — meaning that the court can fashion some remedy (like an injunction) to fix the problem

Organizations like Friends of the Earth and the Center for Food Safety can show the first element if they can demonstrate both (1) frustration of its organizational mission and (2) diversion of its resources to combat the particular conduct in question. At the same time, an organization cannot “manufacture” an injury by sustaining litigation costs or by choosing to use resources to fix problems that otherwise would not have affected it.

Under this standard, the federal court in San Francisco dismissed the case against Sanderson Farms. The two not-for-profit organizations were not able to show any concrete injury caused to them by the alleged misleading and false advertising. The case is notable because it marks a shift in the attitude of the district courts. Issues of standing are being taken more seriously than they were just a few years ago.

Contact San Diego Corporate Law Today

For more information, contact attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard can be reached at (858) 483-9200 or via email. Mr. Leonard provides a full panoply of legal services for businesses including formation of corporate entities of all types. Like us on Facebook.

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