Lokey v. CVS Pharmacy, Inc.

• Court: District Court, N.D. California
• Decided: February 18, 2021
• Docket: 3:20-cv-04782
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 San Francisco Division 11 DANIELLE LOKEY, individually and on behalf Case No. 20-cv-04782-LB of a class of similarly situated individuals, 12 ORDER DISMISSING FIRST Plaintiff, AMENDED COMPLAINT 13 v. Re: ECF No. 42 14 CVS PHARMACY, INC., 15 Defendant. 16 17 INTRODUCTION 18 In this putative class action, the plaintiff challenges CVS Pharmacy’s marketing of its CVS- 19 branded pain-and-fever medicine for infants (called Infants’ acetaminophen) at a higher price than 20 its CVS-branded pain-and fever medicine for children (called Children’s acetaminophen), even 21 though the ingredients in the two products are the same. She claims that this practice violates three 22 California consumer-protection laws: (1) California’s False Advertising Law (FAL), Cal. & Prof. 23 Code § 17500; (2) California’s Unfair Competition Law (UCL), Cal. Bus. & Prof. Code §§ 24 17200–08; and (3) California’s Consumer Legal Remedies Act (CLRA), Cal. Civ. Code §§ 1750– 25 84.1 The court previously dismissed the plaintiff’s initial complaint on the ground that — as a 26 27 1 First Am. Compl. (FAC) – ECF No. 40. Citations refer to material in the Electronic Case File (ECF); 1 matter of law — the labels disclosed the products’ composition and would not deceive a 2 reasonable consumer.2 The amended complaint changes the allegations about product placement in 3 the store and adds allegations about consumer confusion. Given the labels, however, the new 4 allegations do not alter the court’s earlier conclusion that the labels would not deceive a 5 reasonable consumer. The court thus dismisses the complaint. 6 7 STATEMENT 8 1. Allegations in the Complaint 9 CVS markets and sells its CVS-branded products in its stores and online — including an 10 infants’ liquid acetaminophen and a children’s liquid acetaminophen — under the “CVS Health” 11 label.3 Named plaintiff Danielle Lokey bought the infants’ acetaminophen on several occasions 12 “between April 2016 and the present. . . .”4 The products are identical compositionally, but CVS 13 charges a higher price (as much as two and a half times) for the infants’ product.5 14 The front labels for the two products describe their composition identically (including their 15 concentrations of 160 mg/5 mL) but brand them for infants (with a syringe for administering the 16 dosage and with no representation about infant age) and children (with a dosage cup and a 17 representation that the product is for children from ages two to 11 years). (The FDA requires that 18 liquid acetaminophen must be available for infants and children only in concentrations of 160 19 milligrams per 5 milliliters.6) The complaint has the front labels, and CVS submitted the full 20 labels. The following are the images of the labels: the first two are from CVS, and the third is the 21 slightly different (but virtually identical) Infants’ label in the complaint.7 22 23 2 Order – ECF No. 36. 3 FAC – ECF No. 40 at 2 (¶ 3). 24 4 Id. at 11 (¶ 42). 25 5 Id. at 3 (¶ 10), 7 (¶ 27). 26 6 Id. at 6 (¶ 22). 7 The court takes judicial notice of the labels and considers them under the incorporation-by-reference 27 doctrine. Order – ECF No. 36 at 2 n.9; Req. for Judicial Notice – ECF Nos. 11, 31; Fed. R. Evid. 201(b); Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005). The label in the FAC for the Infants’ =i 7 Com the i a= peice CCcvs — Smet Health Tylenol® Oral Suspension = □ cA i □□□ 2 rs || a felt rie Piedra. mPa Ned a Ol at ie siem Peo) a 3 et ae lee hegre lel) rs | | al □□ ag eee) 4 fete ics) Met) salam [=a { =) @ lege) (sams me Ni Cara) PO) me □□□ iy | pear: Peony) +S 5 te ah gd ( fet pate □□ Ce □□ 6 ne ee terete] Ai La erty eleeiCi m-mec (Nicely 7 Ed - ze A oe cee” ty ae eat 3 ea We a a ea »~ be 9 . a = 10 ee ee 1 1 See tee alas oe beer tec eccial Ms manele elie lane tite am Se geen [ors fer a ee] 12 □□ os Wk OY AM (552 | Ob my am ey Ante)

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1 The infants’ label has the following instructions for dosages: 2 Dosing Chart 3 Weight (lb) Age (yr) Dose (mL)* 4 under 24 under 2 years ask a doctor 5 6 24–35 2–3 years 5 mL *or as directed by a doctor 7 8 The children’s label has the following instructions for dosages: 9 10 Weight (lb) Age (yr) Dose (mL)* 11 under 24 under 2 years ask a doctor 12 24–35 2–3 years 5 mL 13 14 36–47 4–5 years 7.5 mL 15 48–59 6–8 years 10 mL 16 60–71 9–10 years 12.5 mL 17 72–95 11 years 15 mL 18 19 *or as directed by a doctor 20 The previous complaint said that the two products were displayed on the same shelf in CVS’s 21 retail stores (creating confusion).8 The amended complaint said that the products are in two 22 different places: the children’s product “is principally found some distance away in the ‘children’s 23 care’ section of CVS stores (as opposed to the ‘baby care’ section of the stores).”9 24 The complaint explains why the products’ compositions are identical. Before 2011, the 25 acetaminophen concentrations in infants’ and children’s products were different, which led 26

27 8 Compl. – ECF No. 4-1 at 4 (¶ 4). 1 consumers to give incorrect doses, causing overdoses. By December 2011, to prevent overdoses, the 2 FDA said that liquid acetaminophen marketed for infants would be available only in concentrations 3 of 160 milligrams per 5 milliliters (the 160 mg/5 ml reflected on the labels).10 4 The complaint’s allegations address consumer habits and confusion. Parents are careful when 5 they buy medicines for infants. CVS exploits this caution by packaging that suggests that its 6 Infants’ products are specially formulated for infants. Parents have a conventional understanding 7 that they should buy medicine branded for infants: “Numerous parenting resources, such as the 8 popular parenting website ‘What to Expect,’ express the conventional understanding that infants 9 always should be given the infant formulations. Similarly, the frequently visited website 10 KidsHealth.org instructs parents to know ‘the name and purpose of the medicine’ and to ‘never give 11 a child medicine that is meant for adults.’” The acetaminophen-awareness coalition 12 KnowYourDose.org warns parents to “always look at the minimum age recommended for taking 13 the medication and don’t give it to your child if he/she is younger than the recommended age unless 14 you have discussed it with your healthcare provider.”11 15 The products are “wholly interchangeable in all material respects.” CVS’s deceptive practices 16 “harness the fear of acetaminophen toxicity to trick consumers . . . into purchasing and overpaying 17 for Infants’ acetaminophen when Children’s acetaminophen would be equally safe and effective at a 18 fraction of the price.”12 19 20 2. Relevant Procedural History 21 The court dismissed the plaintiff’s earlier complaint with leave to amend. The plaintiff 22 amended the complaint, and CVS moved to dismiss it. All parties consented to magistrate-judge 23 jurisdiction. 13 The court held a hearing on February 18, 2021. 24 25 10 Id. at 6 (¶¶ 21–22). 11 Id. at 9–10 (¶¶ 34–36, 38) (website citations omitted). 26 12 Id. at 11 (¶ 40). The FAC also references a consumer survey about Infants’ Tylenol, where customers 27 believed it to be specially formulated for infants. Id. at 10–11 (¶ 39); Mot. – ECF No. 42 at 10 (arguing irrelevance). The allegations are conclusory, about a different product, and thus irrelevant. 1 STANDARD OF REVIEW 2 A complaint must contain a “short and plain statement of the claim showing that the pleader is 3 entitled to relief” to give the defendant “fair notice” of what the claims are and the grounds upon 4 which they rest. Fed. R. Civ. P. 8(a)(2); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A 5 complaint does not need detailed factual allegations, but “a plaintiff’s obligation to provide the 6 ‘grounds’ of his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic 7 recitation of the elements of a cause of action will not do. Factual allegations must be enough to 8 raise a claim for relief above the speculative level[.]” Twombly, 550 U.S. at 555 (cleaned up). 9 To survive a motion to dismiss, a complaint must contain sufficient factual allegations, which 10 when accepted as true, “‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 11 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when 12 the plaintiff pleads factual content that allows the court to draw the reasonable inference that the 13 defendant is liable for the misconduct alleged.” Id. “The plausibility standard is not akin to a 14 ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted 15 unlawfully.” Id. (citing Twombly, 550 U.S. at 557). “Where a complaint pleads facts that are 16 merely consistent with a defendant’s liability, it stops short of the line between possibility and 17 plausibility of ‘entitlement to relief.’” Id. (cleaned up) (quoting Twombly, 550 U.S. at 557). 18 If a court dismisses a complaint, it should give leave to amend unless the “pleading could not 19 possibly be cured by the allegation of other facts.” United States v. United Healthcare Ins. Co., 20 848 F.3d 1161, 1182 (9th Cir. 2016) (cleaned up). 21 22 ANALYSIS 23 CVS moved to dismiss the amended complaint on the ground that the plaintiff did not 24 plausibly plead that the products’ packaging — which disclosed that the products were 25 compositionally identical and differ in that they display different pictures of children and different 26 dosing devices (a syringe for infants and a cup for children) — would deceive a reasonable 27 1 consumer.14 The plaintiff countered that she plausibly alleged consumer confusion, and it is a fact 2 question — not suitable for resolution at a motion to dismiss — whether the labels are misleading 3 or deceptive.15 The labels here are not deceptive. As a result, the plaintiff’s challenge is only to the 4 different pricing, which is not justiciable. 5 Claims under the CLRA, FAL, and UCL are governed by the “reasonable consumer” test. 6 Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008). “Under the reasonable 7 consumer standard, [plaintiffs] must show that members of the public are likely to be deceived.” 8 Id. (cleaned up). “[W]hether a business practice is deceptive will usually be a question of fact not 9 appropriate for decision on [a motion to dismiss]” because [it] requires “‘consideration and 10 weighing of evidence from both sides.’” Id. at 938–39 (cleaned up) (quoting Linear Tech. Corp. v. 11 Applied Materials, Inc., 152 Cal. App. 4th 115, 134–35 (2007)). “The California Supreme Court 12 has recognized that these laws prohibit ‘not only advertising which is false, but also advertising 13 which, although true, is either actually misleading or which has a capacity, likelihood or tendency 14 to deceive or confuse the public.’” Id. at 938 (cleaned up) (quoting Kasky v. Nike, Inc., 27 Cal. 4th 15 939, 951 (2002)). “A perfectly true statement couched in such a manner that it is likely to mislead 16 or deceive the consumer, such as by failure to disclose other relevant information, is actionable 17 under these sections.” Day v. AT&T Corp., 63 Cal. App. 4th 325, 332–33 (1998). 18 As the court held previously, the labels are not deceptive. The front labels for both products 19 show their concentrations of 160 milligrams per 5 milliliters (the 160 mg/5 ml reflected on the 20 labels). Obviously, the products are targeting different markets: parents of infants and parents of 21 children. Obviously, the CVS labeled the products differently, branding them an infants’ product 22 and a children’s product (shown by the names, the photographs of the children, and the different 23 devices to deliver the doses: a syringe for infants and a cup for children). But nothing about the 24 labels is misleading about the products or their composition. To the contrary, the labels are 25 accurate. Bush v. Mondelez Int’l, Inc., No. 16-CV-02460-RS, 2016 WL 7324990, at *2–3 (N.D. 26

27 14 Mot. – ECF No. 42 at 6. 1 Cal. 2016) (consumer-deception claim was implausible because no reasonable consumer was 2 likely to be deceived by packaging that disclosed the net weight and number of cookies per 3 container); Sponchiado v. Apple Inc., 18-CV-07533-HSG, 2019 WL 6117482, at *4–5 (N.D. Cal. 4 Nov. 18, 2018) (dismissing CLRA, UCL, and FAL claims challenging Apple’s alleged 5 misrepresentations about pixel resolution because disclaimer language appearing 10 lines below 6 contradicted the plaintiffs’ interpretation). 7 This case is like Boris v. Wal-Mart Stores, addressed in the earlier order. 35 F. Supp. 3d 1163 8 (C.D. Cal. 2014), aff’d, 659 F. App’x 424 (9th Cir. 2016). In Boris, a putative class action, the 9 plaintiffs challenged two Wal-Mart headache-relief products that had the same composition 10 (ingredients and amounts), were branded differently (Equate Migraine with a red background and 11 Equate Extra Strength Headache Relief with a green background), and were priced differently (the 12 migraine product was priced higher than the other product). Id. at 1166. The plaintiffs alleged that 13 the difference in pricing conveyed that the higher-priced medicine was more effective. Id. at 1168. 14 The court dismissed the FAL, UCL, CLRA claims (and similar claims under New York and New 15 Jersey consumer-protection statutes), holding that the product background was not deceptive and 16 the plaintiffs’ challenge to the merchant’s pricing decisions was not justiciable. Id. at 1169–70. 17 Plaintiffs have not pointed to any specific constitutional, statutory, or regulatory provision that embodies a policy that Equate Migraine’s price and red packaging violate. And the 18 Court is aware of none. Absent some legislative enactment, price setting is ordinarily left to the business judgment of merchants. Taken to its logical conclusion, Plaintiffs’ claim 19 requires the judiciary to make pricing decisions, such as ruling that pharmacologically 20 identical drugs must be the same price or may have only a limited price differential, or imposing liability for differential pricing on a necessarily unpredictable case-by-case 21 basis. . . . To state this reality is to demonstrate that it is untenable: price regulation is a political question beyond the judiciary’s authority. A question is a political question and 22 therefore nonjusticiable when, for example, there is “a lack of judicially discoverable and 23 manageable standards for resolving it [ ] or the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion . . .” Baker v. Carr, 369 24 U.S. 186, 217, 82 S. Ct. 691, 7 L.Ed.2d 663 (1962). California courts have consistently described price regulation as “a question of economic policy . . . [i]t is the Legislature’s 25 function, not ours, to determine the wisdom of economic policy. Judicial intervention in such economic issues is improper. 26 27 Id. at 1171–72 (cleaned up) (collecting cases). Like Boris, this case involves compositionally 1 here, parents of infants and parents of children). Both involve different branding (the backgrounds 2 in Boris and the images of infants and children here) to entice different audiences. Both cases 3 involve a price premium on a product marketed to one audience. Applying Boris, because there is 4 no deception beyond the price differential, the plaintiff’s challenge is a non-justiciable challenge 5 to CVS’s pricing decisions. Id. at 1172. 6 The plaintiff cites two out-of-district cases, Elkies and Youngblood — both involving 7 challenges to pain relievers with identical compositions that were marketed to different audiences 8 (parents of infants and parents of children) — to support her contention that she plausibly pleads a 9 case of deception.16 In Elkies, the products were infants’ Tylenol and children’s Tylenol. Elkies v. 10 Johnson & Johnson Servs., Inc., No. 17-cv-07320-GW, Order – ECF No. 53 at 2 (C.D. Cal. Feb. 11 22, 2018). In Youngblood, the products were the products in this case. Youngblood. v. CVS, No. 12 2:20-cv-06251-MCS-MRW, Order – ECF No. 31 at 2 (C.D. Cal. Oct. 15, 2020). 13 As the court held previously, Elkies is distinguishable: there was no express disclosure that the 14 “medicine in the [Infants’] bottle is exactly the same, and provided at the exact same 15 concentration, as Children’s[.]”17 Order, No. 17-cv-07320-GW, ECF No. 53 at 9. In Elkies, the 16 picture of a mother and baby (“along with the word ‘Infants’” but without the express disclosure 17 that the medicine was the same) could lead a “significant portion of the general consuming public” 18 to conclude that the infants’ product was “unique or specially formulated for children under two.” 19 Id. By contrast, the front label here expressly discloses the medicine’s composition. 20 In Youngblood, involving the products in this case, the court held that the front labels — with 21 their different photographs of children of different ages — plausibly pleaded consumer deception 22 (in the form of a belief that the product was formulated for infants) in part because the label 23 branded the products for “children under two.” Order, No. 2:20-cv-06251-MCS-MRW, ECF No. 24 31 at 7–8. To support that conclusion, the court cited Mullins v. Premier Nutrition for the 25 proposition that a reasonable consumer would believe that the offending product was “specially 26

27 16 Id. at 21–22. 1 formulated for infants.” Id. at 7 (citing Mullins, 178 F. Supp. 3d 867, 891 (N.D. Cal. 2016)). 2 Mullins involved a dietary product that claimed it promoted joint health. 179 F. Supp. 3d at 891. 3 On summary judgment, the Mullins court held that the plaintiff raised triable issues of fact that 4 consumers bought the product to reduce joint pain and stiffness and that the product (characterized 5 as snake oil) did not work. Id. at 875–76, 892. 6 But here (and in Youngblood), the plaintiffs do not challenge the efficacy of the product (a fact 7 disputed in Mullins) and instead challenge marketing that allegedly misleads a consumer into 8 believing that the medicine is specially formulated for children under age two. Like the products in 9 Boris, products that are identical can be marketed to different audiences: migraine-headache 10 sufferers and regular-headache sufferers, parents of infants and parents of children, adults and 11 children (or other age ranges), professional athletes and weekend athletes, or different genders, to 12 name a few. If the labels are accurate, and the difference is only the pricing, then the claim is not 13 justiciable. Boris, 35 F. Supp. 3d at 1169–71. Mullins — a case about an allegedly ineffective 14 product — does not compel the conclusion that the plaintiff pleads plausible claims when the label 15 discloses what the consumer is purchasing. “What ultimately dooms Plaintiff’s claims is that 16 Defendant tells the consumer exactly what she is getting: the package actually discloses the fact 17 that Plaintiff complains it omits.” Dinan v. Sandisk LLC, No. 18-CV-05420-BLF, 2019 WL 18 2327923, at *7 (N.D. Cal. May 31, 2019) (cleaned up). 19 For this reason, the plaintiff’s citation to other cases involving products that were marketed as 20 effective (when they allegedly were not) does not compel a contrary conclusion.18 See, e.g., Brady 21 v. Bayer Corp., 26 Cal. App. 5th 1156, 1172–73 (2018) (label for one-a-day vitamins was 22 misleading because the serving size was two vitamins); Warner-Lambert Co. v. BreathAsure, Inc., 23 204 F.3d 87, 89, 97 (3rd Cir. 2002) (BreathAsure was a misleading name because there was no 24 scientific foundation for the conclusion that the capsules were effective against bad breath); 25 Novartis v. Consumer Health, Inc. v. Johnson & Jonson-Merck Consumer Pharm. Co., 290 F.3d 26 578, 589 (3rd Cir. 2002) (“Night Time Strength” necessarily implied a false message that the 27 1 product possessed “a quality that is particularly efficacious for those suffering from heartburn at 2 || night”). The claim here is not that the Infants’ product was ineffective or did not perform as 3 advertised. To the contrary, the representations on the label are accurate. 4 A final point is that the products are different. They are marketed in different quantities (two 5 ounces for the infants’ product and four ounces for the children’s product) and with different 6 || devices to deliver the doses (a syringe for infants and a cup for children). 7 Often claims involving misleading labels involve questions of fact “not appropriate for 8 decision” on a motion to dismiss. Williams, 552 F.3d at 938; Zeiger v. WellPet LLC, 304 F. Supp. 9 || 3d 837, 852 (N.D. Cal. 2018). That is not the case here. The labels are accurate. The challenge in 10 || the end is to pricing, which is not justiciable. Boris, 35 F. Supp. 3d at 1171-72. 11 12 CONCLUSION 5 13 The court grants the motion to dismiss with prejudice. This disposes of ECF No. 42.

15 IT IS SO ORDERED. Lit EC 16 Dated: February 18, 2021 LAUREL BEELER 17 United States Magistrate Judge 18 19 20 21 22 23 24 25 26 27 28