Hill v. Roll Int'l Corp.

• Decision Date: 26 May 2011
• Docket Number: No. A128698.,A128698.
• Citation: 128 Cal.Rptr.3d 109,2011 Daily Journal D.A.R. 7641,11 Cal. Daily Op. Serv. 6385,195 Cal.App.4th 1295
• Parties: Ayana HILL, Plaintiff and Appellant, v. ROLL INTERNATIONAL CORPORATION et al., Defendants and Respondents.
• Court: California Court of Appeals Court of Appeals

195 Cal.App.4th 1295

128 Cal.Rptr.3d 109

11 Cal. Daily Op. Serv. 6385

2011 Daily Journal D.A.R. 7641

Ayana HILL, Plaintiff and Appellant,

v.ROLL INTERNATIONAL CORPORATION et al., Defendants and Respondents.

No. A128698.

Court of Appeal, First District, Division 2, California.

May 26, 2011.

Reese Richman LLP, Michael R. Reese, for Plaintiff and Appellant.

Roll Law Group P.C., Los Angeles, Daniel S. Silverman, Daniel A. Beck; Sheppard Mullin Richter & Hampton LLP, San Francisco, Neil A.F. Popovic, for Defendant and Respondent.

RICHMAN, J.

Plaintiff Ayana Hill bought bottles of Fiji water, on the label of which was a green drop—a drop, she claimed, that represented Fiji bottled water was environmentally superior to other waters and endorsed by an environmental organization. Alleging that it was not, Hill filed a proposed class action on behalf of herself and other consumers of Fiji bottled water, naming Roll International Corporation (Roll) and Fiji Water Company LLC (Fiji Water), asserting violations of California's Unfair Competition Law (UCL) (Bus. & Prof.Code, § 17200 et seq.), False Advertising Law (FAL) (§ 17500 et seq.), and Consumers Legal Remedies Act (CLRA) (Civ.Code, § 1750 et seq.), plus common law fraud and unjust enrichment.¹ The trial court ruled that Hill's amended complaint failed to state a cause of action ( Code Civ. Proc., § 430.10, subd. (e)), denied further leave to amend, and dismissed the complaint. We affirm.

I. BACKGROUND

Hill's complaint alleges that consumers have become increasingly aware of, and sensitive to, the impact of their purchases on the environment, spawning an environmental “movement” that demands products that are “environmentally superior” to like products in their manufacturing, packaging, and distribution processes. The term “green” (oddly capitalized throughout the complaint) is commonly used to describe such products and the movement that demands them. Companies designate their products as green through written representations and visual images—“such as a green raindrop or pictures of the Earth”—and consumers who see such representations on products are led to believe that those products are “environmentally superior” when compared to products that lack such designations.

Companies motivated by increased profits have made deceptive, misleading, and false representations, a practice known as “greenwashing” (again, capitalized) that “has become so rampant” that the Federal Trade Commission (FTC) has issued standards known as “ ‘Green Guides.’ ”

Hill further alleges that defendants ² have allegedly violated several provisions of those standards by misrepresenting their product as environmentally superior to those of their competitors when, in fact, the processes used for Fiji bottled water “cause as much, if not more, environmental damage” as their competitors.³ Defendants “accomplish this deception,” first, through conspicuous placement of a “ ‘Green Drop’ seal of approval label on the front of the product” that “looks similar to environmental ‘seals of approval’ ... by several independent, third-party organizations.” This connotes approval by such organizations when, in fact, the green drop is created by defendants themselves, for “touting their own product.” Further, in their packaging and marketing, defendants have “called their product FijiGreen” and, in stores and other public places, “stated that ‘Every Drop is Green.’ ” And, Hill alleges, “This Green Drop is deceptive because it conveys that the product is environmentally sound and superior to other bottled waters that do not contain the Green Drop. Furthermore, the Green Drop looks similar to environmental ‘seals of approval’ conveyed by several independent, third-party organizations, thereby further misleading consumers to believe that the Green Drop is a seal of approval from an independent third party.”

Hill's pleading includes photographic images. One shows the front label of a bottle that bears a circumscribed green drop; another shows four back labels, each with the green drop symbol adjacent to an indicated Internet website, “fijigreen.com”; and a third seems to show a store display featuring two of the green drop symbols, and “Every drop is green” between them. A full page of illustrations provided by Hill (and appended to this opinion) shows the green drop—not circumscribed—next to allegedly “independent” seals designating lack of testing on animals or compliance with unstated environmental standards, plus symbols for recyclable products and Earth Day.

Hill's personal allegations are that, starting in 2008, she bought Fiji water about twice a week from Walgreens stores in San Francisco, relying on representations that the product was “environmentally friendly and superior.” She paid a price about 15 percent higher than other bottled water, and would not have bought Fiji water “had she known the truth that the Green Drop was the creation of [defendants], not a neutral party or environmental group, and that Fiji bottled [w]ater was not environmentally friendly or superior to similar bottle[d] water available at cheaper prices.”

II. DISCUSSION

A. Review Standards

On review of a demurrer sustained without leave to amend, “[t]he reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. [Citations.] The court does not, however, assume the truth of contentions, deductions or conclusions of law. [Citation.]” ( Aubry v. Tri–City Hospital Dist. (1992) 2 Cal.4th 962, 966–967, 9 Cal.Rptr.2d 92, 831 P.2d 317.) “[I]t is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. [Citation.] And it is an abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment. [Citation.]” ( Id. at p. 967, 9 Cal.Rptr.2d 92, 831 P.2d 317.)

A court generally confines itself to the pleading but, as appropriate, may extend its consideration to matters subject to judicial notice. ( Smiley v. Citibank (1995) 11 Cal.4th 138, 146, 44 Cal.Rptr.2d 441, 900 P.2d 690.) “[W]hen the allegations of the complaint contradict or are inconsistent with such facts, we accept the latter and reject the former. [Citations.]” ( Blatty v. New York Times Co. (1986) 42 Cal.3d 1033, 1040, 232 Cal.Rptr. 542, 728 P.2d 1177.) We give the same precedence to facts evident from exhibits attached to the pleading. ( Breneric Associates v. City of Del Mar (1998) 69 Cal.App.4th 166, 180, 81 Cal.Rptr.2d 324;Dodd v. Citizens Bank of Costa Mesa (1990) 222 Cal.App.3d 1624, 1626–1627, 272 Cal.Rptr. 623.) Efforts to show reasoning errors are beside the point. “ ‘Our only task in reviewing a ruling on a demurrer is to determine whether the complaint states a cause of action.’ ” ( People ex rel. Lungren v. Superior Court (1996) 14 Cal.4th 294, 300, 58 Cal.Rptr.2d 855, 926 P.2d 1042;Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125, 271 Cal.Rptr. 146, 793 P.2d 479.) We do that independently ( Smiley v. Citibank, supra, 11 Cal.4th at p. 146, 44 Cal.Rptr.2d 441, 900 P.2d 690), regardless of reasons stated by the trial court. ( Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 111, 55 Cal.Rptr.3d 621.)

Our Division has stated, in resolving an appeal based on the reasonable-consumer standard following a bench trial, that “[t]he standard to be used in evaluating whether an advertisement is deceptive under the UCL is purely a question of law.” ( Lavie v. Procter & Gamble Co. (2003) 105 Cal.App.4th 496, 503, 129 Cal.Rptr.2d 486.) Other courts have stated that whether a business practice is fraudulent, deceptive, or unfair is generally a question of fact requiring the consideration and weighing of evidence, and usually cannot be decided on demurrer. ( Linear Technology Corp. v. Applied Materials, Inc. (2007) 152 Cal.App.4th 115, 134–135, 61 Cal.Rptr.3d 221;McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1472, 49 Cal.Rptr.3d 227;Williams v. Gerber Products Co. (9th Cir.2008) 552 F.3d 934, 938–939.) This is not an irreconcilable conflict: generally and usually do not mean invariably, and a demurrer must be sustained when the assumed facts show lack of a valid claim. (See e.g., McKenney, supra, 167 Cal.App.4th at p. 77, 83 Cal.Rptr.3d 810.) And this is the case here, as we hold that, taking as true all well pleaded facts in Hill's complaint, no reasonable consumer would be misled to think that the green drop on Fiji water represents a third party organization's endorsement or that Fiji water is environmentally superior to that of the competition.

B. Statutory Claims

Broadly stated: The UCL prohibits “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by the [FAL]” (§ 17200); the FAL prohibits advertising “which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading” (§ 17500); and the CLRA prohibits specified “unfair methods of competition and unfair or deceptive acts or practices” (Civ.Code, § 1770, subd. (a)). While the operative language of each law differs, Hill bases each claimed violation on an act not itself made a cause action. She uses the Environmental Marketing Claims Act (EMCA) (§ 17580 et seq.), section 17580.5, subdivision (a) of which incorporates into the EMCA definition of “ ‘environmental marketing claim’ ... any claim contained in the ‘Guides for the Use of Environmental Marketing Claims' published by the Federal Trade Commission” (16 C.F.R., pt. 260 (2011)) (hereafter guides, or FTC guides). ⁴

The FTC guides themselves flow from a task force of state attorneys general that looked into potentially misleading environmental advertising claims growing out of...