Prescott v. Bayer HealthCare Pharmaceuticals Inc.

Background

Steven Prescott and Mike Xavier filed a putative class action against Bayer HealthCare LLC and Beiersdorf, Inc. They challenged four sunscreen products whose labels described them as “mineral-based.” According to the complaint, each product contained both mineral active ingredients, such as zinc oxide or titanium dioxide, and chemical active ingredients, such as octisalate or octocrylene. Prescott and Xavier alleged that they sought mineral-based sunscreens because of concerns about possible adverse health effects from chemical ingredients, and that they would not have bought the products had they known they contained chemical ingredients.

The first amended complaint asserted five claims: unlawful and unfair business practices under California law; deceptive advertising practices under California law; violation of the California Consumers Legal Remedies Act; breach of express warranty; and unjust enrichment. Defendants moved to dismiss the complaint and to strike the nationwide class allegations.

Federal Preemption

Defendants argued that the federal Food, Drug, and Cosmetic Act preempted the plaintiffs’ state-law claims. The court rejected that argument. The federal sunscreen regulations require certain labeling, including the product’s sunscreen designation, sun protection factor, uses, warnings, and directions, and prohibit false or misleading claims. But the regulations do not require or prohibit the phrase “mineral-based.” The court concluded that the plaintiffs’ claims did not seek labeling requirements different from or additional to federal requirements and therefore were not expressly preempted. The court denied the motion to dismiss on preemption grounds.

Primary Jurisdiction

Defendants also asked the court to dismiss or pause the case under the primary-jurisdiction doctrine. That doctrine allows a court to defer an otherwise proper lawsuit when technical or policy questions should first be addressed by an agency with relevant regulatory authority.

The court found that the case concerned whether the “mineral-based” description was misleading, an issue courts commonly decide. It did not require the court to determine whether the ingredients were safe or harmful, or to resolve whether particular ingredients were minerals or chemicals. The court also found that waiting for proposed or pending Food and Drug Administration action would be inefficient and could delay the case for more than a year. It denied the motion to dismiss on primary-jurisdiction grounds.

Standing

Defendants argued that Prescott and Xavier lacked standing to challenge two products they had not purchased. The court adopted the prevailing view in the district that a consumer may assert claims involving unpurchased products when the products and alleged misrepresentations are substantially similar. All four products were sunscreens using variations of the “mineral-based” description despite containing some chemical active ingredients. The court concluded that the alleged misleading effect was substantially the same across the products and denied the motion to dismiss claims concerning the Water Babies Lotion or Stick for lack of standing.

Defendants separately argued that the plaintiffs lacked standing to seek injunctive relief. The court found their allegation that they intended to buy defendants’ products in the future if the labels became accurate was sparse but plausible. The plaintiffs could encounter the products again and mistakenly rely on the “mineral-based” label, even though they knew the prior formulation. The court therefore denied the motion to dismiss for lack of standing to pursue injunctive relief.

Whether “Mineral-Based” Was Misleading

Defendants argued that the plaintiffs had not plausibly alleged that a reasonable consumer would find “mineral-based” false or misleading. The court explained that the plaintiffs’ five claims all depended on that allegation. At the motion-to-dismiss stage, the court had to accept the plaintiffs’ factual allegations as true and could not resolve the parties’ competing interpretations of the phrase without evidence.

The plaintiffs alleged that reasonable consumers would understand “mineral-based” to mean that a product contained no chemical active ingredients, or at least that minerals made up a substantial majority of its active ingredients. The court found that interpretation plausible because chemical active ingredients made up roughly the same proportion as, and in some products a greater proportion than, mineral active ingredients. The court also rejected the argument that the detailed ingredients list on the back of the products necessarily cured any misleading front-label statement. It denied defendants’ motion to dismiss the first through fifth claims for failure to allege deception.

Consumer Legal Remedies Act Notice

Defendants argued in the alternative that the California Consumers Legal Remedies Act claim should be dismissed because the plaintiffs had not provided adequate notice. The court agreed that two earlier letters were insufficient: one was sent on behalf of a person who was not a named plaintiff and was addressed to entities that were no longer defendants, while another was not addressed to Bayer HealthCare LLC.

The court nevertheless concluded that the plaintiffs’ amendment of the complaint cured the notice defects. The original complaint notified both defendants of the alleged violations, and the first amended complaint was filed more than 30 days after the original complaint. The court therefore denied the motion to dismiss the Consumers Legal Remedies Act claim for lack of notice.

Class Allegations and Disposition

Defendants moved to strike the nationwide class allegations, arguing that class members’ claims would be governed by different state laws and that the plaintiffs lacked standing to represent people outside California. The court did not decide that motion. It deferred the decision until the class-certification stage.

The court denied defendants’ motion to dismiss. The opinion separately deferred the motion to strike the class allegations until class certification.