By Natalie Holden on September 26, 2018
This month the Third Circuit issued a decision shedding light on an issue facing many courts today: does an individual have standing to sue on the grounds that she purchased a product that, in other contexts has been found to potentially cause cancer, when the plaintiff has not actually suffered any injury other than an alleged economic injury of purchase regret? Estrada v. Johnson & Johnson, No. 17-2980 (3d Cir. 2018). In this case, Plaintiff Estrada sued over her purchase of Johnson & Johnson’s baby powder. She alleged that the product could lead to an increased risk of developing ovarian cancer and that she would not have purchased the product had she known of this risk. Across the country, juries have awarded more than over a billion dollars to plaintiffs who allege that talcum powder caused their cancer. However, the Plaintiff in Estrada did not make any allegations that the product caused any physical injury; she did not allege that she had cancer, or even that she had an increased risk of developing cancer. There also was no claim of emotional injury. Additionally, she did not allege any product defect or that the product failed to adequately perform any of the advertised functions. Instead, she simply alleged that she suffered an economic injury by purchasing improperly marketed baby powder—stating that if she had been properly informed that the use of baby powder could lead to an increased risk in developing ovarian cancer, she would not have purchased the powder in a first place. She sought relief for a class of similarly situated consumers.
The District Court for the District of New Jersey dismissed her Complaint, holding that it did not fall within any of three different theories of economic injury—alternative product, premium price, or benefit of the bargain. On appeal, Estrada only challenged the third theory, arguing that she bargained for a product that was “safe” and that what she received was “unsafe.” Regarding this contention, the Court held that it cannot presume that a Plaintiff would have paid more for a “safe” product than an “unsafe” product if it is not properly alleged. However, the Court went much further than this, finding that the allegations actually led to the conclusion that the product was safe as to her, and that mere references of a product as unsafe as to others are not sufficient or even relevant to determining whether she herself has standing. “The [injury in fact test] requires that the party seeking review be himself among the injured.” Quoting Sierra Club v. Morton, 405 U.S. 727, 734-35 (1972).
The Third Circuit considered whether Estrada had suffered monetary “injury in fact,” a necessary element of proving standing. The court considered whether the three elements of “injury in fact” were met, including whether there was: (1) an invasion of a legally protected interest; (2) a concrete and particularized injury; and (3) an injury that was actual or imminent, not conjectural or hypothetical. The party seeking to invoke federal jurisdiction bears the burden of establishing standing. The Court noted that the law does not mean that “a consumer’s purchase of a product based on the manufacturer’s deceptive and unfair business practices constitutes injury-in-fact,” but instead, that standing is established only when there is an economic theory alleged that allows a court to value the actual harm to consumers. The court held that a plaintiff must set forth sufficient allegations that the product purchased is worth less than what was paid for it. The court also found there was not standing for Estrada to seek either restitutionary damages or injunctive relief.
The Court held that a plaintiff must allege specific economic harm. The opinion suggests, though, that this might not actually be enough for standing. Arguably, the opinion can be read to hold that even when a plaintiff has asserted another theory of recovery, such as product misrepresentation or deceptive business practices, or sufficiently pled facts of economic harm, a plaintiff does not have standing when a product is “safe as to the plaintiff.”