Franz v. Beiersdorf, Inc. et al
Filing
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ORDER granting 22 Motion to Dismiss, denying as moot 23 Motion to strike. Franz's UCL claim is stayed. If Franz thinks she can successfully amend her CLRA-related claims, she must seek leave by ex parte motion no later than August 24, 2015. If she files such a motion, Beiersdorf shall have until September 7, 2015 to oppose it. No reply should be filed unless leave is obtained in advance. Signed by Judge Larry Alan Burns on 8/3/15. (kas)
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UNITED STATES DISTRICT COURT
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SOUTHERN DISTRICT OF CALIFORNIA
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ASHLEY FRANZ,
CASE NO. 14cv2241-LAB (RBB)
Plaintiff,
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ORDER GRANTING
BEIERSDORF'S MOTION
TO DISMISS, STAYING FRANZ'S
UCL CLAIM, AND DENYING
BEIERSDORF'S MOTION TO
STRIKE AS MOOT
vs.
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BEIERSDORF, INC., et al.,
Defendant.
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In this putative class action, Ashley Franz challenges representations that Beiersdorf,
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Inc. makes on bottles of its Nivea CoQ10 Lotion. Beiersdorf has filed a motion to dismiss
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(Docket no. 22) and a motion to strike Franz's class allegations (Docket no. 23).
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I.
Factual Background
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A.
Alleged Misrepresentations
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Franz alleges that Nivea CoQ10 Lotion bottles are misleading because: (1) they
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falsely represent that the product is "proven to firm and tighten skin's surface in as little as
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two weeks," "improves skin firmness within 2 weeks," and "improves skin firmness in as little
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as two weeks" (the "skin firming representations"); and (2) they convey the false message
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that CoQ10 is a key active ingredient. (Docket no. 19 at ¶¶ 1, 2, 14).
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Franz alleges the skin firming representations are false because they're not supported
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by "reliable scientific evidence." (Id. at ¶ 16). She contends the "universally accepted"
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method for determining whether a product provides a health benefit is to demonstrate its
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value over a placebo in randomized controlled clinical trials. (Id. at ¶ 17–18). Even then,
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according to Franz, a study isn't sufficient unless it's "subjected to the peer review publication
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process" and published in "impact peer-reviewed journals." (Id.). Franz alleges she can't
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find any such published reports on Nivea CoQ10 Lotion's ingredients. (Id.).
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Franz alleges Nivea CoQ10 Lotion bottles create the false impression that CoQ10 is
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the key ingredient in the product. (Id. at ¶ 22). But, she contends, three tests have revealed
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that the product contains trivial amounts of CoQ10, at most. (Id. at ¶¶ 23–26). Franz alleges
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further that, for purposes of the federal Food, Drug, and Cosmetics Act ("FDCA") and
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California's Sherman Food, Drug, and Cosmetic Law, Nivea CoQ10 Lotion is a cosmetic drug
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and, as such, can't be sold without an approved New Drug Application ("NDA"). (Id. at ¶¶
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27–36). According to Franz, an NDA must include "substantial evidence" that the drug is
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effective to treat the conditions suggested on the proposed labeling, but Beiersdorf doesn't
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have "substantial evidence" to back its representations. (Id. at ¶ 36). Franz contends that
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Beiersdorf sells the product without an approved NDA and has therefore violated the FDCA
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and California's Sherman Law. (Id. at ¶ 38).
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B.
Franz's Claims
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Based on these two alleged misrepresentations, Franz asserts causes of action for
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violation of the unlawful prong of California's unfair competition law, Cal. Bus. & Prof. Code
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§ 17200 et seq. ("UCL"), the Consumer Legal Remedies Act, Cal. Bus. & Prof. Code § 1750
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et seq. ("CLRA"), and CLRA-like laws from other states. (Docket no. 19 at ¶¶ 58, 67).
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"Under its 'unlawful' prong, the UCL borrows violations of other laws and makes those
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unlawful practices actionable under the UCL." Berryman v. Merit Prop. Mgmt., Inc., 152 Cal.
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App. 4th 1544, 1554, 62 Cal. Rptr. 3d 177, 185 (2007) (internal ellipses and quotation marks
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omitted). Franz's UCL claim is premised on Beiersdorf's alleged violation of the FDCA and
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California's Sherman Law. (Docket no. 19 at ¶¶ 56–64). Under the CLRA, a defendant is
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liable if it misrepresents its goods to contain certain characteristics, uses, or benefits that the
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goods don't have or advertises goods intending not to sell them as advertised. Cal. Civ.
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///
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Code § 1770(a)(5), (7), (9) and (16). Franz bases her CLRA-related claims on both the skin
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firming representations and the CoQ10 representation. (Docket no. 19 at ¶¶ 71–73).
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Franz alleges that she and the putative class members have been injured because
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they wouldn't have purchased Nivea CoQ10 Lotion absent Beiersdorf's skin firming
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representations. (Id. at ¶¶ 42–45). She identifies a proposed multi-state class consisting of
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"[a]ll consumers who, within the applicable statute of limitations period, purchased NIVEA
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CoQ10 Lotion in California and states with similar laws" and an alternative California-only
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class of "[a]ll consumers who, within the applicable statute of limitations period, purchased
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NIVEA CoQ10 Lotion in California." She seeks restitution, disgorgement, injunctive relief,
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corrective advertising, punitive damages, and attorney's fees and costs. (Id. at 20).
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II.
Motion to Dismiss
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Beiersdorf seeks dismissal, arguing: (1) Franz hasn't sufficiently alleged an actionable
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misleading representation; (2) the UCL claim should be dismissed or stayed because the
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question of whether Beiersdorf needs an NDA to sell Nivea CoQ10 Lotion lays within the
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primary jurisdiction of the Food and Drug Administration ("FDA"); and (3) Franz lacks
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standing. (Docket no. 22).
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A.
Legal Standard
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A 12(b)(6) motion to dismiss for failure to state a claim challenges the legal sufficiency
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of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). The Court must accept
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all factual allegations as true and construe them in the light most favorable to Franz. Cedars
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Sinai Med. Ctr. v. Nat'l League of Postmasters of U.S., 497 F.3d 972, 975 (9th Cir. 2007).
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To defeat Beiersdorf's motion to dismiss, Franz's factual allegations need not be detailed,
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but they must be sufficient to "raise a right to relief above the speculative level . . . ." Bell Atl.
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Corp. v. Twombly, 550 U.S. 544, 555 (2007). While the Court must draw all reasonable
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inferences in Franz's favor, it need not "necessarily assume the truth of legal conclusions
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merely because they are cast in the form of factual allegations." Warren v. Fox Family
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Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003) (internal quotation marks omitted). In
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fact, the Court does not need to accept any legal conclusions as true. Ashcroft v. Iqbal, 556
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U.S. 662, 664 (2009). A complaint does not suffice "if it tenders naked assertions devoid of
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further factual enhancement." Id. at 678 (internal brackets and quotation marks omitted).
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B.
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Beiersdorf argues that Franz's allegations are insufficient because: (1) the skin firming
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allegations are uncognizable "lack of substantiation" claims; (2) the absence of published
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randomized controlled clinical trial reports doesn't mean that Beiersdorf's skin-firming
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representations are false; and (3) Franz doesn't plausibly allege that the amount of CoQ10
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in NIVEA CoQ10 Lotion renders the product ineffective.
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Sufficiency of Franz's Allegations
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Lack of Substantiation
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Under California law, a private plaintiff may not bring UCL or CLRA claims based on
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a claim made in advertising that is merely unsubstantiated. See Bronson v. Johnson &
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Johnson, Inc., 2013 WL 1629191, at *8 (N.D. Cal. Apr.16, 2013) ("Claims that rest on a lack
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of substantiation, instead of provable falsehood, are not cognizable under the California
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consumer protection laws. Challenges based on a lack of substantiation are left to the
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Attorney General and other prosecuting authorities; private plaintiffs, in contrast, have the
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burden of proving that advertising is actually false or misleading.") "A claim can survive a
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lack of substantiation challenge by, for example, alleging studies showing that a defendant's
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statement is false." Id. (Internal quotation marks omitted).
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Franz doesn't allege studies that contradict the skin firming representations, or make
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any other nonconclusory allegations that the skin firming representations are false. Instead,
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she merely contends they lack substantiation. But, it remains Franz's burden to allege facts
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sufficient to demonstrate Beiersdorf's statements are false or misleading, and she can't shift
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her burden by merely alleging she can't find substantiation. Beiersdorf's use of the word
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"proven" doesn't change the analysis. See Aloudi v. Intramedic Research Grp., LLC, 2015
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WL 4148381, at *4 (N.D. Cal. July 9, 2015); Kwan v. SanMedica Int'l, LLC, 2015 WL 848868,
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at *7 (N.D. Cal. Feb. 25, 2015) (Plaintiffs can't "make an end run around the bar against
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private substantiation claims" by alleging a reference to the substantiation is misleading).
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Thus, the skin firming misrepresentation allegations fail to state a cognizable claim.
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2.
Randomized Controlled Clinical Trial Reports
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Franz's skin firming representation allegations are insufficient for another
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reason—they're based entirely on her inability to find published randomized controlled clinical
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trial reports. But, even if no published reports exist, it doesn't follow that Beiersdorf's skin
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firming representations are false. Indeed, while the lack of a published report is consistent
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with Franz's allegations, it's at least as likely that Beiersdorf has verified its representations
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through other methods, such as testing that didn't result in a published report. See Iqbal, 556
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U.S. at 681. And Franz doesn't cite any authority supporting her position that, to avoid UCL
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and CLRA liability, a defendant must verify its representations through a randomized
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controlled clinical trial and a published report.
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Key Ingredient
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Franz alleges that, by highlighting the inclusion of CoQ10, Beiersdorf gives the
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impression that it's a "key ingredient" in Nivea CoQ10 Lotion, but her testing revealed the
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product "contained just over one part per million of CoQ10." (Docket no. 19 at ¶¶ 22, 23).
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Franz labels this "on its face, a sub-therapeutic amount," "a trivial and meaningless amount,"
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and "a de minimis amount." (Id. at ¶¶ 2, 3, 23). The Court need not accept Franz's
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conclusory allegation that one part per million is a sub-therapeutic amount of CoQ10. See
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Iqbal, 556 U.S. at 678. That's especially true in light of Franz's prior admission that some
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studies have reported that CoQ10 has skin firming benefits. (Docket no. 1 at ¶¶ 23); cf.
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Harbridge v. Schwarzenegger, 2011 WL 6960830, at *8 (C.D. Cal. Aug. 31, 2011) (collecting
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cases and explaining "[w]here allegations in an amended complaint contradict those in a prior
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complaint, a district court need not accept the new alleged facts as true . . ."). While it's
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possible that one part per million is insufficient to provide skin firming benefits, Franz hasn't
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alleged facts sufficient to demonstrate that's the case.
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Additionally, under the CLRA and UCL, a plaintiff can only recover if she suffers
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damage as a result of the alleged misrepresentation. Cal. Civ. Code § 1780(a); Webb v.
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Carter's Inc., 272 F.R.D. 489, 501 (C.D. Cal. 2011); Pirozzi v. Apple, Inc., 966 F. Supp. 2d
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909, 920 (N.D. Cal. 2013). In her complaint, Franz explains that it was the skin firming
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representations that led her and other putative class members to purchase NIVEA CoQ10
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Lotion. (Docket no. 19 at ¶¶ 11 ("Plaintiff purchased NIVEA CoQ10 Lotion in reliance on
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Defendant's skin firming representations."), 42, 71, 74). Nowhere does she allege that her
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purchase was induced by the prominence of CoQ10 on the product label, or that CoQ10 is
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a prized ingredient that can induce customers to purchase a product. Thus, her key
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ingredient allegations also fall short because she doesn't link them to any injury.
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C.
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Beiersdorf argues that the UCL claim should be dismissed or stayed because the
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question of whether it needs an NDA to sell Nivea CoQ10 Lotion lays within the primary
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Primary Jurisdiction
jurisdiction of the FDA.
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"The primary jurisdiction doctrine allows courts to stay proceedings or to dismiss a
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complaint without prejudice pending the resolution of an issue within the special competence
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of an administrative agency." Clark v. Time Warner Cable, 523 F.3d 1110, 1114 (9th Cir.
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2008). This doctrine enables a court to determine that "an otherwise cognizable claim
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implicates technical and policy questions that should be addressed in the first instance by
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the agency with regulatory authority over the relevant industry rather than by the judicial
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branch." Id. "[I]t is to be used only if a claim requires resolution of an issue of first
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impression, or of a particularly complicated issue that Congress has committed to a
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regulatory agency, and if protection of the integrity of a regulatory scheme dictates
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preliminary resort to the agency which administers the scheme." Id. (citations and quotation
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marks omitted). Although there's no fixed formula, the Ninth Circuit has looked at four factors
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when deciding whether to apply the primary jurisdiction doctrine:
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(1) the need to resolve an issue that (2) has been placed by Congress within
the jurisdiction of an administrative body having regulatory authority (3)
pursuant to a statute that subjects an industry or activity to a comprehensive
regulatory authority that (4) requires expertise or uniformity in administration.
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Syntek Semiconductor Co. v. Microchip Tech. Inc., 307 F.3d 775, 781 (9th Cir. 2002).
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Here, all four factors favor application of the primary jurisdiction doctrine. First, there's
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an issue that needs to be resolved—Franz alleges Beiersdorf acts unlawfully by selling a
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drug without an NDA. Second, the FDA has jurisdiction to determine whether a product is
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a drug and whether an NDA is necessary. 21 U.S.C. § 351 et seq.; Weinberger v. Bentex
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Pharm., Inc., 412 U.S. 645, 653 (1973) (Whether a product is a new drug and whether it's
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grandfathered in "are the kinds of issues peculiarly suited to initial determination by the
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FDA."). Third, the FDCA subjects the drug industry to a comprehensive regulatory authority.
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21 U.S.C. § 301 et seq.; Imagenetix, Inc. v. Frutarom USA, Inc., 2013 WL 6419674, at *4
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(S.D. Cal. Dec. 9, 2013). Fourth, determining whether a product is a drug "involves complex
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chemical and pharmacological considerations and determination of technical and scientific
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questions." Imagenetix, 2013 WL 6419674, at *4 (collecting cases) (internal quotation marks
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omitted).
The FDA's informal guidelines illustrate that it makes fine distinctions when evaluating
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whether a lotion is a drug.
Wrinkle Treatments and Other Anti-Aging Products,
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http://www.fda.gov/cosmetics/productsingredients/products/ucm388826.htm (updated May
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28, 2015) (explaining "if a product is intended to make lines and wrinkles less noticeable,
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simply by moisturizing the skin, it's a cosmetic" but "if a product is intended, for example, to
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remove wrinkles or increase the skin’s production of collagen, it's a drug or a medical
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device").
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Beiersdorf's skin firming representations. Several courts have applied the primary jurisdiction
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doctrine where, as here, "a determination of a plaintiff's claim would require a court to decide
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an issue committed to the FDA's expertise without a clear indication of how the FDA would
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view the issue." Figy v. Lifeway Foods, Inc., 2014 WL 1779251, at *2 (N.D. Cal. May 5,
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2014) (collecting cases). The Court does the same here.
Franz doesn't provide any indication regarding how the FDA would view
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The Court's application of the primary jurisdiction doctrine doesn't leave Franz in
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limbo. FDA regulations expressly provide that an interested person may "petition the
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Commissioner to issue, amend, or revoke a regulation or order, or to take or refrain from
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taking any other form of administrative action." 21 C.F.R. § 10.25(a); see also Imagenetix,
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2013 WL 6419674, at *4. The petition may take the form of a citizen's petition under 21
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C.F.R. § 10.30. The Commissioner's decision on such a petition, which must be made within
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180 days, 21 C.F.R. § 10.30(e)(2), is reviewable in federal court as a final agency action, 21
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C.F.R. § 10.45(d), and with the benefit of a developed administrative record, 21 C.F.R. §
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10.30(I). Imagenetix, 2013 WL 6419674, at *4.
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Franz doesn't address whether her UCL claim should be stayed or dismissed.
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"Typically, if courts conclude that the dispute that forms the basis of the action is within the
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agency's primary jurisdiction, the case should be dismissed without prejudice." Id. at *9. The
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Court may, however, stay the proceedings pending the outcome of the administrative
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process if the statute of limitations may prevent the plaintiff from refiling. Id. Thus, to avoid
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statute of limitations concerns, Franz's UCL claim is STAYED.
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D.
Standing
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Beiersdorf argues that Franz lacks standing to pursue any form of relief because she
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hasn't sufficiently alleged injury, and she lacks standing to pursue injunctive relief because
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she hasn't sufficiently alleged redressability. In response, Franz contends her alleged injury
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is sufficient, but voluntarily dismisses her claim for injunctive relief. (Docket no. 24 at 22–24,
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n.15). Franz hasn't alleged a causal link between the CoQ10 representations and an injury,
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so her CoQ10-based claim falls short of Article III's mandate. In re iPhone Application Litig.,
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6 F. Supp. 3d 1004, 1022 (N.D. Cal. 2013) ("A causal link between a defendant's
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misrepresentation and a plaintiff's injury is required to establish standing under Article III, the
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CLRA, and the UCL."). But, if Franz can amend her complaint to allege that the skin firming
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representations are false or that the prominence of CoQ10 on the product's label is materially
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misleading, and that the alleged misrepresentations induced her to spend money she
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otherwise wouldn't have, then the Court will be inclined to find standing.
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III.
Motion to Strike
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Beiersdorf also seeks to strike Franz's class allegations, arguing: (1) Franz hasn't pled
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that putative class members can be readily identified; (2) her multi-state class definition isn't
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ascertainable because it doesn't specify which state laws apply, and thereby fails to put
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Beiersdorf, putative class members, or the Court on notice of which purchasers are in the
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class or what claims will be asserted; and (3) variations in state laws render Franz's
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multi-state class unmanageable. (Docket no. 23). Because the Court grants Beiersdorf's
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motion to dismiss, it DENIES the motion to strike as moot.
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IV.
Conclusion
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Beiersdorf's motion to dismiss is GRANTED and the motion to strike is DENIED AS
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MOOT. Franz's UCL claim is STAYED, but, to avoid needlessly clogging the Court's docket,
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Franz is ORDERED to report to the Court if she declines to pursue the administrative
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process; begins the process but abandons it; or, if she pursues it, once the administrative
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process is complete. If Franz thinks she can successfully amend her CLRA-related claims,
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she must seek leave by ex parte motion no later than August 24, 2015. Her proposed
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amended complaint must be attached as an exhibit to the motion. If she files such a motion,
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Beiersdorf shall have until September 7, 2015 to oppose it. No reply should be filed unless
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leave is obtained in advance.
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IT IS SO ORDERED.
DATED: August 3, 2015
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HONORABLE LARRY ALAN BURNS
United States District Judge
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