MacNaughten v. Young Living Essential Oils, LC

575 F.Supp.3d 315

Lori MACNAUGHTEN, individually and on behalf of all others similarly situated, Plaintiff,

v.YOUNG LIVING ESSENTIAL OILS, LC, Defendant.

5:21-cv-00071 (BKS/ML)

United States District Court, N.D. New York.

Signed December 16, 2021

For Plaintiff: Gary M. Klinger, Mason Lietz & Klinger LLP, 227 W. Monroe St., Ste. 2100, Chicago, IL 60606, Gary E. Mason, Mason Lietz & Klinger LLP, 5101 Wisconsin Ave. NW Ste. 305, Washington DC 20016, Aaron Siri, Mason A. Barney, Siri & Glimstad LLP, 200 Park Ave., 17^th Fl., New York, NY 10166.

For Defendant: Olivia Arden Adendorff, Jeremy A Fielding, Rachael A. Rezabek, Kirkland & Ellis LLP, 1601 Elm St., Dallas, TX 75201, Alexia Renee Brancato, Kirkland & Ellis LLP, 601 Lexington Ave., New York, NY 10022.

MEMORANDUM-DECISION AND ORDER

Brenda K. Sannes, United States District Judge:

I. INTRODUCTION

Plaintiff Lori MacNaughten¹ brings this proposed class action against Defendant Young Living Essential Oils, LC for Defendant's allegedly "unlawful and deceptive conduct" in the "marketing, sale and delivery" of its line of essential oil products. (Dkt. No. 21, ¶¶ 1–5). Plaintiff asserts claims on behalf of herself and others similarly situated who purchased Young Living essential oil products, alleging: violation of the State Consumer Fraud Acts of the states in the Consumer Fraud Multi-State Class (Count I); violation of New York General Business Law ("NYGBL") § 349 in the alternative to Count I and on behalf of Plaintiff and the New York Sub-Class (Count II); violation of NYGBL § 350 in the alternative to Count I and on behalf of Plaintiff and the New York Sub-Class (Count III); violation of NYGBL § 350-A(1) on behalf of Plaintiff and the National Class and/or New York Sub-Class (Count IV); breach of express warranty on behalf of Plaintiff and the National Class (Count V); breach of implied warranty of merchantability on behalf of Plaintiff and the National Class (Count VI); breach of implied warranty of fitness for a particular purpose on behalf of Plaintiff and the National Class (Count VII); and unjust enrichment in the alternative on behalf of the National Class and the New York Sub-Class (Count VIII). (Id. ¶¶ 80–172).

Presently before the Court is Defendant's motion to dismiss (Dkt. No. 26) the First Amended Complaint ("FAC") under Rules 8(a), 9(b), and 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted. Plaintiff opposes Defendant's motion. (Dkt. No. 27). The Court held oral argument on December 9, 2021. For the following reasons, Defendant's motion to dismiss is granted.

II. FIRST AMENDED COMPLAINT²

Young Living manufactures and sells essential oils and blends. (Dkt. No. 21, ¶¶ 11, 18). The company markets its products "through its website and other e-commerce channels," selling the products throughout the United States and on consumer retail websites, but also by recruiting "thousands of independent distributors" who sell the products to customers through a multi-level marketing model. (Id. ¶¶ 13–14).

Plaintiff, a citizen of New York residing in Syracuse, purchased Young Living products online sometime "in the last four years, and specifically on or around February 2020." (Id. ¶¶ 6, 61). She purchased essential oils "includ[ing], but not limited to," frankincense, lavender, peppermint, eucalyptus, cinnamon, and orange. (Id. ). She read on the label of the oils that they were "therapeutic-grade" and would provide a "physical, mental, or medicinal benefit," and she believed these claims. (Id. ¶ 62). Plaintiff used the Products she purchased "in the manner Defendant instructed her to, either on the Products[’] label and/or in the marketing and advertising materials included with her purchase and/or as seen by the Plaintiff on Defendant's website." (Id. ¶ 64). Plaintiff also:

viewed and relied on ... Defendant's claim(s) or claims substantially similar to the following:

• Defendant's frankincense oil "promotes feelings of relaxation & tranquility";

• Defendant's lavender oil "promote[s] feeling of calm and fight[s] occasional nervous tension’ and has ‘balancing properties that calm the mind and body";

• Defendant's peppermint oil "helps to maintain energy levels when applied topically."

(Id. ¶ 63).³ Plaintiff was "misled by Defendant's misrepresentations" and "would not have purchased and used the Products had she known that they did not provide the promised benefits," or she would not have purchased the Products at the price that Young Living charged. (Id. ¶¶ 65–66).

A. Product Labeling and Marketing

Young Living "prominently labels" each bottle of its essential oil products as "100% Pure, Therapeutic-Grade." (Id. ¶ 19). Plaintiff included an image of Young Living Product packaging in the FAC, with each bottle depicted including the "therapeutic-grade" claim.⁴ (Id. ).

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The Young Living website also makes specific claims about the "physical, mental, or medicinal" benefits of specific oils and blends. (Id. ¶¶ 20–21). The claims include:

• "Dragon Time ‘can help promote feelings of stability and calm during occasional times of moodiness’ ";

• "Lavender can ‘ease your occasional nervous tension’ ";

• "Bergamot Oil ‘[m]ay help relieve tension during times of occasional stress’ ";

• "Sleeplyze ‘promotes feelings of relaxation and tranquility for restful sleep ... and a peaceful send-off to dreamland’ ";

• "Freedom ‘may help with occasional sleeplessness or restlessness’ ";

• "RC oil [ ]‘creates the feeling of normal clear breathing and a refreshing respiratory experience’ ";

• "Brain Power ... ‘promote[s] a sense of clarity and focus when used aromatically’ ";

• "Davana oil ‘boosts your positive outlook on life’ ";

• "One Heart ‘encourages a bright outlook on life’ "; and • "Peppermint ‘helps to maintain energy levels when applied topically.’ "

(Id. ¶ 21). Furthermore, on its website, Young Living instructs its salespeople that when "describing therapeutic-grade oils," they should relay that "every essential oil ... has the highest naturally-occurring blend of constituents to maximize the desired effect." (Id. ¶ 22). A now-removed statement on Young Living's website described the therapeutic-grade "promise" as a "bold statement," but encouraged that "you can share our products with confidence, knowing that Young Living truly has the experience to produce essential oils that work." (Id. ). This statement, although removed from Young Living's website, has not been removed from its "various blogs and other websites." (Id. ).

Young Living also maintains "the D. Gary Young Blog," named for its founder. (Id. ). On May 9, 2019, a Blog re-post titled "Eight Ways to Find Pure, Therapeutic-Grade Essential Oils" stated that:

Pure, therapeutic-grade essential oils can have therapeutic effects on their users. The purer the oils, the stronger the benefits ... Peppermint essential oil should contain between 38 and 47 percent menthol to be therapeutic ...

Look for a guarantee of therapeutic grade, which Young Living provides.

(Id. ). The blog post then describes how Young Living's "guarantee of therapeutic-grade oils is superior to all other ‘therapeutic-grade’ promises because Mr. Young ‘developed Young Living's very high standards for therapeutic-grade essential oils,’ " standards that separate its products from its competitors’. (Id. ¶ 23).

B. Price

Customers "pay a premium" for Young Living essential oils. (Id. ¶ 18). Young Living's products cost more than its competitors’: 1) Young Living charges $33.22 for a 15ml bottle of lavender essential oil, while Walmart charges $4.98 for a similar bottle; 2) Young Living charges $103.29 for a 15ml bottle of frankincense essential oil, while Amazon charges $21.50 for a similar bottle; 3) Young Living charges $52.63 for a 5ml bottle of valerian essential oil, while Eden's Garden charges $16.95 for a similar bottle; and 4) Young Living charges $30.26 for peppermint essential oil, while Target charges $6.50 for a similar bottle. (Id. ). The "therapeutic-grade" guarantee is "one of the major reasons Young Living is able to charge a premium," and yet "no reasonable consumer would have paid a premium for the Products if they knew they did not provide the promised therapeutic benefits." (Id. ¶¶ 23, 57).

C. False and Misleading Claims

Plaintiff contends that Defendant's representations that its oils are "therapeutic-grade" and have numerous health benefits are "false or misleading or were not substantiated at the time the representations were made." (Id. ¶ 38). In 2014, the Food and Drug Administration (FDA) issued a warning letter to Young Living as a result of promoting its essential oils for the treatment of "viral infections (including Ebola ), Parkinson's disease, autism, diabetes, hypertension, cancer, insomnia, heart disease, post-traumatic stress disorder (PTSD), dementia, and multiple sclerosis," conditions that are not "amenable to self-diagnosis and treatment by individuals who are not medical practitioners." (Id. ¶ 50). Subsequently, the National Advertising Division (NAD), which Plaintiff describes as "the advertising industry's robust self-regulatory body which offers a vigorous dispute resolution process for advertisers and is charged with independently monitoring and reviewing national advertising for truthfulness and accuracy," directed Young Living to permanently discontinue its claim that the oils are "therapeutic." (Id. ¶¶ 26–27). According to the FAC, "[i]n that proceeding, Young Living failed to provide any competent and reliable scientific evidence to support its health-related claims about the Products, including that they are ‘therapeutic.’ " (Id. ¶ 27). Specifically, the NAD found:

in the absence of specific product testing (or evidence that Young Living's essential oils have not only the same ingredient, but that such ingredients appear in the products in the same dosage and formulation and that the route of administration is the same as the underlying tests reasonably permitting

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