Tuesday, December 17, 2013

"Natural" plus green imagery not puffery for diapers and wipes

Jou v. Kimberly-Clark Corp., No. C-13-03075, 2013 WL 6491158 (N.D. Cal. Dec. 10, 2013) (magistrate judge)

Plaintiffs brought the usual California claims and claims under Wisconsin law based on the “green” marketing of Huggies “pure & natural” diapers and “Natural Care” baby wipes.  Plaintiffs alleged that they paid a premium for the products based on these representations.

The diapers use the brand name prominently on the front of the packaging, which also says that the diapers are made of “soft organic cotton” and displays green coloring, trees, and leaves, in contrast to conventional Huggies. Plaintiffs alleged that, in fact, P&N diapers didn’t differ materially from other Huggies.  “First, while the product contains organic cotton, the cotton is only on the outside of the diaper and therefore never actually comes into contact with the ultimate user, the baby,” defying reasonable consumers’ expectations that the total diaper is organic cotton.  Second, the diaper liner includes “unnatural and potentially harmful ingredients, such as polypropylene and sodium polyacrylate, which are components of Defendant’s traditional diapers,” and the actual composition isn’t disclosed.

On the wipes, “Natural Care” is displayed prominently on the front of the packaging, along with green coloring and leaves. But the wipes contain sodium methylparaben and methylisothiazolinone, which allegedly are not natural and hazardous (and restricted by other countries).

Standing: allegations about reliance on the misrepresentations established economic injury and thus standing.  Kimberly-Clark’s argument that plaintiffs didn’t properly demonstrate the gap between what they paid and the value they received conflated standing with remedies.  However, because of the Ninth Circuit’s standing rules, plaintiffs lacked standing to seek injunctive relief because they didn’t allege that they’d resume purchasing the products if they were properly labeled.  Though some cases hold that applying this rule thwarts the point of a consumer protection class action (because it does), the magistrate judge disagreed, reasoning instead that a plaintiff could theoretically seek injunctive relief: “it is not impossible that a consumer would be interested in purchasing the products at issue if they were labeled correctly.”

The court then found that the allegations satisfied Rule 9(b).  It identified who bought which products and when; where the misrepresentations occurred (the package); and what the misrepresentations were and why they were false. Plaintiffs alleged reliance, and it was plausible to infer that they meant that they looked at and relied on the front of the package.  “After all, the goal of Rule 9(b) is to provide the defendant with notice, not to ensure that the plaintiff has adequately pled causation.”

Kimberly-Clark argued that plaintiffs didn’t plausibly allege that a reasonable consumer would likely be deceived, but the magistrate judge disagreed.  As for the diapers, “pure & natural” could lead a reasonable consumer to believe that that the product is free of non-natural ingredients, especially reinforced by “Soft Organic Cotton.”  That cotton didn’t touch the baby’s skin, but the non-natural protions did.  In addition, the green banner and images of leaves plausibly reinforced a reasonable consumer’s belief that the diapers were entirely natural.  Contrary to Kimberly-Clark’s arguments, the words “all,” “only” or “100%” were not required for likely deceptiveness.  “Whether one labels a product ‘natural’ or ‘all natural,’ the same plausible inference can be drawn– that the product is natural, meaning it is not made with any non-natural ingredients.” Also, “natural” didn’t stand alone on the diapers—“pure,” like “all,” emphasizes the natural state of the product.  Kimberly-Clark conceded that “purely natural” plausibly would lead a consumer to expect a synthetic-free product, and the judge didn’t see any difference based on the ampersand.

Kimberly-Clark contended that “pure & natural” was mere generalized puffery.  But “describing a product as ‘natural’ or ‘pure & natural’ is not generalized and vague.” Kimberly-Clark even argued that the phrase was true because the diapers had some natural ingredients. The issue was not whether the term was devoid of meaning, but rather what meaning reasonable consumers would give it.  Nor was the term puffery because reasonable consumers know that diapers and wipes can’t really be natural, in that they don’t grow directly from the earth.  This was a caricature: the allegations were that consumers would believe that “natural” means that the diapers had no non-natural ingredients.

In addition, “natural” was not puffery just because the FTC has declined to provide general guidance on the use of the term, which it did because it lacked sufficient consumer perception evidence and because the word might mean different things depending on the context.  That didn’t mean that this use had no specific meaning.  To the contrary, the FTC explicitly warned that some uses of “natural” could be deceptive:

Marketers that are using terms such as natural must ensure that they can substantiate whatever claims they are conveying to reasonable consumers. If reasonable consumers could interpret a natural claim as representing that a product contains no artificial ingredients, then the marketer must be able to substantiate that fact. Similarly, if, in a given context, a natural claim is perceived by reasonable consumers as a general environmental benefit claim or as a comparative claim (e.g., that the product is superior to a product with synthetic ingredients), then the marketer must be able to substantiate that claim and all attendant reasonably implied claims.

The judge also rejected Kimberly-Clark’s argument that the packaging clears up any misconception by identifying which parts of the diaper were natural: “Soft Outer Cover With Organic Cotton” “Aloe & Vitamin E,” and “Liner Includes Renewable Materials,” were on the back or side panels.  But, under the Ninth Circuit’s Williams rule, reasonable consumers aren’t expected to look beyond misleading representations on the front of the packaging to discover the truth from small print or from the back of the packaging. “Further, the Court fails to see how the disclosures necessarily inform the consumer that the diapers include non-natural ingredients.”  Taken together, the phrases suggested that the entire diaper wasn’t made of organic cotton, but didn’t disclose what the “renewable materials” were or what other ingredients were included, such as polypropylene and sodium polyacrylate.  Kimberly-Clark argued that Williams was restricted to cases of affirmative misrepresentations.  First, plaintiffs pled an affirmative misrepresentation; second, the claim was that the diapers misrepresented that they only contained natural ingredients.  “Thus, it is irrelevant that the disclosures ‘confirm’ that the product does indeed contain some natural ingredients or that the disclosures ‘clarify’ which ingredients are natural.”

The judge then dismissed the relevance of Hill v. Roll Int’l Corp., 195 Cal.App. 4th 1295 (Ct. App. 2011).  Hill rejected claims that a bottle of Fiji water was misleading because its packaging included a “green drop” that inaccurately conveyed that the product was endorsed by a third-party environmental organization and referred to the website fijigreen.com.  While a reasonable consumer would likely perceive an environmental reference from the green drop, that didn’t mean she’d view it as a third-party endorsement, and the website wasn’t alleged to contain any false or misleading information.  Plaintiffs here didn’t allege that the green leaves alone were misrepresentations, but rather contributed to the context of the words.

However, the court agreed that it wasn’t plausible that a reasonable consumer would believe that the diapers were made exclusively of “Soft Organic Cotton.”  Instead, the phrase merely communicated the presence of that material, unlike “pure & natural” which at least implicitly represented that the product was not impure or unnatural.

As for the “Natural Care” wipes, it was also plausible that the packaging would likely deceive a reasonable consumer.  “By labeling these wipes as ‘Natural Care,’ and superimposing that term on an image of a green leaf, it is plausible that a reasonable consumer would likely be led to believe that the wipes contained only natural ingredients,” and not allegedly toxic synthetic ingredients.

Finally, the court found that plaintiffs couldn’t state a claim under Wisconsin’s consumer protection law, not because they lacked “standing” as Kimberly-Clark first argued, but because that law only applied to misrepresentations made in advertising “in this state,” that is, in Wisconsin.  It did not cover misrepresentations merely formulated in Wisconsin (where Kimberly-Clark devised and implemented its marketing program). Thus, while plaintiffs could in theory bring two causes of action under different states’ consumer protection statutes, the law here didn’t support such a claim.

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