Ebner v. Fresh, Inc.

• Decision Date: 17 March 2016
• Docket Number: No. 13–56644.,13–56644.
• Parties: Angela EBNER, Plaintiff–Appellant, v. FRESH, INC., a Delaware Corporation, Defendant–Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

818 F.3d 799

Angela EBNER, Plaintiff–Appellant,

v.FRESH, INC., a Delaware Corporation, Defendant–Appellee.

No. 13–56644.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Jan. 11, 2016.

Filed March 17, 2016.

Henry Alexander Iliff (argued), Dorsey & Whitney LLP, New York, NY; James E. Howard, Dorsey & Whitney LLP, Seattle, WA; Adam H. Springel, Springel & Fink LLP, Costa Mesa, CA, for Plaintiff–Appellant.

Stephen R. Smerek (argued), Drew A. Robertson, and Shawn Rieko Obi, Winston & Strawn LLP, Los Angeles, CA, for Defendant–Appellee.

Before: JEROME FARRIS, A. WALLACE TASHIMA, and JAY S. BYBEE, Circuit Judges.

OPINION

TASHIMA

, Circuit Judge:

Angela Ebner ("Plaintiff") alleges that cosmetics and skin care products manufacturer Fresh, Inc. ("Fresh") deceived consumers about the quantity of lip balm in its Sugar Lip Treatment ("Sugar") product line. Although Sugar's label accurately indicates the net weight of included lip product, the tube design uses a screw mechanism that allows only 75% of the product to advance up the tube. A plastic stop device prevents the remaining 25% from advancing past the tube opening. Each Sugar tube contains a weighted metallic bottom and is wrapped in oversized packaging. Plaintiff brought a putative consumer class action against Fresh, alleging that Fresh's label, tube design, and packaging are deceptive and misleading. The district court granted Fresh's Rule 12(b)(6)

motion to dismiss Plaintiff's First Amended Complaint ("FAC") with prejudice. We affirm.

I.

We accept as true the well-pleaded factual allegations in the complaint. Skilstaf, Inc. v. CVS Caremark Corp., 669 F.3d 1005, 1014 (9th Cir.2012)

. According to the FAC, Sugar is a lip treatment that comes in a variety of flavors and tints and sells in retail stores and on the internet for approximately $22.50 to $25.00 per unit. Over the past four years, Plaintiff, a California resident, has purchased Sugar at various locations in Southern California.

Sugar comes in an oversized dispenser tube that uses a screw mechanism to push the lip product to the top of the tube. The tube is packaged and sold in a large cardboard box. Both the tube and the cardboard box have labels indicating the net weight of the included lip product. For an "original" size tube, the indicated product weight is "4.3g e 0.15 oz."; for the "mini" size, the label reads "2.2.g e 0.08 oz." The FAC does not allege that the Sugar tube contains less than the stated quantity of product. Rather, it alleges that the stated product quantity is false and misleading because only a portion of that product is reasonably accessible to the consumer.

Specifically, the tube's screw mechanism permits only 75% of the total lip product to advance past the top of the tube. A plastic stop device prevents the remaining 25% of the product "from being accessible to the consumer in its intended manner or any other reasonable manner." Plaintiff alleges that the "intended manner" of application is to apply the product from the tube directly to the lips. By contrast, other lip balms using a dispenser tube, such as Burt's Bees, make "all or more" of the advertised product weight accessible to the consumer.

Plaintiff alleges that Sugar's "vastly oversized tubes and boxes" create the misleading impression that each unit has a larger quantity of lip product than it actually contains. Each Sugar tube also contains a 5.35 gram metallic weight that is concealed at the base of the tube. Collectively, the tube, cardboard box, weighted bottom, and 4.3 grams of lip product in an original tube of Sugar weigh approximately 29 grams. Plaintiff contends that as a result of Fresh's labeling, design, and packaging practices, she was misled as to the amount of lip product actually accessible in a tube of Sugar and was deprived of the value of her purchases.

The FAC asserts four state-law causes of action: (1) violation of California's False Advertising Law ("FAL"), Cal. Bus. & Prof.Code § 17500 et seq.

; (2) violation of the California Consumers Legal Remedies Act ("CLRA"), Cal. Civ.Code § 1750 et seq.; (3) violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof.Code § 17200 et seq.; and (4) unjust enrichment. Fresh moved to dismiss the FAC under Federal Rule of Civil Procedure 12(b)(6). The district court granted the motion and denied leave to amend. This timely appeal followed.

II.

We have jurisdiction pursuant to 28 U.S.C. § 1291

. "We review de novo the district court's grant of a motion to dismiss under Rule 12(b)(6), accepting all factual allegations in the complaint as true and construing them in the light most favorable to the nonmoving party." Skilstaf, Inc., 669 F.3d at 1014. We may "affirm the district court's dismissal on any ground supported by the record." ASARCO, LLC v. Union Pac. R.R., 765 F.3d 999, 1004 (9th Cir.2014) (citations omitted). Dismissal is appropriate if the plaintiff has not "allege[d] enough facts to state a claim to relief that is plausible on its face." Turner v. City & Cty. of S.F., 788 F.3d 1206, 1210 (9th Cir.2015) (quoting Lazy Y Ranch Ltd. v. Behrens, 546 F.3d 580, 588 (9th Cir.2008) ). Determining whether a complaint states a plausible claim for relief is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

A court's denial of leave to amend is reviewed for an abuse of discretion. Alvarez v. Chevron Corp., 656 F.3d 925, 931 (9th Cir.2011)

. "In dismissing for failure to state a claim, a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Doe v. United States, 58 F.3d 494, 497 (9th Cir.1995) (citation omitted).

III

The district court divided Plaintiff's claims into two categories: (1) claims based on Sugar's labeling; and (2) claims based on Sugar's tube design and packaging. In dismissing the label-based claims, the district court concluded that both California's safe harbor doctrine and federal preemption under the Food, Drug, and Cosmetic Act ("FDCA"), 21 U.S.C. § 301 et seq.,

were independently fatal to Plaintiff's claims. As for the design and packaging claims, the district court concluded that neither Sugar's tube design nor packaging were deceptive or misleading to the reasonable consumer. Additionally, the district court concluded that the FAC failed to plead a violation of the California Fair Packaging and Labeling Act's ("FPLA") prohibition of nonfunctional slack fill, Cal. Bus. & Prof.Code § 12606. We discuss each of these in turn.

A.

1. California's Safe Harbor Doctrine

The UCL, CLRA, and FAL, under which Plaintiff's deceptive labeling claims are brought, all prohibit unlawful, unfair, or fraudulent business practices. See Cal. Bus. & Prof.Code §§ 17200

, 17500 ; see also Cal. Civ.Code § 1770. In California, unfair competition claims are subject to the safe harbor doctrine, which precludes plaintiffs from bringing claims based on "actions the Legislature permits." Cel–Tech Commc'ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal.4th 163, 83 Cal.Rptr.2d 548, 973 P.2d 527, 542 (1999). To fall within the safe harbor, the challenged conduct must be affirmatively permitted by statute—the doctrine does not immunize from liability conduct that is merely not unlawful. As the California Supreme Court explained:

There is a difference between (1) not making an activity unlawful, and (2) making that activity lawful.... Acts that the Legislature has determined to be lawful may not form the basis for an action under the unfair competition law, but acts may, if otherwise unfair, be challenged under the unfair competition law even if the Legislature failed to proscribe them in some other provision.

Id. 83 Cal.Rptr.2d 548, 973 P.2d at 541–42

.

The FAC alleges that, although the Sugar label accurately states the net weight of lip product in the tube, only 75% of that product is reasonably accessible. To the extent the FAC challenges the Sugar label's accurate net weight statement, this claim is barred by the safe harbor doctrine. Both federal and California law affirmatively require cosmetics manufacturers to include an accurate statement of the net weight of included cosmetic product. 21 C.F.R. § 701.13(g)

("The declaration shall accurately reveal the quantity of cosmetic in the package exclusive of wrappers and other material packed therewith[.]"); Cal. Bus. & Prof.Code § 12603(b) ("The net quantity of contents [ ] in terms of weight or mass ... shall be separately and accurately stated ... upon the principal display panel of that label[.]"). Because Fresh complied with federal and state law requiring a net weight statement on Sugar's label, this conduct cannot form the basis of an unfair competition claim. Cal– Tech Commc'ns, Inc., 83 Cal.Rptr.2d 548, 973 P.2d at 541–42.

Plaintiff's other label claim is based on Fresh's omission of any supplemental or clarifying statement about product accessibility. This omission, Plaintiff argues, renders the existing net weight label deceptive and misleading. Unlike a claim seeking to alter the net weight declaration itself, this claim does not fall within the safe harbor because there is no law expressly permitting the omission of supplemental statements. See Davis v. HSBC Bank Nev., N.A., 691 F.3d 1152, 1167 (9th Cir.2012)

("[T]o fall under a safe harbor, the omission of the annual [fee] disclosure from Defendants' advertisements must be expressly permitted by some other provision. It is not enough if [federal law] merely fail[s] to prohibit such an omission."). For that matter, federal regulations governing cosmetic labeling expressly permit "supplemental statements at locations other than the principal display panel(s) describing in nondeceptive terms the net quantity of contents...." 21 C.F.R. § 701.13(q)

. Likewise, the FPLA, Cal. Bus. &...