United States Court of Appeals 

for the Federal Circuit 

__________________________ 

ALLERGAN, INC., 

Plaintiff-Appellant, 

and 

MURRAY A. JOHNSTONE, M.D. AND DUKE 

UNIVERSITY, 

Plaintiffs, 

v. 

ATHENA COSMETICS, INC., PHARMA TECH 

INTERNATIONAL, INC., AND NORTHWEST 

COSMETIC LABORATORIES, INC., 

Defendants-Appellees, 

and 

COSMETIC ALCHEMY, LLC 

Defendant-Appellee, 

and 

NUTRA-LUXE M.D., 

Defendant, 

and 

STELLA INTERNATIONAL, LLC, 

PRODUCT INNOVATIONS, LLC, AND METICS, LLC, 

Movants-Appellees, 

and 

PETER THOMAS ROTH, INC. AND

PETER THOMAS ROTH LABS LLC, 

Defendants-Appellees, 
ALLERGAN v. ATHENA COSMETICS 2

and 

LIFETECH RESOURCES, LLC AND ROCASUBA, 

INC., 

Defendants-Appellees, 

and 

GLOBAL MDRX, COSMETIC TECHNOLOGIES, 

INC., DMI, LA CANADA VENTURES INC., 

AND SUSAN F. LIN, M.D., 

Defendants. 

__________________________ 

2010-1394 

__________________________ 

Appeal from the United States District Court for the 

Central District of California in consolidated case nos. 07-

CV-1316 and 09-CV-0328, Judge James V. Selna. 

__________________________ 

Decided: May 24, 2011 

__________________________ 

MARK A. PERRY, Gibson, Dunn & Crutcher, LLP, of 

Washington, DC, argued for plaintiff-appellant. With him 

on the brief were JEFFREY T. THOMAS and BLAINE H.

EVANSON, Gibson, Dunn, & Crutcher, LLP, of Irvine, 

California. 

STEPHEN BENSON, Katten Muchin Rosenman, LLP, of 

Chicago, Illinois, argued for defendants-appellees Athena 

Cosmetics, Inc., et al. With him on the brief was ROBERT 

B. BREISBLATT. 
3 ALLERGAN v. ATHENA COSMETICS

JEFFREY L. WEISS, Weiss & Moy, P.C., of Scottsdale, 

Arizona, argued for defendants-appellees Cosmetic Alchemy, LLC and Movants-appellees Stella International, 

LLC, et al. 

MARTIN C. WASHTON, Towle Denison Smith & Maniscalco, LLP, of Los Angeles, California, argued for defendants-appellees Lifetech Resources, LLC, et al. With him 

on the brief was AMANDA R. WASHTON. 

__________________________ 

Before NEWMAN, GAJARSA, and PROST, Circuit Judges. 

GAJARSA, Circuit Judge. 

This case arises from the district court’s dismissal of 

Allergan, Inc.’s (“Allergan”) claim for relief under California Business & Professions Code (“UCL”) §§ 17200 et 

seq.—the unfair competition provisions—for lack of standing. The issue before the court is whether a party must 

allege an injury compensable by restitution to have standing under the UCL. The California Supreme Court makes 

clear in two recent decisions, Kwikset Corp. v. Superior 

Court of Orange County, 246 P.3d 877 (Cal. 2011) and 

Clayworth v. Pfizer, Inc., 233 P.3d 1066 (Cal. 2010), that 

UCL § 17204, as amended by Proposition 64, requires 

that a party need only allege an injury in fact that was 

caused by defendant’s unfair competition. We therefore 

reverse and remand. 

BACKGROUND

Allergan manufactures and sells Latisse®, a FDAapproved product that uses PGF, a prostaglandin compound, to treat inadequate eyelash growth. Allergan’s 

First Am. Compl. 5. In fact, Allergan is the only authorized manufacturer of a prostaglandin product for the 

stimulation of hair growth. Id. The only other FDA-
ALLERGAN v. ATHENA COSMETICS 4

approved uses for prostaglandin compounds are to treat 

glaucoma and ocular hypertension. Id. The numerous 

defendants1 in this case allegedly manufacture, market, 

and/or sell products containing PGF for hair and/or eyelash growth. Id. at 6-9. 

Allergan filed an action in the United States District 

Court for the Central District of California, alleging that 

the defendants infringed or induced infringement of U.S. 

Patent Nos. 6,262,105, 7,351,404, and 7,388,029 under 35 

U.S.C. § 271. Allergan also alleged that the defendants 

violated UCL §§ 17200 et seq. Section 17200 defines 

“unfair competition” as “any unlawful, unfair or fraudulent business act or practice . . . .” Allergan alleged that 

the defendants violated the UCL by “unlawfully marketing, selling, and distributing hair and/or eyelash growth 

products without a prescription, without an approved new 

drug application [from] the FDA or the California Department of Health Services, and in violation of state and 

federal misbranding laws.” Allergan’s First Am. Compl. 

11. It also alleged that the use of defendants’ products 

“can result in significant adverse reactions and substantial harm” and that the products are not “recognized . . . 

as safe and effective.” Id. at 12-13. Furthermore, Aller-

 1 The defendants are Athena Cosmetics, Inc.; 

Pharma Tech International, Inc.; Northwest Cosmetic 

Laboratories, Inc.; Cosmetic Alchemy, LLC; Stella International LLC; Product Innovations LLC; Metics LLC; 

Lifetech Resources, LLC; and Rocasuba, Inc. Although 

appearing in the caption, Nutra-Luxe, M.D., Peter Thomas Roth, Inc. and Peter Thomas Roth Labs LLC did not 

file a brief in opposition to Allergan’s appeal. The remaining defendants, Global MDRX; Cosmetic Technologies, 

Inc.; DMI La Canada Ventures Inc.; and Susan F. Lin, 

M.D., are not named in Allergan’s August 10, 2009 complaint, its “operative complaint” for this appeal. Appellant’s Br. 2. 
5 ALLERGAN v. ATHENA COSMETICS

gan claimed that the “[d]efendants’ unfair competition has 

resulted in and continues to result in serious and irreparable injury to Allergan, including but not limited to lost 

sales, revenue, market share, and asset value.” Id. at 14. 

A party found to have violated the UCL may be enjoined or required to “restore to a person in interest any 

money or property, real or personal, which may have been 

acquired by means of such unfair competition.” UCL 

§ 17203. Thus, the remedies available to injured parties 

are an injunction and restitution, id., both of which Allergan requested, Allergan’s First Am. Compl. 15. 

Defendants Athena Cosmetics, Inc., Pharma Tech International, Inc., and Northwest Cosmetic Laboratories, 

LLC (collectively, “Athena”) moved for judgment on the 

pleadings under Federal Rule of Civil Procedure 12(c), 

claiming that Allergan lacked standing to pursue its claim 

that Athena violated UCL §§ 17200 et seq. Allergan, Inc. 

v. Athena Cosmetics, Inc., Case Nos. 07-CV-1316 and 09-

CV-328, slip op. at 1 (Mar. 3, 2010) (“Dismissal Opinion”). 

According to Athena, because Allergan did not allege an 

injury that was compensable by restitution, it failed to 

meet the standing requirements of UCL § 17204. Id. at 3. 

Section 17204 states that “actions for relief pursuant 

to this chapter shall be prosecuted . . . by a person who 

has suffered injury in fact and has lost money or property 

as a result of the unfair competition.” At the time the 

Rule 12(c) motion was filed and decided, California state 

courts had generally held that “[b]ecause remedies for 

individuals under the [unfair competition law] are restricted to injunctive relief and restitution, the import of 

the [loss of money or property] requirement [in UCL 

§ 17204] is to limit standing to individuals who suffer 

losses of money or property that are eligible for restitution.” Citizens of Humanity, LLC v. Costco Wholesale 
ALLERGAN v. ATHENA COSMETICS 6

Corp., 171 Cal. App. 4th 1, 22 (Cal. Ct. App. 2009) (citation omitted) overruled by Kwikset, 246 P.3d at 895. 

The district court determined that Allergan had failed 

to plead an injury that was eligible for restitution. Relying on Korea Supply, it held that a plaintiff seeking 

restitution must have an ownership interest or a vested 

interest in the money it seeks to recover. Dismissal 

Opinion at 4-5 (citing Korea Supply Co. v. Lockheed 

Martin Corp., 29 Cal. 4th 1134, 1149 (2003)). The district 

court reasoned that Allergan did not have an ownership 

interest in its lost profits or market share because the 

defendants’ profits from sales of their products came from 

third party consumers, not Allergan. Dismissal Opinion

at 4-5 (citing Korea Supply, 29 Cal. 4th at 1149). Moreover, the district court held that Allergan lacked a vested 

interest in its lost profits or market share because its 

expectation of receiving this money was contingent on 

payment by a third party. Id. at 5 (citing Korea Supply, 

29 Cal. 4th at 1150). 

The district court concluded that Allergan had not 

sufficiently plead an injury that could be compensated by 

restitution. Id. at 6. Earlier California precedent held 

that a party that failed to plead an injury compensable by 

restitution lacked standing under the UCL. Relying on 

this precedent, the district court found that Allergan 

lacked standing to obtain any relief under the UCL. Id. at 

3-12. Finding that there was no just reason for delay in 

appealing this claim, the district court entered judgment 

pursuant to Federal Rule of Civil Procedure 54(b) and 

dismissed Allergan’s claim for relief under the UCL as to 

all defendants with prejudice.2 Allergan now appeals the 

 2 Although Athena brought the motion for judgment 

on the pleadings, Allergan and all the defendants, except 

Nutra-Luxe, M.D., Global MDRX, Cosmetic Technologies, 
7 ALLERGAN v. ATHENA COSMETICS

dismissal of its UCL claims. Allergan’s patent claims 

remain pending before the district court, but the action is 

stayed until the outcome of this appeal. Although the 

patent claims are not presently at issue, they give rise to 

this court’s jurisdiction over the appeal. See 28 U.S.C. 

§ 1295(a)(1) (stating that this court has jurisdiction “of an 

appeal from a final decision of a district court of the 

United States . . . if the jurisdiction of that court was 

based, in whole or in part, on section 1338 of this title . . . 

.” (emphases added)). We therefore have jurisdiction 

pursuant to 28 U.S.C. § 1295(a)(1). 

STANDARD OF REVIEW

When this court reviews a judgment on the pleadings, 

we follow the procedural law of the regional circuit. 

Imation Corp. v. Koninklijke Philips Elecs. N.V., 586 F.3d 

980, 985 (Fed. Cir. 2009) (citation omitted). In the Ninth 

Circuit, a grant of judgment on the pleadings is reviewed 

de novo. Or. Nat. Desert Ass’n v. U.S. Forest Serv., 550 

F.3d 778, 782 (9th Cir. 2008) (citation omitted). On 

review, the court must “accept all material allegations in 

the complaint as true and construe them in the light most 

favorable to [the nonmoving party].” Turner v. Cook, 362 

F.3d 1219, 1225 (9th Cir. 2004). 

DISCUSSION

The resolution of this appeal turns on the allegations 

a party asserting a claim under the UCL must state to 

satisfy the standing requirements of UCL § 17204. Sub-

 

Inc., DMI La Canada Ventures Inc., and Susan F. Lin, 

M.D., stipulated that the district court’s March 3, 2010 

order dismissing Allergan’s UCL claim applied to them. 

Allergan, Inc. v. Athena Cosmetics, Inc., Case No. 09-CV0328 (May 5, 2010) (D.I. 101); Allergan, Inc. v. Athena 

Cosmetics, Inc., Case No. 07-CV-1316 (Mar. 11, 2010) (D.I. 

518, 519). 
ALLERGAN v. ATHENA COSMETICS 8

sequent to the adoption of Proposition 64—a California 

voter’s amendment that restricted the scope of standing 

under section 17204—California courts required an 

additional limitation for a plaintiff to have standing under 

the UCL: namely, that the party asserting the claim must 

allege an injury compensable by restitution. As discussed 

below, the recent California Supreme Court decisions in 

Kwikset Corp. v. Superior Court of Orange County, 246 

P.3d 877 (Cal. 2011) and Clayworth v. Pfizer, Inc., 233 

P.3d 1066 (Cal. 2010), make clear that section 17204 only 

requires that a party allege an injury in fact and that the 

injury was caused by the defendant. Moreover, section 

17204 does not mandate a “business dealings requirement,” as the defendants argue. Finally, because we hold 

that Allergan’s pleadings meet the standing requirements 

of section 17204, we need not reach the issue of whether it 

plead an injury that could be compensated by restitution. 

See Clayworth, 233 P.3d at 1087. 

I. 

A. 

Prior to November 2004, section 17204 allowed the 

Attorney General, local officials, and “any person acting 

for the interests of itself, its members or the general 

public” to file an action for relief under the UCL. UCL 

§ 17204 (2003). Because a broad range of parties had 

standing to bring a claim under the UCL, frivolous lawsuits were frequently filed by plaintiffs who had “not used 

the defendant's product or service, viewed the defendant's 

advertising, or had any other business dealing with the 

defendant.” Cal. Prop. 64 § 1, approved by voters, Gen. 

Elec. (Nov. 2, 2004). In some instances, these actions 

were nothing more than shakedown schemes that targeted small businesses for minor violations of regulations. 
9 ALLERGAN v. ATHENA COSMETICS

See Angelluci v. Century Supper Club, 158 P.3d 718, 728 

n.10 (Cal. 2007). 

To address these problems, the California voters 

adopted Proposition 64, which narrowed the standing 

requirements under the UCL. The intent of the proposition was to “prohibit private attorneys from filing lawsuits for unfair competition where they have no client who 

has been injured in fact under the standing requirements 

of the United States Constitution.” Cal. Prop. 64 § 1(e). 

Proposition 64 therefore amended section 17204 to limit a 

private person’s right to sue under the UCL to someone 

who has “suffered injury in fact and has lost money or 

property as a result of such unfair competition.” Id. § 3. 

The proposition emphasized that a private person must 

meet these standing requirements by also amending 

section 17203 to state that “[a]ny person may pursue 

representative claims or relief on behalf of others only if 

the claimant meets the standing requirements of Section 

17204.” Id. § 2 (emphasis added). Proposition 64 did not 

amend the Attorney General’s and local officials’ right to 

bring unfair competition claims on behalf of the general 

public. Id. §§ 2, 3. 

B. 

After Proposition 64 was adopted, both state and federal California courts interpreted the limitation of standing under section 17204 to mean that the money or 

property lost by individuals alleging unfair competition 

must be “eligible for restitution.” Buckland v. Threshold 

Enters., Ltd., 155 Cal. App. 4th 798, 817 (Cal. Ct. App. 

2008) overruled by Kwikset, 246 P.3d at 895; see also

Walker v. Geico Gen. Ins. Co., 558 F.3d 1025, 1027 (9th 

Cir. 2009); Walker v. USAA Cas. Ins. Co., 474 F. Supp. 2d 

1168, 1173 (C.D. Cal. 2007); Citizens, 171 Cal. App. 4th at 

22. This conclusion rested on connecting the “lost money 
ALLERGAN v. ATHENA COSMETICS 10

or property” language in section 17204 with the language 

in section 17203 that allowed restitution “as may be 

necessary to restore any person in interest any money or 

property.” The use of money or property in both sections 

led courts to conclude that section 17204 limited standing 

to those who had an injury compensable by restitution. 

See, e.g., Buckland, 155 Cal. App. 4th at 817-18. 

In its most recent decisions, the California Supreme 

Court has rejected this reasoning. It concluded in Kwikset

and Clayworth that “ineligibility for restitution is not a 

basis for denying standing under section 17204 and 

disapprove[d] those cases [including Citizens and Buckland] that have concluded otherwise.” Kwikset, 246 P.3d 

at 895. In Kwikset, the court held that to satisfy the 

standing requirements of section 17204, a plaintiff must 

allege exactly what the statutory text requires: “(1) . . . a 

loss or deprivation of money or property sufficient to 

qualify as injury in fact, i.e. economic injury, and (2) . . . 

that [the] economic injury was the result of, i.e. caused by, 

the unfair business practice . . . .” Id. at 885. 

The plaintiff in Kwikset, who had purchased locks 

falsely labeled “Made in the U.S.A.,” had standing to sue 

under the UCL because (1) he paid for a lock; and (2) 

purchased the lock because its label said “Made in the 

U.S.A.” and would not have purchased the lock if it were 

not made in the United States. Id. at 889-91. In rejecting 

the judicially-imposed requirement to allege an injury 

compensable by restitution, the court explained that 

“nothing in the text or history of Proposition 64 suggests” 

that the drafters intended “to make standing under 

section 17204 expressly dependent on eligibility for restitution under section 17203.” Id. at 894-95. Thus, the 

availability of injunctive relief under section 17203 is not 

contingent on a party’s ability to plead an injury compensable by restitution. Id. 
11 ALLERGAN v. ATHENA COSMETICS

The California Supreme Court used the same rationale to find standing in Clayworth. There, several pharmacies sued pharmaceutical manufacturers, alleging that 

the manufacturers had engaged in price fixing. Clayworth, 233 P.3d at 1070. As a result of this price-fixing, 

the pharmacies had paid manufacturers an artificially 

high price for the drugs and sought restitution and injunctive relief under the UCL. Id. at 1070-71. The court 

held that the pharmacies had standing because they “lost 

money or property[, i.e., the overcharges the pharmacies 

paid,] as a result of the defendant[s’] unfair business 

practices[, i.e. the price-fixing],” which satisfied the requirements of section 17204. Id. at 1087 (citation omitted). The court recognized that “section 17204 requires 

only that a party have ‘lost money or property.’” Id. at 

1087 (footnote omitted). “That a party may ultimately be 

unable to prove a right to damages (or, here, restitution) 

does not demonstrate that it lacks standing to argue for 

its entitlement to them.” Id. (citations omitted). 

Here, Allergan has plainly alleged an economic injury 

that was the result of an unfair business practice. The 

unfair competition that Allergan alleges involves the 

defendants’ manufacture, marketing and/or sale of hair 

and eyelash growth products without a prescription, 

federal or state approval, and proper labeling in violation 

of federal and California laws. Allergan’s First Am. 

Compl. 9-14. As a result of these acts, Allergan alleges 

that it has “lost sales, revenue, market share, and asset 

value.” Id. at 14. Allergan’s complaint sufficiently alleges 

an injury that was caused by the defendants’ unfair 

business practices. Under Kwikset, this satisfies the 

requirements of section 17204, and therefore Allergan has 

standing to pursue its claim for relief under the UCL. See

Kwikset, 246 P.3d at 894-95; Clayworth, 233 P.3d at 1087. 
ALLERGAN v. ATHENA COSMETICS 12

C. 

The defendants, however, maintain that Allergan 

does not have standing because it fails to satisfy the socalled “business dealings requirement” of section 17204. 

One purpose of Proposition 64 was to eliminate lawsuits 

that attorneys filed “for clients who have not used the 

defendant’s product or service, viewed the defendant's 

advertising, or had any other business dealing with the 

defendant.” Cal. Prop. 64 § (1)(b)(3). The defendants 

argued that this purpose of Proposition 64 limited standing under section 17204 to plaintiffs that had direct 

business dealings with the defendant. Oral Arg. at 34:26-

34:50, available at http://www.cafc.uscourts.gov/oralargument-recordings/2010-1394/all. 

Proposition 64 did not add a “business dealings requirement” to standing under section 17204. The only 

amendment Proposition 64 made to section 17204 required that a private person bringing an action pursuant 

to the UCL must have “suffered injury in fact and . . . lost 

money or property as a result of such unfair competition.” 

Cal. Prop. 64 § 3. Reading this amendment to encompass 

a business dealings requirement would contradict the 

plain language of the statute and improperly elevate one 

purpose of Proposition 64 over the language of the statute. See City of Chicago v. Envtl. Def. Fund, 511 U.S. 328, 

337 (1994) (“[I]t is the statute, and not the [voter’s findings], which is the authoritative expression of the law . . . 

.”). 

The defendants also argued that Kwikset approved of 

the business dealings requirement. Oral Arg. at 30:00-

31:00, available at http://www.cafc.uscourts.gov/oralargument-recordings/2010-1394/all. The crux of defendants’ argument is the introduction of Kwikset, which 

states that the purpose of Proposition 64 was to “elimi-
13 ALLERGAN v. ATHENA COSMETICS

nate standing for those who have not engaged in any 

business dealings with would-be defendants . . . .” 246 

P.3d at 881. This argument disregards the focus of Kwikset, which held that the only requirements to establish 

standing under section 17204 are that (1) the plaintiff 

suffered an injury in fact from the loss of money or property; and (2) that this injury was caused by the defendant’s unfair business practice. Id. at 885. 

Moreover, the defendants’ argument ignores that 

there are “innumerable ways” to show economic injury 

from unfair competition and that the Kwikset court did 

not “supply an exhaustive list of ways in which unfair 

competition may cause economic harm.” Id. at 886. 

While a direct business dealing is certainly one way in 

which a plaintiff could be harmed, the California courts 

have also recognized claims under the UCL where a direct 

business dealing was lacking. See, e.g., Overstock.com, 

Inc. v. Gradient Analytics, Inc., 151 Cal. App. 4th 688, 716 

(Cal. Ct. App. 2007) (finding standing under section 17204 

where plaintiff had plead that defendant’s unfair business 

practices—intentional dissemination of false negative 

reports—had “result[ed] in diminution in value of [plaintiff’s] assets and decline in its market capitalization and 

other vested interests”). Thus, standing under section 

17204 is not restricted by a direct business dealings 

requirement. The only standing requirements under 

17204 are those in the language of the statute and, as 

explained in I.B., Allergan has satisfied those requirements. 

CONCLUSION

For the foregoing reasons, we reverse the decision of 

the district court and remand for further proceedings 

consistent with this opinion. 

REVERSED AND REMANDED
ALLERGAN v. ATHENA COSMETICS 14

COSTS

No costs.