1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 San Francisco Division 11 ANTHONY BUSH, Case No. 20-cv-03268-LB
12 Plaintiff, ORDER DENYING MOTION FOR 13 v. SUMMARY JUDGMENT
14 RUST-OLEUM CORPORATION, Re: ECF No. 116 15 Defendant. 16 17 INTRODUCTION AND STATEMENT 18 This is a consumer-products mislabeling case. On behalf of a class of California consumers, 19 the plaintiff challenges defendant Rust-Oleum’s labeling of its “Krud Kutter” cleaning products as 20 “non-toxic” and “Earth friendly,” contending that the products in fact can cause harm to humans, 21 animals, and the environment, in violation of California consumer-protection laws. The plaintiff’s 22 claims largely turn on whether reasonable consumers are deceived by the defendant’s product 23 labeling. The defendant moved for summary judgment, mainly on the ground that the plaintiff’s 24 theory of consumer deception is refuted by disclaimers on the labels themselves and testimony 25 from the plaintiff and his expert toxicologist.1 The court denies the motion. 26 27 1 Mot. – ECF No. 116. Citations refer to material in the Electronic Case File (ECF); pinpoint citations 1 The operative complaint has five claims: (1) unlawful, unfair, and fraudulent business 2 practices under the Unfair Competition Law (UCL), Cal. Bus. & Prof. Code §§ 17200–08; (2) 3 deceptive advertising under the False Advertising Law (FAL), Cal. Bus. & Prof. Code § 17500; 4 (3) deceptive practices under the Consumer Legal Remedies Act (CLRA), Cal. Civ. Code §§ 5 1750–84; (4) breach of express warranties; and (5) unjust enrichment.2 6 It is undisputed that the court has diversity jurisdiction under the Class Action Fairness Act. 28 7 U.S.C. § 1332(d). All parties consented to magistrate-judge jurisdiction.3 Id. § 636(c). The court 8 held a hearing on January 25, 2024. 9 10 STANDARD OF REVIEW 11 The court must grant summary judgment where there is no genuine dispute as to any material 12 fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); 13 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986). Material facts are those that may 14 affect the outcome of the case. Anderson, 477 U.S. at 248. A dispute about a material fact is 15 genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving 16 party. Id. at 248–49. 17 The party moving for summary judgment has the initial burden of informing the court of the 18 basis for the motion and identifying portions of the pleadings, depositions, answers to 19 interrogatories, admissions, or affidavits that demonstrate the absence of a triable issue of material 20 fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986). To meet its burden, “the moving 21 party must either produce evidence negating an essential element of the nonmoving party’s claim 22 or defense or show that the nonmoving party does not have enough evidence of an essential 23 element to carry its ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co. v. Fritz 24 Cos., 210 F.3d 1099, 1102 (9th Cir. 2000); see Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 25 2001) (“When the nonmoving party has the burden of proof at trial, the moving party need only 26
27 2 First Am. Compl. – ECF No. 26 at 31–43 (¶¶ 66–161). 1 point out ‘that there is an absence of evidence to support the nonmoving party’s case.’”) (quoting 2 Celotex, 477 U.S. at 325). “Where the moving party will have the burden of proof on an issue at 3 trial, the movant must affirmatively demonstrate that no reasonable trier of fact could find other 4 than for the moving party.” Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). 5 If the moving party meets its initial burden, then the burden shifts to the nonmoving party to 6 produce evidence supporting its claims or defenses. Nissan Fire & Marine Ins. Co., 210 F.3d at 7 1103. “Once the moving party carries its initial burden, the adverse party may not rest upon the 8 mere allegations or denials of the adverse party’s pleading, but must provide affidavits or other 9 sources of evidence that set forth specific facts showing that there is a genuine issue for 10 trial.” Devereaux, 263 F.3d at 1076 (cleaned up). If the non-moving party does not produce 11 evidence to show a genuine issue of material fact, then the moving party is entitled to summary 12 judgment. Celotex, 477 U.S. at 322–23. 13 In ruling on a motion for summary judgment, the court does not make credibility 14 determinations or weigh conflicting evidence. Instead, it views the evidence in the light most 15 favorable to the non-moving party and draws all factual inferences in the non-moving party’s 16 favor. E.g., Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587–88 (1986); Ting 17 v. United States, 927 F.2d 1504, 1509 (9th Cir. 1991). 18 19 ANALYSIS 20 The court denies the motion because genuine disputes of fact remain on all issues. 21 22 1. Legal Standard 23 Claims under the CLRA, the UCL, and the FAL are governed by the “reasonable consumer” 24 test. Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008). Courts often analyze 25 claims under these statutes together. Hadley v. Kellogg Sales Co., 273 F. Supp. 3d 1052, 1063 26 (N.D. Cal. 2017). “Under the reasonable consumer standard, [plaintiffs] must show that ‘members 27 of the public are likely to be deceived.’” Williams, 552 F.3d at 938 (cleaned up). This requires the 1 acting reasonably in the circumstances, could be misled.’” Freeman v. Indochino Apparel, Inc., 2 443 F. Supp. 3d 1107, 1111 (N.D. Cal. 2020) (quoting Lavie v. Procter & Gamble Co., 105 Cal. 3 App. 4th 496, 508 (2003)). 4 Generally, determining “whether a reasonable consumer would be deceived” is a question of 5 fact. Cheslow v. Ghirardelli Chocolate Co., 445 F. Supp. 3d 8, 16 (N.D. Cal. 2020); Reid v. 6 Johnson & Johnson, 780 F.3d 952, 958 (9th Cir. 2015). But to survive summary judgment, the 7 plaintiff “must demonstrate by extrinsic evidence, such as consumer survey evidence, that the 8 challenged statements tend to mislead consumers.” Ries v. Ariz. Beverages USA LLC, No. 10- 9 01139 RS, 2013 WL 1287416, at *6 (N.D. Cal. Mar. 28, 2013). “[A]necdotal evidence alone is 10 insufficient to prove that the public is likely to be misled.” Id.; Rahman v. Mott’s LLP, No. CV 13- 11 3482 SI, 2014 WL 5282106, at *9 (N.D. Cal. Oct. 15, 2014) (the plaintiff “must introduce some 12 additional evidence [besides his own testimony] in order to raise a triable issue of fact as to 13 whether a reasonable consumer would be misled”). 14 15 2.
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 San Francisco Division 11 ANTHONY BUSH, Case No. 20-cv-03268-LB
12 Plaintiff, ORDER DENYING MOTION FOR 13 v. SUMMARY JUDGMENT
14 RUST-OLEUM CORPORATION, Re: ECF No. 116 15 Defendant. 16 17 INTRODUCTION AND STATEMENT 18 This is a consumer-products mislabeling case. On behalf of a class of California consumers, 19 the plaintiff challenges defendant Rust-Oleum’s labeling of its “Krud Kutter” cleaning products as 20 “non-toxic” and “Earth friendly,” contending that the products in fact can cause harm to humans, 21 animals, and the environment, in violation of California consumer-protection laws. The plaintiff’s 22 claims largely turn on whether reasonable consumers are deceived by the defendant’s product 23 labeling. The defendant moved for summary judgment, mainly on the ground that the plaintiff’s 24 theory of consumer deception is refuted by disclaimers on the labels themselves and testimony 25 from the plaintiff and his expert toxicologist.1 The court denies the motion. 26 27 1 Mot. – ECF No. 116. Citations refer to material in the Electronic Case File (ECF); pinpoint citations 1 The operative complaint has five claims: (1) unlawful, unfair, and fraudulent business 2 practices under the Unfair Competition Law (UCL), Cal. Bus. & Prof. Code §§ 17200–08; (2) 3 deceptive advertising under the False Advertising Law (FAL), Cal. Bus. & Prof. Code § 17500; 4 (3) deceptive practices under the Consumer Legal Remedies Act (CLRA), Cal. Civ. Code §§ 5 1750–84; (4) breach of express warranties; and (5) unjust enrichment.2 6 It is undisputed that the court has diversity jurisdiction under the Class Action Fairness Act. 28 7 U.S.C. § 1332(d). All parties consented to magistrate-judge jurisdiction.3 Id. § 636(c). The court 8 held a hearing on January 25, 2024. 9 10 STANDARD OF REVIEW 11 The court must grant summary judgment where there is no genuine dispute as to any material 12 fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); 13 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986). Material facts are those that may 14 affect the outcome of the case. Anderson, 477 U.S. at 248. A dispute about a material fact is 15 genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving 16 party. Id. at 248–49. 17 The party moving for summary judgment has the initial burden of informing the court of the 18 basis for the motion and identifying portions of the pleadings, depositions, answers to 19 interrogatories, admissions, or affidavits that demonstrate the absence of a triable issue of material 20 fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986). To meet its burden, “the moving 21 party must either produce evidence negating an essential element of the nonmoving party’s claim 22 or defense or show that the nonmoving party does not have enough evidence of an essential 23 element to carry its ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co. v. Fritz 24 Cos., 210 F.3d 1099, 1102 (9th Cir. 2000); see Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 25 2001) (“When the nonmoving party has the burden of proof at trial, the moving party need only 26
27 2 First Am. Compl. – ECF No. 26 at 31–43 (¶¶ 66–161). 1 point out ‘that there is an absence of evidence to support the nonmoving party’s case.’”) (quoting 2 Celotex, 477 U.S. at 325). “Where the moving party will have the burden of proof on an issue at 3 trial, the movant must affirmatively demonstrate that no reasonable trier of fact could find other 4 than for the moving party.” Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). 5 If the moving party meets its initial burden, then the burden shifts to the nonmoving party to 6 produce evidence supporting its claims or defenses. Nissan Fire & Marine Ins. Co., 210 F.3d at 7 1103. “Once the moving party carries its initial burden, the adverse party may not rest upon the 8 mere allegations or denials of the adverse party’s pleading, but must provide affidavits or other 9 sources of evidence that set forth specific facts showing that there is a genuine issue for 10 trial.” Devereaux, 263 F.3d at 1076 (cleaned up). If the non-moving party does not produce 11 evidence to show a genuine issue of material fact, then the moving party is entitled to summary 12 judgment. Celotex, 477 U.S. at 322–23. 13 In ruling on a motion for summary judgment, the court does not make credibility 14 determinations or weigh conflicting evidence. Instead, it views the evidence in the light most 15 favorable to the non-moving party and draws all factual inferences in the non-moving party’s 16 favor. E.g., Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587–88 (1986); Ting 17 v. United States, 927 F.2d 1504, 1509 (9th Cir. 1991). 18 19 ANALYSIS 20 The court denies the motion because genuine disputes of fact remain on all issues. 21 22 1. Legal Standard 23 Claims under the CLRA, the UCL, and the FAL are governed by the “reasonable consumer” 24 test. Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008). Courts often analyze 25 claims under these statutes together. Hadley v. Kellogg Sales Co., 273 F. Supp. 3d 1052, 1063 26 (N.D. Cal. 2017). “Under the reasonable consumer standard, [plaintiffs] must show that ‘members 27 of the public are likely to be deceived.’” Williams, 552 F.3d at 938 (cleaned up). This requires the 1 acting reasonably in the circumstances, could be misled.’” Freeman v. Indochino Apparel, Inc., 2 443 F. Supp. 3d 1107, 1111 (N.D. Cal. 2020) (quoting Lavie v. Procter & Gamble Co., 105 Cal. 3 App. 4th 496, 508 (2003)). 4 Generally, determining “whether a reasonable consumer would be deceived” is a question of 5 fact. Cheslow v. Ghirardelli Chocolate Co., 445 F. Supp. 3d 8, 16 (N.D. Cal. 2020); Reid v. 6 Johnson & Johnson, 780 F.3d 952, 958 (9th Cir. 2015). But to survive summary judgment, the 7 plaintiff “must demonstrate by extrinsic evidence, such as consumer survey evidence, that the 8 challenged statements tend to mislead consumers.” Ries v. Ariz. Beverages USA LLC, No. 10- 9 01139 RS, 2013 WL 1287416, at *6 (N.D. Cal. Mar. 28, 2013). “[A]necdotal evidence alone is 10 insufficient to prove that the public is likely to be misled.” Id.; Rahman v. Mott’s LLP, No. CV 13- 11 3482 SI, 2014 WL 5282106, at *9 (N.D. Cal. Oct. 15, 2014) (the plaintiff “must introduce some 12 additional evidence [besides his own testimony] in order to raise a triable issue of fact as to 13 whether a reasonable consumer would be misled”). 14 15 2. Application 16 The defendant first contends that the plaintiff “cannot meet the threshold requirement of 17 demonstrating how a reasonable consumer interprets” the terms “non-toxic” and “Earth friendly.”4 18 At the pleading stage in this case, the court held that the plaintiff’s definition of “non-toxic” — 19 that “the product[s] did not pose any risk to humans, animals, or the environment” — was 20 sufficient.5 The defendant now contends that because the plaintiff and his expert toxicologist said 21 during their depositions that risk can never be completely eliminated (for example, even water can 22 be toxic in excess amounts), the evidence shows that a reasonable consumer would not believe the 23 Krud Krutter products to be totally free of risk.6 The defendant also argues that the “Green 24 25 26 4 Mot. – ECF No. 116 at 16–20. 27 5 Order – ECF No. 51 at 8–9. 1 Guides” published by the Federal Trade Commission (FTC) are not valid metrics of how a 2 reasonable consumer interprets the terms at issue.7 3 There is some authority for the proposition that a plaintiff must “plausibly define[]” the 4 challenged product-label claims “as a threshold issue” to help inform whether a reasonable 5 consumer would be misled. Stewart v. Kodiak Cakes, LLC, 537 F. Supp. 3d 1103, 1148 (S.D. Cal. 6 2021). Relatedly, “where plaintiffs base deceptive advertising claims on unreasonable or fanciful 7 interpretations of labels or other advertising, dismissal [even] on the pleadings may well be 8 justified.” Moore v. Trader Joe’s Co., 4 F.4th 874, 882–83 (9th Cir. 2021) (cleaned up). In this 9 analysis, where there is ambiguity in the challenged claim, “reasonable consumers would 10 necessarily require more information before they could reasonably conclude” that a particular 11 interpretation is correct. Id. at 882. Thus, the reasonable consumer might rely on “contextual 12 inferences regarding the product itself and its packaging.” Id. at 882–83. 13 As was the case at the pleading stage, the court cannot say as a matter of law that the plaintiff’s 14 asserted definitions of the challenged claims are unreasonable. Deposition testimony of 15 individuals — whether those individuals are the named plaintiff, his expert, or anyone else — is at 16 best anecdotal evidence that isn’t dispositive of how a reasonable consumer interprets the 17 challenged claims. As for the FTC’s Green Guides, it is true that they aren’t dispositive under the 18 reasonable-consumer test. Bush v. Mondelez Int’l, Inc., No. 16-cv-02460-RS, 2016 WL 7324990, 19 at *2–3 (N.D. Cal. 2016) (federal agencies are not the ones who “determine whether a product is 20 misleading under [California’s consumer-protection] laws”). Still, on this issue of the plaintiff’s 21 asserted definitions of the challenged claims, the defendant has not met its burden at summary 22 judgment. Nissan Fire & Marine, 210 F.3d at 1102. Whether the plaintiff’s asserted definitions are 23 reasonable will be for the jury to decide as part of the overall reasonable-consumer test. 24 The defendant’s main contention is that the plaintiff’s theory of deception and supporting 25 evidence are contradicted by the product labels themselves and thus, as a matter of law, no 26 reasonable consumer would be misled. 27 1 For the challenged claim “non-toxic,” the defendant contends mainly that the plaintiff’s expert 2 toxicologist’s theory of toxicity is disclosed on the front labels of its products, which say 3 “Caution: Eye and Skin Irritant” next to the words “Non-Toxic.”8 Freeman v. Time, Inc., 68 F.3d 4 285, 289 (9th Cir. 1995) (where qualifying language on a label is not “hidden or unreadably 5 small” and “appears immediately next to the representations it qualifies,” “no reasonable reader 6 could ignore it”). But Dr. Fraiser’s opinion goes beyond eye and skin irritation, for the reasons 7 given by the plaintiff. There is at least a genuine dispute of fact here. 8 Regarding the challenged claim “Earth friendly,” the rear of the product labels provide a 9 definition of the claim. But the definition is in small type and the defendant’s own surveys provide 10 evidence that most consumers do not read it. Thus, whether the plaintiff’s asserted interpretation 11 of “Earth friendly” is adequately disclaimed by the label is a triable issue of fact. See, e.g., 12 Williams, 552 F.3d at 939. 13 The defendant next contends that the term “Earth friendly” is not actionable under the 14 reasonable-consumer test because it is mere puffery.9 Puffery is a statement that “is extremely 15 unlikely to induce consumer reliance.” Newcal Indus., Inc. v. Ikon Off. Sol., 513 F.3d 1038, 1053 16 (9th Cir. 2008). “Ultimately, the difference between a statement of fact and mere puffery rests in 17 the specificity or generality of the claim.” Id.; Glen Holly Ent., Inc. v. Tektronix Inc., 343 F.3d 18 1000, 1015 (9th Cir.) (“[G]eneralized, vague and unspecific assertions[] constitute[] mere 19 ‘puffery’ upon which a reasonable consumer could not rely.”), opinion amended on denial of 20 reh’g, 352 F.3d 367 (9th Cir. 2003); Lamartina v. VMware, Inc., No. 5:20-cv-02182-EJD, 2021 21 WL 4133851, at *10 (N.D. Cal. Sept. 10, 2021) (“Generalized statements of corporate optimism, 22 such as business is ‘healthy,’ may be considered puffery.”). Whether language constitutes non- 23 actionable puffery may be decided as a matter of law. Cook, Perkiss & Liehe, Inc. v. N. Cal. 24 Collection Serv. Inc., 911 F.2d 242, 245 (9th Cir. 1990). 25 26 27 8 Krud Kutter Label – ECF No. 116-5; Fraiser Dep. – ECF No. 115-5 at 30–31 (pp. 28:18–29:8); Fraiser Decl. – ECF No. 96-5 at 20 (¶ 34), 46 (¶ 77). ] The term “Earth friendly” is not so general or nonspecific as to make it “extremely unlikely” 2 || that a consumer would rely on it. The defendant’s own surveys again provide evidence otherwise. 3 || Also, California statutory law speaks to the term “Earth friendly” and undermines any puffery 4 || argument. White v. Kroger Co., No. 21-cv-08004-RS, 2022 WL 888657, at *2 (N.D. Cal. Mar. 25, 5 || 2022) (“California view[s] terms on the label or container of a consumer good like . . . ‘earth 6 || friendly’ ...to mean that the product is not harmful to, or is beneficial to, the natural 7 environment. While .. . [this] California statute [does not] directly create[] a private cause of 8 action, [it] do[es] undermine any argument that ‘reef friendly’ can be dismissed as mere puffery.”) 9 || (cleaned up). 10 The defendant’s last argument is that the plaintiffs claims for breach of express warranties and 11 unjust enrichment fail “for the same reasons as his UCL, FAL, and CLRA claims.”!° Taking that 12 || argument on its own terms, the court has already resolved it.
CONCLUSION 3 15 The court denies the defendant’s motion for summary judgment. This resolves ECF No. 116. 16 IT IS SO ORDERED. i 17 Dated: January 26, 2024 LAE 18 LAUREL BEELER 19 United States Magistrate Judge 20 21 22 23 24 25 26 27 28 || '°Mot.—ECF No. 116 at 22-23.