In Sarah Samet, et al v. Procter and Gamble Co., the court dismissed Plaintiffs' unjust enrichment claims as duplicative because the Unfair Competition Law (UCL), False Advertising Law (FAL) and Consumer Legal Remedies Act (CLRA) already provided for restitution as a remedy for the facts alleged in Plaintiffs' complaint. (The order is available here.) Plaintiffs filed a motion for reconsideration claiming that the recent Ninth Circuit decision in Astiana v. Hain Celestial Grp. Inc. supports their unjust enrichment claims in addition to those provided by the UCL, FAL and CLRA. The Samet court agreed to reconsider Plaintiffs' claims in light of the Astiana decision, which allowed Plaintiffs to pursue additional restitution claims such as unjust enrichment. While the Astiana court held that unjust enrichment was not a standalone cause of action in California, they stated that a court may construe unjust enrichment allegations as a quasi-contract claim seeking restitution. The court further held that the duplicative nature of the claim was not grounds for dismissal.
Plaintiffs' complaint in Samet alleged that Proctor and Gamble fraudulently mislabeled Pringles chips, Morning Star riblets and other products containing trans fat as "healthy." In its order on the motion for reconsideration, The Samet court followed the Astiana court's lead and allowed Plaintiffs to amend their complaint to include a claim for restitution based on unjust enrichment/quasi contract.
The court would not allow Plaintiffs to include a claim for "nonrestitutionary disgorgement," which would force Defendants to surrender profits made on fraudulently labeled products. The court ruled that while Plaintiffs could have "reasonably raised an argument for nonrestitutionary disgorgement earlier in the litigation they [were] precluded from doing so in a motion for reconsideration."
The court distinguished the case law Plaintiffs tendered in support of their disgorgement claims by pointing out that none of the cases involved product mislabeling. Moreover, the court quoted another Ninth Circuit decision that "'[t]he proper measure of restitution in a mislabeling case is the amount necessary to compensate the purchaser for the difference between a product as labeled and the product received,' not the full purchase price" of the product. The court noted that allowing such a remedy would result in a windfall for Plaintiffs.
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