Steiner v. Vi-Jon Inc

Background

Danielle Steiner and Amnery Castaneda purchased Vi-Jon’s “Germ-X moisturizing original hand sanitizer” in Orange County. The opinion identifies the defendant as Vi-Jon, LLC, incorrectly sued as Vi-Jon, Inc.; it says Vi-Jon manufactures and distributes the product throughout the United States.

Plaintiffs alleged that Vi-Jon misrepresented the product as hand sanitizer, overstated its alcohol content, and deceptively advertised that it “Kills 99.99% of germs” and “Kills germs in 15 seconds.” They alleged that testing showed an alcohol concentration below the advertised “62% ethyl alcohol.” They asserted common-law fraud, intentional and negligent misrepresentation, unjust enrichment, violations of California’s Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law, and breach of express warranty. They sought damages, restitution, and injunctive relief for themselves and a proposed class of California purchasers.

Judicial Notice

The court granted Vi-Jon’s request for judicial notice of the product label and an FDA warning letter concerning another manufacturer’s Purell product. The court found that both documents were incorporated into the complaint by reference.

Rule 12(b)(6) Standard

The court applied Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. It also applied Rule 9(b)’s heightened pleading requirement to claims based on fraud. Under that rule, a plaintiff must describe the alleged fraud with particularity, including who made the statement, what was said, when and where it was said, how it was misleading, and why it was false.

Analysis

Alcohol-content allegations. The court denied the motion to dismiss on the ground that the alcohol-testing allegations lacked sufficient detail. Plaintiffs alleged that they had tested the product using nuclear magnetic resonance and gas chromatography, which the opinion describes as industry testing techniques. The court held that, at the pleading stage, plaintiffs did not need to disclose all testing data or technical details about how they investigated the alleged falsity. Their allegations gave Vi-Jon enough notice of the alleged misconduct to defend against it.

“Kills germs” allegations. The court held that plaintiffs did not adequately plead that the statements “Kills 99.99% of germs” and “Kills germs in 15 seconds” were false or misleading. Plaintiffs did not identify a single germ the product allegedly failed to kill, provide context for the 15-second allegation, or allege that the tested alcohol concentrations failed to kill 99.99% of germs commonly found on their hands. The court also considered the asterisk and qualifying language on the label—“Effective at eliminating 99.99% of many common harmful germs and bacteria in as little as 15 seconds”—and concluded that the label had to be read as a whole. The court stated that these allegations could not support plaintiffs’ claims under California’s reasonable-consumer test.

The court distinguished the FDA warning letter about Gojo’s pathogen-specific claims because the statements at issue in this case were not pathogen-specific, were not addressed in that warning letter, and had not been the subject of FDA enforcement action against Vi-Jon.

California consumer-protection claims. The court explained that claims under California’s Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law are generally evaluated under the reasonable-consumer test: the plaintiff must allege that a significant portion of reasonable consumers could be misled. The court found that the allegations concerning the advertised alcohol content were adequately pleaded, but that the “kills germs” allegations were not.

The court also held that the missing venue affidavit required by California Civil Code section 1780(d) had to be corrected. The statute requires the affidavit to be filed with the complaint and provides that a complaint filed without it “shall” be dismissed without prejudice. The court granted Vi-Jon’s motion to dismiss the entire complaint with leave to amend on that ground. The conclusion, however, specifically states that Castaneda’s Consumer Legal Remedies Act claim was dismissed with leave to amend and that Castaneda had to clarify that the notice defects were cured.

The court separately noted that Castaneda had not alleged that she gave the required pre-suit demand for damages under the Consumer Legal Remedies Act. The opinion says that defect also had to be cured in any amended complaint filed by Castaneda.

Express warranty. The court denied the motion to dismiss Steiner’s express-warranty claim. It accepted, for pleading purposes, the allegations that Vi-Jon’s label statements were promises or descriptions, formed part of the basis of the bargain, and were breached because the product’s alcohol content was lower than stated.

The court dismissed Castaneda’s express-warranty claim because she did not allege that she gave Vi-Jon notice of the breach within a reasonable time, and she did not respond to Vi-Jon’s argument that she failed to provide notice required by California Commercial Code section 2-607(3). The dismissal was with leave to amend according to the order’s conclusion.

Equitable relief. Vi-Jon argued that plaintiffs could not pursue restitution under the Unfair Competition Law, False Advertising Law, and unjust-enrichment theories because they also sought damages and therefore had an adequate legal remedy. The court denied the motion on this basis. It held that plaintiffs could pursue equitable theories as alternative remedies at the pleading stage, particularly because the opinion found no material distinction at that stage between monetary damages and restitution.

Negligent misrepresentation. The court rejected Vi-Jon’s argument that the economic-loss rule barred the negligent-misrepresentation claim. It concluded that the claim arose from allegedly false advertising representations and therefore sounded in fraud rather than merely paralleling a contractual loss. The claim did not need to be dismissed as pleaded.

Disposition

The court granted Vi-Jon’s motion to dismiss under California Civil Code section 1780(d). It stated in the conclusion that Castaneda’s Consumer Legal Remedies Act and express-warranty claims were dismissed with leave to amend, and that any amended complaint had to be filed within 30 days. It also stated that no additional parties or claims could be added without the court’s permission or Vi-Jon’s stipulation. The opinion’s statement that the entire complaint was dismissed with leave to amend is not fully reconciled with its more specific rulings allowing certain theories and Steiner’s express-warranty claim to proceed at the pleading stage.