The plaintiff Evenflo customers brought a number of suits against the company related to the Big Kid’s product marketing and safety. Dismissing for lack of Article III standing, the District Court held that (1) the complaint did not allege that the seats failed to perform, and (2) the plaintiffs had not plausibly shown that the seats were worth less than what they had paid for. The U.S. Court of Appeal for the First Circuit reversed.
“We first address Evenflo’s more sweeping argument: that where a plaintiff is not actually injured by an allegedly unsafe product, she does not have standing to pursue a claim for damages. We disagree. This court has repeatedly recognized overpayment as a cognizable form of Article III injury.” Reviewing caselaw from the various Circuits, the Court points to Cole v. General Motors, 484 F.3d 717 (5th Cir. 2007), in which the Fifth Circuit, for example, held that purchasers of vehicles with allegedly defective airbag systems had standing to sue even though their airbags had never actually inadvertently deployed. The Fifth Circuit concluded that “each plaintiff had suffered an economic injury based on the difference between what they contracted for and what they actually received – an economic injury that manifested at the moment each plaintiff purchased a vehicle because each vehicle was defective.” The Court also pointed to a line of Ninth Circuit cases holding that “in a false advertising case, plaintiffs have standing if they show that, by relying on a misrepresentation on a product label, they paid more for a product than they otherwise would have paid, or bought it when they otherwise would not have done so.”
The First Circuit then turned to Evenflo’s argument that “the complaint does not allege sufficient facts to plausibly demonstrate that, as a result of Evenflo’s misrepresentations, the plaintiffs spent more money than they otherwise would have…. Evenflo attacks the plaintiffs’ claim that they might have paid less for the Big Kid for offering no measure or basis for the decreased price. But it is a reasonable inference that, if Evenflo had not marketed the Big Kid as safe for children as small as thirty pounds and as side impact tested, the product would have commanded a lower price, allowing the plaintiffs to pay less for it. At this stage of the litigation, that inference suffices to support the plaintiffs’ standing even without quantification of the change in market value.” Evenflo also highlights the plaintiffs’ allegation that, were it not for Evenflo’s misrepresentations, they may have purchased a safer alternative seat. It points out that the complaint does not allege that such alternatives would have been cheaper – and in fact alleges that the Big Kid was roughly $10 cheaper than its chief competitor. This argument has some force, but we conclude that, at the pleading stage, it does not defeat the plaintiffs’ standing. Given that purchasing a different seat is only one of the three alternative courses of action described in the complaint and the possibility that a cheaper alternative exists, the complaint, taken as a whole, plausibly supports the plaintiffs’ argument that Evenflo’s misrepresentations caused them to overpay.
“Evenflo also faults the plaintiffs for offering no theories of how damages could be measured; although it concedes that a precise amount of damages need not be pleaded, it asserts that the plaintiffs must at least offer the formula for measuring damages. But at the pleading stage, to demonstrate Article III standing, plaintiffs need not quantify or offer a formula for quantifying their injury.”
Xavier v. Evenflo Co., No.22-1133, 2022 U.S.App.LEXIS 32497 (1st Cir. Nov. 23, 2022).
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