Young v. L'Oreal USA, Inc.

526 F.Supp.3d 700

Renee YOUNG, et al., Plaintiffs,

v.L'OREAL USA, INC., Defendant.

Case No. 20-cv-00944-JSW

United States District Court, N.D. California.

Signed January 15, 2021

Amy Renee Jackson, Pro Hac Vice, Matthew Dameron, Pro Hac Vice, Williams Dirks Dameron LLC, Kansas City, MO, Karen E. Snyder, Pro Hac Vice, Paul D. Snyder, Pro Hac Vice, Snyder Law Firm LLC, Overland Park, KS, Laurence D. King, Matthew B. George, Kaplan Fox & Kilsheimer LLP, Oakland, CA, for Plaintiffs.

Justin Daniel Lewis, Gordon & Rees, L.L.P., San Diego, CA, for Defendant.

ORDER GRANTING MOTION TO TRANSFER

Re: Dkt. No. 28

JEFFREY S. WHITE, United States District Judge

Now before the Court is L'Oréal USA, Inc.’s motion to transfer or dismiss under the first-to-file rule and 28 U.S.C. section 1404(a). The Court finds this motion suitable for disposition without oral argument. See N.D. Civ. L.R. 7-1(b). Having carefully reviewed the parties’ papers, considered their arguments, and the relevant legal authority, the Court hereby GRANTS L'Oréal's motion.

BACKGROUND

A. THE YOUNG CASE

This case is a putative class action brought by consumers who were allegedly misled into purchasing cosmetic products that suffer from labeling and packaging defects arising from a defective pump. L'Oréal manufactures and sells cosmetic products, including the four at issue here: Visible Lift Serum Absolute, Superstay Better Skin Skin-Transforming Foundation, Age Perfect Eye Renewal Eye Cream, and Revitalift Bright Reveal Brightening Day Moisturizer. (Dkt. 26, First Amended Complaint ("FAC") ¶¶ 3, 26-28.) These products are sold in sealed, glass containers and are to be dispensed through a pump, which is permanently attached to the top of the container but is irremovable. (Id. ¶¶ 4, 6.)

The named Plaintiffs, Renee Young and Roxanne Tierney, purchased three of these products. (Id. ¶¶ 41, 44, 47.) Their individual experiences with these products is simple. Plaintiffs allege they were misled into purchasing these products when they discovered the pumps attached to the containers failed to dispense a significant amount of the product. (Id. ¶¶ 2, 5, 42, 45, 48.) Nor could they access the remaining fluid through reasonable and safe means because the container was sealed. (Id. ¶¶ 42, 45, 48.) Had they known they could not access a significant amount of the liquid would not dispense and could not be accessed through reasonable means, Plaintiffs would not have purchased the product or paid less than the retail price. (Id. ¶ 16.) An independent laboratory test conducted by Plaintiffs after their purchase revealed these products dispensed anywhere from about 43% to 81% of the advertised net quantity. (Id. ¶ 9.)

This pump issue is not new to L'Oréal. Several consumers have complained about the defective pump directly on L'Oréal's website or through its customer service hotline. (Id. ¶¶ 30-33.) L'Oréal often responded to the complaints posted on its website and talked about it with those customers who called their customer service hotline. (Id. ¶¶ 32-33.)

In February 2020, Plaintiffs filed this putative class action on their behalves and on behalf of similarly situated California consumers, claiming L'Oréal engaged in deceptive practices when they sold these products without disclosing that it used defective pumps that failed to dispense a significant amount of product. (Id. ¶¶ 1, 2, 5-6.) They sue for alleged violations of two consumer protection statutes, breach of implied warranty, unjust enrichment, and declaratory relief. All claims are brought under California law. They seek redress for their harms in the form of damages, equitable monetary damages, punitive damages, and declaratory and injunctive relief. (Prayer for Relief ¶¶ A-L.) They are represented by three law firms: Kaplan Fox & Kilsheimer LLP, Snyder Law Firm LLC, and Williams Dirks Dameron LLC. (FAC at 28.)

B. THE CRITCHER CASE

Two years before the filing of this case, a similar action was litigated before Judge John G. Koeltl of the Southern District of New York. In that case, four of L'Oréal's products were at issue: Visible Lift Serum Absolute, Age Perfect Eye Renewal Eye Cream, Revitalift Bright Reveal Brightening Day Moisturizer, and Superstay Better Skin Skin-Transforming Foundation. Critcher v. L'Oreal USA Inc. , 18-cv-5639 (JGK), 2019 WL 3066394, at *2 (S.D.N.Y. July 11, 2019), aff'd , 959 F.3d 31 (2d Cir. 2020). The plaintiffs were consumers who purchased these products. Id. They were represented by Kaplan Fox & Kilsheimer LLP, Snyder Law Firm LLC, and Williams Dirks Dameron LLC. (Dkt. No. 29, Declaration of Justin D. Lewis ("Lewis Decl.") Ex. A, at 50.) The products were sold in sealed, glass bottles. Id. Consumers accessed the cosmetic fluid through a pump. Id. Although Plaintiffs agreed the product accurately stated the products’ net quantity, they contended the labels were misleading because the pumps failed to dispense a significant amount of the cosmetic fluid. Id. Because of the sealed, glass containers, the plaintiffs were unable to remove the pumps safely and access the remaining product. Id. The plaintiffs alleged that many consumers complained on L'Oréal's website about their inability to access the products, many of which the latter responded to. Id. Had they known of this defect, and that they would not be able to access a significant amount of the liquid because of the packaging, they would not have purchased the product. Id. The plaintiffs brought a nationwide putative class action, alleging violations of various state consumer protection statutes, unjust enrichment, breach of implied warranty, and declaratory and injunctive relief. Id.

Over the ensuing year and a half of litigation, the parties engaged in discovery. (Lewis Decl. ¶ 10.) They prepared a joint Rule 26(f) report and discovery plan. (Id. ) They made initial disclosures. (Id. ) The plaintiffs issued interrogatories and requests to produce documents; L'Oréal responded to both. (Id. ) They agreed to a stipulated protective order and negotiated a protocol for L'Oréal to gather and produce Electronically Stored Information. (Id. ¶ 11.) During all of this, two discovery disputes arose and were referred to United States Magistrate Judge Katharine H. Parker. (Id. ). Judge Parker issued two orders related to those disputes. (Id. ).

In July 2019, Judge Koeltl granted L'Oréal's motion to dismiss the entire second amended complaint on two independent bases. Critcher , 2019 WL 30166394, at *5 First, Judge Koeltl held the plaintiffs’ claims were preempted by the Federal Food, Drug, and Cosmetics Act and the Fair Packaging and Labeling Act. Id. at *3-4. Second, Judge Koeltl held that the plaintiffs failed to plausibly allege that a "reasonable consumer would be deceived by the products’ packaging." Id. at *5.

The plaintiffs appealed to the Second Circuit. While that case was pending resolution on appeal, Plaintiffs filed the Young action. Three months later, the Second Circuit affirmed Judge Koeltl's dismissal of the Critcher case, holding the FDCA expressly preempted the plaintiffs’ claims. Critcher v. L'Oreal USA, Inc. , 959 F.3d 31, 36-37 (2d Cir. 2020). The Second Circuit declined to reach whether the FPLA preempted the plaintiffs’ claims and whether the plaintiffs failed to state their claims for relief. Id. at 34.

L'Oréal now moves to transfer this case to the Southern District of New York under the first-to-file rule and 28 U.S.C. section 1404(a).

ANALYSIS

A. LEGAL STANDARD

The first-to-file rule is a doctrine of federal comity that allows a district court to decline jurisdiction over a subsequently filed action when a similar action is already pending in another district. Apple Inc. v. Psystar Corp. , 658 F.3d 1150, 1161 (9th Cir. 2011). The rule's purpose is to "avoid placing an unnecessary burden on the federal judiciary, and to avoid the embarrassment of conflicting judgments." Church of Scientology v. United States Dep't of the Army , 611 F.2d 738, 750 (9th Cir. 1979), overruled on other grounds by Animal Legal Def. Fund v. United States Food and Drug Admin. , 836 F.3d 987 (9th Cir. 2016).

Three factors are analyzed when deciding whether to apply the first-to-file rule: "chronology of the lawsuits, similarity of the parties, and similarity of the issues." Kohn Law Grp., Inc. v. Auto Parts Mfg. Mississippi, Inc. , 787 F.3d 1237, 1240 (9th Cir. 2015). The first-to-file rule is neither rigid nor inflexible and should be applied with the consideration of sound judicial administration in mind. Pacesetter Sys. Inc. v. Medtronic, Inc. , 678 F.2d 93, 94-95 (9th Cir. 1982). Because disciplined and experienced judges are given ample discretion in deciding to apply the first-to-file rule, Alltrade, Inc. v. Uniweld Prods., Inc. , 946 F.2d 622, 628 (9th Cir. 1991), a court should thus strive to "maximize ‘economy, consistency, and comity.’ " Kohn Law Grp., Inc. , 787 F.3d at 1240 (quoting Cadle Co. v. Whataburger of Alice, Inc. , 174 F.3d 599, 604 (5th Cir. 1999) ).

B. JUDICIAL ECONOMY , CONSISTENCY , AND COMITY WARRANT APPLICATION OF THE FIRST-TO-FILE RULE .

1. Chronology of the Actions

The first factor "simply requires a chronology of the actions." Wallerstein v. Dole Fresh Vegetables, Inc. , 967 F. Supp. 2d 1289, 1294 (N.D. Cal. 2013). L'Oréal argues the Critcher case was the first-filed action. The Court agrees. It is undeniable that the Critcher case was filed over a year and a half before this case and is thus the first-filed case.

Plaintiffs contend the Critcher case should be disregarded because it had been dismissed and was pending on appeal in the Second Circuit. That argument is unpersuasive. Courts have held that a case can still be considered the first-filed action even if it is pending on appeal. See, e.g., Molander v. Google LLC , 473 F. Supp. 3d 1013, 1017-20 (N.D. Cal. 2020) (first-filed action pending in the Seventh Circuit); Santich v. GNC Holdings, Inc. , No. 17cv540 DMS(RBB), 2017 WL 5614902, at *2 (S.D. Cal. Nov. 21, 2017) (...