On March 31, 2017, the D.C. Circuit held that the Federal Communications Commission (FCC) lacked authority under the Telephone Consumer Protection Act, as amended by the Junk Fax Prevention Act
Continue Reading D.C. Circuit Limits the FCC’s Rulemaking Authority Under the TCPA … and the FCC Chairman Agrees

“Ascertainability” in the context of civil litigation involves the identification of individuals who qualify for membership in a putative class action. Although not an explicit requirement under Rule 23, since

Continue Reading Will Ninth Circuit Class Actions Force Resolution of Ascertainability Circuit Split?

A California federal court recently relied on the so-called “pass-on defense” to deny class certification in a lawsuit asserting claims under California’s Unfair Competition Law (UCL).  Elite Logistics Corp. v. MOL Am., Inc., No. CV1102952DDPPLAX, 2016 WL 409650, at *3 (C.D. Cal. Feb. 2, 2016). Consumer products companies will want to take note of this decision and determine whether it can help them in defending similar UCL claims.

What is the pass-on defense?

“Passing on” describes the action of an overcharged buyer who passes the extra expense on to those who buy from it.  54 Am. Jur. 2d Monopolies and Restraints of Trade § 396.  In many cases, defendants have argued that the plaintiff does not have standing or any injury because it passed any unlawful charge on to others, thus eliminating any harm.

California Supreme Court limits pass-on defense

In Clayworth v. Pfizer, Inc., 49 Cal. 4th 758 (2010), the California Supreme Court limited the pass-on defense in a case asserting claims for violation of the Cartwright Act and for restitution and injunctive relief under the UCL.  Defendant argued that the plaintiffs did not have standing under the UCL because they were able to pass-on any overcharges to their ultimate customers.  The Court rejected this argument, concluding that it “conflates the issue of standing with the issue of the remedies to which a party may be entitled. “  Id. at 789.Continue Reading Pass-On Defense Still Alive and Well