O'Neill v. Standard Homeopathic Co.

346 F.Supp.3d 511

Jennifer O'NEILL and Tricia Zamfino, on Behalf of Themselves and All Others Similarly Situated, Plaintiffs,

v.STANDARD HOMEOPATHIC COMPANY; Hyland's, Inc.; CVS Pharmacy, Inc.; and Target Corporation, Defendants.

Case No. 16-CV-8687 (KMK)

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

Signed September 28, 2018

Jeffrey I. Carton, Esq., Myles K. Bartley, Esq., Robert J. Berg, Esq., Denlea & Carton LLP, White Plains, NY, Counsel for Plaintiffs.

Judith A. Archer, Esq., David B. Schwartz, Esq., Jeffrey Margulies, Esq., Stephanie Stroup, Esq., Norton Rose Fulbright US LLP, New York, NY and Los Angeles, CA, Counsel for Defendants.

OPINION & ORDER

KENNETH M. KARAS, District Judge:

Plaintiffs Jennifer O'Neill ("O'Neill") and Tricia Zamfino ("Zamfino") bring the instant Complaint, on their own behalf and on behalf of a putative class, alleging that they were injured by paying for unsafe products that have since been voluntarily removed from the marketplace by Defendants Standard Homeopathic Company ("Standard") and Hyland's, Inc. ("Hyland's"), and which are no longer available for purchase at Defendants Target Corporation ("Target") or CVS Pharmacy, Inc. ("CVS") (collectively "Defendants"). (Am. Compl. ¶¶ 1–3 (Dkt. No. 20).) According to Plaintiffs, Defendants "made false representations about their teething products," that were in violation of New York General Business Law ("GBL") §§ 349 and 350, and also resulted in a breach of the implied warranty of merchantability and a breach of contract. (Id. ¶¶ 53–76.) Defendants have filed a Motion To Dismiss Plaintiffs' Amended Complaint. (See Defs.' Mot. To Dismiss Am. Compl. (Dkt. No. 59).) For the following reasons, Defendants' Motion is granted in part and denied in part.

I. Background

A. Factual Background

For purposes of the instant Motion, the Court treats the allegations contained in the Amended Complaint as true. Plaintiff O'Neill purchased Hyland's Baby Teething Tablets on an unspecified date at Target in Newburgh, New York. (Am. Compl. ¶ 4.) Plaintiff Zamfino purchased the same product at CVS in Middletown, New York. (Id. ¶ 5.) O'Neill discarded a full, unused container of Hyland's Baby Teething Tablets in the wake of the Food and Drug Administration's (the "FDA") warning regarding the safety of the product in September 2016, (id. ¶ 4), while Zamfino discarded a full, unused container, as well as a half-filled container, of the same, (id. ¶ 5).

Standard, through its Hyland's division, sold various homeopathic medicines under the brand name of "Hyland's." (Id. ¶ 7.) As is relevant here, Standard sold Hyland's Baby Nighttime Teething Tablets, Hyland's Baby Teething Gel, Hyland's Baby Teething Tablets, and Hyland's Teething Gel at various retailers, including Target and CVS. (Id. ¶¶ 14, 18.) According to Plaintiffs, Standard marketed the specific product purchased by O'Neill and Zamfino—the Hyland's Baby Teething Tablets—by claiming that the product "make[s] nights bearable, days livable, and truly make[s] the teething years way more groovy." (Id. ¶ 15.) In addition to these marketing statements, Standard's and Hyland's website allegedly contained a "detailed ‘Safety Information’ " page that included "representations that the FDA had regulated its manufacturing, and provid[ed] an overall impression that their products were safe." (Id. ¶ 16.) This safety information included a hypothetical regarding product safety, wherein Standard and Hyland's asserted that "a 10-pound child would have to accidentally ingest, all at the same time, more than a dozen bottles of 135 Baby Teething Tablets before experiencing certain adverse effects." (Id. ¶ 17 (internal quotation marks omitted).)

However, in 2010, the FDA issued a warning that Hyland's Teething Tablets may pose a risk to children, recommended that "consumers not use this product and dispose of any in their possession," (id. ¶ 19 (internal quotation marks omitted) ), and announced that Hyland's would be issuing a recall of the product, (id. ¶ 20). According to Plaintiffs, the FDA warning concerned the existence of "a small amount of belladonna, a substance that can cause serious harm at larger doses," in the Hyland's Teething Tablets. (Id. ¶ 21.) Plaintiffs allege that the FDA's laboratory analysis showed that the belladonna was not "carefully controlled," as the Hyland's Teething Tablets were shown to "contain inconsistent amounts of belladonna." (Id. ) Moreover, the FDA had "received reports of serious adverse events in children taking this product that [were] consistent with belladonna toxicity." (Id. ) Ultimately, Hyland's agreed to recall the Teething Tablets in 2010 out of "an abundance of caution," although it contended that the Teething Tablets were "safe for infants and toddlers." (Id. ¶ 22–23 (internal quotation marks omitted).) Yet, in 2011, Hyland's reintroduced the Teething Tablets to the market, "stating it had modified its manufacturing process, and ... claiming its products were safe." (Id. ¶ 24.)

Approximately four years later, in September 2015, USA Today published an article wherein the mother of an infant in Texas alleged that her child "was having five to six seizures a day after [the child] started taking Hyland's Baby Nighttime Teething Tablets." (Id. ¶ 25.) According to the article, "an ingredient in Hyland's homeopathic teething tablets had earlier been linked to seizures." (Id. ¶ 27.)

Roughly one year after the USA Today report, the FDA issued a new warning to consumers regarding certain homeopathic remedies. Specifically, the FDA stated that "homeopathic teething tablets and gels may pose a risk to infants and children," and further recommended that "consumers stop using these products and dispose of any in their possession." (Id. ¶ 29 (internal quotation marks omitted).) According to the FDA, these products had been linked to "adverse events ... including seizures in infants and children who were given these products." (Id. ¶ 30 (internal quotation marks omitted).) The FDA also confirmed that homeopathic teething tablets and gels had "not been evaluated or approved by the FDA for safety or efficacy," in direct contrast to representations allegedly made by Defendants. (Id. ¶ 31 (emphasis and internal quotation marks omitted).)

In response, Hyland's maintained that it was "confident that Hyland's Baby Teething Tablets remain safe," and that the FDA's warning came as "a surprise statement." (Id. ¶ 33 (internal quotation marks omitted).) Hyland's also confirmed that its homeopathic products were in fact regulated by the FDA, which placed it in direct conflict with the FDA's statement. (Id. ¶ 34.) Nonetheless, in response to the FDA's warning, "Hyland's discontinued distribution of its teething products in the United States." (Id. ¶ 36.)

Then, on January 27, 2017, the FDA issued another warning regarding homeopathic teething tablets. (Id. ¶ 37.) At this time, the FDA "indicated that it asked Standard to recall its teething tablets containing belladonna." (Id. ) The FDA's January 2017 warning confirmed that a "laboratory analysis found inconsistent amounts of belladonna ... in certain homeopathic teething tablets, sometimes far exceeding the amount claimed on the label." (Id. ¶ 38 (internal quotation marks omitted).) Due to these findings, the FDA "contact[ed] Standard directly and ask[ed] Standard to recall its homeopathic teething tablets in order to protect consumers from inconsistent levels of belladonna." (Id. ¶ 40 (internal quotation marks omitted).) At the time the Amended Complaint was filed, Standard had not yet recalled the relevant products. (Id. ¶ 41.) However, on April 13, 2017, Standard announced that it was recalling all Hyland's Baby Teething Tablets and Hyland's Baby Nighttime Teething Tablets sold in retail stores to consumers. (See Decl. of Judith A. Archer, Esq. in Supp. of Mot. To Dismiss ("Archer Decl.") Ex. B ("Recall Announcement") (Dkt. No. 61).)¹ The recall notice stated that Standard was "notifying its distributors and retailers by mail and [was] arranging for the return of all recalled products," and further that "[c]onsumers who have products which are being recalled should discard the product." (Id. ) As part of the recall, consumers were told they could receive a refund by "call[ing] [the] customer service team," who will then "begin the process of refunding the product." (Archer Decl. Ex. C ("Recall FAQ").)²

Prior to Standard initiating the aforementioned recall, Defendants CVS and Target removed the Hyland's teething products from their stores. (Am. Compl. ¶ 42.) Specifically, on September 30, 2016, CVS announced that it had "voluntarily withdrawn all brands of homeopathic teething products sold in its retail stores and online at CVS.com," and that it had initiated certain in-store controls to "prevent further sale of these products." (Id. ¶ 43 (internal quotation marks omitted).) Target did not make an announcement regarding the homeopathic teething products, but it did "pull[ ] the products from its shelves and stopped making the products available on [its] website." (Id. ¶ 44.) Neither Target nor CVS offered any "refund, rebate, discount, or other form of compensation to consumers" when they removed the Hyland's products from their respective stores and websites. (Id. ¶ 45.)

B. Procedural History

Plaintiffs filed their initial Complaint on November 9, 2016. (Dkt. No. 1.) On February 2, 2017, Defendants filed a pre-motion letter seeking to file a motion to dismiss the Complaint. (Dkt. No. 42.) In response to the pre-motion letter, Plaintiffs filed an Amended Complaint on February 3, 2017, (Am. Compl. (Dkt. No. 44) ), and agreed to dismiss claims brought by former-Plaintiffs Lisa Corbett and Laura Kasiotis against former-Defendant Church & Dwight Co., Inc. and Defendants CVS and Target, (Dkt. No. 46). Plaintiffs then filed a letter in response to Defendants' pre-motion letter on February 7, 2017. (Dkt. No. 47.) The Court thereafter adopted a briefing schedule...