Brown v. Hain Celestial Grp., Inc.

• Decision Date: 22 December 2012
• Docket Number: No. C 11–03082 LB.,C 11–03082 LB.
• Citation: 913 F.Supp.2d 881
• Court: U.S. District Court — Eastern District of California
• Parties: Rosminah BROWN and Eric Lohela, on behalf of themselves and all others similarly situated, Plaintiffs, v. The HAIN CELESTIAL GROUP, INC., a Delaware Corporation, Defendant.

913 F.Supp.2d 881

Rosminah BROWN and Eric Lohela, on behalf of themselves and all others similarly situated, Plaintiffs,

v.The HAIN CELESTIAL GROUP, INC., a Delaware Corporation, Defendant.

No. C 11–03082 LB.

United States District Court, N.D. California,

San Francisco Division.

Dec. 22, 2012.

Lisa Margaret Burger, Howard Judd Hirsch, Mark N. Todzo, Lexington Law Group, San Francisco, CA, for Plaintiffs.

Margaret Dorothy Wilkinson, Simon J. Frankel, Covington & Burling LLP, San Francisco, CA, William J. Friedman, Covington & Burling LLP, Washington, DC, for Defendant.

ORDER DENYING MOTION TO STRIKE AND DENYING MOTION TO DISMISS

LAUREL BEELER, United States Magistrate Judge.

INTRODUCTION

Plaintiffs Rosminah Brown and Eric Lohela bought several different Jason and Avalon Organics brand cosmetic products that are manufactured and marketed by Defendant The Hain Celestial Group (“Hain”) and then—on behalf of themselves and other consumers—sued Hain complaining that these and numerous other products were advertised, marketed, sold, and labeled as organic products when they were not organic, in violation of the following state laws: (1) the California Organic Products Act of 2003 (“COPA”), Cal. Health & Safety Code § 110810 et seq.; (2) the Unfair Competition Law (“UCL”), Cal. Bus. & Prof.Code § 17200, (3) the Consumers Legal Remedies Act (“CLRA”), Cal. Civ.Code § 1750 et seq.; and the California Commercial Code provision regarding express warranties, Cal. Com.Code § 2313. Hain moves to strike and to dismiss, arguing that Plaintiffs lack standing regarding products they never purchased, and that Plaintiffs fail to state claims under the applicable statutes. For the reasons discussed below, the court DENIES both motions.

STATEMENT

I. BACKGROUND ALLEGATIONS

Hain is a Delaware corporation that manufactures and distributes cosmetic products (also referred to as personal care products) that are marketed, labeled, and sold in California as “organic.” First Am. Compl. (“FAC”), ECF No. 68, ¶¶ 1, 7, 13.¹ Hain sells cosmetic products under the Jason and Avalon Organics brands. Id. Plaintiffs Rosminah Brown and Eric Lohela are California residents. FAC ¶¶ 5–6. They allege that Hain markets, labels, and sells these products (the “Products”) as “organic,” even though they are not predominately made from organic ingredients. Id. ¶ 1. Plaintiffs allege that they purchased the Products because they were organic and they would not have purchased them, at least for the same price, but for Hain's allegedly false and misleading claims. Id. ¶¶ 1, 5–6.

On or about September 2009, Brown purchased a Jason Ester–C Super–C Cleanser Gentle Facial Wash (“Jason Face Wash”) at a market in Roseville, California. Id. ¶ 5. The front label of the Jason Face Wash, which Brown reviewed before purchase, states “Pure, Natural & Organic.” Id. Brown believed that the Jason Face Wash was either completely or at least mostly organic and she would not have bought it or would not have paid the same amount for it. Id.

On or about December 2009, Lohela purchased a number of Avalon Organics products. He purchased an Avalon Organics Lavender Hand and Body Lotion (“Avalon Lavender Lotion”) from Vitacost.com, an online retailer. Id. ¶ 6. Before purchasing the Avalon Lavender Lotion, Lohela read the name of the product and reviewed a photograph of the product packaging. Id. The front label and the product name display the word “Organics” and the front label includes a pledge by Hain that the product is “pro-organic.” Id. Lohela believed that the Avalon Lavender Lotion was either completely or at least mostly organic. Id.

Around the same time, Lohela purchased a number of other Avalon Organics Products and he relied on the same representations identified with regard to the Avalon Lavender Lotion. Id. In total, Lohela purchased seven Avalon Organics Products, including: (1) the Avalon Lavender Lotion, (2) Avalon Organics Glycerin Liquid Hand Soap Lemon, (3) Avalon Organics Vitamin C Soothing Lip Balm, (4) Avalon Organics Vitamin C Refreshing Facial Cleanser, (5) Avalon Organics Botanicals Exfoliating Enzyme Scrub Lavender, (6) Avalon Organics Peppermint Botanicals Shampoo, and (7) Avalon Organics Awapuhi Mango Moisturizing Conditioner. Id.

II. THE ALLEGED MISREPRESENTATIONS

Plaintiffs allege that Hain advertises, markets, and labels, the Products as organic, when they contain insufficient organic content under the applicable laws to make such claims. Plaintiffs allege that federal law requires “any foods marketed, advertised, labeled, sold and/or represented as organic or made with organic ingredients [to be] comprised of at least 70% organic ingredients.” FAC ¶ 12 (citing 7 U.S.C. § 6505; 7 C.F.R. § 205.301). Plaintiffs claim that these regulations do not apply to the Products, which are considered cosmetic products, rather than foods, but that the federal definition has shaped consumer expectations for organic products. Id. Plaintiffs allege that California law, however, does apply to the Products. Id. COPA requires cosmetic products advertised, marketed, sold, labeled, and/or represented as organic in California be comprised of at least 70% organic ingredients. Id. They claim that COPA is a “legislative determination” that it is deceptiveto represent that cosmetic products containing insufficient organic ingredients are organic. Id.

Plaintiffs allege that the Jason Products are labeled with the tagline “Pure, Natural & Organic,” and the Avalon Organics Products include a “pro-organic” pledge on their front label and have the word “Organics” in their name. Id. ¶ 14. In contrast to these prominent organic claims, the back label of each Product includes an ingredient list in small print that identifies the organically-produced ingredients with an asterisk. Id. ¶ 15. The ingredients list reveals that the organic ingredients comprise less than 70% of the Products, whether measured by weight or volume. Id.

For example, the Jason Face Wash ingredients list shows that only one of the nineteen ingredients is certified organic and it is listed ninth. Id. ¶¶ 16, 20. Because Hain is legally required to list the ingredients in descending order of prominence, the sole organic ingredient cannot possibly make up 70% of the Product. Id. n. 1. Similarly, only 5 of the 22 ingredients (excluding water and salt) in the Avalon Lavender Lotion are organic and they rank 4th, 10th, 13th, 14th, and 19th in prominence on the ingredient list. Id. ¶¶ 17, 21.

Plaintiffs allege that the ingredients lists on other Jason and Avalon Organics products that they did not purchase also contradict the organic claims made on the front panel. Id. ¶ 22. Some of these products are Baby Avalon Organics Silky Cornstarch Baby Powder, Jason Aloe Vera Soothing Body Scrub, Jason Thin to Thick Extra Volume Conditioner, Jason PowerSmile All–Natural Whitening Toothpaste, Jason Curl Defining Cream, and Avalon Organics Grapefruit & Geranium Refreshing Shampoo. Id.

Plaintiffs do not dispute Hain's labeling claims as to the organic nature of individual ingredients. Id. ¶ 23. Rather, their allegations are based on the assumption that all of the Products' ingredients are accurately identified as organic. Id. Plaintiffs claim that Hain has a pattern and practice of making organic claims on products that do not meet the organic standards required by COPA. Id. ¶ 23.

Plaintiffs also allege that after they filed their original complaint, Hain began a new misleading and deceptive practice. Id. ¶ 27. They allege that Hain now falsely labels some of the Products as containing 70% organic ingredients. Id. Plaintiffs allege that Hain calculates the percentage of organic ingredients in such products by including the weight of water used to reconstitute a dehydrated organic ingredient, a practice allegedly prohibited under COPA. Id. (citing 65 Fed.Reg. 80548–01, 80586 (December 21, 2000) incorporated into COPA by Cal. Health & Safety Code § 110811).

III. CLASS ALLEGATIONS, JURISDICTION, CLAIMS, AND RELIEF SOUGHT

Plaintiffs seek to represent a class and two sub-classes of allegedly similarly-situated individuals. Both Plaintiffs seek to represent a class defined as: “All persons who purchased the Products that were sold under the Jason® or Avalon Organics® brand in California during the applicable statute of limitations.” ²Id. ¶ 28. Brown seeks to represent a subclass defined as: “All persons who purchased the Products that were sold under the Jason® brand in California during the applicable statute of limitations” (the “Jason Subclass”). Id. ¶ 29. Lohela seeks to represent a sub-class defined as: All persons who purchased the Products that were sold under the Avalon Organics® brand in California during the applicable statute of limitations” (the “Avalon Subclass”). Id. ¶ 30.

The parties do not dispute that the number of people in the proposed class exceeds 100, the amount in controversy exceeds $5M, jurisdiction is minimally diverse, and jurisdiction exists under the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1332(d). Compare Notice of Removal, ECF No. 1 (setting forth facts establishing the jurisdictional thresholds under CAFA), with FAC ¶ 8 (same).

Plaintiffs bring six claims for relief. See FAC, ECF No. 68, ¶¶ 38–80.

First, they allege that Hain violated COPA's restrictions on selling, labeling, or representing products “as organic or made with organic ingredients” unless they contain 70% organically produced ingredients. FAC ¶¶ 38–42; Cal. Health and Safety Code § 110838. They allege that they have standing because California Health and Safety Code section 111910(a) permits “any person” to bring an enforcement action seeking injunctive relief under COPA. Id. ¶ 41.

Plaintiffs' second, third, and fourth claims respectively allege violations of the unlawful, fraudulent, and unfair prongs of the UCL, California Business and Professions Code section 17200 et seq.Id. ¶¶ 43–65. The UCL claims under the...