Esquibel v. Colgate-Palmolive Co.

Background

Abigail Esquibel, Tammy Searle, Jeremy Wahl, Aimen Halim, Nicholas Salerno, and Jason Zirpoli brought a proposed class action against Colgate-Palmolive Co. and Tom’s of Maine, Inc. The plaintiffs alleged that Tom’s Wicked Fresh! Mouthwash contained per- and polyfluoroalkyl substances, or PFAS, despite being marketed as “natural” and as the “#1 Natural Mouthwash Brand.” They asserted claims under California’s False Advertising Law, Unfair Competition Law, and Consumer Legal Remedies Act; the Illinois Consumer Fraud and Deceptive Business Practices Act; fraud; constructive fraud; and unjust enrichment.

The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction, Rule 12(b)(6) for failure to state a claim, Rule 9(b) for failure to plead fraud with particularity, and the primary-jurisdiction doctrine. The court had previously dismissed the plaintiffs’ first amended complaint because the plaintiffs had not sufficiently connected PFAS testing of one bottle to products purchased by the named plaintiffs.

Standing

The court held that Esquibel, Halim, and Zirpoli adequately alleged an injury for purposes of Article III standing. Each alleged that testing of a bottle that the plaintiff purchased detected PFAS. The court rejected the defendants’ fact-based challenge because the defendants’ arguments disputed the accuracy or interpretation of the test results but did not contradict the plaintiffs’ allegations at the pleading stage.

The court held that Searle, Wahl, and Salerno lacked standing. The bottles they purchased had not been tested, and the complaint did not provide enough facts to infer that testing four other bottles showed contamination throughout the product line. The court emphasized the different stores and geographic locations, the different purchase dates, the small number of tested samples, the absence of allegations that the plaintiffs regularly purchased the product, and Salerno’s online purchase.

The court also held that none of the plaintiffs had standing to seek injunctive relief. Although the plaintiffs alleged that they would buy the product again if its alleged problems were corrected, the court found that they had not shown a real and immediate threat of future injury.

Pleading of the Claims

The court found that the plaintiffs met Rule 9(b)’s heightened pleading requirement for fraud-based claims. They identified the “natural” representation, alleged that they relied on it, and alleged facts suggesting that the defendants knew consumers were willing to pay more for natural products and had a motive and opportunity to mislead consumers.

The court denied dismissal of the California False Advertising Law claim because the plaintiffs alleged that reasonable consumers could be deceived by the product’s use of the word “natural.” It also denied dismissal of the California Consumer Legal Remedies Act claim. The plaintiffs adequately pleaded California Unfair Competition Law claims based on alleged violations of the California statutes, the California Sherman Food, Drug, and Cosmetic Law, and allegedly unfair or fraudulent business practices. The court rejected only the portion of the Unfair Competition Law claim based solely on the federal Food, Drug, and Cosmetic Act, because that federal law does not provide a private right of action and the court found that portion preempted.

The court found the Illinois consumer-fraud claim adequately pleaded. It also found that the plaintiffs adequately stated common-law fraud claims under New York, California, and Illinois law, and adequately pleaded California and Illinois unjust-enrichment claims.

The court dismissed the constructive-fraud claim because the plaintiffs did not allege a fiduciary or confidential relationship with the defendants. It dismissed the New York unjust-enrichment claim because the plaintiffs did not explain how that claim was not duplicative of their other claims under New York law.

Other Rulings

The court declined to dismiss the case under the primary-jurisdiction doctrine. It found that the central question was whether the “natural” label was misleading, rather than what level of PFAS is safe in cosmetics, and concluded that the labeling question was within the court’s traditional role. The court also declined to dismiss the claims against Colgate-Palmolive Co. at the pleading stage. The plaintiffs alleged that Colgate had pervasive control over Tom’s products, knew consumers would pay more for natural products, and had acquired Tom’s in part for reasons connected to marketing products as natural.

Disposition

The court granted the defendants’ motion to dismiss the Second Amended Complaint in part and denied it in part. Under Rule 12(b)(1), it granted the motion as to all claims asserted by Salerno, Wahl, and Searle, and as to the claims for injunctive relief asserted by Esquibel, Halim, and Zirpoli. Under Rule 12(b)(6), it dismissed the constructive-fraud claim and the New York unjust-enrichment claim asserted by Esquibel, Halim, and Zirpoli. The plaintiffs may move to amend those latter claims within 21 days. If they do not move to amend within that period, the constructive-fraud and New York unjust-enrichment claims will be dismissed with prejudice and without further notice. The motion was denied as to all other claims asserted by Zirpoli, Esquibel, and Halim.