Echeverria-Corzan v. WaterWipes Inc.

Background

The plaintiffs challenge WaterWipes’s labeling of its wipes. They allege that the front label says the product contains only water and a drop of fruit extract, but that the product may also contain trace amounts of benzalkonium chloride (BAC), which they allege is a harmful chemical. They contend that the front-label statement would lead a reasonable consumer to believe that the product contains no chemicals. The opinion also states that both named plaintiffs are California residents who purchased the products in California.

Arguments and analysis

The parties’ briefs focused primarily on whether BAC is an “ingredient” that must be disclosed under applicable federal regulations. The court said that issue might not control at the motion-to-dismiss stage. If the plaintiffs’ theory rested solely on nondisclosure required by federal law, the theory could raise implied preemption, meaning federal law could displace the state-law claim. But the court stated that, regardless of whether BAC qualifies as a federally regulated “ingredient,” it could still be misleading to represent on the front label that the product contains only water and fruit juice when it may contain trace amounts of a chemical alleged to be harmful.

WaterWipes also argued that the plaintiffs had not adequately pleaded their fraud claims. The court found that, although the plaintiffs could have explained their theory more clearly, the complaint sufficiently identified what was misleading about WaterWipes’s statements. The court further stated that a fine-print disclosure on the back label did not necessarily cure a misleading front-label representation.

The court found that the plaintiffs adequately pleaded reliance and economic injury for standing. They alleged that they would not have bought the wipes, or would not have paid the price they paid, without the front-label claims. They also adequately pleaded standing to seek injunctive relief because they alleged that they would like to purchase WaterWipes products in the future but cannot do so unless the labeling changes.

WaterWipes argued that claims for fraud, deceit, and/or misrepresentation, negligent misrepresentation, and unjust enrichment failed because the plaintiffs did not identify the applicable law. The court said there was reason to assume that California common law applies because both named plaintiffs are California residents who purchased the products in California. The court left open the possibility that the parties could raise a different choice-of-law position at summary judgment or class certification, whichever occurs first.

In a footnote, the court addressed the plaintiffs’ claim under California’s Unfair Competition Law. WaterWipes argued that the claim failed because the plaintiffs had not adequately alleged a violation of another law. The court rejected that argument at this stage, concluding that the plaintiffs adequately alleged deception under the Consumer Legal Remedies Act and therefore adequately pleaded the derivative Unfair Competition Law claim.

Disposition

Judge Vince Chhabria denied WaterWipes’s motion to dismiss. The opinion does not resolve the potential preemption issue or decide which law ultimately governs the specified claims; it holds only that the claims were sufficiently pleaded at this stage.