Brown v. Madison Reed, Inc.

Background

Molly Brown and Audrey Sheffler brought a proposed class action against Madison Reed, Inc. They alleged that Madison Reed violated California’s Consumers Legal Remedies Act, False Advertising Law, and Unfair Competition Law by advertising its hair-color products as “free of” ammonia, resorcinol, and PPD and as gentler, safer, or healthier than traditional hair-color products. They alleged that Madison Reed replaced those ingredients with ethanolamine, 2-methylresorcinol, and PTDS, which they said were no better for health.

Brown purchased Madison Reed products between early 2016 and 2019 and alleged that she relied on statements on the company’s website and product packaging. She alleged that her hair became brittle and that she experienced some hair loss, which stopped after she stopped using the products. Sheffler purchased two products around February 2021 after viewing a Madison Reed commercial and website materials. She alleged scalp irritation lasting about two months and hair loss, after which her hair began to grow back.

Choice of Law for Sheffler’s Claims

The court applied California’s governmental-interest test rather than the choice-of-law provision in Madison Reed’s Terms of Service. It reasoned that Sheffler’s claims arose from alleged advertising misrepresentations and omissions, not from the Terms of Service themselves. The court determined that Ohio law governed because Sheffler viewed the advertising and bought the products in Ohio. Ohio’s interest in regulating transactions involving its citizens outweighed California’s interest in applying its consumer-protection laws to a non-California resident’s transaction.

The court also identified differences between the California laws and Ohio’s Deceptive Trade Practices Act and Consumer Sales Practices Act. Among other differences, the court explained that consumers generally cannot bring claims under the Ohio Deceptive Trade Practices Act and that Ohio class-action claims under the Consumer Sales Practices Act have a notice requirement.

Statute of Limitations for Brown’s Claims

The court concluded that Brown’s purchase in early 2016 was outside the applicable three-year limitations periods for the Consumers Legal Remedies Act and False Advertising Law and the four-year period for the Unfair Competition Law. Her September 3, 2017 purchase remained actionable under the Unfair Competition Law but not under the other two laws. Her March 10, 2018 purchase remained actionable under all three laws.

The court rejected Brown’s attempt to rely on delayed discovery and fraudulent concealment to extend the filing deadlines. It found that the complaint did not adequately allege when or how she discovered the alleged violation or that she could not have discovered it earlier through reasonable diligence. The court therefore did not consider the early-2016 purchase or the statements associated with it when evaluating the claims.

Sufficiency of the Claims

The court applied the reasonable-consumer test, which asks whether a significant portion of reasonable consumers could be misled. It also applied the heightened pleading standard for fraud-based claims under Federal Rule of Civil Procedure 9(b), requiring the plaintiffs to identify the particular circumstances of the alleged deception, including what was said, when it was said, and why it was false or misleading.

For Brown, the court treated “Salon Gorgeous,” “Ingredients with Integrity,” and “Salon-quality” as nonactionable puffery—vague and subjective advertising statements that reasonable consumers would understand as slogans rather than factual claims. The court found that the statements that the products were “free of” ammonia, resorcinol, and PPD, and “Ammonia Free,” were factually true. It further found that those statements did not claim that the products were healthier, safer, or gentler, so Brown had not plausibly alleged that they misled reasonable consumers.

For Sheffler, the court found that she had not identified the specific statements she relied on when purchasing the products. Instead, she referred generally to a commercial and webpages containing multiple statements, some of which were puffery or irrelevant to her claims. The court also found that the product packaging accurately stated that the products were free of ammonia, resorcinol, and PPD.

The court separately considered the alleged omission of the replacement chemicals. It found that the plaintiffs plausibly alleged that the replacement chemicals could pose a safety hazard, which could create a duty to disclose. But Madison Reed had disclosed the replacement chemicals on the product ingredient list and website. The court therefore concluded that neither plaintiff plausibly pleaded a claim based on a misrepresentation or omission.

Disposition

The court denied leave to amend. It stated that Brown had made a third attempt to plead plausible claims and that the repeated deficiencies persisted. As to Sheffler, the court concluded that Ohio law barred her claims as a matter of law and that adding other facts could not cure them.

The court granted Madison Reed’s motion to dismiss the second amended complaint with prejudice and dismissed the claims with prejudice.