Whiteside v. Kimberly Clark Corp.

108 F.4th 771

Summer WHITESIDE, individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. KIMBERLY CLARK CORP., Defendant-Appellee.

No. 23-55581

United States Court of Appeals, Ninth Circuit

Argued and Submitted May 13, 2024 Pasadena, California

Filed July 17, 2024

Appeal from the United States District Court for the Central District of California, Jesus G. Bernal, District Judge, Presiding, D.C. No. 5:22-cv-01988-JGB-SP

Glenn A. Danas (argued), Ryan J. Clarkson, and Katelyn M. Leeviraphan, Clarkson Law Firm PC, Malibu, California; Zachary Crosner, Crosner Legal PC, Beverly Hills, California; for Plaintiff-Appellant.

Theodore J. Boutrous Jr. (argued), Timothy W. Loose, and Patrick J. Fuster, Gibson Dunn & Crutcher LLP, Los Angeles, California; Andrew M. Kasabian, Gibson Dunn & Crutcher LLP, Irvine, California; James A. Kelly, Gibson Dunn & Crutcher LLP, Denver, Colorado; for Defendant-Appellee.

Before: Ronald Lee Gilman,^* Ronald M. Gould, and Salvador Mendoza, Jr., Circuit Judges.

OPINION

GOULD, Circuit Judge:

Plaintiff Summer Whiteside brought a putative class action against Defendant Kimberly Clark Corp., alleging that the label of Defendant's baby wipes was misleading, in violation of California's false advertising laws. The district court granted Defendant's motion to dismiss pursuant to Federal Rule of Civil Procedure ("FRCP") 12(b)(6), holding that the label was not misleading as a matter of law. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm in part and reverse in part.

BACKGROUND

I. Facts

Plaintiff's class-action complaint alleges that several versions of Defendant's "Huggies Natural Care® Baby Wipes" (the "Products") were deceptively marketed in violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200, et seq.; False Advertising Law ("FAL"), Cal. Bus. & Prof. Code § 17500, et seq.; and Consumer Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1750, et. seq. Plaintiff also brings claims for breach of warranty and unjust enrichment. Plaintiff claims that the words "plant-based wipes" (or "plant-based ingredients") and "natural care®" on the front label, together with the nature-themed imagery displayed on the packaging, suggest that Defendant's baby wipes contain only "water, natural ingredients, and ingredients that come from plants and that are not subject to chemical modification or processing." To the contrary, the Products contain synthetic ingredients that do not come from plants and are subject to chemical modification or processing.

Plaintiff alleges that she regularly purchased Defendant's baby wipes from Target every two weeks over a five-month period. Plaintiff also asserts class allegations on behalf of consumers who purchased the same or substantially similar Products during the same time period. Although all Products purchased by the putative class members allegedly contain the phrases "natural care" and "plant-based," Defendant uses a variety of label designs for its wipes, with some differences. For example, Plaintiff's complaint contains an image of the label of the wipes she purchased:

Image materials not available for display.

And attachments to the complaint contain numerous examples of the other label designs that Defendant used, like the following example:

Image materials not available for display.

After reviewing the different types of Products described, the district court separated the label designs into two categories: (1) labels where an asterisk was placed after "plant-based wipes*" and a corresponding qualifying statement ("*70%+ by weight") was present elsewhere on the front label (the "Asterisked Products"); and (2) labels on which no asterisk or qualifying statement appeared on the front label (the "Unasterisked Products"). Whiteside v. Kimberly-Clark Corp., Case No. 5:22-cv-01988-JGB-SP, 2023 WL 4328175, at *4 (C.D. Cal. June 1, 2023). Plaintiff alleges that the wipes she purchased were among the Unasterisked Products, and that the Asterisked Products are substantially similar.

Both the Asterisked and Unasterisked Products contain a list of ingredients on their back label. Directly preceding the ingredients list is a statement reading: "NATURAL AND SYNTHETIC INGREDIENTS." The following is an image of the back label on the wipes Plaintiff purchased and a magnified image of the ingredients section:

Image materials not available for display.

II. District Court Proceedings

Defendant moved to dismiss Plaintiff's complaint for lack of standing under FRCP 12(b)(1)¹ and for failure to state a claim under FRCP 12(b)(6). Whiteside, 2023 WL 4328175, at *1. The district court granted Defendant's motion under FRCP 12(b)(6), concluding that Plaintiff had failed to plausibly allege that a reasonable consumer would be misled by the Products' packaging. Id. at *7. Although its analysis was based on Plaintiff's statutory (UCL, FAL, and CLRA) claims, the district court determined that the same reasoning applied to Plaintiff's warranty and unjust enrichment claims, and the court dismissed Plaintiff's complaint in its entirety. Id.

The district court concluded that the Asterisked Products were not misleading as a matter of law because the front label qualified that the wipes were not wholly plant-based, but instead were "70%+ [plant-based] by weight." Whiteside, 2023 WL 4328175, at *4 (alteration added). The district court also reasoned that the "natural and synthetic ingredients" disclaimer on the back label "dispel[led] whatever misrepresentation allegedly exists." Whiteside, 2023 WL 4328175, at *4.

Although the Unasterisked Products presented a "closer question," the district court found that those products too were not misleading as a matter of law. The district court noted that Plaintiff's interpretation of the front label—as implying that the wipes contained only natural, plant-based ingredients—was "contrary to the disclaimer on the back of the label that expressly states the Product contains 'natural and synthetic ingredients.' " Whiteside, 2023 WL 4328175, at *5. Applying this court's decisions in Ebner v. Fresh, Inc. and Moore v. Trader Joe's Co., the district court reasoned that when a product's front label is not "unmistakably clear about the facet for which she seeks more information," a reasonable consumer is expected to look to other features of the packaging, such as the fine print on the back label. See id. at *7 (citing Ebner v. Fresh, Inc., 838 F.3d 958 (9th Cir. 2016); Moore v. Trader Joe's, 4 F.4th 874 (9th Cir. 2021)). The district court also found that the term "plant-based" "plainly means mostly, not necessarily all, derived from plants," and that the Unasterisked Products were not misleading as a matter of law, even without reference to the back label. Id. Plaintiff timely appealed.

LEGAL STANDARDS

I. Standard of Review

"A dismissal for failure to state a claim pursuant to [FRCP] 12(b)(6) is reviewed de novo. All allegations of material fact in the complaint are taken as true and construed in the light most favorable to the plaintiff." Stoner v. Santa Clara Cnty Office of Educ., 502 F.3d 1116, 1120 (9th Cir. 2007) (internal citations and quotation marks omitted). "Dismissal of a complaint under [FRCP] 12(b)(6) is appropriate when the complaint fails to state sufficient facts creating a plausible claim to relief." Trader Joe's, 4 F.4th at 880.

II. False Advertising

A. Reasonable Consumer Standard

California's UCL, FAL, and CLRA require basic fairness in advertising and permit a civil remedy against those who deceive consumers. Those laws prohibit not only false advertising, but also advertising that is "either actually misleading or which has a capacity, likelihood or tendency to deceive or confuse the public." Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008) (quoting Kasky v. Nike, Inc., 27 Cal. 4th 939, 951, 119 Cal.Rptr.2d 296, 45 P.3d 243 (2002)). Claims under each of these statutes are governed by the "reasonable consumer" standard, which requires a plaintiff to "show that members of the public are likely to be deceived" by the defendant's marketing claims. Id. (internal quotation marks and citation omitted).

The reasonable consumer standard requires more than a mere possibility that the label "might conceivably be misunderstood by some few consumers viewing it in an unreasonable manner." Ebner, 838 F.3d at 965 (quoting Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496, 508, 129 Cal.Rptr.2d 486 (2003)). Rather, the reasonable consumer standard requires a probability "that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled." Id. (citation omitted). Stated another way, a complaint asserting a violation of these laws must allege that the packaging will deceive many consumers, not just that a few might be deceived. Although there is no bright-line test, "the law does not concern itself with trifles." Lueras v. BAC Home Loans Servicing, LP, 221 Cal. App. 4th 49, 79, 163 Cal.Rptr.3d 804 (2013).

"California courts . . . have recognized that whether a business practice is deceptive will usually be a question of fact not appropriate for decision [at the pleadings stage]." Williams, 552 F.3d at 938-39 (citing Linear Tech. Corp. v. Applied Materials, Inc., 152 Cal. App. 4th 115, 134-35, 61 Cal.Rptr.3d 221 (2007)) (other citations omitted). Likewise, in federal court, dismissals of UCL, FAL, and CLRA claims at the pleadings stage have "occasionally been upheld," but such cases are "rare." Id. at 939. Dismissal is appropriate when "the advertisement itself [makes] it impossible for the plaintiff to prove that a reasonable consumer [is] likely to be deceived." Id.

B. Back-Label Disclaimers and Ingredients Lists

Placing a disclaimer or a fine-print ingredients list on a product's back label does not necessarily absolve a defendant of liability for deceptive statements on the front label. In the seminal case Will...