no preemption for ordinary falsity claim about FDA-regulated product

Won Kyung Hwang v. Ohso Clean, Inc., 2013 WL 1632697 (N.D. Cal.)

Hwang sued on behalf of consumers who bought CleanWell sanitizing products, alleging California consumer protection claims and violation of the Magnuson Moss Act.  Until relatively recently, Hwang alleged, the labels of defendants’ foaming hand sanitizer, hand sanitizer spray, hand sanitizing wipes, and antibacterial foaming hand soap products prominently and falsely represented that they: (1) “[k]ill[ ] 99.9% of germs naturally,” (2) “kill 99.99% of germs including MRSA, Salmonella, Staph, and E.coli,” (3) “kill 99.9% of the harmful germs that can make you sick,” and (4) “Sanitize hands when you can't wash with soap and water.”

Defendants argued that the claims were preempted under the FDCA.  The governing law is that a state law claim will survive if it doesn’t depend entirely on a violation of the FDCA but rather is premised on conduct that would give rise to liability under traditional common law principles. “Thus, consumer fraud claims based on statements that are alleged to be literally false, as a factual matter, have generally been found to be permissible under the FDCA.”

Pom Wonderful LLC v. CocaCola Company, 679 F.3d 1170 (9th Cir. 2012), didn’t aid defendants’ position.  Pom isn’t really a preemption case but rather a primary jurisdiction case, in which the court of appeals held that, to the extent that the regulations about juice names on labels were unclear, it was for the FDA to fix the problems.  Pom was a Lanham Act case, and preserved the possibility of state law claims on remand.  Where FDA provisions require no original judicial interpretation, application of Pom isn’t appropriate. 

Here, no statutory or regulatory provision expressly preempted the claims, and there was no implied preemption because Hwang’s claims weren’t based on the FDCA but rather on parallel state laws that mirror the relevant FDCA sections.  The only specific regulations cited by defendants were a Tentative Final Monograph, which were never adopted.  The court was merely required to make a factual determination as to whether the challenged statements were false.

As for primary jurisdiction, “where a claim is within the purview of the FDA's regulatory authority and the determination requires the expertise of the FDA, the court should not decide the question before the FDA has had an opportunity to address it.”  Here, the FDA has the authority to regulate the labeling and testing of defendant’s products, but the Tentative Final Monograph proposing specific regulations was never enacted.  Even assuming (not in evidence) that the FDA had plans for further regulations, Pom didn’t require deferring to the FDA when state consumer protection law claims were based on factual falsity, “at least where, as here, there are no regulations suggesting the FDA has adopted a contrary position.”  The FDA’s expertise wasn’t required as to what renders a statement misleading, because incorrect factual statements are by definition false and misleading.  Pom didn’t get rid of the many cases permitting state law and Lanham Act claims based on falsity.

The court rejected challenges to the sufficiency of the pleading: Hwang identified the key statements and alleged that they weren’t true.  Defendants argued that she failed to plead materiality, but that wasn’t a question suitable for a motion to dismiss.  She alleged that she relied on the statements to make her purchase.  “Given that the purpose of Defendants' Sanitizing Products is to kill germs and the statements allegedly overstate the effectiveness of the products in achieving that objective, these allegations are at least plausible and therefore satisfy the pleading standards of Iqbal and Twombly.”  The statements were directed to “what is undisputedly the primary purpose of the products at issue, namely, to kill germs, giving rise to a plausible inference that a reasonable consumer would consider them material.”

Further, the court rejected the argument that the class claims failed to the extent the class includes members who may not have seen the statements or weren’t deceived.  This was the wrong stage at which to address class claims.  The procedural posture also prevented the court from ruling that a nationwide class couldn’t be certified as to Hwang’s California claims under Mazza v. American Honda Motor Co., Inc., 666 F.3d 581 (9th Cir. 2012), which, the court held, didn’t establish a bright-line rule rejecting all nationwide classes under California consumer protection statutes.  Choice of law analysis is more appropriate at the certification stage.

Similarly, the court declined to strike damages claims and class allegations under Rule 12(f), since they weren’t included in the meaning of “any insufficient defense or any redundant, immaterial, impertinent or scandalous matter.”   It also allowed her to amend her CLRA claim to add a damages claim once the required 30-day notice period had passed.