Prescott v. Ricola USA, Inc., No. 3:2023cv02983 - Document 28 (N.D. Cal. 2024)
Court Description: ORDER GRANTING DEFENDANT RICOLA USA'S MOTION FOR JUDGMENT ON THE PLEADINGS. Signed by Judge Maxine M. Chesney on April 30, 2024. (mmclc2, COURT STAFF) (Filed on 4/30/2024)
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Prescott v. Ricola USA, Inc. Doc. 28 1 2 3 4 IN THE UNITED STATES DISTRICT COURT 5 FOR THE NORTHERN DISTRICT OF CALIFORNIA 6 7 STEVEN PRESCOTT, Plaintiff, 8 v. 9 10 RICOLA USA, INC., ORDER GRANTING DEFENDANT RICOLA USA'S MOTION FOR JUDGMENT ON THE PLEADINGS Defendant. 11 United States District Court Northern District of California Case No. 23-cv-02983-MMC 12 Before the Court is defendant Ricola USA, Inc.’s (“Ricola”) “Motion for Judgment 13 14 on the Pleadings,” filed March 22, 2024. Plaintiff Steven Prescott (“Prescott”) has filed 15 opposition, to which Ricola has replied. Having read and considered the papers filed in 16 support of and in opposition to the motions, the Court rules as follows.1 17 BACKGROUND 18 Ricola is a New Jersey corporation with a principal place of business in New 19 Jersey. (See Complaint (“Compl.”) ¶ 30, Doc. No. 1.) Prescott, a “citizen of California” 20 (see id. ¶ 50), alleges he purchased cough suppressant and oral anesthetic lozenges 21 (hereinafter, “the Product”) manufactured by defendant “between July 2020 and May 22 2023” (see id. ¶¶ 1, 37). He alleges he made such purchases in reliance on 23 representations made by Ricola on the Product’s label and “in digital, print, and/or social 24 media . . . through in-store, digital, audio, and print marketing.” (See id. ¶ 40.) 25 // 26 27 28 1 By order filed April 19, 2024, the Court took the matter under submission. (See Doc. No. 27.) Dockets.Justia.com 1 2 a cough suppressant and oral anesthetic due to the presence of herbal ingredients” on 3 the front label (see id. ¶ 38) but, as the back label discloses, the only active ingredient is 4 menthol (see id. ¶ 17). Plaintiff alleges Ricola’s failure to “include the drug ingredient of 5 menthol” on the Product’s front label “renders its labeling misleading to consumers.” (See 6 id. ¶ 25.) 7 United States District Court Northern District of California Specifically, plaintiff alleges he “believed and expected” the Product “functioned as Based on said allegations, Prescott, on his own behalf and on behalf of a putative 8 class, asserts the following claims for relief: (1) “Violation of California’s Unfair 9 Competition Law, Cal. Bus. & Prof. Code § 17200, et seq.”; (2) “Violation of California’s 10 False Advertising Law, Cal. Bus. & Prof. Code § 17500, et seq.”; (3) “Violation of 11 California’s Consumers Legal Remedies Act,” Cal. Civ. Code § 1750, et seq.”; 12 (4) “Breach of Express Warranty and Implied Warranty of Merchantability/Fitness for a 13 Particular Purpose”; (5) “Unjust Enrichment”. 14 By the instant motion, Ricola seeks an order granting it judgment on the pleadings. 15 As to the last two claims, the motion is unopposed. (See Pl.’s Opp’n. to Def.’s Mot. for J. 16 on Pl. (“Pl.’s Opp’n.”) at 1 n.1, Doc. No. 25 (“withdraw[ing] . . . claims for breach of 17 warranty and unjust enrichment”).) 18 19 LEGAL STANDARD A Rule 12(c) motion for judgment on the pleadings may be brought at any time 20 “[a]fter the pleadings are closed,” but “early enough not to delay trial.” See Fed. R. Civ. P. 21 12(c). The standard applicable to the Court’s resolution of a Rule 12(c) motion is the 22 same as the standard applicable to a Rule 12(b) motion to dismiss for failure to state a 23 claim. See Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054 n.4 (9th Cir. 24 2011) (“Rule 12(c) is ‘functionally identical’ to Rule 12(b)(6) and . . . ‘the same standard of 25 review’ applies to motions brought under either rule.”). 26 Dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure "can be 27 based on the lack of a cognizable legal theory or the absence of sufficient facts alleged 28 under a cognizable legal theory." See Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 2 1 699 (9th Cir. 1990). Rule 8(a)(2), however, "requires only 'a short and plain statement of 2 the claim showing that the pleader is entitled to relief.'" See Bell Atlantic Corp. v. 3 Twombly, 550 U.S. 544, 555 (2007) (quoting Fed. R. Civ. P. 8(a)(2)). Consequently, "a 4 complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual 5 allegations." See id. Nonetheless, "a plaintiff's obligation to provide the grounds of his 6 entitlement to relief requires more than labels and conclusions, and a formulaic recitation 7 of the elements of a cause of action will not do." See id. (internal quotation, citation, and 8 alteration omitted). In analyzing a motion to dismiss, a district court must accept as true all material United States District Court Northern District of California 9 10 allegations in the complaint and construe them in the light most favorable to the 11 nonmoving party. See NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). "To 12 survive a motion to dismiss, a complaint must contain sufficient factual material, accepted 13 as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 14 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). 15 In deciding the motion, a court may consider “(1) exhibits to the non-moving 16 party’s pleading, (2) documents that are referred to in the non-moving party’s pleading, or 17 (3) facts that are included in materials that can be judicially noticed.” See Yang v. Dar Al- 18 Handash Consultants, 250 Fed. App’x 771, 772 (9th Cir. 2007).2 Courts "are not bound to 19 accept as true,” however, “a legal conclusion couched as a factual allegation." See Iqbal, 20 556 U.S. at 678 (internal quotation and citation omitted). 21 // 22 // 23 24 25 26 27 28 Defendant requests the Court take judicial notice of the entirety of the Product’s back label. (See Def.’s Request for Judicial Notice, Doc. No. 24.) Under the incorporation by reference doctrine, the Court may consider “documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the [p]laintiff’s pleading.” See Davis v. HSBC Bank Nevada, N.A., 691 F.3d 1152, 1160 (9th Cir. 2012). Plaintiff, who includes in the Complaint an image from the back label (see Compl. ¶ 17), does not contest the authenticity of defendant’s submission nor oppose the request. Accordingly, the request for judicial notice is hereby GRANTED. 2 3 DISCUSSION 1 2 Preemption under the Food, Drug, and Cosmetic Act 3 Defendant first argues plaintiff’s claims “are preempted” by the Food, Drug and 4 Cosmetic Act, 21 U.S.C. § 301 et seq. (“FDCA”). (See Def.’s Mot. for Judgment on the 5 Pleadings (“Def.’s Mot.”) at 13:11, Doc. No. 23.) 6 United States District Court Northern District of California I. Under the Supremacy Clause of the Constitution, state laws are preempted if they 7 “interfere with, or are contrary to the laws of Congress.” See Gibbons v. Ogden, 22 U.S. 8 1, 211 (1824). State laws are “express[ly] preempted” where Congress “withdraw[s] 9 specified powers from the States by enacting a statute containing an express preemption 10 provision,” and are “implied[ly] preempted” where “Congress . . . has determined [a field] 11 must be regulated by its exclusive governance” or “state laws . . . conflict with federal 12 law.” See Arizona v. United States, 567 U.S. 387, 399 (2012); Eidson v. Medtronic, Inc., 13 981 F.Supp.2d 868, 880 (N.D. Cal. 2013) (discussing “implied preemption”). 14 A. Express Preemption 15 The FDCA expressly preempts any state law that “establish[es] or continue[s] in 16 effect any requirement” that is “different from or in addition to . . . a requirement under 17 [the FDCA].” See 21 U.S.C. § 379r(a). State law consumer protection claims seeking to 18 impose requirements that diverge from the FDCA’s requirements are thus subject to 19 dismissal. See, e.g. Pardini v. Unilever U.S., Inc., 65 F.4th 1081, 1084–85 (9th Cir. 2023) 20 (“the FDCA’s preemption provision can preempt state law statutory and common law 21 causes of action . . . to the extent those claims would directly or indirectly impose 22 nutritional label requirements different than those prescribed by federal law”). 23 Here, defendant, citing Singo v. Ricola USA, Inc., No. 22 Civ. 10369 (NSR), 2024 24 WL 196709, at *5 (S.D.N.Y. Jan. 18, 2024), argues plaintiff, who seeks to require 25 defendant to “include the name of the drug, menthol” on the Product’s front label (see 26 Compl. ¶ 22), seeks to “impose additional labeling requirements . . . inconsistent with the 27 FDCA and are therefore expressly preempted.” (See Def.’s Mot. at 15:1–6.) In Singo, 28 however, the plaintiff “d[id] not dispute” that the challenged product’s packaging 4 United States District Court Northern District of California 1 “adhere[d]” to the FDCA’s requirements– apparently, because the active ingredient’s 2 established name, “menthol,” although not listed on the front of the package, was listed 3 on the product’s “back panel.” See id., 2024 WL 196709, at *2. In the instant case, 4 however, plaintiff reads the FDCA and accompanying regulations to require the phrase 5 “menthol lozenge” on the front label. (See Pl.’s Opp’n. to Def.’s Mot. for Judgment on the 6 Pleadings (“Pl.’s Opp’n.”) at 11:7–11, Doc. No. 25.) As set forth below, the Court agrees. 7 Pursuant to 21 C.F.R. § 201.61, “[t]he principal display panel of an over-the- 8 counter drug in package form shall bear as one of its principal features a statement of the 9 identity of the commodity,” see 21 C.F.R. § 201.61(a), which statement “shall be 10 presented in boldface type,” see 21 C.F.R. § 201.61(c), and “shall be in terms of the 11 established name of the drug, if any there be, followed by an accurate statement of the 12 general pharmacological category(ies) of the drug or principal intended action(s) of the 13 drug,” see 21 C.F.R. § 261.61(b). “The term principal display panel . . . means the part of 14 a label that is most likely to be displayed, presented, shown, or examined under 15 customary conditions of display for retail sale.” See 21 C.F.R. § 201.60. The “established 16 name” of a drug or ingredient is the applicable official name designated pursuant to [21 17 U.S.C. § 358]” or “if there is no such name and such drug or such ingredient is an article 18 recognized in an official compendium, then the official title thereof in such compendium,” 19 21 U.S.C. § 352(e)(1)(B)(3), the recognized compendiums being “the official United 20 States Pharmacopoeia, official Homeopathic Pharmacopoeia of the United States, official 21 National Formulary, or any supplement to any of them,” see 21 U.S.C. § 321(j). 22 Here, plaintiff cites the United States Pharmacopoeia (“USP”) designation of 23 “menthol lozenges” as the established name for drugs that “contain NLT 90.0% and NMT 24 125.0% of the labeled amount of Menthol (C10H20O), in a suitable molded base” (see Pl.’s 25 Opp’n. at 10 n.3, citing United States Pharmacopoeia (2024)), and, at this stage of the 26 proceedings, defendant does not argue to the contrary. Accordingly, given the above 27 statutes and regulations, and, in particular, the definition of principal display panel and its 28 required disclosures, the Court finds plaintiff’s claims are not expressly preempted. 5 United States District Court Northern District of California 1 B. Implied Preemption 2 Although state law claims may not impose requirements that diverge from those 3 imposed by the FDCA, a suit brought solely “because [the defendant’s] conduct violates 4 the FDCA . . . would be impliedly preempted.” See Eidson v. Medtronic, Inc., 981 5 F.Supp.2d 868, 880–881 (N.D. Cal. 2013) (citing Buckman Co. v. Plaintiffs’ Legal 6 Comm’n., 531 U.S. 341, 352–53 n.4 (2001) (internal quotation, citation, and emphasis 7 omitted). To avoid implied preemption “a claim based on conduct that violates the FDCA 8 must rely on traditional state tort law principles which predate the relevant FDCA 9 requirement.” See Eidson, 981 F.Supp.2d at 880–881 (finding no implied preemption 10 where allegations “would state a claim under state law even in the absence of the 11 FDCA”); see also Meza v. Coty, Inc., No. 22-cv-05291-NC, 2023 WL 3082346, at *5 12 (N.D. Cal. Apr. 24, 2023) (applying implied preemption analysis to OTC drugs) (citing 13 Buckman). 14 In light of such authority, plaintiff’s claims, “to escape preemption,” must fit in a 15 “narrow gap”. See Eidson, 981 F.Supp.2d at 881. He “must be suing for conduct that 16 violates the FDCA (or else his claim is expressly preempted . . .), but [he] must not be 17 suing because the conduct violates the FDCA ([as] such a claim would be impliedly 18 preempted under Buckman).” See id., at 880–881 (internal quotation and citation omitted) 19 (emphasis in original).3 In that regard, a number of district courts have found that where, 20 as here, the plaintiff alleges conduct that violates an FDCA requirement, such plaintiff’s 21 state law claims are not preempted. See, e.g. McFall v. Perrigo Co., No. 2:20-cv-07752- 22 23 24 25 26 27 3 Wilson v. Colourpop Cosmetics, LLC, No. 22-cv-05198-TLT, 2023 WL 6787986 (N.D. Cal. Sept. 7, 2023) (finding state law claim based on makeup ingredients regulated by FDA impliedly preempted), on which defendant relies, is distinguishable on its facts. In Wilson, the claim “exist[ed] solely by virtue of FDCA requirements,” as the plaintiff “allege[d] that the [p]roducts [were] defective because they contain[ed] [ingredients] that [were] not approved by the FDA.” See id. at *8. Here, although plaintiff argues the Product does not comply with FDCA requirements, the harm alleged does not derive solely from a violation of the FDCA. 28 6 1 FLA (MRWx), 2021 WL 2327936, at *11 (Apr. 15, 2021) (finding California state law 2 claims based on misleading label not preempted because “claims [would] give rise to 3 actions, even in the absence of the FDCA”); see also Dayan v. Swiss-American Products, 4 Inc., 15 Civ. 6895 (DLI) (VMS), 2017 WL 9485702, at *8 (E.D.N.Y. Jan. 3, 2017) (finding 5 false advertising claim brought under New York law not preempted; noting “[e]ven if the 6 FDCA did not exist, [p]laintiff could credibly argue that” defendant’s conduct was 7 “misleading”). Accordingly, the Court finds plaintiff’s claims are not impliedly preempted. 8 9 United States District Court Northern District of California 10 II. Consumer Confusion As noted, plaintiff alleges “[c]onsumers seeing the Product’s front label will expect 11 its cough suppressant and oral anesthetic functionality will be provided by its inactive 12 herbal ingredients” rather than menthol, which provides the Product’s functionality. (See 13 Compl. ¶ 25.) As relevant to such allegation, the parties agree the “reasonable 14 consumer” test applies (see Def.’s Mot. at 15:9–12; Pl.’s Opp’n. at 3:10–13), under which 15 test, as explained in McGinty v. Procter & Gamble Co., 69 F.4th 1093 (9th Cir. 2023), a 16 plaintiff must demonstrate “a significant portion of the general consuming public or of 17 targeted consumers, acting reasonably under the circumstances, could be misled” by the 18 language on the label. See id. at 1097. 19 Here, the Product’s front label states the Product is “Made with Swiss Alpine 20 Herbs,” and contains illustrations of those herbs. (See Compl. ¶ 1.) Plaintiff does not 21 dispute the presence of the depicted herbs in the Product but alleges the label’s 22 “emphasis on [the Product’s] herbal ingredients, relative to itself and in the context of 23 similar products and . . . failure to disclose, as required, the presence of menthol, causes 24 consumers to expect these inactive herbal ingredients have a therapeutic benefit.” (See 25 id. ¶ 24.) Defendant acknowledges that the front label does not specify whether the herbs 26 are active or inactive ingredients, but, pointing to the back panel, which discloses menthol 27 as the Product’s sole active ingredient and lists the herbs illustrated on the front label as 28 inactive ingredients, argues such additional information “makes clear that the active 7 1 ingredient providing the cough suppressant and oral anesthetic functions is menthol” (see 2 Def.’s Mot. at 18:14–16). United States District Court Northern District of California 3 Where a front label is “unambiguously deceptive . . . the presence of fine print 4 revealing the truth is insufficient to dispel that deception.” See McGinty, 69 F.4th at 1098 5 (internal citation and quotation omitted). Here, plaintiff argues, the Product’s label is 6 “unambiguously deceptive,” and, according to plaintiff, defendant should not “escape 7 liability for its front label representations through its back label fine-print disclosures.” 8 (See Pl.’s Opp’n. at 7:22–25.) As defendant notes, however, where “a front label is 9 ambiguous, the ambiguity can be resolved by reference to the back label.” See McGinty, 10 69 F.4th at 1098–99. Here, as set forth below, the Court finds the challenged label is 11 ambiguous.4 12 An “ambiguous” label is one that “could mean any number of things.” See Slaten v. 13 Christian Dior Perfumes, LLC, No. 23-cv-00409, 2023 WL 6959127, at *6 (N.D. Cal. Oct. 14 19, 2023) (finding use of “24H,” i.e., 24-hour, on product’s front label ambiguous because 15 it could refer to cosmetic effects or sun protection; dismissing claims). In McGinty, the 16 plaintiff claimed the use of the phrase “Nature Fusion” and the image of avocado leaves 17 on the front label of a shampoo bottle misleadingly implied the shampoo was made of all- 18 natural ingredients when it was made with a blend of natural and synthetic ingredients, as 19 was disclosed on the back label. See McGinty, 69 F.4th at 1095–96. The Ninth Circuit 20 found the front label was “ambiguous” because it did not “promise a product that is wholly 21 natural,” and that the phrase “Nature Fusion” could “mean any of a number of things.” 22 See id. at 1098. 23 24 In the instant action, Ricola likewise makes no representation on the Product’s front label as to whether the herbs are active or inactive ingredients, and the images of 25 26 27 28 The Court finds unavailing plaintiff’s citation to Davis v. Ricola USA, Inc., No. 22cv-3071, 2022 WL 4131588 (C.D. Ill. Sept. 12, 2022), wherein the district court, as to the same product as that at issue in the instant case, found the fact “[t]hat Ricola’s back label may resolve the ambiguity [was] immaterial at the pleading stage.” See id. at *4. Davis relied on Seventh Circuit law and predates the Ninth Circuit’s decision in McGinty. 4 8 1 and textual references to the herbs could be interpreted by a reasonable consumer to 2 mean either that the herbs are active ingredients or inactive ingredients. In the wake of 3 McGinty, district courts have dismissed similar claims. See, e.g. Scruggs v. Mars, Inc., 4 No. LA CV22-05617 JAK (AFMx) (C.D. Cal. Nov. 9, 2023) (dismissing claims where front 5 label included images of cinnamon sticks along with the words “artificially flavored” and 6 back label disclosed product contained no cinnamon); Dawson v. Better Booch, LLC, No. 7 23-cv-1091-DMS-DEB, 2024 WL 535882, at *3 (S.D. Cal. Feb. 9, 2024) (finding no 8 deception where front label used “golden pear” as descriptor and back label disclosed 9 product contained no pear juice). United States District Court Northern District of California 10 Accordingly, the Court finds the front label is, at most, ambiguous, and, given the 11 clarification provided by the back label’s ingredients list, finds plaintiff’s claims under 12 California’s Unfair Competition Law, False Advertising Law, and Consumers Legal 13 Remedies Act are subject to dismissal.5 CONCLUSION 14 15 For the reasons stated above, defendant’s motion to for judgment on the pleadings 16 is hereby GRANTED, and, as defendant has not shown leave to amend necessarily 17 would be futile, plaintiff is hereby afforded such leave. If plaintiff wishes to file a First 18 Amended Complaint to cure the above-noted deficiencies, he shall do so no later than 19 May 22, 2024. 20 21 IT IS SO ORDERED. 22 23 Dated: April 30, 2024 MAXINE M. CHESNEY United States District Judge 24 25 26 27 28 In light of this finding, the Court does not reach herein the parties’ respective arguments regarding plaintiff’s standing to seek injunctive relief. 5 9
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