Onaka v. Shiseido Americas Corporation

Background

Daian Onaka, Torshia Woods, Sheli Zeller, Margo Ferguson, and Eva Bailey sued Shiseido Americas Corporation individually and on behalf of proposed nationwide and state classes. They alleged that Shiseido’s bareMinerals products were advertised as “clean,” “natural,” “pure,” and free of harsh chemicals, but contained per- and polyfluoroalkyl substances, known as PFAS. The plaintiffs alleged claims for breach of implied and express warranty, negligent misrepresentation, fraud, and violations of consumer-protection statutes in California, Ohio, New Jersey, and North Carolina.

The plaintiffs alleged that they purchased bareMinerals products believing the products were clean, natural, and free of harmful chemicals such as PFAS. They further alleged that they tested “each type” of product they purchased and that each contained PFAS, but the complaint did not state that they tested the specific products they personally bought. The complaint identified one most-recent purchase date for each plaintiff, all in 2021, but did not provide detailed information about the timing or frequency of their other purchases.

Standing Analysis

Shiseido moved to dismiss under Federal Rule of Civil Procedure 12(b)(1), which allows dismissal when the court lacks subject-matter jurisdiction, and Rule 12(b)(6), which addresses failure to state a legally sufficient claim. The court considered the jurisdictional challenge first because a lack of jurisdiction would make the other arguments unnecessary.

The court rejected Shiseido’s argument that an alleged overpayment, sometimes described as a price-premium injury, could not support standing. The court explained that, in the Second Circuit, alleging that a plaintiff would not have bought a product—or would not have paid as much for it—can satisfy the injury requirement. The court also stated that the alleged misrepresentation and omission issues generally concerned the merits rather than standing.

But the court held that the plaintiffs still had to plead enough facts to make it plausible that they personally suffered that economic injury. Their theory depended on having purchased products that were misbranded because they contained PFAS. The court found the allegations insufficient because the complaint did not establish that the plaintiffs’ own purchases contained PFAS, did not say when the independent testing occurred, and did not provide facts showing that the isolated testing applied broadly to the products they bought.

The court also found that the studies and other sources cited in the complaint did not adequately connect PFAS to the same product line sold by Shiseido during the relevant period. One cited study tested cosmetics purchased from 2016 through 2020, did not identify the product lines tested, and therefore did not plausibly connect its results to the plaintiffs’ purchases in 2021. The plaintiffs also did not allege purchases with enough regularity to support an inference that they likely bought a product containing PFAS.

Disposition

Judge Paul A. Crotty granted Shiseido’s motion to dismiss the complaint because the plaintiffs failed to adequately allege standing under Article III of the Constitution. The court did not reach Shiseido’s remaining arguments, including its request for judicial notice, its argument concerning the heightened pleading standard for fraud, and its Rule 12(b)(6) arguments.

The court denied Shiseido’s request for oral argument. Although Shiseido sought dismissal with prejudice, the court stated that a dismissal for lack of Article III standing must be without prejudice because it is based on a lack of subject-matter jurisdiction. The plaintiffs were given 21 days to file an amended complaint.