Food for Thought: Food Industry Decisions with Bite

Food for Thought: Claim Dismissed Against Brand for Deceptive Label, but Retailer May Still Pay

Mass Tort and Product Liability   |   October 9, 2017
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Eidelman v. Sun Prod. Corp., No. 16-cv-3914 (NSR) (S.D.N.Y. September, 25, 2017).

A negligent misrepresentation claim against laundry detergent brand The Sun Products Corp., for an allegedly deceptive label was dismissed by a New York federal district judge, while an unjust enrichment claim against retailer Costco Wholesale Corp., was allowed to proceed. Plaintiff  asserted that a Sun Products laundry detergent label stating, “from the #1 Detergent Brand Recommended by Dermatologists for Sensitive Skin,” was deceptive because it touted a dermatological recommendation without clarifying which detergents within the brand were actually recommended. Plaintiff asserted claims of negligent misrepresentation, unjust enrichment, and injunctive relief. The district court granted defendants’ motion to dismiss in part, dismissing the claim of negligent misrepresentation without prejudice and dismissing the claim for injunctive relief with prejudice. The court allowed the claim for unjust enrichment to proceed.

The court dismissed the claim of negligent misrepresentation because the plaintiff did not establish a special relationship between himself and Sun Products that would warrant such a claim. A special relationship exists if the party making the representation held or appeared to hold a unique or special expertise, if there was trust or confidence between the parties, or  if the speaker was aware of the use to which the information would be put and supplied it for that purpose. Further, there is a rebuttable presumption that an advertisement is generally insufficient to establish such a relationship.

Plaintiffs argued that a special relationship existed between it and Sun Products because Sun Products’ website claimed there was “clinical proof” of the benefits of its detergent and the label on the detergent indicates “it is from the ‘#1’ brand recommended by dermatologists for sensitive skin.” However, the court could not find that the volume or content of Sun Products’ representations plausibly alleged a special relationship, and thus, the plaintiff’s negligent misrepresentation claim could not overcome the presumption that advertisements are generally insufficient to establish a special relationship.

Plaintiff also alleged that Costco was unjustly enriched because plaintiff paid an inflated price for the detergent, which was exclusively sold at Costco, due to Sun Products’ deceptive and misleading label. Costco argued it could not be held liable under a cause of action for consumer deception absent allegations that it participated in the misleading activities. The court disagreed with Costco because plaintiff’s unjust enrichment claim was only for the premium plaintiff was purportedly induced to pay by the deceptive label. The court held because plaintiff alleged a separate claim of unjust enrichment against Costco as the recipient of the premium paid for the possibly mislabeled detergent, the plaintiff plausibly alleged a claim for unjust enrichment.

The court dismissed plaintiffs’ claim for injunctive relief on two grounds. First, plaintiff did not respond to defendant’s argument and therefore it was deemed abandoned. Second, the court noted that an injunction is a remedy and not a cause of action.

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