Gonzalez v. Chattem, Inc.

Background

Mark Gonzalez and Donnie Wesley Sr. filed a putative class action against Chattem, Inc. They alleged that Chattem’s manufacture, marketing, advertising, and sale of Unisom Simple Slumbers gummies were misleading. The challenged front-label phrase was “GET A GOOD NIGHT’S SLEEP, NATURALLY.” The plaintiffs alleged that reasonable consumers could understand “naturally” to mean that the product contained no synthetic or artificial ingredients, or that the listed ingredients—including melatonin and vitamin B6—were natural.

The plaintiffs brought claims under California’s Consumers Legal Remedies Act, False Advertising Law, and Unfair Competition Law. Sanofi-Aventis US LLC and Sanofi US Services Inc., originally named as defendants, were voluntarily dismissed before the amended complaint was filed.

Judicial Notice

The court granted Chattem’s request for judicial notice to the extent the submitted documents indisputably portrayed the product labels at issue. The plaintiffs did not oppose the request. The court considered the labels because the plaintiffs referred to them and because the labels formed the basis of the claims.

Wesley’s Standing

Chattem made a factual challenge under Federal Rule of Civil Procedure 12(b)(1), which permits dismissal for lack of subject-matter jurisdiction. Chattem argued that Wesley could not have purchased the product as alleged because the complaint placed his purchases in late 2019 and around the middle of 2020, while Chattem’s records indicated that the product was not shipped to a U.S. retailer until 2021.

Wesley submitted a declaration stating that the purchase dates in the complaint were inadvertently incorrect and that he bought the product during the COVID-19 pandemic in or after 2021. The court found that this declaration did not rebut the challenge to the allegations in the operative complaint. It therefore granted Chattem’s motion to dismiss Wesley for lack of standing, but permitted the plaintiffs one final opportunity to amend the complaint to address the jurisdictional defects.

Labeling Claims

The court held that Gonzalez had standing and considered Chattem’s arguments concerning the substantive labeling claims. Under the “reasonable consumer test,” the plaintiffs had to plausibly allege that members of the public were likely to be deceived by the challenged representation.

The court found that the phrase “naturally” was ambiguous. A reasonable consumer might understand it to suggest that the product’s ingredients were natural, while another consumer might understand it to describe how the product worked without suggesting anything about the ingredients. The court also considered the product’s disclosures of melatonin, vitamin B6, and other ingredients. It concluded that, at the motion-to-dismiss stage, it could not decide as a matter of law whether reasonable consumers would understand those disclosures to reveal that the ingredients were synthetic.

The court found that the plaintiffs had done enough to allow their Consumers Legal Remedies Act, False Advertising Law, and Unfair Competition Law claims to survive the motion to dismiss. Whether consumers could actually be misled by the complete packaging was left for a later stage of the litigation.

Standing for Injunctive Relief

The court granted Chattem’s motion to dismiss the claims for injunctive relief because the plaintiffs did not plausibly allege a real and immediate risk of being deceived again. The court accepted that the plaintiffs wanted to buy the product as they understood it to be advertised, but found that the product’s front label itself disclosed ingredients that the plaintiffs now understood to be non-natural. Because consumers could use that information to determine whether the product had changed, the court found no sufficient risk of future deception.

The dismissal of the requests for injunctive relief was with leave to amend.

Restitution and Disgorgement

The court also ruled that the plaintiffs had not alleged that damages were an inadequate remedy for their past losses. It therefore found that it lacked equitable jurisdiction over their requests for restitution and disgorgement under the False Advertising Law and Unfair Competition Law.

The court granted Chattem’s motion and dismissed those requests without leave to amend and without prejudice to refiling in state court. The requests for injunctive relief under those laws were dismissed with leave to amend.

Disposition

The court granted in part and denied in part Chattem’s motion to dismiss. It granted Chattem’s request for judicial notice. Any amended complaint was due by December 21, 2023, and the court set a telephonic case-management conference for January 16, 2024.