Anderberg v. The Hain Celestial Group, Inc.

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 HEIDI ANDERBERG, individually and on Case No.: 3:21-cv-01794-RBM-SBC behalf of others similarly situated, 12 ORDER DENYING DEFENDANT’S Plaintiff, 13 MOTION FOR RECONSIDERATION v. 14 [Doc. 42] THE HAIN CELESTIAL GROUP, INC., a 15 Delaware Corporation, 16 Defendant. 17 18 19 On March 2, 2022, Defendant The Hain Celestial Group, Inc. (“Defendant”) filed a 20 Motion to Dismiss Plaintiff Heidi Anderberg’s (“Plaintiff”) First Amended Class Action 21 Complaint (“Motion to Dismiss”). (Doc. 16.) Plaintiff filed an opposition to Defendant’s 22 Motion to Dismiss on April 11, 2022 (Doc. 19), and Defendant filed its reply on April 18, 23 2022 (Doc. 20). On January 26, 2023, the Court issued its Order Denying Defendant’s 24 Motion to Dismiss Plaintiff’s First Amended Class Action Complaint (“Order”). (Doc. 25 23.) 26 On June 30, 2023, Defendant filed a Motion for Reconsideration (“Motion for 27 Reconsideration”). (Doc. 42.) Plaintiff filed an opposition to the Motion for 28 Reconsideration (“Opposition”) on August 7, 2023 (Doc. 44), and Defendant filed a reply 1 on August 11, 2023 (“Reply”) (Doc. 47). 2 For the reasons set forth below, Defendant’s Motion for Reconsideration is 3 DENIED. 4 I. BACKGROUND 5 A. Plaintiff’s First Amended Complaint 6 On October 20, 2021, Plaintiff filed this class action complaint against Defendant. 7 (Doc. 1.) Plaintiff subsequently filed a First Amended Class Action Complaint (“FAC”) 8 on February 2, 2022. (Doc. 13.) Plaintiff’s FAC asserts the following causes of action: 9 (1) violations of California’s Unfair Competition Law (“UCL”), (2) violations of 10 California’s Consumers Legal Remedies Act (“CLRA”), (3) violations of California’s 11 False Advertising Law (“FAL”), (4) breach of express warranty, and (5) breach of implied 12 warranty. (FAC ¶¶ 77–125.) 13 In her FAC, Plaintiff asserts that Defendant “markets and sells chemical sunscreens 14 with labeling and advertising that leads consumers to believe that the sunscreens are 15 ‘Reef[]Friendly’, when in fact the chemical sunscreens contain active ingredients known 16 to damage coral reefs and the marine life that inhabit them.” (FAC ¶ 7.) The FAC discusses 17 the dangers various chemicals pose to coral reefs and states “[c]hemical sunscreens 18 generally consist of a combination of different chemical ingredients, primarily 19 oxybenzone, octinoxate, and avobenzone, but also include[] other chemicals such as 20 octocrylene and homosalate” each of which “are known to cause harm to coral reefs and 21 marine life.” (FAC ¶ 20.) Thus, Plaintiff argues that Defendant labeling its sunscreen 22 products as “Reef Friendly” is misleading because the products “contain avobenzone, 23 octocrylene, homosalate and octyl salicylate.” (FAC ¶¶ 30, 49.) 24 The FAC includes Plaintiff’s individual allegations as well as class allegations. In 25 regard to Plaintiff’s individual allegations, she explains that she “has been purchasing Alba 26 Botanica Hawaiian Sunscreen Coconut Clear Spray 50 and Alba Botanica Hawaiian 27 Sunscreen Green Tea 45 (cream version) consistently for the past two years for personal 28 and household use.” (FAC ¶ 55.) Plaintiff is “eco-conscious” and “believed the products 1 to have clean chemicals and be reef friendly as advertised.” (FAC ¶¶ 56–57.) Thus, 2 Plaintiff alleges she “paid an unlawful premium for the product advertised as reef friendly 3 when it in fact is not safe for coral reefs and marine life” and “would not have purchased 4 the products had the product been truthfully advertised.” (FAC ¶¶ 64–65.) Accordingly, 5 Plaintiff claims she “was harmed and suffered injury in fact and lost money as a result of 6 Defendant’s false, unfair and fraudulent practices.” (FAC ¶ 65.) 7 In regard to Plaintiff’s class allegations, Plaintiff lists a total of fourteen of 8 Defendant’s chemical sunscreens (the “Products”) “which bear labeling stating ‘Reef 9 Friendly,’ yet contain octocrylene and/or avobenzone.” (FAC ¶ 34.) Plaintiff thus brings 10 a class action on behalf of a nationwide class and a California subclass of individuals who, 11 within the applicable limitations period, purchased any of the fourteen products from 12 Defendant. (FAC ¶ 67.) 13 B. Defendant’s Motion to Dismiss 14 On March 2, 2022, Defendant filed its Motion to Dismiss Plaintiff’s FAC. (Doc. 15 16-1.) In its Motion to Dismiss, Defendant argued that the term “Reef Friendly” is not 16 deceptive because a “reasonable consumer” would not be misled by the representation. (Id. 17 at 4.)1 Specifically, Defendant argued that, when viewed as a whole, the sunscreen 18 labeling, including the ingredient list on the back, makes clear that “Reef Friendly” only 19 refers to the absence of oxybenzone and octinoxate. (Id. at 5.) Defendant also contended 20 that a manufacturer may use the ingredient list to eliminate any “purported ambiguity” on 21 the front label. (Id. at 8.) 22 In the Court’s Order on Defendant’s Motion to Dismiss, the Court found that it could 23 not conclude as a matter of law that a reasonable consumer would not be deceived by the 24 term “Reef Friendly” and decided that this was not the “rare situation” warranting dismissal 25 of Plaintiff’s UCL, CLRA, and FAL claims. (Doc. 23 at 12.) 26 27 28 1 C. Defendant’s Motion for Reconsideration 2 On June 30, 2023, Defendant filed the Motion for Reconsideration at issue here. 3 (Doc. 42-1.) Defendant argues that the Ninth’s Circuit’s recent decision in McGinity v. 4 Procter & Gamble Co., 69 F.4th 1093 (9th Cir. 2023) (“McGinity”) is an “intervening 5 change” in “controlling law” that dictates a different result on its Motion to Dismiss. (Id. 6 at 6–7.) 7 II. LEGAL STANDARD 8 Civil Local Rile 7.1(i) outlines the proper procedures for applications for 9 reconsideration: 10 1. Whenever any motion or any application or petition for any order or other relief has been made to any judge and has been refused in whole or in part, … 11 it will be the continuing duty of each party and attorney seeking such relief to 12 present to the judge to whom any subsequent application is made an affidavit of a party or witness or certified statement of an attorney setting forth the 13 material facts and circumstances surrounding each prior application, including 14 inter alia: … what new or different facts and circumstances are claimed to exist which did not exist, or were not shown, upon such prior application. 15

16 2. Except as may be allowed under Rules 59 and 60 of the Federal Rules of Civil Procedure, any motion or application for reconsideration must be filed 17 within twenty-eight (28) days after the entry of the ruling, order or judgment 18 sought to be reconsidered.

19 Civ. L.R. 7.1(i) (emphasis added). Here, Defendant’s Motion was not filed within 28 days 20 of the Court’s order denying Defendant’s Motion to Dismiss; therefore, Defendant’s 21 Motion must be permissible under Federal Rules of Civil Procedure 59 or 60. 22 “[A] motion for reconsideration ‘is treated as a motion to alter or amend judgment 23 under Federal Rule of Civil Procedure Rule 59(e) if it is filed within ten days of entry of 24 judgment. Otherwise, it is treated as a Rule 60(b) motion for relief from a judgment or 25 order.’” Cir. City Stores, Inc. v. Mantor, 417 F.3d 1060, 1064 (9th Cir. 2005) (quoting Am. 26 Ironworks & Erectors, Inc. v. N. Am. Const. Corp., 248 F.3d 892, 899 (9th Cir. 2001)). 27 Here, Defendant’s Motion was not filed within ten days of entry of judgment, which has 28 1 not yet occurred. Therefore, Defendant’s Motion must be treated as a Rule 60(b) motion 2 for relief from the Court’s Order denying Defendant’s Motion to Dismiss. 3 Federal Rule of Civil Procedure 60(b) provides that that the Court may relieve a 4 party from its order for any “reason that justifies relief:” 5 On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following 6 reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly 7 discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether 8 previously called intrinsic or extrinsic), misrepresentation, or misconduct by 9 an opposing party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that has 10 been reversed or vacated; or applying it prospectively is no longer equitable; 11 or (6) any other reason that justifies relief.

12 Fed. R. Civ. P. 60 (emphasis added). Here, judgment has not been entered, and there is no 13 evidence of mistake, inadvertence, surprise, or excusable neglect, newly discovered 14 evidence, and/or fraud. Thus, the present Motion must be brought under Federal Rule of 15 Civil Procedure Rule 60(b)(6). 16 The Ninth Circuit has held that the reasons justifying relief under Rule 60(b)(6) must 17 be “extraordinary.” Sch. Dist. No. 1J, Multnomah Cnty. v. ACandS, Inc., 5 F.3d 1255, 1263 18 (9th Cir. 1993) (“Rule 60(b) provides for reconsideration only upon a showing of (1) 19 mistake, surprise, or excusable neglect; (2) newly discovered evidence; (3) fraud; (4) a void 20 judgment; (5) a satisfied or discharged judgment; or (6) ‘extraordinary circumstances' 21 which would justify relief.”) (internal quotation marks omitted). 22 In its Motion for Reconsideration, Defendant contends that reconsideration is 23 appropriate under Rule 60(b) when there is an “intervening change” in the “controlling 24 law.” (Doc. 42-1 at 8–9.) In support of this position, Defendant cites two published Ninth 25 Circuit cases as well as several unpublished opinions from this District. (Id. (citing Sch. 26 Dist. No. 1J, 5 F.3d 1255 and 389 Orange St. Partners v. Arnold, 179 F.3d 656 (9th Cir. 27 28 1 1999).) Defendant then argues that the Ninth Circuit’s recent decision in McGinity v. 2 Procter & Gamble Co., 69 F.4th 1093 (9th Cir. 2023) is new controlling law warranting 3 reconsideration of Defendant’s Motion to Dismiss. (Id. at 10–11.) 4 For the reasons set forth below, the Court finds Defendant’s argument unpersuasive. 5 III. DISCUSSION 6 A. McGinity Does Not Constitute an Intervening Change in Controlling Law 7 A stated above, reconsideration is only appropriate under Rule 60(b)(6) in 8 “extraordinary circumstances,” such as an intervening change in controlling law. Sch. Dist. 9 No. 1J, Multnomah Cnty., 5 F.3d at 1263. For the reasons set forth below, the Court does 10 not consider the Ninth Circuit’s decision in McGinity an intervening change in controlling 11 law. 12 1. McGinity Merely Reiterates Prior Ninth Circuit’s Decisions 13 a) Moore v. Trader Joe’s Co. 14 The Ninth Circuit’s decision in McGinity is not new law. In fact, the Ninth Circuit’s 15 decision in McGinity reiterates its decision in Moore v. Trader Joe’s Co., 4 F.4th 874 (9th 16 Cir. 2021) (“Trader Joe’s”), decided two years earlier. 17 In Trader Joe’s, the Ninth Circuit held that the label “100% New Zealand Manuka 18 Honey” on Trader Joe’s Manuka honey was not likely to deceive a reasonable consumer 19 into believing that the product contained only honey derived from the Manuka flower. 20 Moore, 4 F.4th at 876-877. The Ninth Circuit reasoned that there was some ambiguity as 21 to what the phrase “100% New Zealand Manuka Honey” meant. Id. at 882. For example, 22 23 24 2 The Court notes that each of these Ninth Circuit cases was decided under Rule 59, not 25 Rule 60(b). However, although never explicitly stated in any published Ninth Circuit opinion, it appears that the Ninth Circuit also considers a change in controlling law “a 26 reason that justifies relief” under Rule 60(b)(6). See e.g., Rhodes v. Raytheon Co., 663 F. 27 App’x 541, 542 (9th Cir. 2016); Holder v. Simon, 384 F. App’x 669 (9th Cir. 2010); In re Schafler, 135 F. App’x 972, 973 (9th Cir. 2005). Thus, the Court will proceed with its 28 1 it could mean that the product was 100% Manuka Honey, that it was 100% derived from 2 the Manuka flower, or that 100% of the honey was from New Zealand. Id. Given this 3 ambiguity, the Ninth Circuit determined that a reasonable consumer would require more 4 information before he or she could conclude that the honey was derived exclusively from 5 the Manuka flower. Id. The Ninth Circuit then identified three other clues on the label 6 that would dissuade a reasonable consumer from the false misconception that the honey 7 was derived exclusively from the Manuka flower: “(1) the impossibility of making a honey 8 that is 100% derived from one floral source, (2) the low price of Trader Joe’s Manuka 9 Honey, and (3) the presence of the ‘10+’ on the label, all of which is readily available to 10 anyone browsing the aisles of Trader Joe’s.”3 Id. at 883. The Ninth Circuit also noted that 11 the label fully complied with the Food and Drug Administration’s “Honey Guidelines,” 12 which permit honey to be labeled with the name of its chief floral source. Id. at 881. 13 Applying its decision in Trader Joe’s, the Ninth Circuit in McGinity decided that the 14 term “Nature Fusion” on the front label of P&G’s shampoos and conditioners was 15 ambiguous and that the back label, including the ingredient list, could be used to resolve 16 this ambiguity. McGinity, 69 F.4th at 1097–99 (“[h]ere, like in Trader Joe’s, there is some 17 ambiguity as to what “Nature Fusion” means…”). Like the various clues on the Manuka 18 honey label in Trader Joe’s, the Ninth Circuit found that the back label of the “Nature 19 Fusion” products included an ingredient list disclosing the presence of both natural and 20 synthetic ingredients. Id. at 1099. Likewise, the presence of the phrases “Smoothness 21 Inspired by Nature” and “NatureFusion Smoothing System with Avocado Oil” on the label 22 23 24 3 “In an effort to regulate and communicate the concentration of Manuka in Manuka Honey 25 products sold to consumers, Manuka honey producers have created a scale to grade the purity of Manuka honey called the Unique Manuka Factor (‘UMF’) grading system. The 26 UMF system grades honey on a scale of 5+ to 26+ based on the concentration of 27 methylglyoxal that is itself related to the concentration of honey derived from Manuka flower nectar.” Moore, 4 F.4th at 877–78. Thus, a rating of 10+ is on the low end of the 28 1 also clarified that P&G’s “Nature Fusion” products contain both natural and synthetic 2 ingredients. Id. Finally, the Ninth Circuit noted that a consumer survey conducted by 3 Plaintiff and referenced in Plaintiff’s complaint demonstrated that the majority (69.2%) of 4 consumers thought that the term “Nature Fusion” meant that the product contained both 5 natural and synthetic ingredients, which is accurate. (Id. at 1096.) Thus, it was apparent 6 on the face of the plaintiff’s complaint that the term “NatureFusion” was at worst 7 ambiguous to the reasonable consumer. (Id.) 8 It is clear that the Ninth Circuit’s decision in McGinity merely applies its decision in 9 Trader Joe’s to a new set of facts and cannot be considered an “intervening change” in 10 “controlling law.” 11 b) Moore v. Mars Petcare US, Inc. 12 The McGinity panel also relies on the Ninth Circuit’s prior decision in Moore v. 13 Mars Petcare US, Inc., 966 F.3d 1007 (9th Cir. 2020) (“Mars Petcare”) for the proposition 14 that a back label ingredients list “can ameliorate any tendency of a label to mislead.” 15 McGinity, 69 F.4th 1093 at 1098 (quotation omitted). 16 In Mars Petcare, the Ninth Circuit decided that “qualifiers in packaging, usually on 17 the back of a label or in ingredient lists, ‘can ameliorate any tendency of the label to 18 mislead.’ If, however, ‘a back label ingredients list ... conflict[s] with, rather than 19 confirm[s], a front label claim,’ the plaintiff's claim is not defeated.” Moore, 966 F.3d at 20 1017 (quoting Brady v. Bayer Corp., 26 Cal. App. 5th 1156, 1167 (2018)). In other words, 21 a back label, including the ingredients list, can “ameliorate” (i.e., clarify) a misleading front 22 label but it cannot “ameliorate” am outright deceptive or false front label. Id. 23 The McGinity case is merely an application of the Ninth Circuit’s prior ruling in 24 Mars Petcare. McGinity’s new use of the word “ambiguous” rather than “misleading” 25 does not create an “intervening change” in “controlling law.” 26 27 28 1 2. The Ninth Circuit’s Decision in McGinity Merely Affirms the District 2 Court’s Decision 3 The Ninth Circuit’s decision in McGinity is not an “intervening change” in 4 “controlling law” because it merely affirms the district court’s ruling. The district court in 5 McGinity found that the plaintiff had failed to allege sufficient facts showing that the term 6 “Nature Fusion” was deceptive. McGinity v. Procter & Gamble Co., No. 4:20-CV-08164- 7 YGR, 2021 WL 3886048, at *2 (N.D. Cal. Aug. 31, 2021), aff’d, 69 F.4th 1093 (9th Cir. 8 2023). Like the Ninth Circuit, the court noted that Plaintiff’s consumer survey 9 demonstrated that most reasonable consumers (~77%) would understand the term “Nature 10 Fusion” to mean that the product contained a mixture of natural and synthetic ingredients 11 and that the ingredient list on the back label “ameliorate[d] any tendency of the label to 12 mislead. Id. at *2-3 (quoting Moore, 966 F.3d at 1017). While the district court did not 13 use the term “ambiguous,” its ruling that the ingredient list on the back label of a product 14 can “ameliorate any tendency of the label to mislead” is synonymous to the Ninth Circuit’s 15 ruling that a back label, including the ingredient list, can be used to resolve and/or clarify 16 ambiguous language on the front label. 17 3. Defendant Already Made the McGinity Argument in its Motion to 18 Dismiss 19 Defendant argued in its Motion to Dismiss that “a manufacturer can use disclosures 20 elsewhere on the packaging—such as an ingredient list—to eliminate any purported 21 ambiguity” and that “[a]bsent any affirmative misrepresentation as to the sunscreen’s 22 contents, Plaintiff has not stated—and cannot state—a plausible claim of deception.” (Doc. 23 16-1 at 14–15 (emphasis added).) This argument mirrors the Ninth Circuit’s rulings in 24 Trader Joe’s, Mars Petcare, and now McGinity. In fact, Defendant cited Trader Joe’s and 25 the district court’s opinion in McGinity in its Motion to Dismiss and its reply memorandum 26 in support of its Motion to Dismiss. (Doc. 16-1 at 10–11, 14; Doc. 20 at 7.) For Defendant 27 to now claim that the ruling set forth in McGinity is an “intervening change” in “controlling 28 law” is disingenuous. 1 B. Even Assuming that McGinity Constitutes an Intervening Change in 2 Controlling Law, McGinity is Easily Distinguishable from the Present Case 3 In her FAC, Plaintiff alleges that “Save the Reef, an organization dedicated to saving 4 the world’s oceans and marine life[,] states the term ‘reef friendly’ typically means that the 5 sunscreen contains only mineral UV blocking ingredients like oxide and titanium dioxide” 6 and that “[Save the Reef] advises consumers to avoid chemical sunscreens.” (FAC ¶ 19 7 (emphasis added).) Yet, “Defendant’s chemical sunscreens are sold and advertised 8 as…’Reef-Friendly’….” (FAC ¶ 30 (emphasis added).) 9 Specifically, Plaintiff alleges that the chemicals octocrylene, avobenzone, 10 homosalate, and octyl salicylate, all of which are found in Defendant’s “Reef Friendly” 11 sunscreen products, are harmful to marine life, including reefs. (FAC ¶¶ 14, 15, 20–30.) 12 In support of these allegations, Plaintiff cites numerous sources, including online 13 publications, studies, transcripts of government sessions, proposed laws, and congressional 14 testimony from the Department of Land and Natural Resources. (FAC ¶¶ 21–30.) Thus, 15 it is not apparent from Plaintiff’s allegations that the phrase “Reef Friendly” is ambiguous. 16 In contrast, in McGinity, it was clear on the face of the plaintiff’s complaint that the 17 phrase “Nature Fusion” was ambiguous. In McGinity, plaintiff’s counsel commissioned 18 an independent third party to conduct a survey of more than 400 consumers regarding their 19 impressions of the product’s front labels. McGinity, 69 F.4th at 1096. The results of the 20 survey revealed that 69.2% of consumers thought that the phrase “Nature Fusion” meant 21 that the product contained both natural and synthetic ingredients, which is true. Id. Thus, 22 the McGinity plaintiff’s complaint revealed that the “Nature Fusion” language was at worst 23 “ambiguous” and that this ambiguity could be resolved by reference to the back label. Id. 24 at 1098. 25 Here, however, Plaintiff has not commissioned a consumer survey revealing that the 26 phrase “Reef Friendly” is ambiguous. Rather, Plaintiff has alleged that “Reef Friendly” 27 means sunscreen that is free of chemicals known to be harmful to reefs, including 28 octocrylene, avobenzone, homosalate, and octyl salicylate, all of which are found in 1 ||Defendant’s “Reef Friendly” sunscreen products. (FAC Jf 14-15, 19-30.) 2 || Reconsideration of the Court’s Order on Defendant’s Motion to Dismiss is not warranted. 3 IV. CONCLUSION 4 Based on the foregoing, Defendant’s Motion for Reconsideration is DENIED in its 5 || entirety. 6 7 IT IS SO ORDERED. 8 || DATE: November 6, 2023 9 Kath Baerrredn, Wf atansps 10 ON. RUTH BERMBDEZ MONTENEGRO UNITED STATES DISTRICT JUDGE 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11