Proskauer on Advertising Law
Proskauer on Advertising Law

Nestlé’s Non-Disclosure of Child and Slave Labor Issues on Packaging Not Deceptive or Unfair, Massachusetts Federal Court Holds

Though child and slave labor is “widespread, reprehensible, and tragic,” a federal court in the District of Massachusetts found it was not deceptive for Nestlé to omit from product labels that those practices (allegedly) exist in its supply chain. In granting defendant Nestlé’s motion to dismiss, the court, after assuming that plaintiff’s allegations are true, found that reasonable consumers would not be misled when manufacturers omit such information at the point of sale. Tomasella v. Nestlé, No. 18-cv-10269 (2019).

In this putative class action – one of a trio of similar lawsuits against chocolate manufacturers – plaintiff, who purchased various Nestlé products, claimed the company’s omissions were deceptive and unfair, and violated Massachusetts consumer protection laws. Plaintiff claimed she would not have bought, or paid as much for, Nestlé’s products had she known that child and slave labor allegedly existed in its products’ supply chain.

First, the court examined whether Nestlé deceived customers by failing to disclose alleged child and slave labor practices in its supply chain on product packaging. Citing FTC administrative precedent, the court characterized Nestlé’s omission as a “pure omission,” involving a subject as to which the seller has said nothing, in a circumstance that does not give any meaning to that silence. Specifically, the court noted that plaintiff did not allege Nestlé made any false statements about child or slave labor on its packaging, “or that Nestlé’s omissions turned an affirmative representation into a misleading half-truth.” By selling chocolate, Nestlé is implying “the product is fit for human consumption.” This implication, the court reasoned, “does not on its own give rise to any misleading impression about how Nestlé or its suppliers treat their workers.” The court therefore found it was not reasonable for a consumer to “affirmatively form any preconception about” Nestlé’s supply chain, “let alone make a purchase decision based on any such preconception.” Because the labeling would not mislead consumers “acting reasonably under the circumstances, to act differently,” plaintiff failed to state a claim for deceptive conduct. The court also held Nestlé’s failure to disclose alleged child and slave labor practices in its supply chain did not constitute unfair trade practices under Massachusetts law, and Plaintiff did not point to any authority that defined such nondisclosure as unfair.

The Tomasella decision echoes a line of other federal cases in which putative class actions were filed alleging similar labor practices in the supply chains of other retailers and manufacturers. These cases, including several brought under California’s consumer protection laws, also found there was no affirmative duty to disclose these types of supply chain labor practices. See, e.g., Sud v. Costco, 15-cv-03783 (N.D. Cal. 2017) and Wirth v. Mars, 15-cv-1470 (C.D. Cal. 2016).

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Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at lweinstein@proskauer.com /212-969-3240 or akaplan@proskauer.com /212-969-3671.  We are partners in Proskauer’s False Advertising & Trademark practice and editors of Proskauer on Advertising Law, which was recently named to the ABA Journal’s Web 100 for 2018.

SDNY Judge Not Sweet on Dannon’s Bid for a Preliminary Injunction

In a battle of leading yogurt beverage makers, Chief Judge Colleen McMahon of the U.S. District Court for the Southern District of New York recently denied Dannon’s application for a preliminary injunction in its false advertising suit against Chobani. The result of Judge McMahon’s decision is that Chobani can continue to sell its yogurt drinks with labeling that claims its drinks contain 33% less sugar than Dannon’s yogurt drinks. Danone, US v. Chobani, No. 18-cv-11702 (S.D.N.Y. Jan. 23, 2019). Although Judge McMahon found that Dannon is likely to succeed on its claims that Chobani’s labeling is misleading under the Lanham Act and N.Y. General Business Law § 349, she concluded that Dannon was not entitled to a preliminary injunction because it had not shown it would be irreparably harmed absent an immediate injunction.

Dannon makes the nation’s leading-selling drinkable yogurt for kids: “Danimals Smoothies.” Danimals are available in eight flavors and sold in 3.1 fluid ounce bottles. All flavors currently contain 9 grams of sugar per serving. Chobani’s competing drinkable yogurt, called “Gimmies,” comes in three flavors and is sold in 4 fluid ounce bottles. Two Gimmies flavors – “Cookies & Cream Crush” and “Bizzy Buzzy Strawberry” – contain 9 grams of sugar per bottle, while the “Chillin’ Mint Chocolate” flavor contains 7 grams.

Chobani’s labels claim that Gimmies contains “33% less sugar than the leading kids’ drinkable yogurt,” which Chobani conceded refers to Dannon’s Danimals. On the front and top of the Gimmies packaging, this claim is unqualified. On the back, the claim appears in much smaller typeface with an asterisk saying: “Chobani Gimmie Milkshakes: avg. 8 g sugar; leading kids’ drinkable yogurt: avg. 12 g sugar, per 4 fl oz serving.”

Chobani asserted that, according to its calculations, the average of the sugar content of the three Gimmie flavors rounds down to 8 grams per 4 fluid ounces. Since Danimals come in a smaller serving size than Gimmies, Chobani then calculated how much sugar a Danimals would contain if it came in a 4 fluid ounce package and found that it would contain nearly 12 grams. Because 12 grams is 33% more than 8 grams, Chobani concluded that Gimmies contained 33% less sugar than Danimals per fluid ounce.

The court found that the Gimmie labeling, while not literally false, would likely be found misleading because it required consumers to perform multiple calculations and search for “fine-print” disclaimers in order to understand the labeling properly. Drawing on the Second Circuit’s recent decision in Mantikas v. Kellogg, which we blogged about here, Judge McMahon noted that a reasonable consumer “should not be expected to look beyond misleading representations on the front of the box to discover the truth regarding the advertisement on the side of the box.”

Nonetheless, Judge McMahon found Dannon’s preliminary injunction motion wanting. She found that Dannon had not shown irreparable harm from the misleading labeling, as Dannon’s total market share for yogurt products grew to its second-highest level ever following Gimmies’ introduction, and that subsequent decreased sales of kids’ drinkable yogurt were not shown to be attributable to Gimmies’ misleading labeling. The court also rejected Dannon’s arguments that Chobani’s marketing harmed Dannon’s reputation as a purveyor of healthy snacks because Danimals do in fact have more sugar per ounce than Gimmies.

The court also weighed the impact such an injunction would have on Chobani, finding that it would cause substantial harm. Chobani presented evidence showing that a preliminary injunction would be “financially ruinous,” as it would essentially amount to a forced recall that would cost the company millions of dollars in wasted product, lost sales, and logistical expenses, as well as jeopardizing relationships with retailers and consumers.

Finally, the court noted that a preliminary injunction was not necessary to advance the public’s interest in truthful advertising, as Chobani had already begun revising its packaging to address Dannon’s complaints and the products with the current labeling will either be sold or expire in a few weeks.

The opinion points to the likely significance of the Second Circuit’s Kellogg decision, underscoring the inadequacy of fine-print disclosures to remedy what the court determined was likely to be implicitly false advertising. However, it also illustrates the importance of establishing likely irreparable harm that false advertising plaintiffs face when seeking the extraordinary remedy of a preliminary injunction.

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Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at lweinstein@proskauer.com /212-969-3240 or akaplan@proskauer.com /212-969-3671.  We are partners in Proskauer’s False Advertising & Trademark practice and editors of Proskauer on Advertising Law, which was recently named to the ABA Journal’s Web 100 for 2018.

State of Nature: District Courts Diverge in Treatment of “Natural” False Advertising Claims

Two recent contrasting decisions in class action false advertising cases alleging misleading uses of the term “natural” for food products underscore the difficulty in predicting the likelihood of achieving an early stage dismissal in these cases.

Late last year, Judge Richard Seeborg in the Northern District of California denied Williams-Sonoma’s motion to dismiss an alleged class action false involving labels describing products as containing “Active Ingredients Derived from Natural Sources.” Kutza v. Williams-Sonoma, 2018 WL 5886611. Just a few weeks later, Judge Allyne Ross of the Eastern District of New York dismissed a putative class action alleging that the brand name “Florida’s Natural” for orange juice misleadingly suggests that the juice contains no herbicide or other chemicals. Axon v. Citrus World, 2018 WL6448646. Last month, the Axon court denied plaintiff’s motion to amend the complaint, causing plaintiff to appeal to the Second Circuit.

The facts of the cases do not readily explain why the Kutza and Axon decisions came out differently.  In the former case, plaintiff claimed Williams-Sonoma breached express and implied warranties to him and to a nationwide class by deceptively advertising that its products are “natural” through product labels that state “Active Ingredients Derived from Natural Sources.” Plaintiff alleged that product ingredients, ranging from phenoxyethanol and dimethicone to citric acid and sodium chloride, are “hazardous” and/or synthetic, and that he would not have purchased the products had he known the nature of these ingredients.

In addition to the product labels, plaintiff also alleged that Williams-Sonoma’s website contains misleading statements that further imply the products are “natural.” One such statement is that “[t]here are no dangerous chemicals like ammonia or chlorine to worry about, and no lauramide DEA or parabens either – only natural oils, essences and cleansing elements.”

Williams-Sonoma argued that none of these statements would mislead reasonable consumers. Indeed, as the court noted, the principal statement at issue – “Active Ingredients Derived From Natural Sources” – concededly is literally true. Nonetheless, Judge Seeborg allowed the false advertising claims to proceed, notwithstanding his recognition of the retailer’s “strong arguments that it can present to the fact-finder, or perhaps on summary judgment.” The opinion did not clearly explain, however, how the label’s literally true, qualified statement might mislead a reasonable consumer that every ingredient in the product was natural.

By contrast, in Axon, the court granted the defendant’s motion to dismiss on the ground that the complaint failed plausibly to explain how a reasonable consumer would be misled by the “Florida’s Natural” brand name into believing that the fruit in the product was not treated with any herbicide or other chemicals. The court relied on In re General Mills, 2017 WL 2983877 (D. Minn. July 12, 2017) – another lawsuit alleging false advertising based on trace amounts of glyphosate in “natural” products – which held that “[i]t would be nearly impossible to produce a processed food with no trace of any synthetic molecule.” As a result, the court found it “implausible that a reasonable consumer would believe that a product labeled ‘Florida’s Natural’ could not contain a trace amount of glyphosate.” It distinguished the instant case – in which a synthetic compound remained in the products due to its use in the growing process – from those in which products labeled “natural” contained synthetic ingredients that had been specifically added. It also distinguished use of the term “natural” in a brand name from instances in which it was applied as a descriptor of the product.

Together, Kutza and Axon are noteworthy for highlighting the degree to which the dismissal of suits challenging “natural” claims on product labels (and for that matter, many other advertising statements challenged in class action false advertising cases) depends on a district court’s inclination (or lack thereof) to “kick the can down the road” to a later phase of the case. This results in significant uncertainty for defense counsel and their clients as to their ability to obtain early stage dismissal even of obviously weak and conclusory allegations of false advertising. The dichotomy in the case law will be one to watch in the future.

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Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at lweinstein@proskauer.com /212-969-3240 or akaplan@proskauer.com /212-969-3671.  We are partners in Proskauer’s False Advertising & Trademark practice and editors of Proskauer on Advertising Law, which was recently named to the ABA Journal’s Web 100 for 2018.

San Francisco City Ordinance Takes a Hard Hit in Ninth Circuit Soft Drink Lawsuit

Can an en banc decision of a federal appellate court be controversial even when every single active judge of that court agrees with the outcome? The answer is emphatically yes, as confirmed by the Ninth Circuit’s January 31, 2019 en banc decision in American Beverage Ass’n et al. v. City & County of San Francisco, 16-16072 (2019), which preliminarily enjoined on First Amendment grounds a San Francisco ordinance mandating health warnings on certain soft drink and other beverage advertising. A link to the en banc decision is here.

In 2015, the City of San Francisco enacted an ordinance requiring certain sugar-sweetened beverage advertisements to include a health and safety warning stating: “WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay. This is a message from the City and County of San Francisco.” The ordinance prescribed instructions as to the format, content, placement and size of the warning, including that it occupy at least 20% of the total space of the advertisement. The ordinance applied principally to billboard, mass transit, arena, wall and other public place advertising, but not to television, print or online advertising, or product labeling. And, the ordinance applied to soft drinks and certain other non-alcoholic beverages with one or more added caloric sweeteners containing more than 25 calories per 12 ounces of beverage, but it did not apply to milk, milk alternatives or natural fruit juices.

The American Beverage Association and other beverage industry associations sued in San Francisco federal district court to enjoin the ordinance on First Amendment grounds. The district court denied the preliminary injunction motion on the ground that plaintiffs had not established a likelihood of success on the merits. In 2017, a Ninth Circuit panel reversed. Last year, the full Ninth Circuit granted en banc rehearing and late last week, the en banc court affirmed the panel decision, with all active judges agreeing that the San Francisco ordinance must be preliminarily enjoined as likely violating the First Amendment. How the judges got to that outcome is where the controversy lies.

The parties agreed that the San Francisco ordinance constituted compelled commercial speech, and the en banc court was confronted with determining the level of scrutiny applicable to plaintiffs’ First Amendment challenge. Judge Graber’s opinion for the en banc Court concluded that the appropriate scrutiny was established by the Supreme Court’s decision in Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626 (1985), and a 2017 Ninth Circuit decision called CTIA. According to Judge Graber, these decisions together established that the ordinance would be proper only if the City could show that it is reasonably related to a substantial governmental interest, which defendant could establish by demonstrating that the compelled speech is (1) purely factual, (2) noncontroversial and (3) not unjustified or unduly burdensome.

Judge Graber’s opinion found that San Francisco failed to establish that the ordinance was not unduly burdensome, and that the ordinance therefore likely violated the First Amendment. The City argued that the ordinance’s size requirements for the health warning – 20% of the total size of the advertisement — “adhere to best practices for health and safety warnings.” However, the study cited by the City’s own expert showed that a 10%-of-total-size requirement was equally effective at communicating the health warning without obscuring the advertiser’s intended message, and the City offered no evidence contradicting plaintiffs’ position that the size of the required warning would “drown out [the] Plaintiffs’ message.” On balance, therefore, Judge Graber’s opinion for the Court held that the ordinance likely was constitutionally infirm due to the unnecessary burden it placed on soft drink and other beverage companies.

The opinion for the Court caught flak in two concurring opinions. Judge Ikuta’s concurrence in the result concluded that under a more recent Supreme Court decision, National Institute of Family Life Advocates v. Becerra, 138 S. Ct. 2361 (2018), the Zauderer “reasonable relationship” test did not apply to the San Francisco ordinance, and that instead, the ordinance must be subjected to the tougher “heightened scrutiny” test. In addition, Chief Judge Thomas and Judge Christen, although also concurring in the result, criticized Judge Graber’s opinion for a different reason – they would not have reached Zauderer’s “undue burden” prong, and instead would have found that the ordinance’s compelled message failed Zauderer’s “purely factual” and “non-controversial” prongs, in that the accuracy of the compelled message was hotly disputed by the parties and not consistent with the FDA’s position regarding sugar in beverages.

In sum, there is little likelihood San Francisco will prevail if it insists on defending the ordinance on remand. However, the appropriate test for adjudicating the constitutionality of a municipality’s compelled commercial speech regulations remains as foggy as many San Francisco mornings. Still, in light of the Ninth Circuit’s en banc decision, and regardless of the level of scrutiny applied, cities and states looking to enact health- and safety-based compelled commercial speech ordinances and statutes are likely to continue to face strong judicial headwinds.

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Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at lweinstein@proskauer.com /212-969-3240 or akaplan@proskauer.com /212-969-3671.  We are partners in Proskauer’s False Advertising & Trademark practice and editors of Proskauer on Advertising Law, which was recently named to the ABA Journal’s Web 100 for 2018.

SCOTUS to Decide If Courts Must Defer to the FCC’s Interpretation of “Unsolicited Advertisements” under the TCPA

On November 13, 2018, the Supreme Court agreed to consider the amount of deference a federal court is required to give the Federal Communications Commission in determining what constitutes an unsolicited advertisement within the meaning of the Telephone Consumer Protection Act (TCPA). PDR Network v. Carlton & Harris, No. 17-1705. The case is scheduled for oral argument on March 25, 2019.

The case arose out of a single unsolicited fax PDR Network sent to a chiropractor’s office offering a free electronic copy of the Physicians’ Desk Reference, a compilation of manufacturer prescribing information for prescription drugs. The chiropractor’s office sued PDR Network, claiming the unsolicited fax constituted an unsolicited advertisement in violation of the TCPA.

A judge in the Southern District of West Virginia dismissed the action on the ground that the fax did not violate the TCPA because it offered the e-book for free. In so ruling, the court rejected plaintiff’s argument that a 2006 FCC rule interpreting the term “unsolicited advertisement” compelled the finding that this phrase included all “facsimile messages that promote goods or services even at no cost.” The court reasoned that, under step one of the well-known Chevron analysis, the TCPA’s own definition of “unsolicited advertisement” was “clear and easy to apply,” so it was not compelled to defer to the FCC’s 2006 rule. The court further held that the FCC rule supported its holding in any case, because it showed that the FCC was concerned only with communications of a commercial nature. Because the fax lacked a “commercial aim” – that is, it was not motivated by “hope to make a profit” – it was not an advertisement under the FCC’s interpretation.

On appeal, the Fourth Circuit, in a 2-1 decision, vacated the district court’s dismissal on the grounds that, under the Hobbs Act, a party aggrieved by FCC rulemaking may challenge the validity of that rulemaking only by filing a petition in a federal appellate court. In other words, district courts are not vested with authority to ignore or invalidate the FCC’s 2006 rule interpreting the term “unsolicited advertisement.” Thus, the district court was wrong to even engage in the first step of the Chevron analysis, as it had no choice but to defer to the FCC’s rulemaking. Furthermore, the Fourth Circuit held that, contrary to the district court’s findings, the FCC’s 2006 rule had interpreted the term “unsolicited advertisement” not to require any commercial aim.

The dissent concluded that the district court did not actually make a finding that the FCC’s 2006 rule conflicted with unambiguous statutory language under step one of Chevron, as evidenced by the fact that the district court applied the statutory language and the 2006 rule together in reaching its conclusions. The dissent would have affirmed the district court’s ruling on the ground that the TCPA’s phrase “unsolicited advertisement” was ambiguous, and that reading the FCC rule as requiring such an “advertisement” to have a commercial aim was a permissible and reasonable construction of the TCPA. This view aligns with holdings of the Second, Sixth, Ninth, and Eleventh Circuit, all of which require that a communication have a commercial nexus to a firm’s business in order to constitute an “advertisement.”

In March, the Supreme Court will consider whether the Hobbs Act required the district court in this case to automatically defer to the FCC’s legal interpretation of “unsolicited advertisement” in the TCPA. Petitioner PDR Network filed its opening brief on January 8, 2019, and the case has caught the attention of amici curiae due to due process concerns regarding the ability of defendants to challenge rules under which they are sued, and disagreement as to whether the Hobbs Act forbids any interpretation of the FCC rule by district courts. Watch this space for further developments.

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Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at lweinstein@proskauer.com /212-969-3240 or akaplan@proskauer.com /212-969-3671.  We are partners in Proskauer’s False Advertising & Trademark practice and editors of Proskauer on Advertising Law, which was recently named to the ABA Journal’s Web 100 for 2018.

Kimberly-Clark Unable to Flush Wet Wipes Case

On December 10, 2018, the Supreme Court denied certiorari in Kimberly-Clark Corp, v. Davidson, No. 18-304 (2018), in which Kimberly-Clark sought to overturn a controversial Ninth Circuit decision allowing a plaintiff in a false advertising case to seek injunctive relief on behalf of an alleged consumer class notwithstanding that plaintiff’s complaint acknowledged she was aware of Kimberly-Clark’s purported false advertising before bringing suit, thus negating any likelihood she would suffer irreparable harm if injunctive relief were not granted.

In 2014, on behalf of a supposed consumer class, plaintiff sued Kimberly-Clark for false advertising under California false advertising and unfair competition statutes. In addition to damages and restitution, plaintiff also sought injunctive relief. Her complaint alleged that Kimberly-Clark’s advertising of its pre-moistened toilet wipes as “flushable” was false and deceptive because that term misleads consumers into the false belief that the wipes disperse and disintegrate within minutes of flushing. Plaintiff claimed she paid a premium to buy Kimberly-Clark’s product as compared to toilet paper or other wipes that do disintegrate quickly, yet unlike those other products, the Kimberly-Clark product did not.

The district court granted Kimberly-Clark’s motion to dismiss on two grounds. First (and most pertinent to the cert. petition), the court held that plaintiff lacked Article III standing to pursue injunctive relief in federal court because when a plaintiff, knowing of the falsity of a defendant’s false advertising, “will no longer purchase the product again, there is no risk of future harm and no basis for injunctive relief.” Second, the court held that the complaint failed to state a claim for relief under Fed. R. Civ. P. 8 and 9(b) because plaintiff failed to allege facts plausibly showing that the “flushable” marketing was false or misleading.

On appeal, the Ninth Circuit reversed, holding that the fact plaintiff knew that a representation was once false doesn’t preclude her from purchasing the product again on the mistaken assumption that the product had been improved, and thus being deceived again. The Ninth Circuit appeared to be concerned about a policy implication flowing from Kimberly-Clark’s argument and the district court’s holding, namely that because the named plaintiff in any consumer false advertising suit has, by definition, already discovered the supposed falsity of the defendant’s advertising, under the district court’s holding, injunctive relief virtually never would be permitted in state law consumer class action suits. The panel’s stated belief that such a result would undercut important consumer protection laws appears to have materially impacted the panel’s decision.

Kimberly-Clark petitioned unsuccessfully for rehearing, but in denying the petition, the Ninth Circuit panel amended its initial decision, acknowledging for the first time that its holding that plaintiff had Article III standing to seek injunctive relief was contrary to the holdings of all other federal appellate courts to have considered this issue. Nonetheless, the panel remained steadfast, holding that “[k]nowledge that the advertisement or label was false in the past does not equate to knowledge that it will remain false in the future ,” and that in all events, “there is no reason prospective injury [sufficient for an entitlement to injunctive relief] must always be premised on a realistic threat of a similar injury occurring” (emphasis added).

In its cert. petition, Kimberly-Clark noted the stark circuit split, and argued that the Ninth Circuit’s ruling conflicted with the Supreme Court’s holding precedent that under Article III, only a “real and immediate threat” of repeated injury suffices for a plaintiff to have standing to seek injunctive relief. In addition, Kimberly-Clark persuasively disposed of the Ninth Circuit’s concern that the district court’s denial of standing to seek injunctive relief might “undermine California’s consumer protection statutes,” arguing that state laws, or a federal court’s inclination to avoid undercutting them, cannot expand federal constitutional limits on a plaintiff’s ability to seek injunctive relief.

One might have supposed that a Supreme Court that has often been wary of class action litigation would have resolved this circuit split this term. Instead, the split will continue for the foreseeable future, and leave California class action defendants at risk of potentially draconian injunctions in consumer class action deceptive advertising suits that they would not face in other federal jurisdictions.

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Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at lweinstein@proskauer.com /212-969-3240 or akaplan@proskauer.com /212-969-3671.  We are partners in Proskauer’s False Advertising & Trademark practice and editors of Proskauer on Advertising Law, which was recently named to the ABA Journal’s Web 100 for 2018.

Failure to Disclose Claims Washed Away in Facial Scrub Case

On December 17, 2018, Judge Andrew J. Guilford in the U.S. District Court for the Central District of California granted defendant Unilever’s motion for summary judgment, dismissing all claims in a putative class action concerning St. Ives Apricot Scrub. Browning v. Unilever United States, Inc., 2018 WL 6615064 (C.D. Cal. Dec. 17, 2018).

Plaintiffs alleged in their complaint that the walnut shell powder used as an exfoliant in St. Ives Apricot Scrub caused “micro-tears” in the skin and sped up the aging process, leading to wrinkles, inflammation, and loss of moisture. According to the complaint, while injury to the skin “may not be noticeable to the naked eye . . . it nonetheless leads to acne, infections and wrinkles.” On this basis, Plaintiffs brought claims for unfair and deceptive acts and practices under both California and New York law, violation of California’s Unfair Competition Law, false advertising under New York law, fraud, and breach of the implied warranty of merchantability

In granting defendant Unilever’s motion for summary judgment, the court noted that Plaintiffs’ claims were omission-based and, to be actionable, Unilever must have failed to disclose a fact that it was obligated to disclose. Plaintiffs argued that manufacturers of consumer products are required to disclose information related to the safety of their products, and the alleged negative side effects at issue made this product unsafe. However, in reviewing the declaration of Plaintiffs’ expert dermatologist, the court noted that on its face Plaintiffs’ expert merely said that he “wouldn’t advise using the [s]crub,” not that the product caused skin damage. In addition, the court criticized the expert’s study investigating the effects of the scrub because this study included only fifteen participants and lasted only two weeks – hardly long enough to show long-term effects. The court also pointed out that Plaintiffs had not provided any causal link demonstrating that it was the scrub, and not a host of other potential lifestyle or environmental factors, that caused the alleged skin damage. The court therefore concluded that Plaintiffs failed to provide sufficient evidence to show that the product posed a safety hazard that Unilever was required to disclose.

Plaintiffs also argued that even absent a finding that the scrub was unsafe, Unilever still had a duty to disclose defects going to the “central function of the product.” On this point, the court noted that even if the existence of an undisclosed defect that undermines the central function of a product were sufficient for a plaintiff to prevail on an omission-based claim—a question the court did not reach—Plaintiffs in this case made no showing that micro-tears in the skin resulting from product use would undermine this product’s central function. In particular, the court noted that St. Ives Apricot Scrub “is an exfoliant and like all such products is necessarily abrasive.” Thus, the court found that Unilever had no duty to disclose, and dismissed the omission-based claims.

The court also dismissed Plaintiffs’ challenge to defendant’s “Dermatologist Tested” claim on its product label. Plaintiffs did not allege that this claim was a misrepresentation in and of itself, but rather that the use of this phrase, while failing to disclose that the scrub was harmful to the skin, was misleading to consumers. But the court held that since it had already found that Unilever had no duty to disclose the skin damage Plaintiffs alleged was caused by the product, “this entire theory of liability falls flat.”

On a separate note, we were pleased to learn recently that the ABA Journal has named our blog to its Web 100 for 2018. The Web 100 comprises 35 law blogs and 65 “web tools” of other types.  Our blog was selected as one of the 35 top law blogs of 2018 by ABA Journal readers, staffers and an expert panel of lawyers.  At the beginning of this new year, we want to thank our readers for following us, and encourage you to reach out to us with comments, questions and suggestions.

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Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at lweinstein@proskauer.com /212-969-3240 or akaplan@proskauer.com /212-969-3671.  We are editors of Proskauer on Advertising Law and partners in Proskauer’s False Advertising & Trademark practice.

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