Duran v. Henkel of Am., Inc.

• Decision Date: 30 March 2020
• Docket Number: 19 Civ. 2794 (PAE)
• Citation: 450 F.Supp.3d 337
• Parties: Abel DURAN, on behalf of himself and all others similarly situated, Plaintiff, v. HENKEL OF AMERICA, INC., and Henkel Corporation, Defendants.
• Court: U.S. District Court — Southern District of New York

450 F.Supp.3d 337

Abel DURAN, on behalf of himself and all others similarly situated, Plaintiff,

v.HENKEL OF AMERICA, INC., and Henkel Corporation, Defendants.

19 Civ. 2794 (PAE)

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

Signed March 30, 2020

Anne Melissa Seelig, C.K. Lee, Lee Litigation Group, PLLC, New York, NY, for Plaintiff.

Jaclyn DeMais, Greenberg Traurig, LLP, New York, NY, Keith Edward Smith, Greenberg Traurig, LLP, Philadelphia, PA, for Defendants.

OPINION & ORDER

PAUL A. ENGELMAYER, District Judge:

Plaintiff Abel Duran, a New York resident, brings a putative class action against defendant Henkel Corporation ("Henkel"), a Delaware corporation.¹ This lawsuit arises from Duran's purchase of one of Henkel's products, Schwarzkop göt2b ultra glued Invincible Styling Gel (the "Product"). Duran takes issue with the Product's label, which advertises "no flakes." He alleges that this label misleads consumers by suggesting that the Product does not produce flakes, when, in fact, it does. Specifically, Duran brings claims of (1) deceptive and unfair trade practices under New York General Business Law ("GBL") § 349, (2) false advertising under GBL § 350, and (3) New York common law fraud.

Before the Court is Henkel's motion to dismiss Duran's First Amended Complaint ("FAC") and to strike Duran's class claims. For the reasons that follow, the Court denies the motion to dismiss Duran's GBL claims; grants that motion as to Duran's fraud claim; and denies, without prejudice, the motion to strike Duran's class claims.

I. Background

A. Factual Background²

1. Consumer Experiences with the Product

On November 21, 2018, Duran purchased a six-ounce bottle of the Product at a CVS store in Queens County, New York. FAC ¶ 17. The Product's front label included the phrase, "no flakes." Id. ¶¶ 17, 21; see also id. , Ex. A (photograph of label). Duran was persuaded by the label and purchased the Product to avoid the flaky residue that is commonly produced by hair gels. See id. ¶¶ 17, 21. That same day, Duran showered, dried his hair, and applied two drops of the Product to his hair. Id. ¶ 22. He later noticed that the Product had produced "white and grayish flakes, similar to that of dried glue." Id. Duran knows that he did not have flakes in his hair before applying the gel because he had inspected his hair before applying the gel. Id. His hair also does not naturally have flakes, and natural flakes and gel flakes are visually distinguishable. Id.

Some consumers have published complaints about the Product similar to Duran's on online review boards. Id. ¶ 24; see also id. , Ex. B (customer reviews from Amazon and Wal-Mart) ("Reviews"). These reviews complain, inter alia , of the following:

• "Poor hold. Very flaky and crunchy.... [T]his stuff gets very flaky, especially near the end of the day[,]" id. ¶ 24; Reviews at 2;

• "A flaky hot mess ... After it dr[ies] it turns white[;] I real[ly] dislike looking like I have dandruff when I don't[,]" FAC ¶ 24; Reviews at 2;

• "I'm a licensed cosmetologist and I do NOT recommend this product. This irritated my scalp and caused hair loss in the area. Initially I did not realize what was happening when my scalp was flaking severely[,]" FAC ¶ 24; Reviews at 2;

• "Too crunchy and flaky. I find this product to rip my edges out due to the hardness of the product. It leaves a white, flaky and crunchy residue behind[,]" FAC ¶ 24; Reviews at 3;

• "But be careful it does flake very[,] very bad. Got some on my hair, and it was huge white flakes[,]" FAC ¶ 24; Reviews at 3;

• "Really flaky. This gel holds really good but then it gets white and flaky. If the gel didn't get white and flaky I would give it 5 stars[,]" FAC ¶ 24; Reviews at 3;

• "Not good. Goopy flaky, would not recommend this at all[,]" FAC ¶ 24; Reviews at 4;

• "[A]ll it did was give me a ton of flakes and nothing held. It's good for edges though[,]" FAC ¶ 24; Reviews at 4.

Some of the consumers who have complained of flakes have also indicated their satisfaction with the Product. See FAC ¶ 26 (citing Amazon reviews). Others have acknowledged that the Product causes flaking, but have suggested workarounds, such as using the Product sparingly and not touching one's hair after applying it. See id. ¶ 28 (citing Amazon reviews).

2. The Product's Ingredients

The Product contains the ingredient poly N-vinyl-2-pyrrolidone ("PVP"), a water-soluble polymer commonly used in hair gel. Id. ¶ 30; see also id. , Ex. C (back label of Product). The FAC cites an article by Tonya Becker, a cosmetic scientist, id. ¶ 30 (citing Tonya McKay Becker, The Secret Science of Hair Gel, Revealed , Naturally Curly (July 10, 2015), https://www.naturallycurly.com/curlreading/kinky-hair-type-4a/the-nitty-gritty-details-about-hair-gel), and a chapter of a book for cosmetic formulators by Bernard Idson, a pharmacy professor at the University of Texas, id. ¶ 31 (citing Bernard Idson, Polymers as Conditioning Agents for Hair and Skin, in Conditioning Agents for Hair and Skin 251, 259 (Randy Schueller & Perry Romanowski, eds., 1999)), both of which state that PVP can become brittle and flaky in dry weather.³ In addition, the FAC excerpts portions of an article from Cosmetics & Toiletries , a research and development website for cosmetic chemists, which states that Luviset One, an alternative polymer available to hair gel manufacturers, has demonstrated less flaking than PVP. Id. ¶ 34 (citing BASF, Multifunctional Performance from a New Generation Hair Polymer , Cosmetics & Toiletries (Sept. 10, 2014), https://www.cosmeticsandtoiletries.com/formulating/category/haircare/Multifunctional-Performance-from-a-New-Generation-Polymer-274506271.html).

The FAC alleges that Henkel intended to mislead consumers by labeling the Product as one that causes "no flakes," when it contains an ingredient, PVP, that is known to produce flakes. Id. ¶ 42. Specifically, it alleges, upon information and belief, that Henkel employs cosmetic scientists who are familiar with PVP's flaking properties and who knew that alternative ingredients are available. Id. ¶ 43.

3. The Product's Price

Duran paid $7.99 for six ounces—or $1.33 per ounce—for the Product. See id. ¶¶ 17, 41. The FAC compares the Product's price to that of three competitors, who allegedly do not make false claims that their gels do not cause flakes:

• Clubman Pinaud Superhold Styling Gel, which costs $6.95 for 16 ounces, or $0.43 per ounce;

• Queen Helene Styling Gel, Hard to Hold, which costs $4.25 for 16 ounces, or $0.27 per ounce; and

• Via Natural Styling Gel Maximum Hold (Crystal), which costs $2.95 for 16 ounces, or $0.18 per ounce. Id. ¶ 41.

The FAC alleges that Henkel charges a price premium for its product, as compared with these competitor hair gels, because of its fraudulent "no flakes" representations. See id. ¶¶ 39–41. It further claims that, had he known that the Product produced flakes, Duran would not have bought the Product or would have only paid significantly less for it. Id. ¶ 17. Instead, he paid full price for the Product and received a product inferior to what was promised by Henkel. Id. ¶ 39.

B. Procedural History

On March 28, 2019, Duran filed his initial complaint against Henkel Corporation and Henkel of America, Inc., Dkt. 1, and then refiled his initial complaint with exhibits, Dkt. 2. On May 1, 2019, Duran voluntarily dismissed his claims against Henkel of America, Inc. Dkt. 11. On June 7, 2019, Henkel filed a motion to dismiss Duran's initial complaint. See Dkts. 16–18. On June 10, 2019, the Court ordered Duran to amend his complaint or oppose Henkel's motion to dismiss. Dkt. 20.

On July 3, 2019, Duran filed the FAC, the operative complaint here, with attached exhibits. Dkt. 24. On July 26, 2019, Henkel filed its motion to dismiss the FAC, Dkt. 27-1, accompanied by a memorandum of law, Dkt. 27 ("Def. Mem."), and the declaration of Keith E. Smith, Esq., Dkt. 27-2 ("Smith Decl."), and attached exhibits. On August 9, 2019, Duran filed his opposition, Dkt. 28 ("Pl. Mem."), along with a declaration from C.K. Lee, Esq., Dkt. 29 ("Lee Decl."), and an attached exhibit. On August 23, 2019, Henkel filed its reply, Dkt. 32 ("Def. Reply"), along with a reply declaration from Keith E. Smith, Esq., Dkt. 33 ("Smith Reply Decl."), and an attached exhibit.

II. Discussion

First, Henkel argues that the FAC should be dismissed because Duran has failed to state a claim for relief under GBL §§ 349 or 350 for deceptive and unfair trade practices or under New York common law for fraud. Henkel then argues that Duran's claims for injunctive relief, at least, should be dismissed for lack of standing. Finally, Henkel moves to strike Duran's class claims. The Court addresses these four issues in turn.

A. Motion to Dismiss Under Rule 12(b)(6)

To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a complaint must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim will only have "facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). A complaint is properly dismissed where, as a matter of law, "the allegations in a complaint, however true, could not raise a claim of entitlement to relief." Twombly , 550 U.S. at 558, 127 S.Ct. 1955.

For the purpose of resolving a motion to dismiss, the Court must assume all well-pled facts to be true, drawing all reasonable inferences in favor of the plaintiff. See Koch , 699 F.3d at 145. That tenet, however, "is inapplicable to legal conclusions." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937. A pleading that offers only "labels and conclusions" or "a formulaic recitation of the elements of a cause of action will not do." Twombly , 550 U.S. at 555, 127 S.Ct. 1955.

1. GBL §§ 349 and 350 Claims

The...