White v. The Kroger Co.

Background

Phillip White filed this proposed class action against The Kroger Co. and other defendants. The complaint alleges that sunscreen products produced by Fruit of the Earth and sold by Kroger under its house brand were misleadingly labeled “reef friendly,” although they contained ingredients with the potential to damage reefs.

White asserted claims under California’s Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act. He also asserted claims for breach of implied warranty and unjust enrichment. Kroger moved to dismiss the operative First Amended Complaint in its entirety under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states legally sufficient claims.

Court’s reasoning

The court held that the complaint could not be dismissed on the ground that “reef friendly” was mere puffery. Claims under the California consumer-protection laws use a reasonable-consumer standard: the alleged statement must be likely to deceive a significant portion of reasonable consumers. The court explained that whether consumers could understand “reef friendly” as meaning that a sunscreen product would not damage reefs was not suitable for resolution against White at the pleading stage. Although some uses of “friendly” may be too vague to support a claim, the court found that Kroger had not shown that this use was necessarily too generalized or subjective.

The court also relied on federal guidance and California law concerning environmental marketing claims. It noted that the Federal Trade Commission’s environmental-marketing guides recognize that unqualified general environmental claims may convey that a product has specific environmental benefits or no negative environmental impact. The court further noted that California law covers “any other like term” in addition to listed phrases such as “environmentally friendly” and “earth friendly.” These authorities undermined Kroger’s argument that “reef friendly” was necessarily nonactionable, even though they did not themselves create a private cause of action.

The court rejected Kroger’s primary-jurisdiction argument. That doctrine can allow an agency to address an issue before a court proceeds when Congress has assigned the issue to an agency with comprehensive regulatory authority and the issue requires agency expertise or uniform administration. The court found that possible future federal legislation and possible future Food and Drug Administration regulations were too remote to justify staying or dismissing the case, and that evaluating the alleged misrepresentation under existing law was within the court’s expertise.

The court also found the fraud-related allegations sufficiently specific under Rule 9(b). The complaint identified what representation was allegedly misleading, where and how defendants made it, and why White claimed it was misleading. The court stated that White was not required at the pleading stage to prove his claims through the studies cited in the complaint.

Regarding the implied-warranty claim, the court explained that merchantability includes a promise that goods conform to promises or factual affirmations on their container or label. The court found White’s allegation that the products did not conform to the “reef friendly” label sufficient to plead breach of that implied promise.

The court deferred Kroger’s challenges concerning White’s standing to contest specific sunscreen products he did not purchase and his ability to represent a nationwide class. It stated that those issues were better addressed at the class-certification stage, although they can sometimes be resolved at the pleading stage. Finally, the court allowed the unjust-enrichment claim to proceed because the underlying claims remained, despite continuing dispute over whether unjust enrichment is an independent claim.

Ruling and effect

The court denied Kroger’s motion to dismiss. The order did not determine the ultimate truth of the alleged labeling statements, whether White will prevail, or whether a class will be certified.