Moran v. Edgewell Personal Care, LLC

Filing 56

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS. Signed by Chief Judge Richard Seeborg on 8/2/2022. (rslc3, COURT STAFF) (Filed on 8/2/2022)

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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 10 MICHELLE MORAN, Case No. 21-cv-07669-RS Plaintiff, 11 United States District Court Northern District of California v. 12 13 14 EDGEWELL PERSONAL CARE, LLC, et al., ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS Defendants. 15 16 I. Introduction 17 Plaintiff Michelle Moran brings this putative class action on behalf of consumers 18 nationwide who purchased Defendant Edgewell Personal Care’s (“EPC”) Banana Boat branded 19 sunscreen products. Moran avers that statements on Banana Boat products indicating that the 20 sunscreen is “Reef Friendly” are false as the products contain ingredients harmful to coral reefs, 21 and that she would not have purchased a Banana Boat sunscreen with that claim had she known 22 the statement was false. She asserts various common law claims on behalf of a proposed 23 nationwide class, and various violations of California law on behalf of a proposed California 24 subclass. EPC brings this motion to dismiss pursuant to Federal Rules of Civil Procedure 8, 9(b), 25 12(b)(1), 12(b)(2), 12(b)(6), and 12(f). The motion to dismiss is granted as to advertisements other 26 than the “Reef Friendly – No Oxybenzone or Octinoxate” claim on the sunscreen labels, and as to 27 the claim for breach of implied warranty. The motion to dismiss is denied in all other respects. 28 II. Factual Background 1 EPC sells sunscreen products under the brand Banana Boat. These products, of which over 2 3 ten are at issue in this lawsuit, contain a claim on the label stating “Reef Friendly – No 4 Oxybenzone or Octinoxate.” On behalf of a proposed nationwide class and a subclass of 5 California consumers, Moran brings breach of warranty and unjust enrichment/restitution claims. 6 Moran also brings three additional claims on behalf of the proposed California subclass: violation 7 of the California Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200, et seq.; 8 California False Advertising Law (“FAL”), Cal. Bus. & Prof. Code §§ 17500, et seq.; and the 9 California Consumers Legal Remedies Act (“CLRA”), Cal. Civ. Code §§ 1750, et seq. III. Failure to State a Claim Under Rule 12(b)(6) United States District Court Northern District of California 10 11 Defendant raises multiple arguments under Federal Rule of Civil Procedure 12(b)(6): (1) 12 Plaintiff’s CLRA, UCL, and FAL claims should be dismissed because Plaintiff fails to meet the 13 reasonable consumer standard, and (2) the breach of warranty claim should also be dismissed 14 because Defendant did not make an express or implied warranty and because the implied warranty 15 claim fails for lack of privity.1 For the reasons explained below, these arguments are granted in 16 part and denied in part. A. Legal Standard 17 Rule 12(b)(6) governs motions to dismiss for failure to state a claim. A complaint must 18 19 contain a short and plain statement of the claim showing the pleader is entitled to relief. Fed. R. 20 Civ. P. 8(a). While “detailed factual allegations” are not required, a complaint must have sufficient 21 factual allegations to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 22 U.S. 662, 678 (2009) (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007)). A Rule 23 12(b)(6) motion tests the legal sufficiency of the claims alleged in the complaint. See Parks Sch. of 24 Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). When evaluating such a motion, 25 26 27 28 1 Defendant also contends that Plaintiff fails to allege facts sufficient to establish she is entitled to restitution. This argument, while a Rule 12(b)(6) argument, is addressed in the discussion of Plaintiff’s equitable claims. ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS CASE NO. 21-cv-07669-RS 2 1 courts generally “accept all factual allegations in the complaint as true and construe the pleadings 2 in the light most favorable to the nonmoving party.” Knievel v. ESPN, 393 F.3d 1068, 1072 (9th 3 Cir. 2005). United States District Court Northern District of California 4 B. Discussion 5 1. Reasonable Consumer Standard 6 The UCL, FAL, and CLRA all utilize the reasonable consumer standard, Shaeffer v. 7 Califia Farms, LLC, 44 Cal. App. 5th 1125, 1136 (2020), “which requires a plaintiff to show 8 potential deception of consumers acting reasonably in the circumstances-not just any consumers.” 9 Hill v. Roll Internat. Corp., 195 Cal. App. 4th 1295, 1304 (2011). “[W]hether a business practice 10 is deceptive will usually be a question of fact not appropriate for decision” on a motion to dismiss. 11 Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008). Defendant argues that the 12 inclusion of “No Oxybenzone or Octinoxate” below the statement “Reef Friendly” on the label 13 means that no reasonable consumer would be misled, because a reasonable consumer would only 14 interpret the label to mean that there was no oxybenzone or octinoxate in the product. This inquiry 15 is “fact-intensive and not well-suited for resolution at the pleading stage.” White v. Kroger Co., 16 No. 21-CV-08004-RS, 2022 WL 888657, at *2 (N.D. Cal. Mar. 25, 2022). Plaintiffs aver—with 17 support from some scientific studies and regulators—that some of the chemicals in the challenged 18 products damage coral reefs. It is inappropriate to conclude at the pleadings stage that a reasonable 19 consumer would have interpreted the label to mean that the product was only free from 20 oxybenzone or octinoxate, regardless of possible harms from other chemicals. The questions of 21 whether the other chemicals in the products are harmful to reefs, and how a reasonable consumer 22 would have interpreted the claim on the label, can only be resolved after the development of 23 evidence in this case. The motion to dismiss is therefore denied as to Defendant’s theory that the 24 reasonable consumer standard cannot be met as a matter of law. 25 2. Breach of Warranty Claim 26 Defendant argues that Plaintiff has failed to state a claim for breach of an express or 27 28 implied warranty. “To prevail on a breach of express warranty claim, Plaintiffs must prove: (1) ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS CASE NO. 21-cv-07669-RS 3 United States District Court Northern District of California 1 ‘the seller’s statements constitute an affirmation of fact or promise or a description of the goods; 2 (2) the statement was part of the basis of the bargain; and (3) the warranty was breached.’” Brown 3 v. Hain Celestial Grp., Inc., 913 F. Supp. 2d 881, 899-900 (N.D. Cal. 2012) (quoting Weinstat v. 4 Dentsply Int’l, Inc., 180 Cal. App. 4th 1213, 1227 (2010)). Defendant’s arguments concerning the 5 breach of express warranty claim are repetitive of the arguments discussed above; courts have held 6 that when a plaintiff adequately pleads falsity of an advertising claim under California consumer 7 protection statutes, the plaintiff also has adequately pled a breach of express warranty based on 8 those claims. See, e.g., In re S.C. Johnson & Son, Inc. Windex Non-Toxic Litigation, Case No. 20- 9 cv-03184-HSG, 2021 WL 3191733, at *9 (N.D. Cal. July 28, 2021). Here, Plaintiffs have 10 adequately pled that the “Reef Friendly” label indicated more than just the absence of oxybenzone 11 and octinoxate, and thus Plaintiff has pled a claim for breach of express warranty. The motion is 12 therefore denied as to the breach of express warranty claim. 13 Defendant next argues that the breach of implied warranty claim fails because plaintiff 14 cannot show privity. The privity requirement has an exception for “when the plaintiff relies on 15 written labels or advertisements of a manufacturer[,]” Clemens v. DaimlerChrysler Corp., 534 16 F.3d 1017, 1023 (9th Cir. 2008), but Defendant argues this exception “is applicable only to 17 express warranties.” Burr v. Sherwin Williams Co., 42 Cal. 2d 682, 696 (1954). Plaintiff argues 18 that courts have “relaxed” this requirement “when the plaintiff relies on written labels or 19 advertisements of a manufacturer[.]” Roper v. Big Heart Pet Brands, Inc., 510 F. Supp. 3d 903, 20 924 (E.D. Cal. 2020) (quoting Van Mourik v. Big Heart Pet Brands, Inc., No. 3:17-CV-03889-JD, 21 2018 WL 1116715, at *5 (N.D. Cal. Mar. 1, 2018)). As this Court has previously noted, however, 22 the holding from the California Supreme Court in Burr v. Sherwin Williams that the privity 23 exception only applies to express warranties has never been overruled. See In re Sony PS3 Other 24 OS Litig., No. C-10-1811-RS, 2011 WL 672637 (N.D. Cal. Feb. 17, 2011) (explaining that a case 25 which said the privity requirement could be “relaxed” was “not consistent with clear California 26 precedent that privity remains a requirement in implied warranty claims even though it has been 27 eliminated in express warranty claims”). The motion to dismiss is thus granted as to the breach of 28 ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS CASE NO. 21-cv-07669-RS 4 1 2 United States District Court Northern District of California 3 implied warranty claim. IV. Failure to Meet the Pleading Requirements of Rule 9(b) Defendant contends that Plaintiff has not met the heightened pleading standard of Federal 4 Rule of Civil Procedure 9(b). When a claim is “grounded in fraud” a pleading “must satisfy the 5 particularity requirement of Rule 9(b)[,]” Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th 6 Cir. 2009), which requires the party to “state with particularity the circumstances constituting 7 fraud or mistake.” Fed. R. Civ. P. 9(b). Defendant argues that “[i]t is facially impossible for 8 Plaintiff to explain what is false about the ‘Reef Friendly – No Oxybenzone or Octinoxate’ claim 9 and why it is false[.]” Motion to Dismiss, p.10. Plaintiff has set out in her Complaint “what 10 representation is allegedly misleading, where and how defendants make the representation, and 11 why plaintiff contend[s] it is misleading.” White v. Kroger, 2022 WL 888657, at *3. The motion to 12 dismiss for failure to plead with particularity is therefore denied. 13 Defendant also argues that Plaintiff makes vague references to “advertising” and 14 “marketing” without any further explanation, and that to “the extent Plaintiff’s claims rely on any 15 marketing or advertising aside from the ‘Reef Friendly – No Oxybenzone or Octinoxate’ claim, 16 they must be dismissed.” Motion to Dismiss, p.10. Plaintiff does not identify any other marketing 17 claims or forms of advertisements in her Complaint. To the extent Plaintiff’s claims are predicated 18 on anything other than the “Reef Friendly – No Oxybenzone or Octinoxate” claim, the motion to 19 dismiss is granted. V. Article III and Statutory Standing 20 21 22 A. Legal Standard Standing is a requirement for federal court jurisdiction. See Spokeo, Inc. v. Robins, 578 23 U.S. 330, 337-38 (2016). To establish standing, “[t]he plaintiff must have (1) suffered an injury in 24 fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to 25 be redressed by a favorable judicial decision.” Id. at 338. The party asserting federal subject matter 26 jurisdiction has the burden of proving the existence of jurisdiction. Chandler v. State Farm Mut. 27 Auto Ins. Co., 598 F.3d 1115, 1122 (9th Cir. 2010). 28 ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS CASE NO. 21-cv-07669-RS 5 1 United States District Court Northern District of California 2 B. Discussion Defendant raises a variety of arguments concerning standing. Defendant first argues that 3 Plaintiff has not sustained an injury-in-fact because she did not use the product near any coral reef 4 or in the ocean. That is not Plaintiff’s theory of injury; instead, she argues that she has suffered an 5 injury-in-fact due to purchasing a product at a higher price than she would have, had she known 6 that the reef-friendly claim was false as she alleges. “A quintessential injury-in-fact” is alleged 7 when plaintiffs aver they “spent money that, absent defendants’ actions, they would not have 8 spent.” Maya v. Centex Corp., 658 F.3d 1060, 1069 (9th Cir. 2011) (concluding plaintiffs 9 adequately pled an injury-in-fact when they alleged “they paid more for their homes than the 10 homes were worth at the time of sale”). As for the challenge to Plaintiff’s standing to bring 11 nationwide claims and the inclusion of products she did not purchase, as the Court stated in a 12 similar class action brought by the same attorneys, “challenges to plaintiff's standing with respect 13 to specific sunscreen products he did not purchase and to his ability to represent a nationwide class 14 both represent matters that are better addressed at the class certification stage[.]” White v. Kroger, 15 2022 WL 888657, at *3. 16 Defendant further challenges Plaintiff’s statutory standing. Statutory standing concerns the 17 elements of a claim and “whether a plaintiff states a claim for relief[,]” which “relates to the merits 18 of a case, not to the dispute’s justiciability,” and thus this argument falls more appropriately under 19 the realm of Rule 12(b)(6) rather than Rule 12(b)(1). See Jewel v. Nat’l Sec. Agency, 673 F.3d 20 902, 907 n.4 (9th Cir. 2011) (“Statutory ‘standing, unlike constitutional standing, is not 21 jurisdictional.’” (quoting Noel v. Hall, 568 F.3d 743, 748 (9th Cir. 2009)). Defendant argues that 22 Plaintiff does not meet the injury requirement of the California statutes. The California statutes she 23 pleads, however, “demand[] no more than the corresponding requirement under Article III of the 24 U.S. Constitution.” Reid v. Johnson & Johnson, 780 F.3d 952, 958 (9th Cir. 2015). Thus, Plaintiff 25 has satisfied the injury requirement of statutory standing. 26 Plaintiff has also adequately alleged reliance on the “Reef Friendly” claim. Reliance under 27 the FAL, CLRA, and UCL “requires that a plaintiff allege she saw and read deceptive statements.” 28 ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS CASE NO. 21-cv-07669-RS 6 1 Cohen v. E. W. Tea Co., LLC, No. 17-CV-2339-JLS (BLM), 2018 WL 3656112, at *4 (S.D. Cal. 2 Aug. 2, 2018). Plaintiff here alleges that she saw and read the allegedly deceptive statements on 3 the label, and thus has adequately alleged reliance.2 VI. Equitable Relief United States District Court Northern District of California 4 5 Citing Sonner v. Premier Nutrition, 971 F.3d 834, 844 (9th Cir. 2020) for the proposition 6 that a plaintiff “must establish that she lacks an adequate remedy at law before securing equitable 7 restitution for past harm under the UCL and CLRA[,]” Defendant argues that the equitable claims 8 should be dismissed because Plaintiff has failed to establish she lacks an adequate remedy at law. 9 Plaintiff points out that Defendant’s argument only addresses her claim for restitution, not her 10 forward-facing claim for injunctive relief. Further, she argues that at the pleading stage, she may 11 plead claims in the alternative, and need not allege that she does not have an adequate remedy at 12 law. Notably, Defendant does not respond in its reply to Plaintiff’s arguments concerning whether 13 she has an adequate remedy at law. “[T]he import of Sonner at the pleading stage is an unsettled question of law and has given 14 15 rise to an intra-circuit split.” Yeomans v. World Fin. Grp. Ins. Agency, Inc., No. 19-CV-00792- 16 EMC, 2022 WL 844152, at *7 (N.D. Cal. Mar. 22, 2022) (collecting cases). As a number of other 17 courts in this district have concluded, “Sonner does not preclude a plaintiff from pleading 18 equitable remedies in the alternative.” Id.; see also Nacarino v. Chobani, LLC, No. 20-CV-07437- 19 EMC, 2022 WL 344966, at *9 (N.D. Cal. Feb. 4, 2022) (“Sonner teaches that a plaintiff, on the 20 eve of trial, cannot create an inadequacy of a legal remedy by eliminating its availability by taking 21 volitional action.”); Jeong v. Nexo Fin. LLC, No. 21-CV-02392-BLF, 2022 WL 174236, at *27 22 (N.D. Cal. Jan. 19, 2022) (“The Court finds that Sonner has limited applicability to the pleading 23 stage because it pertained to circumstances in which a plaintiff dropped all damages claims on the 24 eve of trial.”). The motion to dismiss the claims for equitable relief due to the availability of 25 26 27 28 2 To the extent Plaintiff alleges reliance on advertisements or marketing other than the label, the motion is granted, as also addressed in the discussion of the Rule 9(b) arguments. Plaintiff has not alleged that she relied on any statements other than those on the product label. ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS CASE NO. 21-cv-07669-RS 7 1 remedies at law is therefore denied. “The issue of Plaintiff's entitlement to seek the equitable 2 remedy of restitution may be revisited at a later stage.” Nacarino, 2022 WL 344966, at *10. United States District Court Northern District of California 3 Additionally, Defendant argues that Plaintiff has failed to allege facts to establish she is 4 entitled to restitution, contending that “Plaintiff fails to allege any facts indicating that the Product 5 she allegedly purchased was worth any less than what she paid or, indeed, that she did not receive 6 the benefit of her bargain because she did not or could not use the product for its intended purpose 7 to protect her from harmful rays of the sun.” Motion to Dismiss, p.25. This argument essentially 8 repeats the same arguments Defendant makes concerning the lack of an injury-in-fact, and is 9 rejected for the same reason. Plaintiff has adequately pled that she paid more for a “Reef Friendly” 10 product than a product that did not contain those advertised qualities. She has therefore adequately 11 pled facts that she is entitled to restitution. 12 VII. Preemption and Primary Jurisdiction 13 Defendant next argues that dismissal is warranted because the state law claims are 14 preempted by federal law, and because the primary jurisdiction doctrine permits this Court to stay 15 or dismiss claims which fall within the jurisdiction of a federal agency. As explained, dismissal is 16 not warranted under either doctrine. 17 “Federal preemption occurs when: (1) Congress enacts a statute that explicitly pre-empts 18 state law; (2) state law actually conflicts with federal law; or (3) federal law occupies a legislative 19 field to such an extent that it is reasonable to conclude that Congress left no room for state 20 regulation in that field.” Chae v. SLM Corp., 593 F.3d 936, 941 (9th Cir. 2010) (internal quotation 21 marks and citation omitted). Federal preemption may be express or implied. Atay v. Cnty of Maui, 22 842 F.3d 688, 699 (9th Cir. 2016). Neither express nor implied preemption applies here. 23 Defendant argues that Plaintiff’s claims are expressly preempted because Plaintiff’s claims 24 would impose labelling requirements different than those implied by the Federal Food, Drug, and 25 Cosmetic Act (“FDCA”), and contends that Plaintiff’s claims are impliedly preempted because of 26 the “extensive and exclusive regulation of the Products” by the Food and Drug Administration 27 (“FDA”). Motion to Dismiss, p.16. Defendant, however, cites no authority to establish that the 28 ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS CASE NO. 21-cv-07669-RS 8 1 FDCA or the FDA regulates environmental claims such as “Reef Friendly.” Defendant thus has 2 failed to demonstrate that the claims are expressly or impliedly preempted. United States District Court Northern District of California 3 The primary jurisdiction doctrine applies when there is: “(1) [a] need to resolve an issue 4 that (2) has been placed by Congress within the jurisdiction of an administrative body having 5 regulatory authority (3) pursuant to a statute that subjects an industry or activity to a 6 comprehensive regulatory authority that (4) requires expertise or uniformity in administration.” 7 Clark v. Time Warner, 523 F.3d 1110, 1115 (9th Cir. 2008). “In practice, this means that the court 8 either stays proceedings or dismisses the case without prejudice, so that the parties may seek an 9 administrative ruling.” Id. at 1115. The doctrine of primary jurisdiction may only be properly 10 invoked “in a limited set of circumstances”; it “is not designed to ‘secure expert advice’ from 11 agencies every time a court is presented with an issue conceivably within the agency's ambit.” Id. 12 at 1114 (internal quotations omitted). “It is to be used only if a claim requires resolution of an 13 issue of first impression, or of a particularly complicated issue that Congress has committed to a 14 regulatory agency.” Id. (internal quotations omitted). 15 Defendant argues that the primary jurisdiction doctrine applies because the “FDA is in the 16 process of promulgating new OTC sunscreen regulations that cover all of the ingredients relevant 17 to Plaintiff’s claim” and states “[t]his Court should defer to the FDA’s expertise[.]” Motion to 18 Dismiss, p.16. District courts must “consider whether invoking primary jurisdiction would 19 needlessly delay the resolution of claims.” Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753, 760 20 (9th Cir. 2015). “Under [Ninth Circuit] precedent, ‘efficiency’ is the ‘deciding factor’ in whether 21 to invoke primary jurisdiction.” Id. Here, the possibility that FDA regulations will change in a way 22 that will materially impact the outcome of this litigation “is too remote at this juncture to warrant a 23 stay or dismissal[.]” Kroger, 2022 WL 888657, at *2. The primary jurisdiction doctrine therefore 24 does not apply. 25 VIII. Conclusion 26 The motion to dismiss is granted as to Plaintiff’s ability to pursue liability for 27 advertisements other than the “Reef Friendly – No Oxybenzone or Octinoxate” claim on the 28 ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS CASE NO. 21-cv-07669-RS 9 1 sunscreen labels, and as to the claim for breach of implied warranty. The motion to dismiss is 2 denied in all other respects. Although it appears unlikely the defects in the Complaint can be 3 cured, Plaintiff is granted leave to amend. 3 Any amended complaint must be filed by 21 days from 4 the date of this Order.4 5 6 IT IS SO ORDERED. 7 8 Dated: August 2, 2022 ______________________________________ RICHARD SEEBORG Chief United States District Judge 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 Plaintiff also filed a motion for leave to file a Second Amended Complaint, to make a factual correction to her complaint. The motion is denied as moot, because leave to amend the complaint has been granted. 4 Defendant’s motion for leave to file a statement of recent decision is denied. ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS CASE NO. 21-cv-07669-RS 10

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