Buonasera v. Honest Co.

• Decision Date: 23 September 2016
• Docket Number: 16 Civ. 1125 (VM)
• Citation: 208 F.Supp.3d 555
• Parties: Brad BUONASERA, on behalf of himself and all others similarly-situated, Plaintiff, v. The HONEST COMPANY, INC., Defendant.
• Court: U.S. District Court — Southern District of New York

208 F.Supp.3d 555

Brad BUONASERA, on behalf of himself and all others similarly-situated, Plaintiff,

v.The HONEST COMPANY, INC., Defendant.

16 Civ. 1125 (VM)

United States District Court, S.D. New York.

Signed September 23, 2016

Adrienne D. McEntee, Beth Ellen Terrell, Terrell Marshall Daudt & Willie PLLC, Seattle, WA, Douglas Gregory Blankinship, Todd Seth Garber, Finkelstein Blankinship, Frei–Pearson & Garber, LLP, White Plains, NY, Javier Osvaldo Hidalgo, Kim Eleazer Richman, The Richman Law Group, Brooklyn, NY, Yvette Golan, The Golan Firm, Houston, TX, for Plaintiff.

Jonathan Paul Bach, Lauren Gerber Lee, Rebecca Welsh, Cooley LLP, New York, NY, William P. Donovan, Cooley LLP, Santa Monica, CA, for Defendant.

DECISION AND ORDER

VICTOR MARRERO, United States District Judge.

On April 20, 2016, Brad Buonasera ("Buonasera") filed an amended complaint ("Amended Complaint") on behalf of himself and all others similarly situated (collectively, "Plaintiffs"), alleging four causes of action against The Honest Company, Inc. ("Honest"): (1) violation of New York General Business Law Section 349 (" Section 349"); (2) violation of New York General Business Law Section 350 (" Section 350"); (3) breach of an express warranty; and (4) unjust enrichment. (Dkt. No. 27.)

By letter dated May 9, 2016, Honest requested a pre-motion conference in anticipation of filing a motion to dismiss. ("May 9 Letter," on file with chambers.) In so doing, Honest attached pre-motion correspondence exchanged between the parties including Honest's letter dated March 15, 2016 and Buonasera's letter in response dated March 21, 2016. (On file with chambers.)

After reviewing this correspondence, the Court held a pre-motion conference by telephone on June 21, 2016. ("June 21 Telephone Conference," see Dkt. Minute Entry for June 21, 2016.) On that occasion, the Court indicated that while Honest may have valid grounds for dismissal of the unjust enrichment and injunctive relief claims, the Court was not persuaded that motion practice would be productive, namely because it would not resolve the entire matter. The Court suggested that the parties reserve the issues for the class certification or summary judgment stages. Honest requested full briefing on the record before the Court. The Court permitted the parties to submit an additional round of letter briefing on open issues not sufficiently addressed by the Second Circuit. (See id. )

In response to the Court's direction, Honest submitted a letter to the Court dated July 6, 2016 regarding the open issues before the Second Circuit. ("July 6 Letter," Dkt. No. 35.) Honest argues: (1) Buonasera does not have standing to bring suit for products that he did not purchase; (2) the terms, "natural," "plant-based," and without "harsh" chemicals, are too vague to be materially deceptive; and (3) the injunctive relief and unjust enrichment claims should be dismissed for the reasons discussed during the June 21 Telephone Conference. (Id. )

By letter dated July 19, 2016, Buonasera responded to the July 6 Letter. ("July 19 Letter," Dkt. No. 37.) Buonasera contends: (1) under NECA–IBEW Health & Welfare Fund v. Goldman Sachs & Co. , 693 F.3d 145 (2d Cir. 2012), Buonasera is permitted to bring claims concerning products he never purchased because all of the products implicate the same set of concerns as they are all similar products labeled with uniform misrepresentations; (2) whether a label is materially deceptive is a factual question that should not be addressed on a motion to dismiss; (3) injunctive relief is warranted because Buonasera would consider purchasing Honest's products in the future if they were reformulated; and (4) New York law permits a plaintiff to plead unjust enrichment as an independent or alternative theory of recovery. (Dkt. No. 37.)

The Court now construes the correspondence described above as a motion by Honest to dismiss the Amended Complaint ("Motion") on the following grounds: (1) lack of subject matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure (" Rule 12(b) (1)") on the basis that Buonasera lacks standing both to bring suit for products that he did not purchase and to seek injunctive relief and (2) failure to state a claim upon which relief may be granted pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (" Rule 12(b)(6)") as it relates to the Section 349, Section 350, breach of an express warranty, and unjust enrichment claims. For the reasons discussed below, Honest's Motion is DENIED in part and GRANTED in part.

I. FACTUAL BACKGROUND¹

Buonasera is a consumer in New York who purchased Honest's Conditioning Detangler and Shampoo + Body Wash products from the Costco store located at 517 East 117th Street, New York, New York during the class period.² Buonasera alleges that he saw, relied upon, and reasonably believed the representation that the products were "natural" and contained "no harsh chemicals (ever!)."

Buonasera alleges that Honest falsely, misleadingly, and deceptively labels its products as "natural," "all natural," "naturally derived," "plant-based," and/or containing "no harsh chemicals ever!" when the products contain synthetic and toxic ingredients. In addition to the two products Buonasera purchased, Buonasera alleges that 39 other Honest products contain synthetic or toxic ingredients. The Amended Complaint contains a substantial list of these ingredients.

Buonasera asserts the four causes of action mentioned above and seeks: (1) class certification; (2) declaratory relief; (3) an order for accounting; (4) restitution, disgorgement, refund, and/or other monetary damages, together with costs and disbursements, including reasonable attorneys' fees and prejudgment interest; (5) injunctive relief; (6) statutory damages; and (7) any other relief the Court deems just and proper.

II. STANDARD OF REVIEW

A. MOTION TO DISMISS PURSUANT TO RULE 12(b)(1)

The inquiry on a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) concerns whether the district court has the statutory or constitutional power to adjudicate the case. See Makarova v. United States , 201 F.3d 110, 113 (2d Cir. 2000). "A plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists." Id. ; see also Robinson v. Overseas Military Sales Corp. , 21 F.3d 502, 507 (2d Cir. 1994). "[J]urisdiction must be shown affirmatively, and that showing is not made by drawing from the pleadings inferences favorable to the party asserting it." Shipping Fin. Servs. Corp. v. Drakos , 140 F.3d 129, 131 (2d Cir. 1998) (citing Norton v. Larney , 266 U.S. 511, 515, 45 S.Ct. 145, 69 L.Ed. 413 (1925) ). The preliminary showing that must be made by the plaintiff, however, is not meant to be overly burdensome, "allowing for subject matter jurisdiction so long as ‘the federal claim is colorable.’ " Cromer Fin. v. Berger , 137 F.Supp.2d 452, 467 (S.D.N.Y. 2001) (quoting Savoie v. Merchants Bank , 84 F.3d 52, 57 (2d Cir. 1996) ).

B. MOTION TO DISMISS PURSUANT TO RULE 12(b)(6)

"To survive a motion to dismiss [pursuant to Rule 12(b) (6) ], a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). This standard is met "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."Id. A court should not dismiss a complaint for failure to state a claim if the factual allegations sufficiently "raise a right to relief above the speculative level[.]" Twombly , 550 U.S. at 555, 127 S.Ct. 1955. The task of the court in ruling on a motion to dismiss is to "assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof." In re Initial Pub. Offering Sec. Litig. , 383 F.Supp.2d 566, 574 (S.D.N.Y. 2005) (internal quotation marks omitted). The court must accept all well-pleaded factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. See Chambers , 282 F.3d at 152 (citing Gregory v. Daly , 243 F.3d 687, 691 (2d Cir. 2001) ).

III. DISCUSSION

The Court will first consider Honest's motion to dismiss for lack of standing pursuant to Rule 12(b) (1) because it raises a jurisdictional challenge. See Spiro v. Healthport Technologies, LLC , 73 F.Supp.3d 259, 266 (S.D.N.Y. 2014) ("Because it is jurisdictional, the Court first considers defendants' argument that plaintiffs lack standing."); see also Rhulen Agency, Inc. v. Alabama Ins. Guar. Ass'n , 896 F.2d 674, 678 (2d Cir. 1990) ("Where, as here, the defendant moves for dismissal under Rule 12(b)(1), Fed. R. Civ. P., as well as on other grounds, ‘the court should consider the Rule 12(b) (1) challenge first since if it must dismiss the complaint for lack of subject matter jurisdiction, the accompanying defenses and objections become moot and do not need to be determined.’ ").

A. MOTION TO DISMISS PURSUANT TO RULE 12(b)(1)

1. Buonasera's Standing for Unpurchased Products

Relying on the Second Circuit's decisions in NECA–IBEW Health & Welfare Fund v. Goldman Sachs & Co. , 693 F.3d 145 (2d Cir. 2012) and DiMuro v. Clinique Labs., LLC , 572 Fed.Appx. 27 (2d Cir. 2014), Honest argues that Buonasera does not have standing to bring suit on the basis of products that he did not purchase. (See Dkt. No. 35.) On the other hand, Buonasera contends that Second Circuit precedent permits a plaintiff to bring claims for unpurchased products if all the relevant claims implicate the same set of concerns. (See Dkt. No. 37.) The Court will now turn to the issue of whether Buonasera has standing for products he did not personally purchase.

In NECA–IBEW Health & Welfare Fund ,...