Sneed v. The Procter & Gamble Company

Background

The plaintiffs, Stephen Sneed and Nickolas Cannon, brought a putative class action against The Procter & Gamble Company concerning several ZzzQuil “Nighttime Sleep Aid” products containing diphenhydramine hydrochloride. They alleged that P&G falsely or misleadingly advertised, labeled, and packaged the products as “Non-Habit Forming,” even though diphenhydramine can allegedly lead consumers to use the products frequently over a prolonged period.

The second amended complaint asserted claims under California’s Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act; a breach-of-express-warranty claim; a breach-of-implied-warranty-of-merchantability claim; and an unjust-enrichment claim. The court had jurisdiction under 28 U.S.C. § 1332(d). P&G moved to dismiss the second amended complaint under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint plausibly states a legally recognized claim.

Judicial Notice and Incorporation by Reference

P&G asked the court to consider three FDA documents and seventeen scientific sources cited in the complaint. The court granted the requests concerning the FDA documents, but only to recognize their existence, the FDA approvals and labels described in two documents, and the existence of the FDA webpage—not the truth of the conclusions stated in those materials.

The court also found that the scientific sources had been incorporated by reference because the plaintiffs repeatedly cited them, did not dispute their authenticity, and relied on them to support the allegation that diphenhydramine can be habit forming. The court recognized the sources’ existence but declined to consider their merits beyond their general conclusions in a way that would resolve factual disputes against the complaint.

Preemption

P&G argued that 21 U.S.C. § 379r expressly preempted the plaintiffs’ state-law claims because the FDA had approved “Non-Habit Forming” labels for other diphenhydramine products and had published information stating that over-the-counter sleep aids are non-habit forming.

The court declined to find preemption. It explained that federal law preempts state requirements that would require information on a federally approved label that is different from or additional to federal requirements. The court concluded that the cough medicines cited by P&G were not materially identical to ZzzQuil because they involved different products, intended uses, and dosing characteristics. The court also found that the cited FDA materials did not establish a federally approved ZzzQuil label concerning the challenged representation. It further concluded that the FDA’s 2007 consumer-information booklet was informational and did not have the force of law for the preemption analysis.

California Advertising and Consumer Claims

For the claims under California’s Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act, the plaintiffs needed to allege facts showing that P&G made statements likely to deceive a reasonable consumer. The court noted that dismissal at this stage is appropriate only when the alleged facts make it impossible for the plaintiff to prove likely deception.

The court had previously found that the first amended complaint did not cite enough material to show that ZzzQuil or diphenhydramine could cause habit formation with prolonged use. The second amended complaint cited additional materials, including a declaration stating that regular diphenhydramine use can be habit forming and can produce dependency and withdrawal symptoms; studies concerning dopamine transmission, tolerance, and diphenhydramine exposures; and other scientific sources.

The court found that these materials sufficiently supported the plaintiffs’ allegations that diphenhydramine can lead to habit formation over time, including with directed use. Although P&G challenged the sources’ methods, limitations, and comparability, the court held that those challenges should not be resolved against the plaintiffs on a motion to dismiss. The court therefore found that the plaintiffs sufficiently stated claims under the Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act.

Warranty Claims

P&G argued that the express-warranty claim should be dismissed because the plaintiffs allegedly sought the entire purchase price rather than the difference between the product’s value as warranted and its value as sold. The court rejected that argument at this stage. It read the complaint as alleging that the plaintiffs paid a price premium for the products, rather than necessarily seeking recovery of the entire amount paid.

The court also declined to dismiss the implied-warranty-of-merchantability claim. It found that the plaintiffs had separately alleged that the products failed to conform to promises or factual statements on their packaging and labels. The claim was not based on whether ZzzQuil was fit for its ordinary purpose. The court also found that the plaintiffs had identified an exception to California’s usual requirement of contractual privity because their claim was based on the manufacturer’s written labels and advertisements.

Unjust Enrichment

P&G argued that the express-warranty claim barred the unjust-enrichment claim because an express agreement governed the sale of ZzzQuil. The court concluded that the plaintiffs’ express-warranty claim was based on the products’ labeling and advertising, not on an express contract that defined the parties’ rights. It therefore found no express agreement barring the unjust-enrichment claim and declined to dismiss it.

Disposition

The court denied The Procter & Gamble Company’s motion to dismiss the second amended complaint. The order did not decide whether P&G was ultimately liable or whether the plaintiffs would prevail; it held that the pleaded claims could proceed beyond the dismissal stage. Jon S. Tigar signed the order as United States District Judge.