Barnes v. Unilever United States Inc.

• Docket Number: 21 C 6191
• Decision Date: 11 March 2023
• Parties: YVONNE BARNES, PATRICIA DEAN, ANTONIO MORRIS, and BERNADETTE BOGDANO v. individually and on behalf of all others similarly situated, Plaintiffs, v. UNILEVER UNITED STATES INC., Defendant.
• Court: U.S. District Court — Northern District of Illinois

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YVONNE BARNES, PATRICIA DEAN, ANTONIO MORRIS, and BERNADETTE BOGDANO v. individually and on behalf of all others similarly situated, Plaintiffs,
v.
UNILEVER UNITED STATES INC., Defendant.

No. 21 C 6191

United States District Court, N.D. Illinois, Eastern Division

March 11, 2023

MEMORANDUM OPINION AND ORDER

MATTHEW F. KENNELLY, United States District Judge

Four plaintiffs-Yvonne Barnes, Patricia Dean, Antonio Morris, and Bernadette Bogdanovs-filed suit against Unilever United States Inc. Unilever manufactures and distributes Suave antiperspirant products. The plaintiffs (which the Court will collectively call Barnes) allege that the products contain benzene, a carcinogen, which was not disclosed in the labeling and renders the products adulterated.

Before Barnes filed her consolidated amended complaint combining this case with Case No. 22 C 3143, Bogdanovs v. Unilever United States Inc., Unilever moved to dismiss an earlier version of Barnes's complaint for lack of standing and failure to state a claim. The Court denied the motion to dismiss for lack of standing, except with respect to Barnes's request for injunctive relief, and granted in part and denied in part the motion to dismiss for failure to state a claim. See Barnes v. Unilever U.S. Inc., No. 21 C 6191,2022 WL 2915629, at *2-3 (N.D. Ill. July 24, 2022).

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In her consolidated amended complaint, Barnes asserts claims on behalf of nationwide, multi-state, and Illinois-based and California-based classes under the state consumer fraud acts of the various states (Count 1); the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA) (Count 2); the California Unfair Competition Law (CUCL) (Count 3); the California False Advertising Law (CFAL) (Count 4); the California Consumer Legal Remedies Act (CCLRA) (Count 5); and for unjust enrichment (Count 6). Unilever has again moved to dismiss for failure to state a claim. For the reasons stated below, the Court denies the motion, except to the extent Barnes's claims are based on Unilever's alleged omission of benzene in its labeling.

Background

Unilever sells Suave-brand deodorant and antiperspirant aerosol and spray products at retail stores throughout the United States. According to the amended complaint, deodorants and antiperspirants are considered, respectively, cosmetics and over-the-counter (OTC) drugs by the U.S. Food and Drug Administration (FDA). OTC drugs are required by federal law to comply with current Good Manufacturing Practices (cGMPs) established by the FDA "to assure that such drug meets the requirements of this chapter as to safety and has the identity and strength, and meets the quality and purity characteristics, which it purports or is represented to possess." 21 U.S.C. § 351(a)(2)(B).

In November 2021, Valisure, the operator of an analytical laboratory, tested for benzene in thirty brands of antiperspirant aerosol products. Valisure detected benzene in most of the 108 batches tested. In Unilever's products, Valisure's testing allegedly measured benzene concentrations from 0.97 to 5.21 ppm. Unilever had discontinued

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the product line in October 2021 and voluntarily recalled the products in March 2022.

Barnes alleges that benzene is a carcinogen that Unilever's products "are not designed to contain." Am. Compl. ¶ 58. In June 2017, the FDA issued a guidance document stating that benzene "should not be employed in the manufacture of drug substances, excipients, and drug products because of [its] unacceptable toxicity or [its] deleterious environmental effect." Q3C - Tables and List Guidance for Industry, 2017 WL 3491767, at *2. "If [its] use is unavoidable in order to produce a drug product with a significant therapeutic advance, then [its] levels should be restricted" to 2 ppm "unless otherwise justified." Id. Barnes alleges that "because benzene is not a requisite component of manufacturing or packaging body sprays," its use in Unilever's products "is not unavoidable." Am. Compl. ¶ 56. Barnes further alleges that the presence of benzene "resulted from Defendant's failure to comply with cGMPs" and renders Unilever's products "adulterated" under federal and state law. Id. ¶ 75.

Benzene is not listed as either an active or inactive ingredient on Unilever's products' labels. The labels also do not warn of the risk of benzene exposure. Barnes alleges that these omissions mislead consumers about the safety of the products. The amended complaint also identifies several statements regarding product safety and testing from Unilever's website that Barnes alleges are false and misleading. Had Barnes known that the products contained or may contain benzene, Barnes alleges that she would not have purchased the products or would have paid less for them.

Discussion

Barnes asserts claims under the state consumer fraud acts of various states, including the ICFA, CUCL, CFAL, and CCLRA specifically, and for unjust enrichment.

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Unilever has moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim.

In deciding a motion to dismiss for failure to state a claim, the court must accept as true all well-pleaded factual allegations in the complaint and draw all reasonable inferences in the plaintiff's favor. See NewSpin Sports, LLC v. Arrow Elecs., Inc., 910 F.3d 293, 299 (7th Cir. 2019). To survive a motion to dismiss, a plaintiff must allege "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Bissessur v. Ind. Univ. Bd. of Trs., 581 F.3d 599, 602 (7th Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

A. Consumer fraud claims

Unilever contends that all Barnes's claims are based on her allegations that Unilever engaged in deceptive practices by omitting the presence of benzene in its products. Barnes contends that she has also asserted claims based on unfair practices and affirmative misrepresentations.

1. Alleged unfair practices

"The Supreme Court of Illinois has held that recovery under the Consumer Fraud Act 'may be had for unfair as well as deceptive conduct.'" Windy City Metal Fabricators & Supply, Inc. v. CIT Tech. Fin. Servs., Inc., 536 F.3d 663, 669 (7th Cir. 2008) (quoting Robinson v. Toyota Motor Credit Corp., 201 Ill.2d 403, 416, 775 N.E.2d 951, 960 (2002)). Deceptive conduct and unfair conduct "are separate categories," and an ICFA claim "may be premised on either (or both)." Vanzant v. Hill's Pet Nutrition, Inc., 934 F.3d 730, 738 (7th Cir. 2019). Similarly, "the UCL creates 'three varieties of unfair competition-acts or practices which are unlawful, or unfair, or fraudulent.'" Wilson v.

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Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012) (quoting Cel-Tech Commc'ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal.4th 163, 180, 973 P.2d 527, 540 (1999)).

Barnes's amended complaint is not as limited as Unilever contends; it includes claims premised on allegations of unfair practices. As the Court held on Unilever's first motion to dismiss, "allegations that Unilever put adulterated and therefore dangerous products into the marketplace without adequate testing or screening-which is the gist of Barnes's claim-are sufficient to state a claim for an unfair practice violative of the ICFA." Barnes, 2022 WL 2915629, at *3. Similarly, such allegations can form the basis of a CUCL claim. See Wilson, 668 F.3d at 1140 ("The California Supreme Court has held that the UCL's 'coverage is sweeping, embracing anything that can properly be called a business practice and that at the same time is forbidden by law.'" (quoting Cel-Tech, 20 Cal.4th at 180, 973 P.2d at 539)).

Although Unilever argues that Barnes's earlier complaint "has been superseded," Def.'s Reply Br. at 10, Unilever does not point to any changes to the complaint that would dictate a different result. Instead, Unilever emphasizes Barnes's misrepresentations and omissions allegations from the operative complaint, without addressing Barnes's allegations that Unilever sold adulterated products. See Am. Compl. ¶¶ 62-75 (explaining how the products are adulterated and illegal to sell), ¶ 83 ("As a seller of an OTC drug product, Defendant had and has a duty to ensure that its Products did not and do not contain excessive (or any) level of benzene, including through regular testing, especially before . . . injecting [the products] into the stream of commerce for consumers to use on their bodies.").

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Unilever concedes that Barnes alleges the factual basis of an unfair practices claim-namely, that Unilever sold adulterated products-but asserts that Barnes "does not purport to state a separate claim of unfairness on that ground." Def.'s Reply Br. at 10. The Court disagrees with this interpretation of the operative complaint, and, in any event, "[t]he Federal Rules of Civil Procedure do not require a plaintiff to plead legal theories." Chessie Logistics Co. v. Krinos Holdings, Inc., 867 F.3d 852, 859 (7th Cir. 2017) (internal quotation marks omitted).

Unilever argues for the first time in reply that Barnes's allegations do not satisfy the elements of an unfair practices claim. "[A]rguments raised for the first time in a reply brief are waived." Williams v. Bd. of Educ. of City of Chi., 982 F.3d 495, 507 n.30 (7th Cir. 2020). Even if the argument were not forfeited, Barnes has sufficiently alleged an unfair practices claim, as the Court held on the first motion to dismiss. See Barnes, 2022 WL 2915629, at *3. Barnes's "allegations of unfair practices meet the federal notice-pleading standards because they claim that [Unilever] engaged in unfair conduct and aver facts that, if proven, make relief more than merely speculative." Benson v. Fannie May Confections Brands, Inc., 944 F.3d 639, 647 (7th Cir. 2019) (alterations accepted) (internal quotation marks omitted).

"To determine whether a practice is unfair, Illinois courts...