In re Colgate-Palmolive Softsoap Antibacterial Hand Soap Mktg. & Sales Practices Litig.

• Decision Date: 18 March 2013
• Docket Number: Case No. 12-md-2320-PB
• Parties: In re: Colgate-Palmolive Softsoap Antibacterial Hand Soap Marketing and Sales Practices Litigation
• Court: U.S. District Court — District of New Hampshire

In re: Colgate-Palmolive Softsoap Antibacterial Hand Soap Marketing and Sales Practices Litigation

Case No. 12-md-2320-PB

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

March 18, 2013

All Cases

Opinion No. 2013 DNH 038

MEMORANDUM AND ORDER

Consumers of Softsoap Antibacterial branded soap ("Softsoap Antibacterial") have filed a consolidated class action complaint against Colgate-Palmolive Company ("Colgate"), the manufacturer of Softsoap Antibacterial. Plaintiffs' claims, which are based entirely on state law, charge that Colgate is liable for damages because it induced class members to purchase Softsoap Antibacterial by making false and misleading marketing claims. Colgate has responded by arguing, among other things, that the action should be dismissed or stayed because the Food and Drug Administration ("FDA") has primary jurisdiction over certain factual questions that must be answered to resolve plaintiffs' claims. For the reasons set forth below, I reject Colgate's argument and deny its motion to dismiss or stay to the extent that it is based on the primary jurisdiction doctrine.

I. THE AMENDED COMPLAINT

The active ingredient in Softsoap Antibacterial is triclosan, a chemical that can function as an antibacterial and antifungal agent. The FDA has been studying the safety and effectiveness of triclosan in consumer hand soaps since the 1970s. In 1994, the agency announced that it lacked sufficient evidence to determine whether triclosan is safe and effective for use in consumer hand soaps, and it has not updated its assessment since then, though its review is ongoing.

Plaintiffs assert that numerous scientific studies over the last fifteen years have raised doubts about the safety and effectiveness of triclosan. For example, they claim that studies show that repeated use of triclosan hand soap can produce bacteria that are resistant to the chemical. Additionally, they assert that triclosan kills only some types of bacteria, and is classified as a chlorophenol, a class of chemicals that is suspected of causing cancer in humans. Further, they assert that numerous studies suggest that triclosan hand soaps are no more effective at killing bacteria than regular soap and water.

In light of the data questioning triclosan's safety and effectiveness, plaintiffs argue that Colgate's marketing strategy misled consumers. In particular, Plaintiffs claim that:

- Colgate's use of the "Softsoap Antibacterial" brand is false or misleading because it implies that antibacterial soaps with triclosan are more effective than non-triclosan liquid hand soaps or regular soap and water;

- Assertions that Softsoap Antibacterial "kills 99% of common germs" and "eliminates 99% of germs" are false or misleading because it does not actually kill 99% of germs;

- The assertion that Softsoap Antibacterial is "dermatologist tested" is false or misleading because it was not dermatologist tested;

- The assertion that Softsoap Antibacterial is "clinically proven to eliminate 99% of germs your family encounters" is false or misleading because Colgate has no clinical proof of its assertion;

- The assertion that the product "offers antibacterial protection" is false or misleading because Colgate either lacks facts to substantiate its claim or the claim is false;

- The statements "Goodbye germs. Hello world." are false or misleading because they incorrectly imply that Softsoap Antibacterial products are superior to regular soap and water and non-triclosan hand soaps; and

- The assertion that Softsoap Antibacterial is "America's most trusted hand soap" is false or misleading because Colgate lacks substantiation for its claim.

These allegations provide the basis for plaintiffs' consumer protection, breach of warranty, and unjust enrichment claims.¹ Plaintiffs seek monetary damages, restitution, and disgorgement of revenues. Plaintiffs originally sought injunctive relief as well, but in light of Colgate's disclosure that the company has ceased manufacturing and distributing consumer products containing triclosan, plaintiffs voluntarily abandoned their requests for injunctive relief.

I. STANDARD OF REVIEW

The defendant bases its motion to dismiss or stay on Fed. R. Civ. P. 12(b)(6). In considering a Rule 12(b)(6) motion, the court's review is generally limited to the matters asserted in the complaint. See Curran v. Cousins, 509 F.3d 36, 44 (1st Cir. 2007). I must "accept as true the well-pleaded factual allegations of the complaint, draw all reasonable inferencestherefrom in the plaintiff's favor and determine whether the complaint, so read, sets forth facts sufficient to justify recovery on any cognizable theory." Martin v. Applied Cellular Tech., 284 F.3d 1, 6 (1st Cir. 2002). The plaintiff must make factual allegations sufficient to "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when it pleads "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations omitted).

To decide a Rule 12(b)(6) motion based on the primary jurisdiction doctrine, the court must determine whether referral to a federal agency is appropriate in light of Iqbal and Twombly. Iqbal, 556 U.S. at 678 (2009); Twombly, 550 U.S. at 556. See Cnty. of Santa Clara v. Astra USA, Inc., 588 F.3d 1237, 1252 (9th Cir. 2009), rev'd on other grounds 131 S.Ct. 1342 (2011). Accordingly, it must decide "whether the complaint plausibly asserts a claim that would not implicate thedoctrine." Astra, 588 F.3d at 1252 (emphasis in original). If it does, then the court must deny the motion to dismiss with respect to that claim. Davel Commc'n, Inc. v. Qwest Corp., 460 F.3d 1075, 1088 (9th Cir. 2006) (citing Iqbal, 565 U.S. at 678).

II. ANALYSIS

A. Legal Background: Primary Jurisdiction Doctrine

The primary jurisdiction doctrine applies when a claim that is originally cognizable in either the courts or an administrative agency "requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body." United States v. W. Pac. R.R. Co., 352 U.S. 59, 64 (1956). See Tex. & Pac. Ry. Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 440-42 (1907) (referring an issue to the Interstate Commerce Commission in a case involving interpretation of a statute that, on its face, gave the courts and the ICC concurrent jurisdiction). Thus, despite its name, the primary jurisdiction doctrine is unrelated to a court's subject matter jurisdiction, or power, to hear a dispute. Mashpee Tribe v. New Seabury Corp., 592 F.2d 575, 580 n.1 (1st Cir. 1979). It is, instead, "a prudential doctrine,"Assoc. of Intern. Auto. Mfrs., Inc. v. Comm'r, Mass. Dept. of Evntl. Prot., 196 F.3d 302, 304 (1st Cir. 1999), that is primarily "concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties." W. Pac., 352 U.S. at 63.

The doctrine serves two primary purposes. First, it helps promote "national uniformity in the interpretation and application of a federal regulatory regime . . . by permitting the agency that has primary jurisdiction over the matter in question to have a first look at the problem." Am. Auto. Mfrs. Ass'n v. Mass. Dep't of Envtl. Prot., 163 F.3d 74, 81 (1st Cir. 1998). See also Tex. & Pac. Ry., 204 U.S. at 440-42 (emphasizing agencies' ability to obtain uniformity in the interpretation of federal regulations). A second justification for the doctrine is that it promotes efficiency by allowing courts to capitalize on the expertise that agencies often develop in deciding technical factual questions. Am. Auto. 163 F.3d at 81. See also Far E. Conference v. United States, 342 U.S. 570, 574-75 (emphasizing agencies' "specialized competence"to determine facts "underlying legal issues").²

When a court encounters a factual issue that is within an agency's special competence, it may suspend the judicial process "pending referral of such issues to the administrative body for its views."³ Israel v. Baxter Lab., Inc., 466 F.2d 272, 281 (D.C. Cir. 1972). There is, however, "[n]o fixed formula" for determining when a court should refer a case. W. Pac., 352 U.S.at 64. Accordingly, courts have developed various criteria to guide their discretion. See, e.g., Ellis v. Tribune Television Co., 443 F.3d 71, 81-83 (2d Cir. 2006); Syntek Semiconductor Co., Ltd. v. Microchip Tech., Inc., 307 F.3d 775, 781 (9th Cir. 2002); Mashpee Tribe, 592 F.2d at 580-81.

The First Circuit considers three related factors in determining whether to apply the doctrine: (1) whether an important issue in the case lies "at the heart of an administrative agency's task,"⁴ Ricci v. Chi. Mercantile Exch.,409 U.S. 289, 305 (1973) (cited in Mashpee Tribe, 592 F.2d at 580-81); (2) whether the issue requires the agency's technical expertise, Mashpee Tribe, 592 F.2d at 580-81; and (3) whether, "though perhaps not determinative, the agency determination would materially aid the court."⁵ Id. at 581. These factors animate the purposes of the primary jurisdiction doctrine. See Am. Auto., 163 F.3d at 81 ("In every case, the question is whether the reasons for the existence of the doctrine are present and whether the purposes it serves will be aided by its application in the particular litigation.") (quoting W. Pac., 352 U.S. at 81).

The first factor reflects the doctrine's goals of avoiding disruption of an agency's regulatory regime and promotinguniformity in regulatory interpretation. See id. It manifests the courts' respect for executive agencies' power to perform their core functions as assigned by Congress. The second two factors reflect the doctrine's goal of promoting...