Herding cats: follow-on Clorox class action proceeds

In re Clorox Consumer Litigation, --- F. Supp. 2d ----, 2012 WL 3642263 (N.D. Cal.)

After Church & Dwight successfully attacked Clorox’s Fresh Step ads (settled before resolution of the appeal), plaintiffs filed a putative nationwide class action alleging that Clorox falsely advertised that (1) Fresh Step is more effective at eliminating cat odors than products that do not contain carbon, and (2) cats choose Fresh Step over these other cat litters.

The first relevant ads showed several cats jumping into a Fresh Step litter box, after some of them examined and apparently rejected a Super Scoop litter box.  Supers said “dramatization” and “based on lab tests,” while the voiceover said: “Cats like boxes. Big ones. Little ones. And ones with Fresh Step litter inside. That's because Fresh Step's scoopable litter with carbon is better at eliminating odors than Arm & Hammer's Super Scoop. Fresh Step. Cats know what they like.”  Then Clorox ran an ad showing cats opening jars of cat food, unlocking doors, thwarting a dog from entering a house, etc., and finally choosing a box of Fresh Step over a box of Super Scoop. Voiceover: “Cats are smart. They can outsmart their humans. Their canines. And locked doors. They're also smart enough to choose the litter with less odors. That's because Fresh Step Scoopable Litter with carbon is better at eliminating litter box odors than Arm & Hammer Super Scoop. Fresh Step, cats know what they like.”  Church & Dwight’s study in response showed that 6 of 158 studied cats rejected a Super Scoop box, while 8 rejected a Fresh Step box.

Clorox’s next set of ads kept up the playful theme, and showed two beakers, one filled with a black substance labeled “carbon” and the other filled with a white substance labeled “baking soda.” Green gas floated through the beakers, rapidly dissipating in the carbon beaker but not reacting much in the baking soda beaker.  Voiceover: “That's why Fresh Step Scoopable has carbon, which is more effective at absorbing odors than baking soda.” The super said: “Dramatization of cat waste malodor after 1 day. Based on sensory lab test.”  Church & Dwight commissioned an independent lab to do a ten-day sensory study using people trained in odor evaluation.  On every day and overall, the panel’s average rating for Church & Dwight’s baking soda-based litter was lower (more palatable) than the average rating for Fresh Step.

Plaintiffs sued under the usual California statutes and, in the alternative to a nationwide class, asserted consumer protection claims on behalf of five subclasses in California, Florida, New Jersey, New York, and Texas. They also brought causes of action for breach of express warranty and unjust enrichment.

Clorox argued that the claims failed because they were based on allegations that its ads lacked substantiation.  Such claims aren’t cognizable under California law when brought by private parties, though the law allows certain government authorities to demand substantiation.  Plaintiffs responded that their argument was not that the claims were unsubstantiated, but that they were provably false.  The court agreed.  Plaintiffs alleged that the two claims (carbon-based cat litter’s greater effectiveness on odors than non-carbon brands, and cat preference) were contradicted by scientific studies.  This was more than an allegation that scientific evidence in support of the claims was lacking.

Clorox also moved to dismiss the claims to the extent they were based on the ads’ statements that cats “like” or “are smart enough to choose Fresh Step.”  Whether an alleged misrepresentation is puffery, the court said, was a question of law that could be answered on a motion to dismiss.  (Always?  That seems unlikely.  Or very confident.)  Plaintiffs argued that claims that cats “like” and “choose” particular litter brands are measurable.  One of Church & Dwight’s studies measured such preferences by looking at cats’ rejection of litter.  Similarly, the ads themselves depict preferences, thus allegedly giving the impression that the claims were based on scientific testing.

The court agreed that the first set of ads conveyed a preference message, but found that they provided no basis for the claim.  “[T]he depiction of four or five cats choosing to playfully jump into a litter box of Fresh Step rather than a litter box of the competitor's brand does not give the impression of scientific testing—especially since this demonstration follows several videos of cats playing with boxes.”  These ads didn’t make quantifiable claims that could be proved or disproved; no reasonable consumer would consider the message that cats prefer Fresh Step because they are “smart enough to choose the litter with less odors” to be a statement of fact.  (The judge is not a cat person, I see.  If humans are smart enough to do that, why not cats?)

The court also relied on the super, without assessing whether consumers were likely to perceive it as part of the message (which I would argue shouldn’t be done on a motion to dismiss anyway).  The “dramatization” disclaimer undercut the plaintiffs’ arguments, while “based on lab tests” “[had] the potential to cut the other way,” but since the ads didn’t clearly identify which representations were based on lab test, that didn’t help.  The court thought “based on lab tests” was intended to convey “better at eliminating odors,” given its placement against the voiceover.  (Again, if it’s not clear, why does that hurt plaintiffs on a motion to dismiss?  If “based on lab tests” could plausibly refer to cat preference, that should matter at this stage of the case.)

So the claims were dismissed to the extent they were based on statements that cats “like” or “are smart enough to choose Fresh Step.”

Clorox next argued that plaintiffs failed to satisfy Rule 9(b) by failing to allege the content of the alleged misrepresentations, when they saw them, or where. Without contesting that the fraud pleading requirements applied, plaintiffs argued they’d met them, and the court agreed.  Rule 9(b) has three functions: to provide defendants with adequate notice/deter fishing expeditions, to protect reputations against fraud charges, and to keep plaintiffs from taking up resources on litigation without a factual basis.  Here, requiring pleading of additional facts wouldn’t advance any of these goals.  The complaint identified each ad on which the plaintiffs allegedly relied and described their contents.  It alleged when the commercials aired and provided storyboards for each.  Plaintiffs alleged that they bought Fresh Step in reliance on the ads.  That was enough to put Clorox on notice and showed that plaintiffs weren’t on a fishing expedition.  Indeed, Clorox had located and produced videos of the ads.

On to substance: Breach of express warranty under California law requires a plaintiff to allege the exact terms of the warranty, reasonable reliance thereon, and a breach proximately causing injury.  Plaintiffs identified two alleged warranties: (1) carbon-based Fresh Step is better at eliminating and absorbing odors than baking soda-based cat litters, and (2) cats “are smart enough to choose” carbon-based Fresh Step over baking soda-based cat litters. The second was puffery and nonactionable.  Also, vague allegations about “product labels” couldn’t support the claim, since plaintiffs didn’t specify what the labels said.  But the claim based on the first alleged warranty was properly pled.

Clorox argued that its statements weren’t actionable because they were “highly subjective product superiority claims.”  No, reasonable consumers are likely to consider “Fresh Step ... is better at eliminating litter box odors than Arm & Hammer Super Scoop” a statement of fact. This was neither “vague” nor “highly subjective.” “Clorox identifies both a point of comparison—Arm & Hammer Super Scoop—and a metric for comparison—elimination of cat odors. Further, the beaker comparison depicted in the Second Commercials gives the impression that this representation is based on the results of a scientific study.  Clorox's apparent representation that this beaker test is '[b]ased on [a] sensory lab test’ furthers this impression.”  (The court also rejected Clorox’s argument that there was no privity—there’s an exception when the consumer relies on labels or ads from the manufacturer, and Clorox provided no warrant for the idea that the exception is limited to written warranties.)

Clorox also moved to strike the class allegations.  Motions to strike are disfavored, but occasionally granted when it’s clear that class claims can’t be sustained.  Clorox said this was true here given Mazza’s holding that California's consumer protection laws cannot be applied nationwide.  But Mazza was decided on a motion for class certification, not a motion to strike. “At this stage of the instant litigation, a detailed choice-of-law analysis would be inappropriate. Since the parties have yet to develop a factual record, it is unclear whether applying different state consumer protection statutes could have a material impact on the viability of Plaintiffs' claims. Further, unlike the defendant in Mazza, Clorox has not explained how differences in the various states' consumer protection laws would materially affect the adjudication of Plaintiffs' claims or otherwise explained why foreign laws should apply.”

Clorox contended that out-of-state plaintiffs lacked standing to sue under California law.  But California remedies can be invoked by out-of-state parties harmed by wrongful conduct occurring in California. Plaintiffs alleged that Clorox conducts substantial business in California and has its principal place of business and corporate headquarters in the state, decisions regarding the challenged representations were made in California, Clorox's marketing activities were coordinated at its California headquarters, and a significant number of class members reside in California. This was enough for purposes of the present motion.