Kellman v. Whole Foods Mkt., Inc.

Decision Date12 June 2018
Docket NumberCase No. 17–cv–06584–LB
Citation313 F.Supp.3d 1031
Parties Shosha KELLMAN, et al., Plaintiffs, v. WHOLE FOODS MARKET, INC., et al., Defendants.
CourtU.S. District Court — Northern District of California

David A. Searles, James A. Francis, Francis & Mailman, Philadelphia, PA, Yvette Y. Golan, The Golan Firm, Washington, DC, Stephanie R. Tatar, Tatar Law Firm, APC, Burbank, CA, for Plaintiffs.

Brian R. Blackman, J.T. Wells Blaxter, Blaxter | Blackman LLP, San Francisco, CA, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS AND DENYING DEFENDANTS' MOTION TO STRIKE

Re: ECF No. 35

LAUREL BEELER, United States Magistrate Judge

INTRODUCTION

Shosha Kellman, a California resident, and Abigail Starr, a New York resident, are suing four corporate entities associated with the Whole Foods supermarket chain. The plaintiffs allege that Whole Foods has been mislabeling certain household and body-care products that it sells as "hypoallergenic" despite the fact that they actually contain known allergens.

The plaintiffs bring this suit as a class action under Federal Rule of Civil Procedure 23 on behalf of themselves and other consumers who bought these "hypoallergenic"-labeled products. They define three classes: a nationwide class, a California class, and a New York class. The plaintiffs' operative Second Amended Complaint ("SAC") asserts claims for (1) breach of express warranty, (2) unjust enrichment, (3) unfair and deceptive acts and practices in violation of California's Consumers Legal Remedies Act ("CLRA"), Cal. Civ. Code §§ 1750 – 1785, (4) violations of California's False Advertising Law ("FAL"), Cal. Bus. & Prof. Code § 17500 et seq., (5) violations of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200 et seq., (6) violations of New York's General Business Law § 349, and (7) violations of New York's General Business Law § 350. The plaintiffs name as defendants (1) Whole Foods Market, Inc. ("WFMI"), the parent Whole Foods holding company, (2) Whole Foods Market California, Inc. ("WFM California"), a subsidiary that operates Whole Foods retail stores in northern California, (3) Whole Foods Market Services, Inc. ("WFM Services"), a subsidiary that provides various administrative services to other Whole Foods entities, and (4) Whole Foods Market Group, Inc. ("WFM Group"), a subsidiary that operates Whole Foods retail stores in various eastern states, including New York.

The defendants move to dismiss under Federal Rules of Civil Procedure 12(b)(1), 12(b)(2), and 12(b)(6). First, the defendants argue that the court does not have personal jurisdiction over the non-Californian defendants WFMI, WFM Services, and WFM Group, or over Ms. Starr's non-Californian claims, and that the court should dismiss these defendants and claims under Rule 12(b)(2). Second, the defendants argue that the plaintiffs have not alleged plausible claims for false or misleading advertising or for breach of express warranty and that the court should dismiss these claims under Rule 12(b)(6). Third, the defendants argue that the plaintiffs do not have standing to pursue claims for any products other than the ones that the plaintiffs themselves purchased and that the court should dismiss these claims under Rule 12(b)(1). The defendants also move to strike allegations about products that the plaintiffs themselves did not purchase and product representations that the plaintiffs themselves did not see or rely on from the SAC under Rule 12(f).

The court finds this matter suitable for determination without oral argument. N.D. Cal. Civil L.R. 7–1(b). The court grants the defendants' motion in part and (1) dismisses WFMI, WFM Services, and WFM Group for lack of personal jurisdiction, (2) dismisses Ms. Starr's claims for failure to state a claim against WFM California, and (3) dismisses the plaintiffs' claims for products for which they identify no ingredients (and therefore identify no allergens) for lack of standing. In all other respects, the court denies the defendants' motion to dismiss. The court denies the defendants' motion to strike. The court grants the plaintiffs leave to file an amended complaint within 14 days of the date of this order.

STATEMENT1
1. Allergens and Skin Sensitizers

According to the Centers for Disease Control and Prevention ("CDC"), 8.8 million children (12% of U.S. children) reported skin allergies

in 2012.2 Skin allergies are even more prevalent among young children: the CDC reports that 14.2% of children between the ages of 0 and 4 suffered a skin allergy

in 2012.3 These numbers may underreport the prevalence of allergic-contact dermatitis : recent studies show that somewhere between 14–70% of children suffer from skin allergies, based on positive patch skin tests.4 Skin allergies are similarly prevalent among adults.5

When skin is exposed to a sufficient amount of a chemical allergen, the skin is "sensitized."6 Upon re-exposure to the allergen, the skin initiates an inflammatory cascade, causing skin changes associated with allergic-contact dermatitis

.7 These include redness, edema (fluid retention ), scaling, fissures (cracking), vesicles (fluid-filled sacs), bullae (bubble-like cavities), and eventually oozing.8 Contact sensitization and related skin allergies can severely affect a person's quality of life, depending on the severity and the site of skin sensitization.9 People suffering from noticeable skin allergies will try to hide the symptoms under clothing if possible, and if not, will avoid public spaces entirely.10 In either case, skin allergies can dramatically affect a person's confidence and engagement in life.11

It is difficult to identify the substance causing an allergic response.12 Allergic-contact dermatitis

develops several days after exposure to a skin allergen.13 Some substances do not cause symptoms until a week after exposure.14 Additionally, once an individual is sensitized to an allergen, future contact with the allergen can trigger a response in the original site of sensitization.15 For example, if someone had an allergic response to a product used on the face, and later used a different product containing the same allergen on the legs, the allergic response will occur again on the face—even if the face was never exposed to the second product.16 When a consumer cannot identify the material that triggers an allergic reaction, allergic-contact dermatitis will persist, and, it is believed, will take longer to resolve even after the cause is identified.17 Once skin is sensitized, even a minute amount of the chemical allergen is enough to cause a full-blown allergic response.18

The scientific and regulatory definition of a "skin sensitizer" is a substance that causes sensitization by skin contact in a substantial number of persons based on human evidence or appropriate animal testing.19 If a skin sensitizer makes up 0.1% or more of a product, or if the product contains a sensitizer that may elicit an allergic response at concentrations smaller than 0.1% in individuals who are already sensitized to the chemical, the entire product mixture is classified as a skin sensitizer, i.e., the product causes sensitization by skin contact in a substantial number of persons based on human evidence or appropriate animal testing.20 A product that is a skin sensitizer is not hypoallergenic.21

2. Whole Foods's Labeling of Products as "Hypoallergenic"

Whole Foods advertises itself as "America's Healthiest Grocery Store."22 It lists "quality standards" and identifies as its top standard: "We carefully evaluate each and every product we sell."23 Whole Foods stresses not only product safety, but also ingredient safety.24 As Whole Foods explains:

OUR BODY CARE QUALITY STANDARDS
We carry the finest, high-quality beauty, hair and body care products available because we believe the quality of the items and ingredients you put on your body is as important as the foods and nutritional supplements

you put in your body. We evaluate the quality of personal care products in terms of ingredients, experience, and efficacy.25 Whole Foods knows that consumers rely upon it to not only test the final product formulation for basic safety, but also to select only those ingredients that it considers to be safe.26

On product labels and on its retail website, Whole Foods represents that certain of the products it sells are "hypoallergenic."27 Whole Foods does not label all of its products as "hypoallergenic."28 Instead, it labels only some of its products as "hypoallergenic," giving consumers the impression that it carefully reviewed each ingredient in its products to ensure that the "hypoallergenic" promise was made for only those products that are truly hypoallergenic.29 These products, however, actually contain skin sensitizers, skin irritants, eye irritants, and other deleterious compounds.30

The plaintiffs name (1) 365 Baby Foaming Wash, (2) 365 Baby Lotion, (3) 365 Baby Shampoo, (4) 365 Bubble Bath, (5) 365 Gentle Skin Cleanser

, (6) 365 Kids' Foaming Wash, (7) 365 Maximum Moisture Body Lotion, (8) 365 Moisturizing Lotion, (9) Whole Foods Market Baby Laundry Detergent, (10) Whole Foods Market Organic Laundry Detergent, (11) Wild Kratts Bubble Bath, and (12) Wild Kratts Kids Foaming Body Wash (which the SAC calls the "Falsely Labeled Products").31 Whole Foods represents that each of these products is "hypoallergenic."32 Whole Foods additionally represents that the products are "non-toxic" and "safe," have "only the gentlest ingredients," and/or cause "no tears."33 The plaintiffs allege, however, that each of these products contains known skin sensitizers.34 Each of these products contains known skin or eye irritants, carcinogens, teratogens, mutagens, or pollutants.35 Each of these products contains substances that have not been adequately assessed for safety or skin-sensitization potential.36

The plaintiffs additionally name (1) 365 Diapers, (2) 365 Sustainably Soft Bath Tissue, (3...

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