McWhorter v. The Procter & Gamble Company

Background

The plaintiffs challenged advertising on certain Pantene and Herbal Essences shampoos and conditioners. The products’ front labels stated percentages such as “90% Natural Origin” or “96% Naturally Derived Ingredients.” The back labels explained that the statements referred to natural-source ingredients with limited processing and purified water, and that after processing those ingredients maintained at least 50% of their natural-origin material.

Loraine McWhorter and Sameer Sharma alleged that, apart from water, natural oils, and natural fragrances, the products contained no natural-source ingredients or ingredients made or derived using limited processing. They alleged that the labels could mislead consumers about the number or composition of natural ingredients, whether ingredients were extracted directly from plants, and whether industrial chemical modifications were excluded. They asserted claims under California’s Consumers Legal Remedies Act, Unfair Competition Law, and False Advertising Law, as well as claims for common-law fraud, deceit or misrepresentation, and negligent misrepresentation. The plaintiffs sought to represent a California class.

Motion to dismiss

Procter & Gamble moved under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim, and also challenged standing. Because the court found the claims legally insufficient, it did not reach the standing arguments concerning products the plaintiffs did not purchase or their request for equitable relief.

Judicial estoppel

The plaintiffs argued that Procter & Gamble should be barred from taking positions inconsistent with positions it allegedly took in an earlier product-labeling case. The court rejected that argument. It found that Procter & Gamble’s earlier appellate arguments did not amount to a factual concession with preclusive effect. The court also explained that, even if Procter & Gamble had previously described certain ingredients as synthetic, that position was not clearly inconsistent with arguing that the ingredients could still be “naturally derived” or of “natural origin” under the definitions on the products’ back labels.

Reasonable-consumer claims

The court held that the plaintiffs’ California consumer-protection claims failed the reasonable-consumer test as a matter of law. Under that test, the alleged advertising must be likely to mislead a significant portion of consumers acting reasonably in the circumstances.

The court found the front-label statements ambiguous because they used the qualified terms “naturally derived” and “natural origin,” stated a percentage below 100 percent, and included asterisks connecting the statements to explanations elsewhere on the labels. In the court’s view, a reasonable consumer would need additional information to understand the claims and therefore would consult the back labels. Those labels sufficiently explained what Procter & Gamble meant by the percentage statements.

The court distinguished cases involving “100% natural” or “all natural” claims. It concluded that the plaintiffs could not treat “naturally derived” and “natural origin” as identical to “natural” while ignoring the labels’ qualifying language and definitions. The court therefore found that the plaintiffs’ proposed interpretations—based on weight, volume, the number of ingredients, plant extraction, or exclusion of industrial chemical modifications—did not make the labels false or misleading.

Omission theory

The court also rejected the plaintiffs’ alternative theory that Procter & Gamble omitted material information. Under California law, an actionable omission must contradict a representation actually made or involve a fact the defendant had a duty to disclose. The court found that the plaintiffs alleged no facts establishing such a duty. It further found that they did not identify an actionable omission involving the details of how Procter & Gamble calculated the stated proportions or characterized particular ingredients.

Negligent misrepresentation

The court dismissed the negligent-misrepresentation claim under California’s economic-loss rule. That rule generally bars recovery in negligence for purely financial harm unaccompanied by physical or property damage, particularly when the alleged loss arises from disappointed contractual expectations. The court found that the plaintiffs had not identified an independent basis for damages beyond their economic loss.

Fraud

The court dismissed the fraud claim because the plaintiffs did not adequately allege that Procter & Gamble knowingly made a false representation. The plaintiffs relied partly on Procter & Gamble’s use of the ISO 16128 standard and the standard’s statement that it did not address product communication or labeling. The court held that this did not adequately establish that Procter & Gamble knowingly misrepresented the product labels or that the labels were false.

Leave to amend and disposition

The court denied leave to amend because it found that amendment would be futile. At the hearing, the plaintiffs’ counsel had stated that no additional facts would support the claims if the court determined that the plain language of the labels would not plausibly deceive a reasonable consumer. The court concluded that none of the theories could be saved by adding factual allegations.

The court granted Procter & Gamble’s motion to dismiss for failure to state a claim. It dismissed the plaintiffs’ claims with prejudice and denied leave to amend.