Brown v. Hain Celestial Grp., Inc., Case No. 11-cv-03082-LB

• Decision Date: 30 May 2015
• Docket Number: Case No. 11-cv-03082-LB
• Court: U.S. District Court — Northern District of California
• Parties: ROSMINAH BROWN, et al., Plaintiffs, v. THE HAIN CELESTIAL GROUP, INC., Defendant.

ROSMINAH BROWN, et al., Plaintiffs, v. THE HAIN CELESTIAL GROUP, INC., Defendant.

Case No. 11-cv-03082-LB

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA San Francisco Division

May 30, 2015

ORDER ON SUMMARY JUDGMENT

[Re: ECF No. 323]

INTRODUCTION

This is a consumer-products mislabeling case. The plaintiffs allege that defendant Hain Celestial Group sold two lines of cosmetics whose front labels used the word "organic," but that did not contain at least 70% organic ingredients as required by the California Organic Products Act ("COPA"), Cal. Health & Safety Code § 110810 et seq. For this alleged violation, the plaintiffs bring claims under COPA itself and under two general California remedial statutes: the Unfair Competition Law ("UCL"), Cal. Bus. & Profs. Code §§ 17200-10; and the Consumers Legal Remedies Act ("CLRA"), Cal. Civ. Code §§ 1750-84. (See generally 1st Am. Compl. - ECF No. 68 at 16-22.)¹ They also bring a claim for breach of express warranty under Cal. Comm. Code § 2313. (ECF No. 68 at 22-23.)

The plaintiffs allege that they bought various Hain cosmetic products under the brand names Avalon Organics and Jason² The word "organic" obviously appears in the very name of — and so was on the front labels of — Avalon Organics products. And, for some time, Jason products carried the front-label tagline, "Pure, Natural, and Organic." Cosmetics in both lines underwent reformulations during the class period, as well as relabeling that (among other things) removed the "Pure, Natural, and Organic" tagline from Jason products. The court has certified two plaintiff classes (corresponding to the two Hain product lines) under federal procedural Rule 23(b)(3). (ECF No. 269 at 33.)

The plaintiffs now move for partial summary judgment with respect to 167 "Disputed Products." (ECF No. 322.) (A list of the Disputed Products appears at ECF No. 323 at 25-29.) The plaintiffs' motion and the parties' arguments present the court with three issues. (See generally ECF No. 323 at 5.)

First, do any of the Disputed Products satisfy the controlling definition of "cosmetic"? This definition is located in California's Sherman Food, Drug, and Cosmetic Law ("Sherman Law"), of which COPA is a part; the "cosmetic" definition appears at Cal. Health & Safety Code § 109900. From the definition of "cosmetic" the Sherman Law excludes "soap" — but does not define "soap."

Second, what is the applicable definition of "soap"? In the absence of California law defining "soap," the parties offer competing alternatives. The plaintiffs argue that the federal regulatory definition (21 C.F.R. § 701.20) should apply; Hain contends that "soaps" should be defined as anything that "foams and cleanses." After settling on a definition, are any of the Disputed Products excluded from COPA's organic-labeling requirement as soaps?

Third, Hain explains that a number of the Disputed Products are federally regulated drugs. The plaintiffs do not deny this. Are such products subject to simultaneous regulation as cosmetics under COPA? Put differently, if a product satisfies the definitions of both "drugs" and "cosmetics" under California law, is that "drug" also subject to COPA's organic-labeling and -content rule as a"cosmetic"? Relatedly, does federal law preempt COPA from covering Disputed Products that are federally regulated drugs?

The parties have submitted deposition testimony, discovery responses, declarations, the products' names (which, for the most part, indicate their intended functions), and samples of labels for some (though not all) of the Disputed Products. The court held a hearing on May 28, 2015 and, for the reasons given below, now partly grants and partly denies the plaintiffs' motion.

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SUMMARY-JUDGMENT LAW

The court must grant a motion for summary judgment if the movant shows that there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). Material facts are those that may affect the outcome of the case. Anderson, 477 U.S. at 248. A dispute about a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the non-moving party. Id. at 248-49. Federal courts sitting in diversity normally apply the substantive law of the forum state. E.g., Nelson v. Int'l Paint Co., 716 F.2d 640, 643 (9th Cir. 1983).

ANALYSIS

I. MOST OF THE DISPUTED PRODUCTS ARE "COSMETICS"

The plaintiffs first move the court to hold that all the Disputed Products are "cosmetics" under relevant California law. The controlling definition of "cosmetic" resides in California's Sherman Food, Drug, and Cosmetic Law, of which COPA is a part. Under that law,

"Cosmetic" means any article, or its components, intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to, the human body, or any part of the human body, for cleansing, beautifying, promoting attractiveness, or altering the appearance.

The term "cosmetic" does not include soap.

Cal. Health & Safety Code § 109900. Neither the Sherman Law nor COPA defines "soap." (A point that is discussed in its own right, below. Infra, Analysis, Part II.)

The plaintiffs argue that Hain has already admitted that all the Disputed Products meet thisdefinition. The plaintiffs here cite to Hain's answers to the plaintiffs' Fourth Requests for Admission. In those requests, the plaintiffs asked, product by product, whether specific Avalon Organics and Jason products were "cosmetics." The plaintiffs defined "cosmetics" using the definition at Cal. Health & Safety Code § 109900. (ECF No. 330-3 at 3.) The plaintiffs defined "soap" by synopsizing the key parts of the federal regulatory definition. (Id. at 4.)

Asked to admit that these products were cosmetics, as so defined, Hain provided one of two answers. For some products, Hain simply "admitted" that the product met the given definition of "cosmetic." (E.g, ECF No. 323-9 at 6 (RFA #118).) For many others, Hain responded: "Admit that [the specific product] is a 'COSMETIC' under Plaintiffs' definition, but deny that the product is regulated as a 'cosmetic' under California's Sherman Law and COPA." (E.g., id. at 8-9 (RFA #122).) More generally, Hain placed clear limits and reservations on its answers. It argued that some of the products were soaps, drugs, or pesticides under California law, and were thus outside COPA. (Id. at 4.) It noted the parties' disagreement over the applicable definition of "soap." (Id.) And, perhaps having in mind the plaintiffs' partial summary-judgment motions that were then pending, Hain stated that it in no way agreed to the further "legal implications" that might be said to follow from its responses. (See id. at 4-5.)

For every product covered by its responses, however, Hain did admit that the item in question met the governing definition of "cosmetic." Hain calls that the "plaintiffs' definition." But it is the Sherman Law's definition. It is the controlling definition. In the many responses in which Hain "admits" that a given product is a "cosmetic," but denies that it comes within COPA's reach, Hain does admit that the product at least initially meets the Sherman Law's definition of a "cosmetic." Its admissions on that point are binding. Fed. R. Civ. P. 36(b) ("A matter admitted under this rule is conclusively established unless the court, on motion, permits the admission to be withdrawn or amended."). Some of these products may ultimately be excluded from COPA's reach: either because they are "soaps," or because (as Hain argues) they are drugs that cannot be simultaneously regulated as a cosmetic. But those are secondary questions. The initial question — Do these products meet the Sherman Law's definition of "cosmetic"? — must be answered affirmatively.The Disputed Products — at least those covered by the plaintiffs' Fourth Requests for Admission³ — are all cosmetics.

This conclusion also follows (for some products) from Hain's arguments about "soap." Hain contends that 133 of the Disputed Products are "soaps" under the Sherman Law and are thus excluded from COPA's reach. (ECF No. 328 at 26.) This argument depends on Hain's proposed definition of "soap" as anything that "foams and cleanses." (Id. at 26-27.) The court discusses this definition at length below. For now, the important point is to notice that by claiming that 133 of the Disputed Products "foam[] and cleanse[]" the human body, Hain effectively concedes that these products meet the Sherman Law's initial definition of a "cosmetic" — precisely because they are "intended to be . . . applied to . . . the human body . . . for cleansing." See Cal. Health & Safety Code § 109900. Whether they can then be removed from COPA's reach as "soaps" is, again, a subsequent issue.

The court would raise an additional point. There are some products that, in answering the plaintiffs' discovery requests, Hain admitted are cosmetics, but that, in its summary-judgment opposition, Hain argues are not cosmetics, after all. For example, Hain's discovery responses admit that diaper balm is a cosmetic. (ECF No. 323-9 at 16.) Its summary-judgment brief denies this, pointing out that the purpose of diaper balm is to alleviate (what else?) diaper rash — and that the product does not meet the initial definition of a cosmetic. (See ECF No. 328 at 20.) So, too, for therapeutic gels intended to relieve pain. (Compare, e.g., ECF No. 323-9 at 167-68 (admissions) with ECF No. 328 at 20 (brief).) Some or all of these latter products are federally regulated drugs. (See ECF No. 328 at 28-30.)

Calling such products "cosmetics" seems counterfactual. And patently outside the Sherman Law's definition of "cosmetics." The plaintiffs insist that Hain is bound to its admissions. For the most part, that is true and uncontroversial. Can it be true for these "cosmetics" that are obviously not cosmetics? Can Hain's admissions bind the...