9th Circuit affirms class status based on materiality of claim in product name

Noohi v. Johnson & Johnson Consumer Inc., --- F.4th ----, 2025 WL 2089582, No. 23-55190 (9th Cir. Jul. 25, 2025)

J&J sells Neutrogena Oil-Free Face Moisturizer for Sensitive Skin. The district court certified a class in a consumer protection case brought by Noohi, who alleges that, despite the name, Neutrogena Oil-Free Face Moisturizer for Sensitive Skin contains oils and oil-based ingredients (ethylhexyl palmitate and soybean sterols). The court of appeals affirmed the certification.

Noohi’s expert Hickner, a professor of materials science and engineering, opined that, although “oil” lacks a standard scientific definition, the term generally refers to a “naturally-derived, chemically synthesized, or petrochemically-refined slippery ... substance” that is hydrophobic—meaning that it does not mix with water—and more viscous than water, but less dense. Dr. Hickner opined that, based on their chemical structures and physical properties, ethylhexyl palmitate and soybean sterols are oils with oil-like physical properties.

Her expert Roberts, an econometrics expert, described his proposed process for measuring class members’ damages by calculating the economic value to consumers of the “oil-free” statement: qualitative market research designed to uncover consumers’ understanding of and response to the “oil-free” label, plus quantitative surveying and market analysis to measure the economic value to consumers of the “oil-free” statement.

J&J contested the evidentiary value of both experts’ proposed testimony and submitted competing expert declarations for both.

First, the district court could properly accept the proposed damages model of Noohi’s economic expert. The Ninth Circuit has held that “class action plaintiffs may rely on a reliable though not-yet-executed damages model to demonstrate that damages are susceptible to common proof so long as the district court finds that the model is reliable and, if applied to the proposed class, will be able to calculate damages in a manner common to the class at trial.” The district court did not abuse its discretion in finding the proposed damages model fit Noohi’s theory of harm and was sufficient for purposes of class certification.

For measuring the price premium, Dr. Roberts proposed to show survey participants the product and ask at what prices they would find it “too inexpensive to be considered, a good value, expensive but still worth considering, and finally, too expensive to be considered.” Dr. Roberts would introduce information “challenging the ‘oil-free’ claim,” e.g. by telling participants that the ingredients contained extracts of soybean and palm oil. Then the survey would ask the price question again. He proposed to use regression analysis to determine the percent of the product’s overall price associated with the phrase “oil-free.” Courts have approved of similar “benefit-of-the-bargain” damages models in deceptive marketing cases under California law.

Dr. Roberts also proposed to measure “softer” kinds of harms consumers might experience, such as changes to “overall consumer satisfaction, brand loyalty, willingness to recommend [the Product], and repurchase intent.” He proposed questions about their attitudes towards and impressions of the product before and after the “exposure.” He would use “multivariate statistic[al]” analysis to quantify the changes in respondents’ perceptions of the Product. That would include damages beyond a price premium. But that didn’t make the problem unusable. The problem only comes when a model proposes to measure damages not associated with the plaintiffs’ theory of harm that can’t be separated from damages tied to the plaintiff’s theory. So all Roberts had to do to solve the problem was … not ask those questions.

J&J also argued that rather than comparing what consumers are willing to pay before and after they learn that the Product is not “oil-fee,” Roberts should compare “what consumers paid for ‘Neutrogena’s Oil-Free Face Moisturizer for Sensitive Skin’ and what they would have been willing to pay for ‘Neutrogena’s Face Moisturizer for Sensitive Skin,’ holding everything else about the product’s performance and packaging (other than the ‘oil-free’ claim) constant.” Dr. Roberts’ model, J&J argued, would improperly include the “emotional value” that consumers associate with learning that the “Product’s label contains a lie.”  But “California law does not prescribe any specific means of measuring a price premium for purposes of actual damages or restitution. In fact, ‘[c]lass wide damages calculations under the UCL, FAL, and CLRA are particularly forgiving.’” All that was required was “some reasonable basis of computation.”

“There is no talismanic means of measuring damages for deceptive marketing claims under California consumer protection law.” Conjoint analysis is ok, as is “contingent valuation analysis,” which is similar to Dr. Roberts’ proposed methodology in that it varies the features of a single product by presenting new information about the product and asks survey participants to “directly report what they are willing to pay for it.”

True, surveys might be badly done and inflate damages or fail to replicate purchase conditions. But Dr. Roberts recognized those risks in his deposition and rejected telling survey participants “you were lied to.” “Should Dr. Roberts’ execution of the survey fall short of that mark, [J&J] may explore that failure at summary judgment, in a renewed Daubert motion, or during cross-examination at trial.” At the class certification stage, the key inquiry was simply whether Noohi has “demonstrated the nexus between [her] legal theory ... and [her] damages model.” Whether the proposed calculation of the price premium would be accurate was a “merits inquir[y] unrelated to class certification.”

Second, materiality and reliance were susceptible to common proof. “Materiality, and therefore an inference of reliance, can be established by reference to an objective, reasonable consumer standard, and so in this case may be proven in a way common to the class.” It is for this reason that class actions asserting the usual California claims are generally “ideal for class certification.”

The presumption was rebuttable, but the district court didn’t abuse its discretion in finding the presumption to be unrebutted. “If the misrepresentation or omission is not material as to all class members, the issue of reliance ‘would vary from consumer to consumer’ and the class should not be certified.” Here, the district court also relied on the undisputed evidence of classwide exposure to the “oil-free” language prominently displayed on the front of the packaging. In determining material misleadingness under California law, “the primary evidence ... is the advertising itself.” The court was quite plaintiff-favorable here, as its understanding of California law required:

It is hard to imagine that consumers would purchase a product labeled “Oil-Free Moisture” without regard to whether the product was free from oil. If, somehow, the evidence later shows that a reasonable consumer would not have found the product’s name to be material to their purchase decision, “the failure of proof on the element of materiality would end the case for one and for all; no claim would remain in which individual reliance issues could potentially predominate.” 

Given the objective standard for materiality and the undisputed evidence of classwide exposure, Noohi is entitled to the inference that reliance can be shown via common proof.

J&J argued that “oil-free” might have multiple different interpretations: doesn’t contain oils, doesn’t contain ingredients derived from oils, or doesn’t perform in a way consumers consider “oily.” But J&J didn’t offer persuasive evidence of this variance, only Noohi’s testimony as to her motivations for purchasing and the expert report of a dermatologist as to the dermatologic uses of oil-free products. That didn’t show variance within the class.

Second, even if understanding of “oil-free” varies across the class, J&J didn’t explain why that would undermine the commonality of materiality based on a reasonable consumer standard, or rebut the inference of reliance. In cases reaching the opposite conclusion, “a sizable portion of the class either were not misled by the statements or would not have found the misrepresentations to be material had they known the truth.” As opposed to showing that “oil-free” didn’t affect the purchase decision, J&J’s evidence at most showed that it “affected the purchase decision of class members—and so was material—for different reasons.” J&J offered no evidence that “a consumer who thought ‘oil-free’ meant ‘without oils’ was any more or less likely to be affected in their purchase decision than someone who thought it meant ‘without oil derivatives’ or not tactilely ‘oily.’” Thus, J&J’s argument didn’t undermine the idea that materiality was susceptible to common proof:

The baseline inquiry is whether the statement was material to a reasonable person. An affirmative answer to that question gives rise to an inference of reliance. A showing that for some portion of a class that statement was not in fact material upsets that inference. But a showing that a statement was material to different class members in different ways does not.

In California, “a plaintiff need not establish at the class certification stage that class members share a uniform understanding of the contested term.”

J&J also argued that it defeated the inference of reliance by showing that 30% of purchases were repeat purchases. (One thing that could be useful in a false advertising case would be to know whether that was a low percentage for a personal care product, or a high one.) “The existence of repeat purchasers does not defeat the inference of reliance. There is no indication that the repeat purchasers knew that the Product was not oil-free and purchased it anyway.” Plus, for reliance under California law, a misrepresentation need not be “the sole or even the decisive cause of the injury-producing conduct.”