Rosenberg v. S.C. Johnson & Son, Inc.

• Decision Date: 07 February 2023
• Docket Number: 20-CV-869-JPS
• Court: U.S. District Court — Eastern District of Wisconsin
• Parties: OWEN ROSENBERG, CARRIE MCDOUGLE, CHRIS LEMKE, and ANGELA MILLER, Plaintiffs, v. S.C. JOHNSON & SON, INC., Defendant.

OWEN ROSENBERG, CARRIE MCDOUGLE, CHRIS LEMKE, and ANGELA MILLER, Plaintiffs, v. S.C. JOHNSON & SON, INC., Defendant.

No. 20-CV-869-JPS

United States District Court, E.D. Wisconsin

February 7, 2023

ORDER

J. P Stadtmueller U.S. District Judge

1. INTRODUCTION

On June 8, 2020, Plaintiff Owen Rosenberg (“Rosenberg”)^[1] filed this lawsuit, pleading class allegations based on labeling claims of non-toxicity on Windex products. ECF No. 1. On September 28, 2020, Defendant S.C. Johnson & Son, Inc. (“Defendant”) filed a motion to dismiss the complaint. ECF No. 4. On October 19 2020, Rosenberg filed an amended complaint, which added Plaintiffs Carrie McDougle, Chris Lemke, and Angela Miller (“Plaintiffs”). ECF No. 12. On November 16, 2020, Defendant filed a motion to dismiss the amended complaint. ECF No. 14. On August 2, 2021, the Court denied the motion to dismiss the complaint as moot, granted in part the motion to dismiss the amended complaint, and afforded Plaintiffs leave to amend the amended complaint. ECF No. 21. On August 23, 2021, Plaintiffs filed their second amended complaint. ECF No. 22.

On September 7, 2021, Defendant filed a motion to dismiss the second amended complaint and a motion to stay. ECF Nos. 23, 25. The motion to stay was premised on a parallel class action that had been filed in California state court on July 15, 2020, following the commencement of this action: Clark v. S.C. Johnson & Son, Inc., No. RG20067897 (Cal. Super. Ct.) (the “Clark Action”). ECF No. 32 at 1-3; ECF No. 43-2. On October 18, 2021, the Court granted the motion to stay. Id. The Court noted that “[t]he crux of [Plaintiffs'] opposition to the motion for a stay [wa]s that the Clark settlement is unfair” and constituted a “reverse auction.” Id. at 2-3. However, the Court explained that another party had raised this concern before the California state court, the Clark Action received preliminary approval, and that “the issue of whether to approve a potentially reverse-auctioned settlement [wa]s not before this Court; that is something for the [California state] court to determine .... [I]f the [California state] court is satisfied with the settlement, then the class claims raised in this litigation may well be foreclosed.” Id. at 3.

On February 28, 2022, the Court lifted the stay following the parties' notification that the California state court had granted final approval of a class settlement in the Clark Action. ECF No. 36. Thereafter, in accordance with the Court's protocols (as it presumably followed a meet-and-confer, see ECF No. 30), Plaintiffs filed a third amended complaint. ECF No. 41. On May 13, 2022, Defendant filed a motion to dismiss the third amended complaint, or in the alternative to strike the class allegations, on the basis of the settlement in the Clark Action. ECF No. 42. That motion is now fully briefed, ECF Nos. 43, 45, 46, and for the reasons set forth herein, the motion will be granted in part and denied in part.

2. LEGAL STANDARDS

2.1 Rule 12(b)(1)

Federal Rule of Civil Procedure 12(b)(1) provides for dismissal of a case where the Court lacks subject matter jurisdiction. When faced with a jurisdictional challenge, the Court accepts as true the well-pleaded factual allegations found in the complaint, drawing all reasonable inferences in favor of the plaintiff. Ctr. For Dermatology & Skin Cancer, Ltd. v. Burwell, 770 F.3d 586, 588 (7th Cir. 2014). In this context, the Court may also consider extrinsic evidence adduced by the parties. Lee v. City of Chicago, 330 F.3d 456, 468 (7th Cir. 2003).

2.2 Rule 12(b)(6) and Rule 9(b)

Federal Rule of Civil Procedure 12(b) provides for dismissal of complaints which, among other things, fail to state a viable claim for relief. Fed.R.Civ.P. 12(b)(6). To state a claim, a complaint must provide “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). In other words, the complaint must give “fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The allegations must “plausibly suggest that the plaintiff has a right to relief, raising that possibility above a speculative level.” Kubiak v. City of Chicago, 810 F.3d 476, 480 (7th Cir. 2016) (internal citation omitted). Plausibility requires “more than a sheer possibility that a defendant has acted unlawfully.” Olson v. Champaign County, 784 F.3d 1093, 1099 (7th Cir. 2015) (internal citations and quotations omitted). In reviewing the complaint, the Court is required to “accept as true all of the well-pleaded facts in the complaint and draw all reasonable inferences in favor of the plaintiff.” Kubiak, 810 F.3d at 480-81. However, the Court “need not accept as true legal conclusions, or threadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009) (internal citations and quotations omitted).

“In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b). In other words, the Plaintiff must set forth the “who, what, when, where, and how of the fraud.” Pirelli Armstrong Tire Corp. Retiree Med. Benefits Tr. v. Walgreen Co., 631 F.3d 436, 441-42 (7th Cir. 2011) (quoting United States ex rel. Lusby v. Rolls-Royce Corp., 570 F.3d 849, 854 (7th Cir. 2009)).

3. RELEVANT FACTS

3.1 Underlying Allegations

Plaintiffs are three individuals who bought certain Windex “NonToxic Formula” products, believing such purchases would “avoid harm caused by harsh chemicals.” ECF No. 41 at 15. The products in question are Windex Original Glass Cleaner, Windex Multi-Surface Cleaner, Windex Vinegar Cleaner, and Windex Crystal Rain (Ammonia-Free) (collectively, the “Products”). Id. at 14-15. Each Product boasts a “non-toxic formula.” Id. at 6.

Plaintiffs contend that “[i]n spite of the labeling, the Products contain, in varying combinations, ingredients that are harmful to humans, animals, and/or the environment.” Id. at 8. Plaintiffs list which of the Products contain which ingredients and explain the harm that they attribute to each listed ingredient. Id. at 9-12. According to Plaintiffs, “Defendant's branding and packaging of the Products is designed to-and does-deceive and mislead consumers.” Id. at 12. Moreover, “[t]he marketing of the Products as ‘non-toxic' has a material bearing on price and consumer acceptance of the [P]roducts because consumers are willing to pay more for such Products”; in other words, “[a]s a result of the false and misleading labeling, the Products are sold at a premium price.” Id. at 12-13. Plaintiffs allege that had they “known the truth, they would not have bought the [P]roducts or would have paid less for them.” Id. at 12.

The Federal Trade Commission has promulgated a series of regulations known as the “Green Guides” to “help marketers avoid making environmental marketing claims that are unfair or deceptive.” Id. at 6 (quoting 16 C.F.R. § 260.1). These regulations forbid misrepresentations, “directly or by implication, that a product, package, or service is non-toxic,” either to humans or the environment generally. Id. at 7 (quoting 16 C.F.R. § 260.10(a)). The Green Guides instruct marketers to “have reliable scientific evidence” that the product in question “is non-toxic for humans and for the environment.” Id. (citing 16 C.F.R. § 260.10(b)). The Environmental Protection Agency has commented that it “believes that marketers will rarely, if ever, be able to adequately qualify and substantiate such a claim of ‘non-toxic' in a manner that will be clearly understood by consumers.” Id. (citation and internal quotations omitted).

The National Advertising Division of the Council of Better Business Bureaus, Inc. (the “NAD”) “examines advertising claims made for . . . ‘green' or natural claims.” Id. at 7-8. Around March 2020, the NAD launched an investigation into the Products' non-toxic claims and found that the term “non-toxic” as used by the Products signifies to reasonable consumers that the Products will not be harmful to people, common pets, or the environment. Id. at 8. The NAD also concluded that a reasonable consumer's understanding of “will not harm” is not limited to toxins that cause death, but “also various types of temporary physical illness, such as vomiting, rash and gastrointestinal upset.” Id. (citation and internal quotations omitted).

Plaintiffs' putative class is defined as

[A]ll consumers who reside in the United States (except for residents of California or New York) who purchased any of the Products in the United States (except for purchases of the Products made in the states of California or New York), who bought any of the Products during the time period June 8 2017 to the time of trial. (“Class”).

Plaintiffs also seek to represent a sub-class of Wisconsin residents who purchased the Products in the state of Wisconsin at any time during the time period June 8, 2017 to the time of trial. (“Wisconsin Sub-Class”).

Id. at 16. Plaintiffs plead claims (1) under the Wisconsin Deceptive Trade Practices Act (“DTPA”), which they assert “applies to a Class of purchasers of Defendant's products bearing the Non-Toxic label, both within and outside of Wisconsin, who have been harmed as a result,” given that Defendant's “Non-Toxic marketing program was devised, implemented and directed from Defendant's headquarters in Racine, Wisconsin,” and (2) for unjust enrichment.^[2] 3.2 The Clark Action^[3]

The plaintiffs in the Clark Action also alleged that the non-toxic label on the Products is false and misleading because the Products contain ingredients harmful to people pets, and the environment, and that...