United States District Court, E.D. California
ALBA MORALES and LANIE COHEN, on behalf of themselves and all others similarly situated, Plaintiffs,
UNILEVER UNITED STATES, INC., Defendant.
MEMORANDUM AND ORDER RE: MOTION TO DISMISS
WILLIAM B. SHUBB, District Judge.
Plaintiffs Alba Morales and Lanie Cohen brought this putative class-action lawsuit against defendant Unilever United States, Inc., in which they allege that defendant misled them and similarly situated consumers by falsely representing that its TRESemme Naturals line of hair care products contained no synthetic chemicals or artificial ingredients. Defendant now moves to dismiss the First Amended Complaint ("FAC") pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of standing and Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted.
I. Factual & Procedural History
Defendant is a major cosmetics company that produces, among other products, the TRESemme Naturals line of shampoos and conditioners. (FAC ¶ 1 (Docket No. 1).) Morales is a resident of South Lake Tahoe, California. (Id. ¶ 6.) Morales alleges that she purchased defendant's Nourishing Moisture shampoo, Nourishing Moisture conditioner, Vibrantly Smooth shampoo, and Vibrantly Smooth conditioner at a Safeway store in South Lake Tahoe, California in June 2012. (Id.) Cohen is a resident of Canton, Massachusetts. (Id. ¶ 7.) Cohen alleges that she purchased defendant's Radiant Volume shampoo and Vibrantly Smooth conditioner at a Target store in Stoughton, Massachusetts in April 2013. (Id.) Both plaintiffs allege that they viewed the product labels before purchasing the products and paid a premium for the products over comparable products not marketed as "natural." (Id. ¶¶ 6-7, 17.) Plaintiffs allege that defendant's representation that the products are natural is false because the products contain numerous "unnatural synthetic ingredients." (Id. ¶ 16.)
On October 22, 2013, plaintiffs brought this action on behalf of themselves, a putative class of purchasers located in twenty-one states including California and Massachusetts (the "Class"), a subclass of California purchasers (the "California subclass"), and a subclass of Massachusetts purchasers (the "Massachusetts Subclass"). Plaintiffs assert three claims: (1) a claim by Morales under the Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200 et seq., on behalf of the California Subclass; (2) a claim by Morales under the Consumers Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1750 et seq., and twenty other state consumer protection statutes on behalf of the Class and the California Subclass; and (3) a claim by Cohen under the Massachusetts Consumer Protection Act ("MCPA"), Mass. Gen. Laws. Ann. ch. 93A, and twenty other state consumer protection statutes on behalf of the Class and the Massachusetts Subclass. Defendant now moves to dismiss the complaint pursuant to Rule 12(b)(1) for lack of standing and pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted.
A. Article III and Statutory Standing
"An Article III federal court must ask whether a plaintiff has suffered sufficient injury to satisfy the case or controversy' requirement of Article III of the U.S. Constitution." Brazil v. Dole Food Co. , 935 F.Supp.2d 947, 960 (N.D. Cal. 2013) (citing Clapper v. Amnesty Int'l, ___ U.S. ___ , 133 S.Ct. 1138, 1146 (2013)). "To establish Article III standing, an injury must be concrete, particularized, and actual or imminent; fairly traceable to the challenged action; and redressable by a favorable ruling." Clapper , 133 S.Ct. at 1147 (internal quotation marks omitted). A plaintiff invoking federal jurisdiction must satisfy the standing requirements of Article III even if she asserts only state-law claims. Birdsong v. Apple, Inc. , 590 F.3d 955, 960 n.4 (9th Cir. 2009).
In addition to the requirements set forth by Article III, a plaintiff asserting claims under California's consumer protection statutes must also establish statutory standing. To have standing to sue under the UCL, a plaintiff must "(1) establish a loss or deprivation of money or property sufficient to qualify as an injury in fact, i.e., economic injury, and (2) show that that economic injury was the result of, i.e., caused by, the unfair business practice or false advertising that is the gravamen of the claim." Kwikset Corp. v. Superior Court , 51 Cal.4th 310, 322 (2011) (emphasis in original).
The standing requirements under the UCL are both similar to and "substantially narrower than federal standing under [A]rticle III... which may be predicated on a broader range of injuries." Id. at 324. The standing requirements under the UCL are also more stringent than those imposed by the CLRA, which requires only that a plaintiff have suffered "any damage" as a result of the defendant's misconduct. Cal. Civ. Code § 1780(a); see also Hinojos v. Kohl's Corp. , 718 F.3d 1098, 1108 (9th Cir. 2013) ("[A]ny plaintiff who has standing under the UCL's... lost money or property' requirement will, a fortiori, have suffered any damage' for purposes of establishing CLRA standing." (emphasis in original)); Meyer v. Sprint Spectrum L.P. , 45 Cal.4th 634, 641-43 (2009) (discussing standing requirements under CLRA). Therefore, if plaintiffs have sufficiently alleged standing under the UCL, they have also alleged standing under the CLRA and Article III.
1. Economic Injury
A plaintiff must establish that he suffered "some form of economic injury" in order to have standing under the UCL. Kwikset , 51 Cal.4th at 323. "An economic injury exists where a seller misrepresents a product and, had the product been represented accurately, buyers would not have been willing to pay as much as they did, or would have refused to purchase the product altogether." Rosales v. FitFlop USA, LLC , 882 F.Supp.2d 1168, 1174 (S.D. Cal. 2012).
Here, plaintiffs allege that they suffered economic injury because they paid a premium for TRESemme Naturals products over comparable products that are not marketed as "natural." (FAC ¶ 17.) The "extra money paid" for these products above what plaintiffs would have paid but for defendant's allegedly deceptive representations constitutes economic injury. Kwikset , 51 Cal.4th at 330; see also Mazza v. Am. Honda Motor Co. , 666 F.3d 581, 595 (9th Cir. 2012) (holding that plaintiffs' allegations that "class members paid more... than they otherwise would have paid... because Honda made deceptive claims" sufficiently alleged economic injury). Even if plaintiffs have not alleged what they would have paid absent defendant's alleged misrepresentations that the products were free from artificial ingredients, they are not required to do so in order to allege economic injury under the UCL. See Hinojos , 718 F.3d at 1105 (noting that the UCL does not require a plaintiff "to plead how much he would have paid for the merchandise had he known its true value"). Accordingly, plaintiffs have sufficiently alleged that they suffered economic injury as a result of defendant's misrepresentations. See Kwikset , 51 Cal.4th at 323.
In order to have standing under the UCL, a plaintiff must allege not only that he suffered economic injury, but also that there was a "causal connection" between that injury and the defendant's alleged misrepresentation. Kwikset , 51 Cal.4th at 326. Because "reliance is the causal mechanism of fraud, " a plaintiff "proceeding on a claim of misrepresentation must demonstrate actual reliance on the allegedly deceptive or ...