Goldstein v. Walmart, Inc.

Docket Number22-cv-00088 (LJL)
Decision Date28 October 2022
Citation637 F.Supp.3d 95
PartiesAileen GOLDSTEIN, individually and on behalf of all others similarly situated, Plaintiff, v. WALMART, INC., Defendant.
CourtU.S. District Court — Southern District of New York

Simon Carlo Franzini, Jonas Bram Jacobson, Dovel & Luner, LLP, Santa Monica, CA, for Plaintiff.

Emily Marie Weissenberger, Michael Fitzgerald Healy, Michael Kevin Underhill, Shook, Hardy & Bacon L.L.P., San Francisco, CA, Joseph Angelo Iemma, Shook Hardy & Bacon, LLP, New York, NY, for Defendant.

OPINION AND ORDER

LEWIS J. LIMAN, United States District Judge:

Aileen Goldstein ("Plaintiff" or "Goldstein") brings this action, individually and on behalf of all others similarly situated, against Walmart, Inc. ("Defendant" or "Walmart"). She alleges, on behalf of a nationwide class, breach of express warranty and breach of the Magnuson-Moss Warranty Act ("MMWA"), and on behalf of a consumer protection subclass, violations of the consumer protection acts of various states1 and Washington, D.C. Dkt. No. 15. On behalf of a New York subclass, she alleges violations of sections 349 and 350 of New York General Business Law. Id. Walmart moves, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), to dismiss Goldstein's amended complaint ("Complaint") for lack of subject matter jurisdiction and for failure to state a claim for relief. Dkt. No. 22.

For the following reasons, the motion to dismiss is GRANTED.

BACKGROUND

The Court accepts as true the well-pleaded allegations of the Complaint, as supplemented by the documents incorporated by reference, for the purposes of this motion to dismiss.

I. The Allegations of the Complaint

Goldstein is a citizen and domiciliary of New York. Dkt. No. 15 ¶ 5. Walmart manufactures, distributes, markets, and sells an over-the-counter ("OTC") cough medicine sold under the brand "Equate," which includes versions of the product similar to brands like Robitussin and DayQuil. Id. ¶¶ 1, 10. Like those brands, many of the Equate products contain the active ingredient Dextromethorphan Hydrobromide ("DXM"). Walmart sells products containing DXM which are prominently marked on the label as "non-drowsy." Id. ¶¶ 1, 11. Such products ("Non-Drowsy Equate Products") include, for example, Adult Tussin DM Cough Syrup, Adult Daytime Severe Cold & Flu medicine, and Daytime Tussin DM Max. Id. ¶ 11.

In or around March 2021, Goldstein bought a bottle of Equate Daytime Tussin DM Max from a Walmart store in Monticello, New York (the "Product"). Id. ¶ 32. The package for the Product said "Non-Drowsy" prominently on the label, and she read and relied on that statement when purchasing the Product. Id. But after taking the recommended dose of the medication as directed on the label by Walmart, Goldstein became unexpectedly drowsy. Id. She was not on any other medication that would have caused drowsiness and there were no other potential causes for drowsiness aside from the ingredients in Defendant's Product. Id.

Goldstein claims that, notwithstanding the claim on the label, "products containing DXM—like the Non-Drowsy Equate Products—do cause drowsiness, and drowsiness is a documented side effect of DXM" at recommended dosages. Id. ¶¶ 16, 17. The Complaint cites a study allegedly showing that " '[s]omnolence is a common side effect of centrally acting antitussive drugs' like [DXM] and that 10.4% of users of products containing DXM develop drowsiness within three days of starting treatment with DXM cough medicine." Id. ¶ 17 (quoting E. Catena & L. Daffonchio, "Efficacy and Tolerability of Levodropopizine in Adult Patients with Non-productive Cough, Comparison with Dextromethorphan," 10 Pulmonary Pharmacology & Therapeutics 89-96 (1997)). That study also indicated that "cases of intense somnolence were related only to dextromethorphan" rather than the other drug addressed in the study. Id. (internal quotation marks omitted). In addition, the Complaint notes that study participants "were given an even smaller dosage of DXM . . . than the recommended dose found in many Equate products." Id. Goldstein also alleges that the adverse event report database of the U.S. Food and Drug Administration ("FDA") "confirm[s] that 'sedation' is one of the most frequently-cited side effects" of DXM-containing products, and that the Federal Aviation Administration prohibits pilots from flying after ingesting DXM. Id. ¶¶ 18-19.

Goldstein alleges that the "Non-Drowsy" representation on the label is false and misleading, noting that FDA regulations prohibit drug labeling that is "false or misleading." Id. ¶¶ 20, 24. The Non-Drowsy Equate Products do not disclose anywhere on their packaging that they do or can cause drowsiness or that drowsiness is a side effect of those products. Id. ¶ 13. Goldstein alleges that based on the label, a reasonable consumer would believe that the products do not cause drowsiness and would believe that drowsiness is not a side effect of the products. Id. ¶ 14. For support, Goldstein cites a Consumer Reports article stating that " 'Non-drowsy' is code for antihistamines and other medications that don't make you sleepy" and a dictionary definition of non-drowsy as "not causing or accompanied by drowsiness." Id. ¶ 21. There is also no language that would "qualify these representations, or that would otherwise put a reasonable consumer on notice of the fact that the Non-Drowsy Equate Products actually cause drowsiness." Id. ¶ 22. Moreover, other drug makers who sell products with DXM, such as Mucinex DM, do not claim that their products are non-drowsy. Id. ¶ 23. Goldstein alleges that Walmart "could have simply omitted the false and misleading statement, Non-Drowsy," from its products. Id. ¶ 24. Alternatively, Goldstein states that Walmart could have labeled it as "less drowsy," as other drug makers do for non-DXM products. Id. ¶¶ 25-26.

Goldstein alleges that Walmart labels the products "Non-Drowsy" intending to cause consumers to rely upon it and believe that the products would not cause drowsiness, so that they would buy more products or pay more for them. Id. ¶¶ 14-15, 56. She further alleges that Walmart's "Non-Drowsy" representation is material to reasonable consumers. Id. ¶ 27. In certain situations, consumers prefer OTC drugs that will not make them drowsy to products that may make them drowsy, particularly if they are using them during the day, or if they are planning to engage in activities, such as work, that require them to be alert. Id. Indeed, in many situations, taking a drug that does or can cause drowsiness can be dangerous, such as when the customer is or plans to be driving. Id. Because customers value the non-drowsiness aspect of the medication, Walmart's false statements increased the demand for the Non-Drowsy Equate Products and allowed them to charge a price premium. Id. ¶ 28. Absent the "non-drowsy" label, demand would drop, and the price would be reduced. Id. ¶ 29. In addition, because the Non-Drowsy Equate Products actually do cause drowsiness, Plaintiff and each class member did not get what they paid for: a cough medicine that does not cause drowsiness. Id. ¶ 30. Goldstein claims that she, and members of her class, sustained economic injuries for these reasons. Id. ¶¶ 28, 30, 31.

Goldstein claims that she would not have purchased the Product had she known that it caused drowsiness. Id. ¶ 32. She also alleges that the price she paid for the Product was artificially inflated by Defendant's misleading "Non-Drowsy" label and that the Product was worthless to her because it causes drowsiness. Id. She also claims that she would purchase Non-Drowsy Equate Products again for non-drowsy use if they were actually "non-drowsy," but since she faces an "imminent threat of harm" because she cannot rely on the labels, she "will not be able to purchase the products." Id. ¶ 33.

II. Federal Regulation of OTC Cough Medicine

The sale in the United States of OTC medications is regulated by the FDA under the Federal Food, Drug, and Cosmetic Act ("FDCA"), 21 U.S.C. § 301 et seq. A manufacturer seeking to sell a new drug in interstate commerce may qualify for an FDA determination that the drug is generally recognized as safe and effective ("GRAS/E") by following a "monograph," which is a detailed regulation established by the FDA for each therapeutic class of OTC drug product. See Natural Res. Def. Council, Inc. v. U.S. Food & Drug Admin., 710 F.3d 71, 75 (2d Cir. 2013). A monograph, which is promulgated by the FDA through the notice-and-comment process, sets "the FDA-approved active ingredients for a given therapeutic class of OTC drugs and provides the conditions under which each active ingredient is GRAS/E." Id. Monographs identify the active ingredients that can be marketed for certain use, such as cough remedies. 21 C.F.R. § 341.1. In the case of antitussive drug products, the monograph sets forth certain "indications" and "warnings" and "directions" to be included on the label, including a "statement of identity" with the name of the product and the kind of medicine it is. Id. § 341.74. Before a monograph is published, an "advisory review panel of qualified experts" "prepare[s] a report containing its conclusions and recommendations to the Commissioner with respect to the safety and effectiveness of the drug." Id. § 330.10; see also Cold, Cough, Allergy, Bronchodilator, and Antiasthmatic Drug Products for Over-the-Counter Human Use; Final Monograph for OTC Antitussive Drug Products, 52 Fed. Reg. 30,042, 30,055-56 (Aug. 12, 1987). The monograph requires certain antitussive products—but not those made with DXM—to include on the label a warning that the drug may cause drowsiness. 21 C.F.R. § 341.74.

The FDCA prohibits the misbranding of drug. A drug is "deemed to be misbranded [if] its labeling is false or misleading in any particular." 21 U.S.C. § 352. The FDA's regulations also provide that:

An over-the-counter cold, cough, allergy, bronchodilator, or antiasthmatic drug product
...

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