L'Oreal USA, Inc. v. Burroughs

903 S.E.2d 740

L’OREAL USA, INC. et al

v.BURROUGHS.

Strength of Nature Global, LLC

v.Burroughs.

A24A0313

A24A0314

Court of Appeals of Georgia.

June 21, 2024

Leslie Kali Eason, David Matthew Clarke, Atlanta, Dennis S. Ellis, Katherine F. Murray, Nicholas J. Begakis, for Appellant in A24A0313.

Mark David Johnson, Brunswick, Lori B. Leskin, Rhonda Trotter, Leah Schultz, for Appellant in A24A0314.

Nkosi John Bey, Darren Summerville, Tina Marie Bullock, Atlanta, Alison Lee Currie, Elizabeth C. Stone, Danielle Mason, for Appellee.

Gobeil, Judge.

In these related appeals, L’Oréal USA, Inc., L’Oréal USA Products, Inc., SoftSheen-Carson, LLC, and SoftSheen-Carson (W. I.), Inc. (collectively referred to as "L’Oreal"), and Strength of Nature Global, LLC ("SON"), (and together, "Appellants"), appeal from the trial court’s order denying Appellants’ motions to dismiss Kiara Burroughs’s complaint asserting claims for products liability, negligence, and fraud. Appellants present two primary issues for appeal: (1) Does Georgia’s ten-year statute of repose for products liability actions (OCGA § 51-1-11 (b) (2)) preclude Burroughs’s strict liability and/or negligence claims, when she first purchased the products allegedly causing injury more than ten years before filing her action, but claims to have purchased new containers of the same products within ten years of filing her action? And (2) Are Burroughs’s fraud claims preempted by federal law? For the reasons set forth below, we affirm in part, reverse in part, and remand the case to the trial court for further proceedings not inconsistent with this opinion.

[1] We review the trial court’s ruling on a motion to dismiss de novo, and a motion to dismiss should not be granted "unless the allegations of the complaint disclose with certainty that the claimant would not be entitled to relief under any state of provable facts asserted in support thereof." Golden v. Floyd Healthcare Mgmt., Inc., 368 Ga. App. 409, 410, 890 S.E.2d 288 (2023) (citation and punctuation omitted). "We construe the pleadings in the light most favorable to the plaintiff with any doubts resolved in the plaintiff’s favor." Id. (citation and punctuation omitted).

So viewed, the record in this case shows that Burroughs began using chemical hair relaxers at the age of six, and she used them continuously until she was twenty-five years old in 2014. During that time period, she purchased and used products from L’Oreal, SON, and Namaste Laboratories, LLC ("Namaste"). As described in her amended complaint, she began using SON products in 1995, and used them through 2014. She used L’Oreal and Namaste products from 2003 through 2014. She alleged that her last purchase of a chemical hair relaxer product was in 2014. In 2018, Burroughs was diagnosed with uterine fibroids, which have caused her significant health problems in the years since. In October 2022, a scientific study was released finding an association between chemical hair relaxers and uterine cancers. Publicity surrounding the study alerted Burroughs to the possibility that she may have been harmed by her use of chemical hair relaxers.

On October 27, 2022, Burroughs filed her original complaint against L’Oreal, SON, and Namaste ("Defendants"). In broad terms, she alleged that endocrine-disrupting chemicals (including phthalates) found in Defendants’ products are harmful and known to adversely impact the reproductive system. She alleged that uterine fibroids "are associated with phthalate metabolites found in chemical hair straightening and hair relaxer products" and that uterine fibroids are more common among Black women, who are more likely to use chemical hair relaxing products than women of other races. As relevant here, her original complaint raised claims of strict liability (failure to warn), strict liability (design and/or manufacturing defect), negligence (failure to warn), negligence (design and/or manufacturing defect), general negligence, negligent misrepresentation, fraud, and fraudulent concealment.¹

Defendants all filed motions to dismiss. Namaste’s motion focused on the specificity of Burroughs’s allegations, arguing that she had not identified specific Namaste products she had used that allegedly caused her injuries. L’Oreal and SON also were concerned about specificity (and L’Oreal specifically moved in the alternative for a more definite statement on Burroughs’s fraud claims), but they argued further that many of Burroughs’s claims were barred by the statute of limitation and the statute of repose. L’Oreal argued additionally that Burroughs’s negligent misrepresentation and fraud claims were preempted by the Federal Food, Drug, and Cosmetic Act ("FDCA") and its labeling requirements.

On the day Defendants’ motions to dismiss were to be argued, Burroughs filed an amended complaint. The amended complaint added specificity about which products from each defendant Burroughs had used, and the chemicals found in these products she alleges caused injury. She also significantly amended her claims, listing a total of 34 counts. Broadly, she asserted five categories of claims against each defendant: (1) strict liability - failure to warn (Counts 1-7); (2) strict liability - design/manufacturing defect (Counts 8-13²); (3) negligence - negligent failure to warn (Counts 14-20); (4) general negligence (Counts 21-27); and (5) fraud - fraudulent misrepresentation (Counts 28-34).

Finding that the amended complaint satisfied its concerns, Namaste orally withdrew its motion to dismiss. Appellants, however, wished to proceed on their legal arguments concerning the statute of repose, statute of limitation, preemption, and fraud. After the hearing, the trial court denied Appellants’ motions to dismiss. Relevant to the issues on appeal, the trial court ruled that Burroughs’s claims were timely filed under the statute of repose. As for the product liability claims, the court found that "[e]ach application of hair relaxer constituted exposure to a new product, with her last use occurring in 2014." The trial court noted that it was "the last sale of the property as new" that triggered the statute of repose, or potentially even the date of Burroughs’s injury. And as for the negligence claims, the court found that an exception in the statute of repose allowed for failure-to-warn claims outside the ten-year repose period.

The trial court also ruled that Burroughs’s fraud claims were not preempted by federal law and were sufficiently pled to survive a motion to dismiss. Further, the court found further that Burroughs’s fraud claims "additionally toll the … statute of repose …. " This appeal followed.³

There are two primary issues raised by Appellants. First, both L’Oreal and SON argue that the trial court erred in concluding that the statute of repose did not bar Burroughs’s products liability and general negligence claims. Second, L’Oreal (alone) contends that Burroughs’s fraud claims are preempted by federal statutes. (However, in its reply brief, SON also makes this argument.)

1. Statute of Repose

(a) Strict Liability and "First Sale"

[2] In Georgia,

[t]he manufacturer of any personal property sold as new property directly or through a dealer or any other person shall be liable in tort, irrespective of privity, to any natural person who may use, consume, or reasonably be affected by the property and who suffers injury to his person or property because the property when sold by the manufacturer was not merchantable and reasonably suited to the use intended, and its condition when sold is the proximate cause of the injury sustained.

OCGA § 51-1-11 (b) (1). For product liability claims, Georgia’s statute of repose states that no action "shall be commenced … with respect to an injury after ten years from the date of the first sale for use or consumption of the personal property causing or otherwise bringing about the injury." OCGA § 51-1-11 (b) (2). Subsection (c) extends the statute of repose to negligence claims against manufacturers, subject to certain exceptions (discussed in more detail below). "The purpose of OCGA § 51-1-11 (b) (2) was to address problems generated by the open-ended liability of manufacturers so as to eliminate stale claims and stabilize products liability underwriting." Johnson v. Ford Motor Co., 281 Ga. App. 166, 168, 637 S.E.2d 202 (2006) (citation and punctuation omitted), overruled on other grounds by Campbell v. Altec Indus., 288 Ga. 535, 707 S.E.2d 48 (2011).

[3–5] As the Georgia Supreme Court has explained, under Georgia’s statute of repose, "strict liability actions filed more than ten years after the date of the first sale for use or consumption of the product are completely barred." Chrysler Corp. v. Batten, 264 Ga. 723, 725 (2), 450 S.E.2d 208 (1994) (citation and punctuation omitted). Indeed the statute of repose may extinguish a cause of action before it even accrues or destroy a previously existing right of action so that it no longer exists. See PTI Royston, LLC v. Eubanks, 360 Ga. App. 263, 267-268 (1), 861 S.E.2d 115 (2021). If applicable, "[a] statute of repose stands as an unyielding banner to a plaintiff’s right of action." Id.

Appellants assert that the trial court’s conclusions regarding the statute of repose are erroneous and include either misunderstandings or misstatements of law. They argue that, because Burroughs does not contest that she first began purchasing and using their products in 1995 (SON) and 2003 (L’Oreal), the statute of repose began running in those years, and lapsed in 2005 and 2013, respectively, many years before she brought this action in 2022. Appellants contend that the statute does not support a reading that each container of a product constitutes a new "first sale," but that it is a plaintiff’s first purchase of a product they might purchase many times later that triggers the commencement of the statute of repose.

[6] First, we agree with Appellants that the trial court’s reasoning is flawed.⁴ The trial...