even if retailer is responsible for price premium, misleading label is actionable

DiGiacinto v. RB Health (US) LLC, --- F.Supp.3d ----, 2023 WL 2918745, No. 22-cv-04690-DMR (N.D. Cal. Apr. 11, 2023)

Plaintiff alleged that Children’s Delsym Cough Relief was misleadingly marketed as different from, and more expensive than, the adult product, when the concentration is the same. The front of the packaging for the children’s product contains a cartoon image of a child. It states “Ages 4+” at the top of the package and “For Children & Adults” at the bottom. The front of the packaging for the adults’ product contains no statement about the suitability of the product for any ages: 

The side labels for both products contain an identical dosing chart that includes dosing amounts for children and adults along with the statement “Dosing Cup Included” below an image of a cup containing liquid. The “Drug Facts” labels on the back of the packaging for both products are identical. Both products contain the same amount of the active ingredient and the same inactive ingredients.

DiGiacinto further alleged that “[n]o reasonable consumer who understood that the Children’s Delsym Cough Relief product was formulated identically to the adult’s Delsym Cough Relief product would choose to pay more for it.” He brought the usual California statutory and common-law claims.

RB Health submitted a declaration by its Trade Marketing Director stating that RB Health does not sell the Delsym Cough Relief and Children’s Delsym Cough Relief products “directly to consumers, but, instead, sells the Products to retailers and to distributors who in turn sell to retailers.” Since 2018, RB Health has sold both products “to the same distributors and retailers at the same price. The price the consumer pays for the Products is not set by RB Health.” Thus, RB Health argued, it was not responsible for plaintiff’s harm and he lacked Article III standing.

But Article III doesn’t require proximate cause.

Here, RB Health was responsible for the different labeling of identical products, which plausibly linked to his injury in a way that was “more than attenuated.” Even if RB Health wasn’t responsible for the price premium, it was allegedly responsible for the representations that allegedly led him to purchase the more expensive product. “A causation chain does not fail simply because it has several links, provided those links are not hypothetical or tenuous and remain plausible.” DiGiacinto also sufficiently alleged that he will be unable to rely on the advertising or labeling of the children’s product in the future, providing standing to seek injunctive relief.

This is because DiGiacinto cannot discover whether RB Health’s misrepresentations have been cured simply by looking at the children’s product front label since it does not disclose that it is pharmacologically identical to the adults’ product. Instead, he would have to inspect and compare the ingredient labels on two separate products, including the active and inactive ingredients listed, to determine whether the products are identical in form and quantity. The Ninth Circuit has held that “reasonable consumers” should not “be expected to look beyond misleading representations on the front of [packaging] to discover the truth from the ingredient list in small print on the side of the [packaging],” and RB Health does not cite any cases holding that a reasonable consumer is expected to compare labels on more than one product in order to determine whether a label is accurate.

Cases rejecting similar claims were distinguishable because here, the front of the packaging of both the children’s and the adults’ products identifies the active ingredient but not its concentration. (That’s not really a great distinction because it still requires consumers to compare two different products to avoid deception.) Also, while the front of the children’s product discloses that it can be used for anyone over four years of age (“Ages 4+”), the front label of the adults’ product said nothing about age. “This could lead a reasonable consumer to believe that the adults’ product is not suitable for children to consume and to purchase the children’s product instead.”