Mattero v. Costco Wholesale Corp.

336 F. Supp. 3d 1109
CourtDistrict Court, N.D. California
DecidedSeptember 17, 2018
DocketCase No. 18-cv-02871-WHO
StatusPublished
Cited by8 cases

This text of 336 F. Supp. 3d 1109 (Mattero v. Costco Wholesale Corp.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mattero v. Costco Wholesale Corp., 336 F. Supp. 3d 1109 (N.D. Cal. 2018).

Opinion

William H. Orrick, United States District Judge

Plaintiff, on behalf of herself and a proposed class of nationwide consumers and a subclass of California consumers, challenges defendant Costco Wholesale Corporation's (Costco) advertising and marketing on its Kirkland Signature Premium Liquid Dish Soap (Dish Soap) and Kirkland Signature Premium Laundry Detergent (Laundry Detergent, collectively Products) as "environmentally responsible." Plaintiff alleges that Costco's use of various "environmentally friendly" phrases and images on its labeling and marketing for the Products is false, misleading, and in violation of state and federal laws because the Products contain "unnatural, harmful, and toxic chemical ingredients" and that reasonable consumers do not expect *1113such ingredients to be in products labeled "environmentally responsible."

Costco moves to dismiss. I am denying that motion because plaintiff has adequately alleged her deceptive and fraud-based claims and Costco's challenges to the same cannot be resolved on a motion to dismiss. Costco also moves to stay this case until a pending motion to dismiss is resolved by the Eastern District of New York in a case based on similar misrepresentations. I deny that motion as well because the claims here are largely based on California law (and to a lesser extent Washington law) while the claims in the other case are based largely on New York law. Moreover, staying this case is not equitable because in the Eastern District of New York Costco sought, and the plaintiffs eventually agreed, to dismiss California law claims from that litigation. Those claims should proceed here.

BACKGROUND

Plaintiff challenges Costco's advertising and marketing its Kirkland Signature Premium Dish Soap and Laundry Detergent as "environmentally responsible," along with specific representations that the Products are made from "naturally derived ingredients," are "recognized for safer chemistry," are "safer for the planet," and are made with a "biodegradable formula." Compl. ¶¶ 4-6 (Statements). The Products' labels are also filled with imagery - icons resembling recycling symbols, water drops, leaves, and a central image of a leaf floating in pristine water-that are according to plaintiff "highly suggestive of [a] 'green,' environmentally responsible product." Id. ¶¶ 7, 35-42. These Statements, plus the imagery, create "an impression that the Products are natural, safer, and environmentally sound alternatives to traditional dish soaps and detergents." Id. ¶¶ 8, 32-33.

Plaintiff contends that representation or impression is false because the Products "contain unnatural, harmful, and toxic chemical ingredients, including sodium hydroxide, sodium lauryl sulfate ('SLS'), lauramine oxide, and methylisothiazolinone ('MI')" as well as methylchloroisothiazolinone ("MCI") and benzisothiazolinone ("BIT"). Id. ¶ 10 & n.2; see also id. ¶¶ 44-73.1 According to plaintiff, "[r]easonable consumers do not expect such ingredients to be in products labeled 'environmentally responsible.' " Id. ¶¶ 10, 68-73.

Plaintiff alleges that because of its deceptive conduct, Costco is able to sell more or charge more for the Products than it would if the Products were accurately labeled. Id. ¶¶ 15, 83. Plaintiff purchased the Dish Soap in December 2015, and she reviewed and relied on the "environmentally responsible" labelling and images. Id. ¶¶ 18-19. If defendant remedied its misleading conduct, plaintiff avers that she would consider buying the Products again. Id. ¶ 21.

Plaintiff brings this case on behalf, first, of a nationwide class (Class), and separately, on behalf of a California sub-class (Sub-Class). Id. ¶ 85. She alleges that defendant's misrepresentations and false advertising violate the Federal Trade Commission's (FTC) "Green Guides," and as such are per se unlawful under California's Environmental Marketing Claims Act (EMCA). Id. ¶¶ 75-82. She assets causes of action for: (i) violation of the California Consumer Legal Remedies Act, Cal. Civ. Code § 1750, on behalf of the Sub-Class; (ii) violation of California's False Advertising Law, Cal. Bus. & Prof. Code § 17500, on behalf of the Sub-Class; (iii) violation of *1114the California EMCA, Cal. Bus. & Prof. Code §§ 17580 - 17581, on behalf of the Sub-Class; (iv) violation of California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, on behalf of the Sub-Class; (v) breach of express warranty, on behalf of the Class; and (vi) violation of the Washington Consumer Protections Act, RCW § 19.86.010, on behalf of the Class.

Costco moves to dismiss, arguing that plaintiff does not have standing to pursue claims against the Laundry Detergent because she did not buy it, fails to identify an actionable misrepresentation to support her breach of express warranty claim, fails to plead her fraud-based claims with particularity, and fails to allege that "environmentally responsible" is deceptive under California or Washington law.

In the alternative, Costco moves to stay this case pending the determination of a pending motion to dismiss in a "first-filed" case, Gonzalez v. Costco Wholesale Corp ., No. 16-cv-2590 (NG) (E.D.N.Y.), which is based on the same misrepresentations.

LEGAL STANDARD

Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim is facially plausible when the plaintiff pleads facts that "allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937

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Bluebook (online)
336 F. Supp. 3d 1109, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mattero-v-costco-wholesale-corp-cand-2018.