United States: Guest Post - The Sweet Smell Of Preemption Overcomes Plaintiffs' Stinky Consumer Fraud Claims

Last Updated: September 21 2015
Article by Andrew D. Stillufsen

What follows is a guest post from Reed Smith's Andrew Stillufsen, an associate in our Princeton office.  He discusses a new FDCA preemption case involving a cosmetic, rather than a drug or device.  As always, Andrew is entitled to all the credit (and any blame) for the contents of this post.

Take it away Andrew, and beware Sir Nose D'voidoffunk.

The ingenuity of our friends in the plaintiffs' bar is never-ending and always fascinating, like Cyrano de Bergerac's prodigious proboscis.  For example, this post is about a case brought by some resourceful lawyers who did  not turn up their nose at the possibility of a contingent fee based on the weight of a stick of deodorant.  Perhaps they were inspired by television ads showing average-looking twenty-somethings apply a certain deodorant and instantly becoming the best-looking  (and best-smelling) people in the room.  Perhaps not.  In any case, one thing is certain:  the court did not like what it sniffed after plaintiffs' claims were unwrapped, and so applied the sweet smell of preemption.  Another thing is also certain:  an overload of olfactory references appear in this post. 

Before we nosedive into the court's preemption analysis, let's take a look at plaintiffs' claims.  This putative consumer fraud class action was brought in the Southern District of New York and alleged the usual potpourri  of violations of consumer protection laws, as well as common law claims for breach of warranty, negligent misrepresentation and unjust enrichment.  Plaintiffs alleged that the defendant deceived them by (a) misstating the actual weight of usable product in each stick of its deodorant, (b) misstating the total net weight of each stick, and (c) not stating the amount of non-functional slack fill in each stick.  Bimont v. Unilever United States, Inc.,  2015 US Dist. Lexis 119908, at *2 ( S.D.N.Y. Sept. 9, 2015).

Defendant's motion to dismiss was likely inspired by the fragrance of preemption, since the deodorants at issue were both cosmetics and OTC drugs, and thus subject to the FDCA and FDA regulations.  This blog has posted before on preemption, cosmetics and OTC drugs, including sunscreen twice, and mouthwash.

The court began its preemption analysis with the refrain familiar to readers of this blog that "there is  no private right of action to enforce the FDCA."  Id. at *3.  Furthermore, "the FDCA explicitly forbids the states [from establishing] any requirement for labelling or packaging of a cosmetic that is different from or in addition to..." requirements under the FDCA.  Id. at *5 (quotations omitted).  However, in a provision with a scent similar to Buckman's "parallel violations" aroma, the court noted that the states are "free to create private rights of action under state statutes that impose requirements identical to those of the FDCA."  2015 US Dist. Lexis 119908, at *5.  In other words "[a] state law that applies to drugs or cosmetics is preempted if it imposes a requirement that is not identical to the requirements of the FDCA and the FDA's regulations."  Id. at *6.  Still, there's a caveat (isn't there always?):  "preemption does not preclude a state-law claim if the state requirement is outside the scope of the relevant federal requirements."  Id.

With the preemption table now set, the court proceeded to analyze three preemption approaches from other Second Circuit courts,  which ranged from fragrant to fetid (at least to our defense palate).  In the first approach, which had the sweetest-smelling bouquet, "state laws imposing non-identical requirements in areas that the FDA could have regulated are preempted."  Id. at *7 (emphasis in original).    The court explained that "the standard ...is not whether a state law actively undermines federal law.  It is whether state law diverges from federal law at all."  Id.  (citations omitted) (emphasis and ellipses in original).

The second approach was still agreeable, though slightly more pungent.  This approach to preemption is all about subject matter; "[i]f the FDA regulates a given subject matter, it preempts all non-identical state laws within the subject matter."  Id. at *8.  However, silence is not golden, and states are free to regulate where "FDA says nothing about the subject matter...."   Id. 

The third and the most malodorous approach "applies preemption only where state law requirements plainly conflict with federal requirements – most commonly, where a state law claim would prohibit conduct that is explicitly permitted by federal law."  Id. at *9.  Tellingly, the court noted that only one court in the Second Circuit had adopted this view.

Let's get right to the good news:  the court held that "Plaintiffs' claims are preempted under the first and second rules."  Id. at *10.  But before it told us why, the court held its nose and first set out to determine "whether or not the third rule is the correct one."  Id.  Spoiler alert:  "[i]t is not."  Id.

The court rejected the third approach because it "is inconsistent with the plain language of the FDCA's preemption statute" which forbids the states from imposing any requirements that are not "identical" to those within the scope of federal law.  Id. at *10.   If this third view were adopted, it would mean that "nothing would be left of the word 'identical' in this context.

States, under the third rule, would be free to pass any requirement: If the FDA has not already imposed them, they would, by definition, be outside the scope of federal law; and if the FDA has already imposed them, they would be identical to federal law.  That cannot be right. 

Id. at *10-11.  Accordingly, plaintiffs' claims would be preempted if FDA could have made regulations in the area, or had already made regulations in the subject matter at issue.

While the court's preemption analysis is the more interesting part of the opinion, its application to plaintiffs' claims still has a pleasant aroma.  First, plaintiffs' argued that they were misled by the amount of usable net weight in a deodorant stick because some of the deodorant is "embedded under the plastic platform ('bed') on which the deodorant stick stands," and is thus unusable.  Id. at *20. Who knew that little piece of plastic was called a bed?  More importantly, this argument was undercut by the fact that "federal law does not explicitly require that 'usable' net weight be disclosed."  Id. at *20.  Instead, federal law only requires disclosure of the weight of the product without its packaging.  Therefore, this claim was preempted under both the first and second approaches, not only because "FDA could have regulated in this area," but in fact it had already "promulgated regulations in the area of net weight disclosures for drugs and cosmetics," i.e. the subject matter of plaintiffs' complaints.   Id. at *21 (emphasis added).

Plaintiffs' claim that defendant's total net weight disclosures were false suffered a similar fate.  While plaintiffs conceded that federal regulations permitted "reasonable variations" in weight, and that the deodorant's actual net weight fell within the permitted variations, they nonetheless argued that defendant "intentionally and systematically" under filled the deodorant, which was not permitted by federal  law.  Id. at *17.

Let's unpack this argument.  Essentially, plaintiffs were claiming that, even though the deodorant's net weight was always within the permitted variation, defendant intentionally filled their products so that the net weight was at the bottom end of the permissible range.  The court took one whiff of this argument and easily turned it aside, because there was "nothing in federal law to suggest that manufacturers cannot do what [plaintiffs] allege [defendant] has done."  Id. at *18.

The court also cited a helpful Supreme Court decision which found that a California rule permitting net weight variances in meat was preempted because it did not allow for loss of weight from moisture loss, which was permitted under USDA regulations.  Id. at *18-19, citing Jones v. Rath, 430 U.S. 519 (1977).  While the court didn't explicitly say so, both the first and second approaches to preemption presumably applied to plaintiffs' second claim, as not only could FDA have regulated net weight disclosures, but it in fact had issued regulations on this very subject matter.  Therefore, "state laws forbidding net weight variations that are within the range allowed by federal law ought to be preempted as well, even if those variations are intentional or systematic."  Id. at *19.

Plaintiffs' third claim was also snuffed out by the court.  They argued that the deodorants were packaged with slack-fill "so as to give the appearance that they contain more deodorant then they actually contain."  Now we know that this concept has a name.  Unfortunately for plaintiffs, Congress also knew the name for this concept, and "specifically addressed the issue of slack-fill by explicitly authorizing the FDA to enact regulations to prevent the nonfunctional slack-fill of packages containing food, drugs, or cosmetics."  Id. at *11 (internal quotations and citations omitted).  While FDA had enacted regulations on slack-fill for food products, it had not done so for drugs or cosmetics.  In a similar refrain, not only could FDA have regulated the amount of slack-fill in cosmetics and drugs, it had actually made regulations in this specific subject matter.  Therefore, plaintiffs' claim that they were defrauded by the amount of slack-fill in the deodorant was preempted under both the first and second approaches, but not under the third, which the court had rejected.  It did make a difference.

Finally, in a clean sweep, the court also threw out plaintiffs'  remaining, equally foul-smelling claims.  Plaintiffs' claims for breach of warranty, negligent misrepresentation and unjust enrichment were tossed because common law torts like these "constitute requirements within the meaning of FDCA preemption" and were thus preempted for the same reasons as their consumer fraud claims.  Id. at *23.  Plaintiffs' false advertising claims were also dumped because plaintiffs failed to make any allegations regarding advertisements in their complaint, and thus were Twiqballed into the garbage.  As the saying goes, the nose knows, and doubly so for claims like these.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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