Twiqbal kills consumer class action in 2d Circuit

DiMuro v. Clinique Laboratories, LLC, --- Fed.Appx. ----, 2014 WL 3360586, No. 13–4551 (2d Cir. July 10, 2014)

The Second Circuit quickly affirms the dismissal of a putative consumer class action based on Clinique’s marketing of seven different “Repairwear” cosmetics. First, the named plaintiffs only bought three of the seven.  They argued that they had standing for products they didn’t buy under NECA–IBEW Health & Welfare Fund v. Goldman Sachs & Co., 693 F.3d 145, 162 (2d Cir. 2012).  (Of note because it suggests a securities law crossover that Ann Lipton would probably have a lot to say about; securities law is very different from consumer protection law and standing analysis should probably differ.)  The court of appeals didn’t disagree with the comparison, but held that the case was no help, because that case involved sales of related securities where the misrepresentations were nearly identical; different offering documents were insufficient to distinguish them.  By contrast, each of the seven products here had different ingredients and Clinique made different claims for them. 

The remaining consumer fraud claims were properly dismissed for failure to plead with particularity.  The complaint failed to disaggregate the different products or explain why the claims were false, beyond saying that the products can’t work:

Plaintiffs allege … that the products “do not and cannot live up to [Clinique’s] efficacy claims,” and that “no ingredient in any of the Repairwear Products can actually ‘de-age’ the skin.” Plaintiffs fail to allege what the specific ingredients in each product are and that these ingredients lack the ability to improve skin appearance. This bare-bones pleading is thus inconsistent with Rule 9(b).

The complaint also failed to allege that the plaintiffs used the product as directed, and to specify the claims on which they allegedly relied. Plaintiffs argued that they sufficiently specified because they alleged that Clinique’s advertised results could only be achieved by drugs, and since these were cosmetics these claims must be false.  This was both conclusory and implausible; plaintiffs didn’t allege facts to show, for example, that if the claim to “smooth out laugh lines” were true, the cosmetics would “affect the structure or function of the human body and therefore [would] be regulated as a drug.”

Finally, the plaintiffs alleged that Clinique’s dramatizations were fraudulent.  “But there is nothing misleading about a dramatization that presents ‘average results’ as long as the dramatization accurately depicts the average results consumers may achieve.”  (Note the weirdness introduced by “may” in describing an “average.”)  Anyway, the plaintiffs didn’t allege more than conclusorily that the dramatization was overly optimistic or portrayed effects that are above average.

Unjust enrichment and breach of warranty claims also failed; Rule 9(b) doesn’t apply to breach of warranty claims, but the allegations were too conclusory to survive Iqbal/Twombly because they just said that the products didn’t and couldn’t provide the promised anti-aging results.  (The court did not explain what more should have been said.)