"Why Materiality Does Not Equal a Safety Risk"

The Spring 2012 issue of Competition, journal of the Antitrust and Unfair Competition Law Section of the State Bar of California, is just out.

The issue has an interesting article called "Revisiting Materiality in the Context of CLRA and UCL Claims:  Why Materiality Does Not Equal a Safety Risk" by James C. Shah and Rose F. Luzon.  Here is an excerpt from the introduction:

Some practitioners and courts now take the position that, in order to establish materiality in an omission-based claim under the CLRA and UCL, a plaintiff must allege that the subject product poses a safety risk.  ....

As this discussion will demonstrate, given what is and has been the prevailing materiality standard for years, the existence of a safety risk is clearly not a required element of this standard, and its absence should not be a basis for precluding otherwise viable CLRA and UCL claims that are brought to redress consumer wrongs.  This article discusses why the imposition of a "safety" requirement for pleading materiality in omission-based consumer fraud claims is both contrary to controlling legal authority and to the express legislative purpose of the CLRA and UCL.

The article is worth a read.  This is an important area of law and one in which we are seeing what is perhaps CAFA's most problematic side effect:  federal judges making California law.  Federal judges construe the law in removed class-action cases raising no federal questions, their rulings are cited by litigants in state courts, and those rulings are followed by state-court judges.  The intermediate Court of Appeal opinion in Brinker is another example of this phenomenon.