In re Tobacco II Cases

In In re Tobacco II Cases (2009) 46 Cal.4th 298, a group of plaintiffs comprised of smokers in California filed a class action against several tobacco companies. The complaint alleged a cause of action under the UCL based on a claim that the plaintiffs had become smokers after being exposed to the companies' false advertising and deceptive marketing activities within the state. After our state's voters passed Proposition 64 at the November 2004 general election, the tobacco companies filed a motion for an order decertifying the class action claims under the UCL, arguing that "each class member was now required to show an injury in fact ... as a result of the alleged unfair competition." (Tobacco II, at p. 306.) The trial court granted the motion, and the Court of Appeal affirmed the trial court's order. The Supreme Court granted review. On review, the Supreme Court specifically addressed two questions: "First, who in a UCL class action must comply with Proposition 64's standing requirements, the class representatives or all unnamed class members, in order for the class action to proceed? ... Second, what is the causation requirement for purposes of establishing standing under the UCL ... ?" (Tobacco II, supra, 46 Cal.4th at p. 306.) This past spring, the Supreme Court answered these two questions by ruling: (1) only the class representatives must meet Proposition 64's standing requirements of actual injury and causation; (2) only the class representatives must establish reliance in accordance with fraudulent inducement principles in order for the class action to proceed; (3) the class representatives do not have to show reliance on particular advertisements or marketing materials with "unrealistic" specificity. (Tobacco II, supra, 46 Cal.4th at pp. 321-329.) In short, Tobacco II essentially ruled that, for purposes of standing, as long as a single plaintiff is able to establish that he or she relied on a defendant's false advertising, a multitude of class members will also have standing, regardless of whether any of those class members have in any way relied upon the defendant's allegedly improper conduct. In Tobacco II, supra, 46 Cal.4th 298, the Supreme Court held that this standing requirement applies only to the named plaintiffs in a class action (id. at pp. 320-321), and that it imposes an actual reliance requirement on named plaintiffs seeking relief under the fraudulent prong of the UCL (46 Cal.4th at p. 326). The court went on to explain what a plaintiff must plead and prove: "while a plaintiff must allege that the defendant's misrepresentations were an immediate cause of the injury-causing conduct, the plaintiff is not required to allege that those misrepresentations were the sole or even the decisive cause of the injury-producing conduct. Furthermore, where a plaintiff alleges exposure to a long-term advertising campaign, the plaintiff is not required to plead with an unrealistic degree of specificity that the plaintiff relied on particular advertisements or statements." (Id. at p. 328.) In In re Tobacco II Cases (2009) plaintiffs alleged violations of the UCL based on defendant tobacco companies' "deceptive advertising and misleading statements to the public about the addictive nature of nicotine and the relationship between tobacco use and disease." (46 Cal.4th at pp. 306, 307-308, fn. 2.) After having previously granted class certification, in the wake of Proposition 64, the trial court reversed course and decertified the class concluding each absent class member would have to establish his or her injury and therefore significant questions had arisen " 'undermining the purported commonality among the class members, such as whether each class member was exposed to defendants' alleged false statements and whether each member purchased cigarettes "as a result" of the false statements. Clearly ... individual issues predominate, making class treatment unmanageable and inefficient.' " (46 Cal.4th at p. 311.) The Supreme Court reversed, concluding individualized proof of injury to absent class members in a UCL action was not required. (Id. at pp. 320, 324.)