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Food for Thought: Ninth Circuit Affirms Dismissal of Putative Class Action Against Lip Balm Manufacturer Accused of Deceiving Customers as to Product Amount

Ebner v. Fresh, Inc., 838 F.3d 958 (9th Cir. 2016)

Plaintiff Angela Ebner alleged that defendant Fresh, Inc. deceived its customers as to the quantity of lip balm in its Sugar Lip Treatment product line. Plaintiff alleged that although defendant accurately indicated the new weight of the lip product, the tube design prevented the product from being dispensed in its entirety. Specifically, the tube uses a screw mechanism that allows 75 percent of the product to advance in the tube. The remaining 25 percent cannot advance due to a plastic stop device. Thus, plaintiff contends that only a portion of the stated product quantity is reasonably accessible to the consumer. Furthermore, the tube contains a weighted metallic bottom, is packaged in an oversized dispenser tube, and sold in a large cardboard box, creating the impression that each unit has a larger quantity of lip product than it does.

Plaintiff brought a putative class action against defendant alleging that defendant’s label, tube design, and packaging are deceptive and misleading. Plaintiff’s complaint asserted causes of action for violations of California’s False Advertising Law (FAL), California Consumers Legal Remedies Act (CLRA), California’s Unfair Competition Law (UCL), and for unjust enrichment.

The district court granted defendant’s motion to dismiss and denied plaintiff leave to amend, finding that California’s safe harbor doctrine and federal preemption under the Food, Drug, and Cosmetic Act (FDCA) were each fatal to plaintiff’s labeling claims. Furthermore, as to the packaging claims, the district court held that neither the tube dispenser nor the packaging were deceptive or misleading to the reasonable consumer. Finally, the district court held that plaintiff failed to plead a violation of California’s Fair Packaging and Labeling Act’s (FPLA) prohibition on nonfunctional slack fill. The Ninth Circuit affirmed the district court’s decision on March 17, 2016, but later withdrew its opinion, reported at 818 F. 3d 799 (9th Cir. 2016), and replaced it with this Amended Opinion in September 2016.

California’s safe harbor doctrine barred plaintiff’s claim relating to accurate statement of net weight of product, but did not bar plaintiff’s claim alleging omission of a supplemental statement on the product’s label

The Ninth Circuit first addressed California’s safe harbor doctrine, which precludes plaintiffs from bringing claims based on actions permitted by the legislature. Because defendant complied with federal and state law requiring the net weight of the lip product in the tube be stated on the product’s label, its conduct could not be the basis of an unfair competition claim under the UCL, CLRA, and FAL. However, the court held that plaintiff’s claim that the net weight label was deceptive due to the lack of a supplemental statement explaining accessibility to the product was not precluded by the safe harbor doctrine. Because this part of plaintiff’s claim was based on allegations that defendant omitted information in the label, thus rendering the label deceptive, the claim did not fall within the safe harbor because there is no law expressly permitting the omission of supplemental statements.

Federal Food, Drug, and Cosmetic Act did not preempt plaintiff’s claim alleging omission of a supplemental statement on the product’s label

However, the Ninth Circuit disagreed with the district court’s dismissal of the labeling claim based on preemption. The court held that California’s Sherman Law (Sherman Law) and the federal FDCA are virtually identical in that they both prohibit the false or misleading labeling of cosmetics. Thus plaintiff is seeking to enforce under the Sherman Law the identical duty that defendant has under the FDCA. As a result, plaintiff’s claim is not preempted.

Plaintiff’s labeling and product packaging claims failed under the "reasonable consumer" test

Although neither preemption nor the safe harbor doctrine barred plaintiff’s claims, the Ninth Circuit nonetheless held that plaintiff’s labeling claims failed on the merits because "Plaintiff cannot plausibly allege that the omission of supplemental disclosures about product weight rendered Sugar’s label ‘false or misleading’ to the reasonable consumer." Under the "reasonable consumer" test, plaintiff must show that "members of the public are likely to be deceived," a standard higher than the possibility that the label "might conceivably be misunderstood by some few consumers viewing it in an unreasonable manner." The consumer standard requires a probability "that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled."

Because it is undisputed that defendant disclosed the correct amount of lip balm included in the product, and the mechanism used in the tube dispenser is commonplace in the marketplace, the reasonable consumer "understands that some product may be left in the tube to anchor" it in place. And although a consumer does not know how much additional product is left in the tube, "the consumer’s knowledge that some additional product lies below the tube’s opening is sufficient to dispel any deception." The court reasoned that it is up to the consumer to decide if it is worth the additional effort to extract the remaining product from the tube using a different mechanism such a tool or finger.

The Ninth Circuit also affirmed the district court’s ruling on the product packaging claim. The court reasoned that just as a reasonable consumer understands that additional product may remain in the dispenser tube, the reasonable consumer understands that some additional weight in the tube may be necessary to keep the product upright. Furthermore, given the product’s price point, "elaborate packaging and the weighty feel of the tube is commonplace and even expected by a significant portion" of defendant’s consumers. In fact, the court concluded that no reasonable consumer would expect the size of the packaging to be a direct reflection of the quantity of the product included by the manufacturer.

Defendant’s product did not contain prohibited slack fill

Finally, the court also affirmed the district court’s ruling on plaintiff’s claims that the lip product was misleading because it contained nonfunctional slack fill. According to the applicable California statute on which plaintiff based her claims, slack fill is "the difference between the actual capacity of a container and the volume of product contained therein." According to that same statute, "nonfunctional slack fill is the empty space in a package that is filled to substantially less than its capacity for reasons other than" those enumerated in the statute. The Ninth Circuit held that plaintiff had not stated a claim because her challenge was not directed to the amount of "empty space" in each tube, but at the amount of product in each tube that was not easily accessible. Thus, plaintiff’s allegation did not meet the definition of actionable slack fill.

UPDATE: The amended opinion filed September 27, 2016, is identical to the original opinion, with one exception. In discussing the reasonable consumer standard, the court addressed plaintiff’s reliance on Williams v. Gerber Prods. Co., 552 F. 3d 934 (9th Cir. 2008).

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