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In California, the “Reasonable Person” Still Helps Consumer Class-Action Defendants

No litigation foot soldier has been conscripted more often than the “reasonable person” in defining false advertising and unfair competition under California law. With the recent gusher of consumer class actions in California, it is appropriate to ask: Has the reasonable person become more intelligent, more educated, or more tech savvy over time? Or has the reasonable person been dumbed down, become less capable of self-protection, more trusting, and more in need of judicial paternalism?

In California, the reasonable person has proven quite resilient. Although his or her specific characteristics have evolved, the reasonable person provides an objective standard for assessing permissible competitive conduct and advertising claims. Far from being defenseless against the wiles of marketers and advertisers, the reasonable person is not gullible enough to fall for anything.

California unfair-competition jurisprudence dates back to 1895. The focus was on protecting competition, not competitors, and certainly not consumers. The law of “unfair competition” principally applied to one “passing off” his goods as those of another. The key in early cases was evidence of actual deception. The courts did not call upon the reasonable person in order to hypothesize about what actual persons might do.

Civil Code § 3369

In 1933, the California legislature amended and expanded Civil Code § 3369 to cover “unfair” competition and “misleading advertising.” The primary concern remained preventing businesses from being harmed, but courts recognized that the amended statute also aimed to protect the general public. Am. Philatelic Soc. v. Claibourne, 3 Cal. 2d 689 (1935). Over time, courts addressed conduct likely to cause confusion among consumers, even when no direct competitive interests were at stake. Thus, in Academy of Motion Picture Arts & Sciences v. Beeson, 15 Cal. 2d 685 (1940), the Motion Picture Academy sued a Hollywood acting school called “The Hollywood Motion Picture Academy.” The parties did not “compete,” and the court specifically noted that “[b]y the use of the name Hollywood Motion Picture Academy the defendant does not take away from the plaintiff and draw to herself any business the plaintiff would otherwise receive.” Id. at 688-89. Nonetheless, the court noted that injunctive relief could be appropriate if plaintiff could show that the similarity in names “would be likely to deceive or mislead an ordinary unsuspecting customer[.]” Id. at 692 (quotation omitted).

This principle was echoed in Jackman v. Jack A. Mau, 78 Cal. App. 2d 234 (1947). Plaintiff had long used the name “Jackman of Hollywood” to market and sell clothing. The defendant opened in a different part of town under the name of “Jackmau of Hollywood.” The likelihood of confusion appears obvious enough, but the plaintiff also produced evidence from consumers who had entered defendant’s store and asked for plaintiff’s goods by name. Similarly, the defendant admitted that other consumers had mistaken his store for Jackman of Hollywood. On this record, the court held the trial court had erred in failing to enjoin the offending conduct and remanded for a new trial.

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