Eidelman v. Sun Prods. Corp.

SHAYA EIDELMAN, on behalf of himself and otherssimilarly situated, Plaintiff, v. THE SUN PRODUCTS CORPORATION,COSTCO WHOLESALE CORPORATION, Defendants.

No. 16-cv-3914 (NSR)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

September 25, 2017

OPINION & ORDER

NELSON S. ROMÁN, United States District Judge

Plaintiff Shaya Eidelman brings this proposed class action against the Sun Products Corporation ("Sun Products") and the Costco Wholesale Corporation ("Costco") (collectively, "Defendants"), alleging violations of New York's General Business Law ("GBL") §§ 349 and 350, and alleging claims of negligent misrepresentation, unjust enrichment and injunctive relief. Before this Court is Defendants' motion to dismiss the Amended Complaint ("Am. Compl."). For the following reasons, Defendants' motion is GRANTED in part and DENIED in part.

BACKGROUND

The following facts are derived from Plaintiff's Amended Complaint, (ECF No. 18), unless otherwise noted, and are accepted as true for the purposes of this motion.

Plaintiff alleges that on March 8, 2016, he entered Costco in Nanuet, New York, with the intention of purchasing liquid laundry detergent free from any irritant chemical ingredients, and recommended by dermatologists. (Am. Compl. ¶ 20.) Plaintiff viewed the labels on the various detergent bottles, including that of Defendant Sun Product's "237-fl oz. bottle of ALL PLUS + FREE CLEAR ... liquid detergent" (the "Product" or the "Detergent"). (Id.) Based upon this label, Plaintiff ultimately purchased the Detergent over other available liquid laundry detergents. (Id. ¶ 20.) After Plaintiff used the product to launder his family's clothing, he discovered that the Product was "in fact, not recommended by dermatologists with sensitive skin [and] ... accordingly, ceased using the product to launder his or his family's clothes." (Id. ¶ 22.)

The detergent bottle purchased by Plaintiff bore a label indicating that the Product was "from the #1 Detergent Brand Recommended by Dermatologists for Sensitive Skin" (the "Label"), with the words "from the" presented in an "excessively small" font size, as compared to the remainder of the text, and the words "recommended by dermatologists" in bold. (Id.) Plaintiff asserts that the phrase "from the" is a "barely readable prefix" that modifies the remaining, "more prominently displayed, partly bolded, portion" of the text. (Id. ¶ 11.) As such, it is alleged that the "variant display scheme presents the reasonable consumer with the misleading and incorrect impression" that the Product itself is the "#1" detergent recommended by dermatologists for sensitive skin (id. ¶ 11), when, "the detergent is not [in fact] recommended by dermatologists for those with sensitive skin." (Id. ¶ 2.)

Furthermore, Plaintiff alleges that the "tiny and unbolded 'from the' disclaimer prefix" fails to cure the misleading statement on the Label, because the reasonable consumer would presume that if the Product is "from the #1" recommended brand for sensitive skin, this should include the detergent contained in the labeled bottle. (Id. ¶ 13.) Along these lines, Plaintiff also asserts that the Label is deceptive because it touts a dermatological recommendation without clarifying which detergents within the brand have actually been recommended and reasonable consumers, not stopping to analyze the Label or conduct research when purchasing a "low value item" such as this one, would be "unprepared to distinguish between a recommendation intended for the brand as opposed to the" actual detergent contained within the bottle bearing the Label. (Id. ¶ 14.)

Plaintiff asserts that Defendant Sun Products allegedly knew that the Detergent was not the most recommended by dermatologist for sensitive skin and thus wrote the "from the" "disclaimer prefix" in "very small font," with the presumable intention of inducing consumers to purchase the Detergent. (Id. ¶¶ 14, 16.) In fact, Defendant allegedly manufactures a standard bottle for an alternate detergent which has a label that states that it is "#1 recommended by Dermatologist, Allergists [and] Pediatricians for Sensitive Skin," without the aforementioned "from the" qualifier. (Id. ¶ 17.) According to Plaintiff, this is likely because the alternate, standard bottle contains detergent that is in fact the most recommended by dermatologists for sensitive skin. (Id.) Thus, Plaintiff also asserts, presumably given the similarities between the bottles, at the time of product selection and purchase, consumers would be misled into believing that both detergents are the most highly recommended by dermatologists for those with sensitive skin types. (Id.) For these reasons, Plaintiff contends that the Product's label is intentionally, negligently, and/or recklessly deceptive in the conclusion it leads consumers to draw. (Id. ¶ 12.)

Plaintiff also alleges that the Detergent contains a "number of known skin irritants" (id. ¶ 18), but that the ingredients for the Detergent are not listed on the bottle, nor easily accessible online. (Id. ¶ 15.) As such, Plaintiff contends that it is unlikely consumers seeking to purchase detergents recommended by dermatologists for sensitive skin would have any reasonable way of knowing that the ingredients are irritating to sensitive skin, and not the "#1 recommended" by dermatologists for this skin type. (Id.)

Plaintiff alleges he and putative class members were ultimately "deceived and misled" into believing that the Product was recommended by dermatologists, and that the deception caused him and putative class members to purchase the Detergent over other available alternatives, and to pay a "premium or inflated price" to Costco, "instead of purchasing another[,] cheaper detergent." (Id.¶ 20.) Plaintiff also alleges that, had he and putative class members never viewed the allegedly deceptive label, they would not have paid the alleged premium. (Id.) Plaintiff further contends that dermatologist recommendations are an important, material factor for Plaintiff and putative class members in determining which detergent product to purchase, and that they were motivated to select Defendant's Detergent because of the allegedly misleading Label. (Id. ¶ 21.)

STANDARD ON A MOTION TO DISMISS

Under Rule 12(b)(6), the inquiry is whether the complaint "contain[s] sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); accord Hayden v. Paterson, 594 F.3d 150, 160 (2d Cir. 2010). "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Id. at 679. To survive a motion to dismiss, a complaint must supply "factual allegations sufficient 'to raise a right to relief above the speculative level.'" ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007) (quoting Twombly, 550 U.S. at 555). The Court must take all material factual allegations as true and draw reasonable inferences in the non-moving party's favor, but the Court is "'not bound to accept as true a legal conclusion couched as a factual allegation,'" or to credit "mere conclusory statements" or "[t]hreadbare recitals of the elements of a cause of action." Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). In determining whether a complaint states a plausible claim for relief, a district court must consider the context and "draw on its judicial experience and common sense." Id. at 662. A claim is facially plausible when the factual content pleaded allows a court "to draw a reasonable inference that the defendant is liable for the misconduct alleged." Id. at 678.

DISCUSSION

I. Claims Under New York General Business Law §§ 349 and 350

Plaintiff asserts that the Label violates GBL §§ 349 and 350 because it falsely implies that the actual Detergent in question is recommended by dermatologists for those with sensitive skin based upon the "ambiguity as to which, if any, of the brand's product detergents are excluded from the dermatologists' recommendation," and the placement, font size and general presentation of "key qualifying terms" on the Label. (Pl. Opp. Mot. Dismiss ("Pl. Opp."), at 4, ECF No. 28 (citing FAC ¶¶ 14, 16-17.); id. at 9 ("Even assuming that the eye of the reasonable consumer would, in the brief moments of viewing the product label, both notice and unpack the implications of its small and unbolded, hard to notice disclaimer, one would still be misled in reasonably understanding that the brand recommendation relates to all of the brand's detergents, including the brand detergent contained in the subject labeled bottle.") (citing FAC ¶ 14).) Defendants assert that Plaintiff fails to plausibly allege that the Product label is false or misleading.¹ (See Def. Mem. Supp. Mot. Dismiss ("Def. Mem."), at 7-8, ECF No. 25.) Defendants do not argue that the detergent in question is in fact recommended by dermatologists; instead, they contend that the Label is limited to a claim about the All Free Clear brand itself, that the text on the label is easily read and clearly conveys this message, and that a "reasonable consumer acting reasonably under the circumstances understands what it means for doctors to recommend a 'brand' as opposed to aparticular product." (Def. Reply Mot. to Dismiss, at 5,7 ECF No. 29 ("There is no conceivable reason for consumers to miss that it is the 'detergent brand,' not this particular Product" that is the subject of the recommendation on the label.); Def. Mem. at 7-14.) For these reasons, Defendants argue that the Court can decide, as a matter of law, that the Label would not have misled a reasonable customer. (See Def. Mem., at 8.)

Section 349 prohibits "[d]eceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state[.]" N.Y. Gen. Bus. Law § 349(a). A plaintiff asserting a cause of...