MCNAMEE v. JOHNSON & JOHNSON PHARMACEUTICALS
Filing
16
OPINION. Signed by Chief Judge Jerome B. Simandle on 9/28/2012. (TH, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
BRIDGET CROZIER,
Plaintiff,
Civil Action
No. 12-0008 (JBS/KMW)
v.
JOHNSON & JOHNSON CONSUMER
COMPANIES, INC.,
Defendant.
MARGUERITE MCNAMEE,
Civil Action
No. 12-0010 (JBS/KMW)
Plaintiff,
v.
JOHNSON & JOHNSON CONSUMER
COMPANIES, INC.,
Defendant.
OPINION
APPEARANCES:
Daniel Joseph Sherry, Jr.
Eisenberg, Rothweiler, Winkler, Eisenberg, & Jeck, PC.
1634 Spruce St.
Philadelphia, PA 19103
-andDavid T. Shulick
2 Bala Plaza, suite 300
Bala Cynwyd, PA 19004
-andNancy J. Winkler
Eisenberg, Rothweiler, Winkler, Eisenberg, & Jeck, PC.
Bldg Q42
1930 East - Rt 30
Cherry Hill, NJ 08003
Attorneys for Plaintiffs
Anna F. Lesovitz
Drinker Biddle & Reath LLP
105 College Road East, suite 300
Princeton, NJ 08542-0627
-andDavid F. Abernathy
Drinker Biddle & Reath LLP
One Logan Square, Ste. 2000
Philadelphia, PA 19103-6996
Attorneys for Defendant
SIMANDLE, Chief Judge:
I.
INTRODUCTION
Plaintiffs Bridget Crozier and Marguerite McNamee have
brought these putative class actions alleging that Defendant
Johnson & Johnson Consumer Companies Inc. has violated the New
Jersey Consumer Fraud Act, N.J.S.A. § 56:8-1, et seq, as well as
the implied warranties of merchantability under N.J.S.A. § 12A:2314, and of fitness under N.J. Stat. Ann. § 12A:2-314, in
connection with the sale of Neosporin NEO TO GO! first aid
antiseptic/pain relieving spray.
This matter comes before the Court on Defendant’s Motions to
Dismiss [Civ. No. 12-0008, Docket Item 4; Civ. No. 12-0010,
Docket Item 4]1 Plaintiffs’ New Jersey Consumer Fraud Act
(“NJCFA”) and breach-of-warranty claims. The Court finds that
federal law preempts any claims relating to the spray’s label. In
terms of the spray’s advertising, the Court finds that Plaintiffs
1
Because the motions and briefing are virtually identical on
the two dockets, the Court will only reference docket items in
Civ. No. 12-0008, unless otherwise noted.
2
failed to state plausible claims for relief. The Motion to
Dismiss will be granted. The NJCFA claims will be dismissed
without prejudice, and the breach-of-warranty claims will be
dismissed with prejudice.
II.
BACKGROUND
The procedural history of the two cases, the factual and
legal allegations contained in Plaintiffs’ Complaints, and the
arguments in Defendant’s Motions to Dismiss are now discussed.
A. Procedural History
Plaintiffs Bridget Crozier and Marguerite McNamee both filed
lawsuits against Johnson & Johnson Consumer Companies Inc.
(“J&J”)2 in New Jersey Superior Court, Camden County Law
Division. The Complaints in both cases were virtually identical.
Defendant removed both cases to this Court. The Court has
jurisdiction over these actions pursuant to the Class Action
Fairness Act (“CAFA”), 28 U.S.C. § 1332(d), because they are
putative class actions having at least minimal diversity of
citizenship, an aggregate amount in controversy in excess of
$5,000,000, and 100 or more class members. The two cases were
consolidated for pre-trial purposes. [Docket Item 16.] Defendant
has filed identical Motions to Dismiss in both cases. This
2
The lawsuits were actually filed against Johnson & Johnson
Pharmaceuticals, and many documents contain that name. But
counsel signed a joint stipulation changing the Defendant’s name
to Johnson & Johnson Consumer Companies Inc. [Docket Item 15.]
3
Opinion addresses both motions.
B. Factual Background
Plaintiff Bridget Crozier filed a lawsuit individually and
on behalf of other similarly situated individuals in New Jersey
who purchased Neosporin NEO TO GO! first aid antiseptic spray
since the product was introduced “in or around 2008.” [Docket
Item 1, Ex. A.]; (Compl. ¶ 6). Plaintiff Marguerite McNamee filed
an identical Complaint. [Civ. No. 12-0010, Docket Item 1, Ex. A.]
Defendant J&J produces over-the-counter medications,
including Neosporin antibiotic ointments and NEO TO GO antiseptic
spray. (Compl. ¶ 2.) Neosporin antibiotic ointment’s intended use
is “the prevention of infection and pain relief at the sites of
scratches, cuts and other minor wounds.” (Id. ¶ 29.) It contains
three antibiotics as active ingredients. (Id. ¶ 30.) J&J also
produces Maximum Strength Neosporin, which contains the same
three antibiotics and also a pain reliever. (Id. ¶ 31.) Both
Neosporin antibiotic ointment and Maximum Strength Neosporin are
“sold in boxes that, in an attempt to capitalize on the product’s
established goodwill and reputation, prominently display the
Neosporin Signature Gold Mark and Neosporin Trade Dress.” (Id. ¶
32.) J&J also makes Neosporin NEO TO GO! Single Use Packets,
which are “single use packets which each contain a single dose of
original Neosporin antibiotic ointment.” (Id. ¶ 34.)
In addition to these antibiotic ointments, J&J produces
4
Neosporin NEO TO GO! spray, which is the subject of this action.
The spray “uses Benzalkanium Chloride as the active First Aid
Antispetic,” and its label identifies this active antiseptic
ingredient. (Compl. ¶ 43.) It is sold in 7.7 ml (0.26 oz) spray
bottles and “is specifically designed to fit anywhere to give you
infection protection anytime, anywhere.” (Id. ¶ 35.)
The antiseptic spray does not contain antibiotics, but
Plaintiffs allege that the spray “is manufactured, marketed,
advertised, and distributed in a manner that intentionally,
recklessly, and/or negligently confuses and misleads consumers,
including Plaintiff[s], into believing that they have purchased a
product that contains antibiotics.” (Id. ¶ 36.) The spray is
allegedly marketed and labeled with the same green and yellow
color scheme, Signature Gold Mark, trade dress, and goodwill and
reputation that are associated with Neosporin, Neosporin Maximum
Strength, and NEO TO GO! Single Use Packets, all of which contain
antibiotics. (Id. ¶ 37.)
The Neosporin family of products also includes nonantibiotic products, such as Lip Treatment, Athlete’s Foot Cream,
Athlete’s Foot Spray Powder, Athlete’s Foot Spray Liquid, and
Jock Itch Cream. (Id. ¶ 39.) These non-antibiotic products are
not marketed with the “Neosporin Signature Gold Mark or the
Neosporin Trade Dress and therefore do not capitalize on the
goodwill and antibiotic reputation associated with each of them.”
5
(Id. ¶ 40.)
Plaintiffs also allege that the spray is “significantly and
exponentially more expensive . . . for a much smaller volume”
than other brand name topical antiseptic products. (Id. ¶ 42.)
The spray, which contains 7.7 milliliters, costs $4.00 to $7.00.
(Id. ¶ 42.) A 16-ounce bottle of a common antiseptic typically
sells for less than one dollar. (Id. ¶ 42.) Plaintiffs state that
“[t]he extraordinary and unreasonable price differential between
the subject spray and common antiseptic products can only be
explained by the fact that Johnson & Johnson has intentionally,
recklessly, and/or negligently misled consumers into believing
that the subject spray contains antibiotic ingredients.” (Id. ¶
44.) Plaintiffs allege that consumers believe that “they are
paying a higher price for the extra infection prevention that is
provided by an antibiotic, when in fact the spray contains no
antibiotics whatsoever.” (Id. ¶ 44.)
Plaintiffs allege two counts. Count I alleges that J&J has
violated the New Jersey Consumer Fraud Act (“NJCFA”). Plaintiffs
allege that Defendant’s actions constitute “unconscionable
commercial practices, misrepresentations, concealment,
suppression, or omission of material facts with the intent that
Plaintiff[s] and members of the proposed class would rely on such
concealment, suppression, or omission.” (Id. ¶ 47.) Plaintiffs
allegedly suffered “a measurable and easily-calculable economic
6
loss between the value of an antiseptic and the cost of the
subject spray.” (Id. ¶ 49.)
Count II alleges that J&J breached implied warranties of
merchantability and fitness for a particular purpose. Plaintiffs
relied on J&J’s “representations about the character, quality,
and/or recommended uses of NEO TO GO! spray,” (Id. ¶ 54), and
J&J’s “misleading marketing and advertising” breached implied
warranties, (Id. ¶ 55). Plaintiff also alleges that “[t]hese
breaches of warranties were substantial factors in inducing
Plaintiff[s] and other New Jersey residents to purchase NEO TO
GO! spray, and falsely indicated that the spray would provide
infection protection in a manner similar to Johnson & Johnson’s
product lines.” (Id. ¶ 55.)
C. Defendant’s Motions to Dismiss
Defendant filed identical Motions to Dismiss pursuant to
Fed. Rule Civ. P. 12(b)(6). [Docket Item 4.] Defendant argued
that Plaintiffs’ claims are preempted by federal law and that
Plaintiffs did not state a claim for relief under New Jersey
law.3
3
J&J also argued that the claims should be dismissed under
the prior pending action doctrine because Plaintiffs had an
identical action, Pang v. Johnson & Johnson Pharmaceuticals, No.
L-3309-10, N.J. Super. Law Div., Camden Cnty., pending in state
court. But J&J withdrew this argument in its Reply brief because
the Pang action was dismissed with prejudice and is no longer
pending. (Def. Reply Br., at 5 n.1.) The Court will not address
this argument as it is moot.
7
J&J argued that the spray is labeled in accordance with
federal regulations and that federal regulations regarding overthe-counter medications prohibit states from imposing different
labeling requirements. J&J stated:
Plaintiff asserts that state law imposes additional or
different requirements - either adding a disclaimer of
antibiotic content to the federally mandated ingredient
label, or removing Defendant’s lawful trademark and
trade dress. . . . Those different and additional
requirements would be preempted. . . .
(Def. Mem. Law Supp. Mot. Dismiss, at 2.)
J&J also argued that Plaintiffs did not state a claim under
the NJCFA because Plaintiffs failed to plead elements required
under the NJCFA and failed to state with particularity the
alleged circumstances constituting fraud. In addition, J&J argued
that Plaintiffs do “not allege that Defendant made any
affirmative statement, either on the product label or in any
advertising, that Neo to Go! spray contains antibiotics.” (Id. at
10.) J&J noted that “[e]ntirely absent from the Complaint are any
allegations that Defendant ever actually stated that Neo To Go!
spray contained antibiotics; any allegations that the product
failed to provide infection protection; and any specific
allegations all [sic] relating to Plaintiff’s purchase.” (Id. at
4.)
And finally, J&J argued that Plaintiffs’ warranty arguments
“are duplicative and defective” because Plaintiffs did not allege
that the spray was “unfit for its ordinary purpose” or that the
8
Plaintiff had any “particular purpose,” of which Defendant had
reason to be aware, that was different from the spray’s “ordinary
purpose.” (Def. Mem. Law Supp. Mot. Dismiss, at 26-27.) J&J
argued that Plaintiffs’ warranty claims were “a restatement” of
the NJCFA claim. (Id. at 26.)
III. Standard and Scope of Review
The Court next addresses the standard and scope of its
review. The Court outlines the standard of review for a motion to
dismiss in federal district court and rejects Plaintiffs’
argument that the New Jersey state court standard of review, N.J.
Rule Civ. P. 4:6-2(e), should apply. In addition, the Court
explains which materials it can consider at this procedural
posture. Finally, the Court explains why it cannot deny
Defendant’s motion to dismiss simply because Plaintiffs have
noted prior state and federal cases in which J&J was a party.
A.
Standard of Review
A motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) may be granted only if, accepting all well-pleaded
allegations in the complaint as true and viewing them in the
light most favorable to the plaintiff, a court concludes that
plaintiff has failed to set forth fair notice of what the claim
is and the grounds upon which it rests that make such a claim
plausible on its face. Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 555 (2007). A complaint will survive a motion to dismiss if
9
it contains sufficient factual matter to “state a claim to relief
that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662,
663 (2009). Although a court must accept as true all factual
allegations in a complaint, that tenet is “inapplicable to legal
conclusions,” and “[a] pleading that offers labels and
conclusions or a formulaic recitation of the elements of a cause
of action will not do.” Id. at 678.
Additionally, “if a complaint is vulnerable to 12(b)(6)
dismissal, a district court must permit a curative amendment,
unless an amendment would be inequitable or futile.” Phillips v.
County of Allegheny, 515 F.3d 224, 236 (3d Cir. 2008).
Plaintiffs erroneously describe the standard of review on a
motion to dismiss under Rule 12. They argue that “Defendant
possesses an extraordinarily heavy burden for a Rule 12(b)(6)
Motion to Dismiss,” and that a court “may dismiss a complaint
only if it is clear that no relief could be granted under any set
of facts that could be proved consistent with the allegations.”
(Pl. Br. Opp’n. Def. Mot. Dismiss (“Pl. Opp’n”), at 15-16, Mar.
8, 2012.)
Plaintiffs seem unaware that pleading standards in federal
court have changed in the past five years: Before the Supreme
Court's decision in Twombly, the test as set out in Conley v.
Gibson, 355 U.S. 41, 45-46 (1957), only permitted district courts
to dismiss a complaint for failure to state a claim if “it
10
appear[ed] beyond doubt that the plaintiff can prove no set of
facts in support of his claim which would entitle him to relief.”
Id. The Supreme Court rejected the “no set of facts” standard in
Iqbal and Twombly. Iqbal “provide[d] the final nail-in-the-coffin
for the ‘no set of facts’ standard that applied to federal
complaints before Twombly.” Fowler v. UPMC Shadyside, 578 F.3d
203, 210 (3d Cir. 2009).
Plaintiffs also described the “generous and hospitable”
pleading standard that applies under New Jersey Rule 4:6-2(e),
the rule governing motions to dismiss in New Jersey state courts.
(Pl. Opp’n at 16.) But Fed. Rule Civ. P. 12(b)(6), not N.J. Rule
4:6-2(e), applies here. The Federal Rules of Civil Procedure
“govern the procedure in all civil actions and proceedings in the
United States district courts.” Fed. R. Civ. P. 1. In this Court,
the standards under New Jersey Rule 4:6-2 are irrelevant.
Essentially, Plaintiffs’ assertion that they are “confronted with
an exceedingly light threshold in order for [their] case to
proceed beyond a 12(b)(6) motion,” (Pl. Opp’n at 16), is wrong.
Plaintiffs also assert that “[t]he question as to whether
Defendant’s advertising violates the New Jersey Consumer Fraud
Act cannot be determined pursuant to a 4:6-2(e) Motion to
Dismiss.” (Pl. Opp’n at 19.) The Court is not deciding a Rule
4:6-2(e) motion to dismiss; it is deciding a Rule 12(b)(6)
motion. This Court must apply federal pleading standards, which
11
do not prohibit assessing whether Plaintiffs’ Complaints contain
a plausible NJCFA claim for relief.
The Court is mindful, however, that these cases were
originally pled in the Superior Court of New Jersey and removed
to this Court by Defendant. In formulating their Complaints,
Plaintiffs and their counsel may reasonably have anticipated that
their pleading needed to meet only the standard of N.J. Rule 4:62(e), which is rooted in the pre-Twombly and Iqbal jurisprudence.
If a pleading in a removed case falls short of the 12(b)(6)
standard, it is important for the Court to exercise its
discretion in favor of permitting Plaintiffs to attempt an
amended pleading; that the original Complaints did not meet the
enhanced standard for stating the grounds giving rise to a claim
that is plausible on its face does not mean that the Plaintiffs
could not meet this standard in their first attempt in federal
court to do so.
B. Consideration of Documents Outside the Complaints
Both Plaintiffs and Defendant attached documents to their
briefing. In this section, the Court analyzes these different
materials and explains why it either cannot or will not consider
them.
In their Opposition briefs, Plaintiffs argue that their
claims should stand because they have evidence obtained in
discovery in a state court proceeding. They state, “Discovery in
12
similar litigation involving NEO TO GO Spray has resulted in a
significant record” that allegedly substantiates their claims.
(Pl. Opp’n at 10.) They provide a 3-page chart listing various
evidentiary sources that purportedly support their claims and
that “represent only a fraction of the evidence accumulated. . .
.” (Pl. Opp’n at 13.) A sampling of these documents includes:
J&J’s March 31, 1953 patent trademark for Neosporin, a check-out
station photograph, a Neosporin Brand Identity Chart, a summary
of J&J’s television marketing campaigns, deposition transcripts,
and e-mail exchanges between J&J employees. Plaintiffs also
describe a Consumer Reports article, arguing that the spray is
“so disingenuously and deceptively marketed, it became the focus
of a Consumer Reports article.” (Pl. Opp’n at 1.)
The Court cannot and will not consider these materials. “As
a general matter, a district court ruling on a motion to dismiss
may not consider matters extraneous to the pleadings.” In re
Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir.
1997). If these materials were integral to or referenced in the
pleadings, the Court could potentially consider them because “a
document integral to or explicitly relied upon in the complaint
may be considered. . . .” Id. at 1426.
But these materials were not integral to or referenced in
the pleadings. All of the materials purportedly support the
veracity of Plaintiffs’ allegations that J&J’s use of the
13
Signature Gold Mark and trade dress was intended to deceive
consumers into believing that the spray contained antibiotics. At
the motion to dismiss stage, the Court must assess whether
Plaintiffs’ allegations, if taken as true, establish a plausible
claim for relief. Materials that purportedly bolster their
allegations are irrelevant because the Court must already accept
all factual allegations as true. If the allegations do not
establish plausible claims, the Court must dismiss the Complaint,
regardless of how much evidentiary support Plaintiffs purportedly
have for their allegations.
Plaintiffs also attached copies of photographs of Neosporin,
Maximum Strength Neosporin, and NEO TO GO! Single Packets. (See
Pl. Opp’n at 4 (describing attached photographs).) These
materials could potentially be considered by the Court since the
Complaints directly discuss the similarity between the markings
on these products and the spray. But the Court need not determine
here whether it can consider these images because, for the
purposes of evaluating the Motion to Dismiss, the Court must
simply accept as true Plaintiffs’ allegation that the spray has
the same trade dress, trademark, and coloring as the antibiotic
products. The documentary support for this allegation is, at this
stage, irrelevant.
In addition to listing materials, Plaintiffs also describe
television advertisements that J&J has used to market the spray,
14
directing the Court to certain aspects of the commercials. (E.g.
Pl. Opp’n at 9.) To the extent that Plaintiffs reference exhibits
in their Opposition to establish facts beyond those pled in the
Complaint, the Court must disregard them. Plaintiffs cannot add
factual allegations in Opposition; the mechanism for curing
pleading deficiencies is to file an amended complaint pursuant to
Fed.R.Civ.P. 15(a). “It is axiomatic that the complaint may not
be amended by the briefs in opposition to a motion to dismiss.”
Com. of Pa. ex rel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173, 181
(3d Cir. 1988). The Court has not considered Plaintiffs’
references to television commercials, and it has not watched the
commercials that Plaintiffs submitted as exhibits with the
Opposition briefs. At this procedural posture, the Court is
simply assessing whether Plaintiffs have alleged plausible claims
for relief.
In the Motion to Dismiss, Defendant attached copies of the
NEO TO GO spray label. The Court finds that it need not determine
whether the label is integral to or relied upon in the pleadings,
and thus whether the Court could consider it, because Plaintiffs
acknowledged all the facts that Defendant introduced the label to
prove. Defendant introduced the label to show that the label
identifies the product as an antiseptic and contains no claim
that the product contains antibiotics. (Def. Mem. Law Supp. Mot.
Dismiss, at 10-11.) But Plaintiffs acknowledged that the spray
15
label notes that the spray “uses Benzalkanium Chloride as the
active First Aid Antispetic,” (Compl. ¶ 43), and did not allege
that the label claims any antibiotic ingredients. The Court will
therefore assess the Motion to Dismiss without further
considering the label because Plaintiffs’ Complaints acknowledged
the facts that Defendants sought to prove by introducing the
label.
C. Prior Court Decisions Involving Defendant
In their Opposition, Plaintiffs argue that “Defendant has
made identical arguments in a New Jersey state court action
involving the same underlying facts and legal issues,” and “these
arguments were rejected by both the trial court and by the New
Jersey Appellate Division.” (Pl. Opp’n at 14.) Plaintiffs argue
that this Court should follow suit and deny the Motion to Dismiss
presently at issue. (Id. at 14-15.) The Court must apply
established precedent to the facts and arguments before it. The
Court cannot deny Defendant’s Motion to Dismiss based on
Plaintiffs’ assertion, absent any citations or quotations
explaining legal reasoning, that another court did so in similar
circumstances.
In their Opposition briefs, Plaintiffs also extensively cite
Johnson & Johnson v. Actavis Group hf, 06 CIV. 8209 (DLC), 2008
WL 228061 (S.D.N.Y. Jan. 25, 2008), a case from the Southern
District of New York in which Plaintiffs Johnson & Johnson and
16
Johnson & Johnson Consumer Companies sued the Actavis Group, a
manufacturer of antibiotic ointments that are packaged and sold
as store-brands. Plaintiffs in that action argued that Actavis
was copying the Neosporin Signature Gold Mark in order to confuse
customers purchasing store-brand antibiotic ointments. Plaintiffs
Crozier and McNamee claim that the Southern District of New York
evaluated “Johnson & Johnson’s assertions that the Signature Gold
Mark is distinct in the marketplace as identifying a product as
(a) manufactured by Johnson & Johnson and, inter alia, (b)
representing antibiotic product. . . .” (Pl. Opp’n at 5.)
The Southern District of New York opinion did not discuss
the perception that the Signature Gold Mark represents
antibiotics. The case was about potential customer confusion
regarding which antibiotic ointments J&J had produced, as opposed
to store-brand competitors; there was no discussion of whether
the Signature Gold Mark implies the existence of antibiotics in
products that do not contain them. The court analyzed whether
Johnson and Johnson’s Signature Gold Mark was entitled to brand
protection because it had acquired secondary meaning, which is
the ability to identify the source of the product, rather than
the product itself. The court found that “[m]uch of the evidence
on which J&J relies to establish secondary meaning in the Gold
Mark could be used as well to show consumer recognition of the
NEOSPORIN brand name, which is indisputably a strong mark in its
17
own right.” Id. at *2. The court denied summary judgment on the
secondary meaning issue because “while J&J’s evidence of
secondary meaning is sufficient for a jury to conclude that the
Gold Mark has acquired distinctiveness in the marketplace, it is
insufficient to establish secondary meaning as a matter of law.”
Id. at *2.
That case does not support Plaintiffs’ argument that the
Signature Gold Mark connotes the presence of antibiotics, and it
certainly does not support Plaintiffs’ argument that J&J used the
Signature Gold Mark on the spray so that consumers would think
the spray contained antibiotics. It has no bearing on the Court’s
analysis of the present motion.
IV. Analysis of Plaintiffs’ Claims
The Court will now proceed to its analysis of the merits of
Plaintiffs’ claims. Defendant argues that Plaintiffs’ claims are
preempted by federal laws that govern the labeling of over-thecounter medications. For reasons next discussed, the Court finds
that only claims relating to the product label are preempted. In
terms of the spray’s advertising, Defendant’s argument that
Plaintiffs failed to state an NJCFA claim is meritorious because
Plaintiffs failed to allege that they actually noticed
Defendant’s advertising and that it misled them. Plaintiffs’
NJCFA claims will be dismissed without prejudice to cure the
deficiencies noted herein. In addition, Plaintiffs’ warranty
18
claims will be dismissed with prejudice because Plaintiffs have
not alleged that the spray had any defects and their claims
pertain to marketing and consumer confusion, not product defects.
A. Federal Law Preempts Plaintiffs’ Labeling Claims
Defendant claims that “Plaintiff[s’] claims rest on the
proposition that compliance with federal regulations that govern
the labeling of ingredients on Neo to Go! Spray was insufficient.
. . .” (Def. Mem. Law Supp. Mot. Dismiss, at 6.) And J&J further
argues that, with 21 U.S.C. § 379r, “Congress unambiguously
stated its intent to preempt any state law which purports to
impose additional or different requirements relating to the
labeling of active ingredients on OTC medications. . . .” (Id. at
6-7.) Defendant is correct the Congress has preempted state laws
that regulate labeling over-the-counter medications, but this
preemption does not extend to Plaintiffs’ marketing claims.
Under the Supremacy Clause of the United States
Constitution, federal law is the supreme law of the land and any
conflicts between federal and state laws must be resolved in
favor of federal law. Essentially, “state law that conflicts with
federal law is without effect.” Cipollone v. Liggett Group, Inc.,
505 U.S. 504, 516 (1992) (citing U.S. Const. art. VI, cl. 2).
Federal preemption of state law, however, “will not lie unless it
is the clear and manifest purpose of Congress.” CSX Transp., Inc.
v. Easterwood, 507 U.S. 658, 664 (1993) (citation omitted).
19
Defendant contends that Plaintiffs' state-law claims impose
state law requirements that are expressly preempted under § 379r
of the Food, Drug, and Cosmetic Act (“FDCA”). Section 379r(a)
provides that states may not establish “any requirement . . . (1)
that relates to the regulation of a [nonprescription drug]; and
(2) that is different from or in addition to, or that is
otherwise not identical with, a requirement under [the FDCA]. . .
.” 21 U.S.C. § 379r(a). Congress has therefore mandated that
states may not create requirements different from the FDCA’s
requirements.
Pursuant to the FDCA, the Food and Drug Administration
(“FDA”) promulgated rules, under 21 C.F.R. § 201, that regulate
the labeling of over-the-counter medications. Each product label
must contain, inter alia, “the established name of each active
ingredient and the quantity of each active ingredient per dosage
unit,” 21 C.F.R. § 201.66(c)(2), and “the principal intended
action(s) of the drug,” 21 C.F.R. § 201.66(c)(3). The active
ingredient must be listed first. 21 C.F.R. § 201.66(c) (mandating
that label information must be provided “in the order listed” and
placing “active ingredients” immediately after the “Drug Facts”
heading).
The FDA promulgated these rules specifically to address
potential problems arising from brand confusion. When creating
the labeling rules, the FDA received public comments arguing that
20
“product line extensions (i.e., OTC drug products with the same
brand name that contain different active ingredients) invite the
need for more prominent placement of the active ingredients”
because “most consumers are able to recognize brand names but are
unable to identify the relevant active ingredients.” Over-TheCounter Human Drugs; Labeling Requirements, 64 Fed. Reg. 13254-01
at 13260 (Mar. 17, 1999). These comments informed the final rule:
This final rule requires the listing of active
ingredients as the very first information. . . . This
location
will
enable
consumers
to
quickly
and
systematically compare ingredients within products for
similar uses. In addition, because the respective
purposes will be listed next to each active ingredient,
consumers will know why the ingredient is in the product.
. . . [S]uch uniform and prominent placement will help to
ensure proper product selection, especially for product
line extensions.
Id. The Federal Register notice thus shows that the FDA clearly
contemplated the confusion that can arise when consumers become
familiar with a brand name and see multiple different products
with the same brand name. The FDA’s solution for this potential
problem was to require clear, accurate, and prominent listing of
active ingredients and intended uses on product labels. The
Federal Register notice does not specifically discuss signature
marks or trade dresses, but the Court infers that the FDA
considered these items because they are indicators of brand names
and the FDA clearly considered the impact of brand name
recognition. Federal regulations therefore specify the required
21
content on over-the-counter medication labels and, with 21 U.S.C.
§ 379r, Congress preempted state law claims regarding such
labels. Any of Plaintiffs’ claims that pertain to the spray’s
label are preempted.
Plaintiffs argue that preemption is inapplicable. They cite
Wyeth v. Levine, 555 U.S. 555 (2009), to argue that the United
States Supreme Court “dealt with prescription strength drug
labeling (potentially a far more critical issue from a consumer
safety standpoint) and still rejected a drug manufacturer’s claim
of preemption.” (Pl. Opp’n at 28.) Wyeth is inapposite. In Wyeth,
the Supreme Court considered whether the FDA’s approval of a
product label for a prescription anti-nausea medication provided
a complete defense, via preemption, to a claim that the drug’s
approved label contained an inadequate warning. The Supreme Court
held that state tort claims for inadequate warning on
prescription medications were not preempted because “[i]f
Congress thought state-law suits posed an obstacle to its
objectives, it surely would have enacted an express pre-emption
provision at some point during the FDCA's 70–year history. . . .
Congress has not enacted such a provision for prescription
drugs.” Id. at 574. Wyeth thus involved a prescription drug, not
an over-the-counter medication, and the two types of medications
are regulated separately. See 21 U.S.C. § 379r, et seq (“National
Uniformity for Nonprescription Drugs”). The Wyeth court, indeed,
22
also noted that “Congress pre-empted certain state requirements
concerning over-the-counter medications and cosmetics but
expressly preserved product liability actions.” Id. at 575 no.8.
Plaintiffs have not presented a product liability action, and
they cannot use Wyeth to argue that federal preemption does not
apply because Wyeth did not involve over-the-counter medications,
for which Congress has enacted an express preemption provision in
21 U.S.C. 379r(a)(2).
Plaintiffs also argue that they are “not complaining that
the label is inaccurate or incomplete;” rather, their claims are
“predicated on allegations that advertising and marketing of NEO
TO GO! spray were misleading or fraudulent. . . .” (Pl. Opp’n at
26.) As explained supra, FDA regulations cover the entire label,
including indications of a product’s brand name, and thus preempt
challenges to a label, even if the challenge is not based on
inaccuracy or incompleteness. To the extent that Plaintiffs imply
that they have not challenged the label at all, the Court notes
that while their Complaints primarily focus on advertising and
marketing, they do refer to the spray’s label. (See e.g., Compl.
¶ 9.a. (“fraud in [J&J’s] labeling”); Compl. ¶ 50 (“deceptive and
improper use of the Neosporin Signature Gold Mark, the Neosporin
Trade Dress . . . on the subject spray”)). Congress has expressly
indicated its intentions in 21 U.S.C. 379r, and the FDA
specifically considered brand name confusion in drafting its
23
regulations; Plaintiffs’ present claims pertaining to the spray’s
label are preempted.
But, even though Plaintiffs’ labeling claims are preempted,
Defendant has not established that federal law preempts
Plaintiffs’ marketing claims. J&J cites Carter v. Novartis
Consumer Health, Inc., 582 F. Supp. 2d 1271 (C.D. Cal. 2008) to
support its preemption argument. But, although Carter found that
some of the plaintiffs’ claims were preempted, it did not dismiss
their advertising claims on that basis. In Carter, the plaintiffs
argued that the defendants had falsely labeled, advertised, and
marketed over-the-counter cough medicines as safe and effective
for children because they only warned against use under age two.
Prior to the lawsuit, an FDA Advisory Panel concluded that the
medications should not be used in children under age six, but the
FDA itself only adopted the Panel’s recommendation for children
under age two. The Carter plaintiffs argued that the defendants
“knew or should have known that OTC cough and cold medicines do
not work and are dangerous to children under the age of six.”
Carter at 1276. The Carter plaintiffs thus presented a direct
challenge to the FDA-approved language regarding appropriate
product warnings. The Carter court held that preemption applied
to some of the plaintiffs’ claims because “[t]he touchstone of
preemption under § 379r is the effect that a finding of liability
on a particular claim would have. . . . As long as that claim
24
imposes a requirement that is at variance with FDA regulations,
it is preempted.” Id. at 1283. The Carter plaintiffs’ claims were
at variance with FDA regulations because the FDA had specifically
adopted age two, not age six, as the appropriate warning age for
the medications and had approved labeling and advertising
containing that age limit. Id. at 1284. The Carter court thus
held that “claims based upon FDA-approved statements in product
labeling and advertising are preempted.” Id. at 1286. But the
Carter court did not discuss preemption in regards to the
plaintiffs’ consumer fraud claims; the court dismissed those
claims under Fed. R. Civ. P. 9(b) because plaintiffs “provide[d]
no details of the alleged fraud” and did “not provide any facts
relating to their reliance on Defendants’ alleged
misrepresentations.” Id. at 1289. In the present case, the Court
will dismiss Plaintiffs’ NJCFA claims for the same reason, as
explained infra.
B. New Jersey Consumer Fraud Act Claim
The New Jersey Consumer Fraud Act is designed to address
“sharp practices and dealings . . . whereby the consumer could be
victimized by being lured into a purchase through fraudulent,
deceptive or other similar kind of selling or advertising
practices.” Smajlaj v. Campbell Soup Co., 782 F. Supp. 2d 84, 97
(D.N.J. 2011) (quoting Daaleman v. Elizabethtown Gas Co., 77 N.J.
267, 271 (1978)). It provides:
25
The act, use or employment by any person of any
unconscionable commercial practice, deception, fraud,
false pretense, false promise, misrepresentation, or the
knowing, concealment, suppression, or omission of any
material fact with intent that others rely upon such
concealment, suppression or omission, in connection with
the sale or advertisement of any merchandise . . .,
whether or not any person has in fact been misled,
deceived or damaged thereby, is declared to be an
unlawful practice[.]
N.J. Stat. Ann. § 56:8-2. Courts “have emphasized that like most
remedial legislation, the Act should be construed liberally in
favor of consumers.” Cox v. Sears Roebuck & Co., 138 N.J. 2, 15,
647 A.2d 454, 461 (1994).
Because NJCFA claims “sound in fraud or misrepresentation,”
Rule 9(b) of the Federal Rules of Civil Procedure applies.
Smajlaj v. Campbell Soup Co., 782 F. Supp. 2d 84, 91 (D.N.J.
2011); see also F.D.I.C. v. Bathgate, 27 F. 3d 850 (3d Cir. 1994)
(affirming district court's application of Rule 9(b) to NJCFA
claim). Rule 9(b) requires such claims to be pled with
“particularity.” Naporano Iron & Metal Co. v. Am. Crane Corp., 79
F. Supp. 2d 494, 510 (D.N.J. 2000). A plaintiff must allege the
“who, what, when, where, and how” of the claim. Lum v. Bank of
Am., 361 F.3d 217, 224 (3d Cir. 2004). A plaintiff “may satisfy
this requirement by pleading the ‘date, place or time’ of the
fraud, or through ‘alternative means of injecting precision and
some measure of substantiation into their allegations of fraud.’”
Id. at 224 (quoting Seville Indus. Mach. Corp. v. Southmost Mach.
26
Corp., 742 F.2d 786, 791 (3d Cir. 1984)). In class action cases,
each “individually named plaintiff must satisfy Rule 9(b)
independently.” Pacholec v. Home Depot USA, Inc., 2006 U.S. Dist.
LEXIS 68976, *4–5 (D.N.J. Sept. 25, 2006).
To state a claim under the NJCFA, a plaintiff must allege:
(1) unlawful conduct by the defendant; (2) an ascertainable loss;
and (3) a causal relationship between the defendant’s unlawful
conduct and the plaintiff's ascertainable loss. Frederico v. Home
Depot, 507 F.3d 188, 202 (3d Cir. 2007). Unlawful conduct falls
into three general categories: affirmative acts, knowing
omissions, and regulation violations. Frederico v. Home Depot,
507 F.3d 188, 202 (3d Cir. 2007). The only possible unlawful
conduct here is either an affirmative act or a knowing omission
on Defendants’ part because Plaintiffs have not alleged
“violations of specific regulations promulgated under the NJCFA,”
which are required to establish regulation violations. See Cox at
19. Regardless of the category, “[t]he capacity to mislead is the
prime ingredient of all types of consumer fraud.” Cox v. Sears
Roebuck & Co., 138 N.J. 2, 17 (1994). With respect to the
causation element, “courts have found allegations that a
plaintiff would not have purchased a product had it been
accurately labeled or that they purchased the product because of
the misleading claim are sufficient to plead causation.” Mason v.
Coca-Cola Co., CIV.A. 09-0220-NLH, 2010 WL 2674445 (D.N.J. June
27
30, 2010).
Neither Complaint alleges that the Plaintiffs were in fact
misled by J&J’s use of the Signature Gold Mark and trade dress in
the spray advertising. The Complaints contain no information
about when Plaintiffs saw J&J’s advertising, when or where they
bought the spray, why they bought the spray, whether they bought
the spray because they thought it contained antibiotics, or
whether Plaintiffs even noticed the Signature Gold Mark and trade
dress. In short, neither Complaint alleges with particularity the
gravamen of Plaintiffs’ claims, i.e., that Plaintiffs bought the
spray specifically because its advertising contained the
Neosporin trade dress and signature gold mark, thus leading them
to believe that the product contained antibiotics. Plaintiffs’
failure to plead that they were misled is fatal, particularly
given the specificity that Rule 9(b) requires for NJCFA claims.
Plaintiffs argued in their Complaints that “[t]he
extraordinary and unreasonable price differential between the
subject spray and common antiseptic products can only be
explained by the fact that [J&J] has intentionally, recklessly,
and/or negligently misled consumers into believing that the
subject spray contains antibiotic ingredients.” (Compl. ¶ 44.)
But the Complaints also acknowledge that the spray is sold in
spray bottles and “is specifically designed to fit anywhere to
give you infection protection anytime, anywhere.” (Id. ¶ 35.)
28
Plaintiffs’ own statements discount their assertion that the
price differential can “only” be explained by misleading
advertising that implied that the spray contained antibiotics.
The spray’s convenience and portability can also explain the
price differential. Absent any allegations about the
circumstances under which Plaintiffs chose to buy the spray,
including whether the Defendant’s advertising led Plaintiffs to
mistakenly believe that the spray contained antibiotics, the
Court cannot find that Plaintiffs have stated a plausible claim
for relief under the NJCFA.4
Plaintiffs’ remaining arguments require only brief
attention. First, they cite the New Jersey Administrative Code
for the proposition that it is unlawful to obscure material facts
in advertisements, arguing that
Plaintiff’s Complaint is supported by N.J. Admin. Code
13:45A-9.2(a)(5), which states ‘[w]ithout limiting the
application of N.J.S.A. 56:8-1 et seq., the following
practices shall be unlawful with respect to all
advertisements: The use of any type, size, location,
lighting, illustration, graphic depiction, or color
resulting in the obscuring of any material fact.
4
Because the Court finds that Plaintiffs’ allegations are
insufficient to survive Defendant’s Motion to Dismiss, the Court
need not determine whether Defendant’s alleged conduct was, in
fact, unlawful and, if so, whether it would constitute
affirmative actions or knowing omissions. In addition, the Court
need not determine whether Plaintiffs have sufficiently pled that
they have suffered ascertainable losses caused by Defendant’s
conduct. The Court declines to make those determinations because
the insufficiency of Plaintiffs’ pleadings makes them moot.
29
(Pl. Opp’n at 23 (emphasis omitted)). This citation is
irrelevant. Plaintiffs have not alleged that J&J obscured any
material facts; they have alleged that the use of the Neosporin
Signature Gold Mark and trade mark confused customers into
believing that the spray contained antibiotics.
Plaintiffs also cited Chattin v. Cape May Greene, Inc., 243
N.J. Super 590 (N.J. App. Div. 1990), for the proposition that
“when a manufacturer (such as Defendant) makes . . .
misrepresentations, and said misrepresentations are intended to
be conveyed to the product’s ultimate retail purchaser, the
manufacturer can be held liable for violating the [NJCFA].” (Pl.
Opp’n at 23.) In Chattin, homeowners sued the developer, who
built and sold their homes, because the homes had been advertised
to have insulated windows but, while the windows were doublepaned, the window frames were not insulated. The developer argued
that the window manufacturer should also be liable. The Chattin
court held that, even though the NJCFA permits manufacturer
liability, the trial court had properly refused to submit the
question of the window manufacturer liability’s to the jury: “The
trial court correctly found that there was no evidence that any
of the homeowners with consumer fraud claims had seen, read, or
relied upon [the window manufacturer’s] brochure.” Chattin at
607. Chattin supports the Defendant’s Motion to Dismiss. Absent
any showing that Plaintiffs had “seen, read, or relied upon”
30
J&J’s use of the Neosporin Signature Gold Mark and trade dress in
advertising, the Court must find that Plaintiffs have not stated
a plausible claim for relief.
Plaintiffs also cite Lieberson v. Johnson & Johnson Consumer
Cos., 2011 U.S. Dist. LEXIS 107596 (D.N.J. Sept. 21, 2011), for
the proposition that “the only time that courts reject Consumer
Fraud Actions pursuant to a 12(b)(6) Motion is if the complainedof conduct is nothing more than mere ‘puffery’. . . .” (Pl. Opp’n
at 21.) Lieberson does not stand for this proposition. The
Lieberson court outlines several requirements for NJCFA claims,
including, inter alia, stating a plausible claim for relief
pursuant to Iqbal and Twombly, stating a claim with particularity
pursuant to Rule 9(b), and stating a claim that alleges unlawful
conduct, causation, and ascertainable loss pursuant to the NJCFA.
The Lieberson court noted that mere puffery is not actionable
under the NJCFA, but it did not state that a NJCFA claim can only
be dismissed if the challenged statements are puffery.
Lieberson actually supports J&J’s argument that Plaintiffs
failed to describe with particularity their spray purchases or
the advertisements that allegedly induced them to purchase the
spray. The Lieberson court stated, “Plaintiff has nowhere alleged
whether or when the advertisements quoted in the Complaint
appeared . . ., nor has she alleged whether or when she viewed
these advertisements. . . . Thus, the Court finds that these
31
allegations are patently insufficient to satisfy Rule 9(b).”
Lieberson at 19-20. Essentially, Plaintiffs cited a case that
highlights the primary shortcoming of their Complaints, i.e.
their failure to plead with particularity when and why they
purchased the spray, whether they believed the spray contained
antibiotics, and, if they were misled, the advertising that led
them to believe the spray contained antibiotics.
And finally, Plaintiffs argue that Defendant acknowledged
the validity of their NJCFA claims when it filed petitions for
removal from state court. Specifically, Plaintiffs state, “[i]n
that petition, Defendant clearly sets forth the claims being
asserted by plaintiff . . . are pursuant to the [NJCFA]. . . .
Accordingly, there can be no serious dispute that Plaintiff has
properly pled a cause of action. . . .” (Pl. Opp’n at 24-25.)
This statement is wrong. The removal petitions’ description of
the nature of Plaintiffs’ claims does not establish that
Plaintiffs’ pleadings are sufficient to survive a motion to
dismiss.
The Court will dismiss Plaintiffs’ NJCFA claims without
prejudice and with leave to seek to amend with respect to
misleading advertising of the product.
C. Breach of Implied Warranty of Merchantability
Plaintiffs allege that Defendant has violated the implied
warranty of merchantability, pursuant to N.J. Stat. Ann. § 12A:2-
32
314, which provides that merchantable goods must
(a) pass without objection in the trade under the
contract description; and
(b) in the case of fungible goods, are of fair average
quality within the description; and
(c) are fit for the ordinary purposes for which such
goods are used; and
(d) run, within the variations permitted by the
agreement, of even kind, quality and quantity within each
unit and among all units involved; and
(e) are adequately contained, packaged, and labeled as
the agreement may require; and
(f) conform to the promises or affirmations of fact made
on the container or label if any.
N.J. Stat. Ann. § 12A:2-314. Plaintiffs also allege that J&J has
violated the implied warranty of fitness for particular purpose,
pursuant to N.J. Stat. Ann. § 12A:2-315, which provides that
Where the seller at the time of contracting has reason to
know any particular purpose for which the goods are
required and that the buyer is relying on the seller's
skill or judgment to select or furnish suitable goods,
there is unless excluded or modified under the next
section an implied warranty that the goods shall be fit
for such purpose.
N.J. Stat. Ann. § 12A:2-315. These two warranties “protect buyers
from loss where the goods purchased are below commercial
standards or are unfit for the buyer's purpose.” Altronics of
Bethlehem, Inc. v. Repco, Inc., 957 F.2d 1102, 1105 (3d Cir.
1992). To establish a breach of either warranty, Plaintiffs “must
show that the equipment they purchased from defendant was
defective.” Id.
Plaintiffs have not alleged that the spray was defective or
33
that it failed to provide infection protection and pain relief,
the purposes for which it is intended. In fact, Plaintiffs’
Complaints contain no allegations whatsoever about any injuries
that Plaintiffs sustained and how their use of J&J’s spray
impacted their healing processes. Even assuming, arguendo, that
the spray should have contained antibiotics, Plaintiffs have not
alleged that the lack of antibiotics prevented them from
recovering from injuries or caused infections to occur or to
worsen. Plaintiffs allege that these warranty breaches “induced”
them to purchase the spray. But establishing a breach of the
implied warranties of merchantability and fitness for a
particular purpose requires a showing regarding the product’s
functionality, not the advertisements that allegedly induced a
customer to purchase it.
The Court will dismiss this Count because Plaintiffs have
not shown that the spray was defective or that it operated
improperly. The dismissal will be with prejudice because the
Complaints contain no indication that Plaintiffs had any problems
with the spray’s functioning; their claims lie solely with
allegedly misleading advertising.
V.
CONCLUSION
Defendant’s Motions to Dismiss will be granted. Any claims
relating to the spray’s label are preempted by federal law and
34
must be dismissed with prejudice. Plaintiffs’ NJCFA claims will
be dismissed without prejudice and with leave to amend with
respect to misleading marketing. Plaintiffs’ breach of warranty
claims will be dismissed with prejudice. The accompanying Order
will be entered.
September 28, 2012
Date
S/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge
35
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