Angela Ebner v. Fresh, Inc. , 818 F.3d 799 ( 2016 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ANGELA EBNER, No. 13-56644
Plaintiff-Appellant,
DC No.
v. 8:13 cv-00477
JVS-RNB
FRESH, INC., a Delaware
Corporation,
Defendant-Appellee. OPINION
Appeal from the United States District Court
for the Central District of California
James V. Selna, District Judge, Presiding
Argued and Submitted
January 11, 2016—Pasadena, California
Filed March 17, 2016
Before: Jerome Farris, A. Wallace Tashima,
and Jay S. Bybee, Circuit Judges.
Opinion by Judge Tashima
2 EBNER V. FRESH, INC.
SUMMARY*
California Law
The panel affirmed the district court’s Fed. R. Civ. P.
12(b)(6) dismissal of a plaintiff’s putative consumer class
action alleging that cosmetics and skin care products
manufacturer Fresh, Inc. deceived consumers about the
quantity of lip balm in its Sugar Lip Treatment product line.
The panel held that under California law, plaintiff has not
alleged, and cannot allege, facts to state a plausible claim that
the Sugar label was false, deceptive, or misleading; and thus,
the district court did not err in dismissing the label-based
claims. The panel also held that because plaintiff cannot
plausibly allege that Sugar’s design and packaging was
deceptive, the district court did not err in dismissing the
packaging-based claims. The panel further held that the
district court correctly concluded that the First Amended
Complaint failed to allege a violation of the California Fair
Packaging and Labeling Act, Cal. Bus. & Prof. Code
§ 12606(b).
The panel held that any further amendment of plaintiff’s
complaint would be futile. Finally, the panel held that
because the First Amended Complaint failed to state a claim
under any of the California statutes – the Unfair Competition
Law, the Consumer Legal Remedies Act, the False
Advertising Law, and the Fair Packaging and Labeling Act,
the unjust enrichment cause of action was mooted.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
EBNER V. FRESH, INC. 3
COUNSEL
Henry Alexander Iliff (argued), Dorsey & Whitney LLP, New
York, New York; James E. Howard, Dorsey & Whitney LLP,
Seattle, Washington; Adam H. Springel, Springel & Fink
LLP, Costa Mesa, California, for Plaintiff-Appellant.
Stephen R. Smerek (argued), Drew A. Robertson, and Shawn
Rieko Obi, Winston & Strawn LLP, Los Angeles, California,
for Defendant-Appellee.
OPINION
TASHIMA, Circuit Judge:
Angela Ebner (“Plaintiff”) alleges that cosmetics and skin
care products manufacturer Fresh, Inc. (“Fresh”) deceived
consumers about the quantity of lip balm in its Sugar Lip
Treatment (“Sugar”) product line. Although Sugar’s label
accurately indicates the net weight of included lip product,
the tube design uses a screw mechanism that allows only 75%
of the product to advance up the tube. A plastic stop device
prevents the remaining 25% from advancing past the tube
opening. Each Sugar tube contains a weighted metallic
bottom and is wrapped in oversized packaging. Plaintiff
brought a putative consumer class action against Fresh,
alleging that Fresh’s label, tube design, and packaging are
deceptive and misleading. The district court granted Fresh’s
Rule 12(b)(6) motion to dismiss Plaintiff’s First Amended
Complaint (“FAC”) with prejudice. We affirm.
4 EBNER V. FRESH, INC.
I.
We accept as true the well-pleaded factual allegations in
the complaint. Skilstaf, Inc. v. CVS Caremark Corp.,
669 F.3d 1005, 1014 (9th Cir. 2012). According to the FAC,
Sugar is a lip treatment that comes in a variety of flavors and
tints and sells in retail stores and on the internet for
approximately $22.50 to $25.00 per unit. Over the past four
years, Plaintiff, a California resident, has purchased Sugar at
various locations in Southern California.
Sugar comes in an oversized dispenser tube that uses a
screw mechanism to push the lip product to the top of the
tube. The tube is packaged and sold in a large cardboard box.
Both the tube and the cardboard box have labels indicating
the net weight of the included lip product. For an “original”
size tube, the indicated product weight is “4.3g e 0.15 oz.”;
for the “mini” size, the label reads “2.2.g e 0.08 oz.” The
FAC does not allege that the Sugar tube contains less than the
stated quantity of product. Rather, it alleges that the stated
product quantity is false and misleading because only a
portion of that product is reasonably accessible to the
consumer. Specifically, the tube’s screw mechanism permits
only 75% of the total lip product to advance past the top of
the tube. A plastic stop device prevents the remaining 25%
of the product “from being accessible to the consumer in its
intended manner or any other reasonable manner.” Plaintiff
alleges that the “intended manner” of application is to apply
the product from the tube directly to the lips. By contrast,
other lip balms using a dispenser tube, such as Burt’s Bees,
make “all or more” of the advertised product weight
accessible to the consumer.
EBNER V. FRESH, INC. 5
Plaintiff alleges that Sugar’s “vastly oversized tubes and
boxes” create the misleading impression that each unit has a
larger quantity of lip product than it actually contains. Each
Sugar tube also contains a 5.35 gram metallic weight that is
concealed at the base of the tube. Collectively, the tube,
cardboard box, weighted bottom, and 4.3 grams of lip product
in an original tube of Sugar weigh approximately 29 grams.
Plaintiff contends that as a result of Fresh’s labeling, design,
and packaging practices, she was misled as to the amount of
lip product actually accessible in a tube of Sugar and was
deprived of the value of her purchases.
The FAC asserts four state-law causes of action:
(1) violation of California’s False Advertising Law (“FAL”),
Cal. Bus. & Prof. Code § 17500 et seq.; (2) violation of the
California Consumers Legal Remedies Act (“CLRA”), Cal.
Civ. Code § 1750 et seq.; (3) violation of California’s Unfair
Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200
et seq.; and (4) unjust enrichment. Fresh moved to dismiss
the FAC under Federal Rule of Civil Procedure 12(b)(6). The
district court granted the motion and denied leave to amend.
This timely appeal followed.
II.
We have jurisdiction pursuant to 28 U.S.C. § 1291. “We
review de novo the district court’s grant of a motion to
dismiss under Rule 12(b)(6), accepting all factual allegations
in the complaint as true and construing them in the light most
favorable to the nonmoving party.” Skilstaf, Inc., 669 F.3d at
1014. We may “affirm the district court’s dismissal on any
ground supported by the record.” ASARCO, LLC v. Union
Pac. R.R., 765 F.3d 999, 1004 (9th Cir. 2014) (citations
omitted). Dismissal is appropriate if the plaintiff has not
6 EBNER V. FRESH, INC.
“allege[d] enough facts to state a claim to relief that is
plausible on its face.” Turner v. City & Cty. of S.F., 788 F.3d
1206, 1210 (9th Cir. 2015) (quoting Lazy Y Ranch Ltd. v.
Behrens, 546 F.3d 580, 588 (9th Cir. 2008)). Determining
whether a complaint states a plausible claim for relief is “a
context-specific task that requires the reviewing court to draw
on its judicial experience and common sense.” Ashcroft v.
Iqbal, 556 U.S. 662, 679 (2009).
A court’s denial of leave to amend is reviewed for an
abuse of discretion. Alvarez v. Chevron Corp., 656 F.3d 925,
931 (9th Cir. 2011). “In dismissing for failure to state a
claim, a district court should grant leave to amend even if no
request to amend the pleading was made, unless it determines
that the pleading could not possibly be cured by the allegation
of other facts.” Doe v. United States, 58 F.3d 494, 497 (9th
Cir. 1995) (citation omitted).
III.
The district court divided Plaintiff’s claims into two
categories: (1) claims based on Sugar’s labeling; and
(2) claims based on Sugar’s tube design and packaging. In
dismissing the label-based claims, the district court concluded
that both California’s safe harbor doctrine and federal
preemption under the Food, Drug, and Cosmetic Act
(“FDCA”), 21 U.S.C. § 301 et seq., were independently fatal
to Plaintiff’s claims. As for the design and packaging claims,
the district court concluded that neither Sugar’s tube design
nor packaging were deceptive or misleading to the reasonable
consumer. Additionally, the district court concluded that the
FAC failed to plead a violation of the California Fair
Packaging and Labeling Act’s (“FPLA”) prohibition of
EBNER V. FRESH, INC. 7
nonfunctional slack fill, Cal. Bus & Prof. Code § 12606. We
discuss each of these in turn.
A.
1. California’s Safe Harbor Doctrine
The UCL, CLRA, and FAL, under which Plaintiff’s
deceptive labeling claims are brought, all prohibit unlawful,
unfair, or fraudulent business practices. See Cal. Bus. & Prof.
Code §§ 17200, 17500; see also Cal. Civ. Code § 1770. In
California, unfair competition claims are subject to the safe
harbor doctrine, which precludes plaintiffs from bringing
claims based on “actions the Legislature permits.” Cel-Tech
Commc’ns, Inc. v. L.A. Cellular Tel. Co., 973 P.2d 527, 542
(Cal. 1999). To fall within the safe harbor, the challenged
conduct must be affirmatively permitted by statute – the
doctrine does not immunize from liability conduct that is
merely not unlawful. As the California Supreme Court
explained:
There is a difference between (1) not making
an activity unlawful, and (2) making that
activity lawful. . . . Acts that the Legislature
has determined to be lawful may not form the
basis for an action under the unfair
competition law, but acts may, if otherwise
unfair, be challenged under the unfair
competition law even if the Legislature failed
to proscribe them in some other provision.
Id. at 541–42.
8 EBNER V. FRESH, INC.
The FAC alleges that, although the Sugar label accurately
states the net weight of lip product in the tube, only 75% of
that product is reasonably accessible. To the extent the FAC
challenges the Sugar label’s accurate net weight statement,
this claim is barred by the safe harbor doctrine. Both federal
and California law affirmatively require cosmetics
manufacturers to include an accurate statement of the net
weight of included cosmetic product. 21 C.F.R. § 701.13(g)
(“The declaration shall accurately reveal the quantity of
cosmetic in the package exclusive of wrappers and other
material packed therewith[.]”); Cal. Bus. & Prof. Code
§ 12603(b) (“The net quantity of contents []in terms of weight
or mass . . . shall be separately and accurately stated . . . upon
the principal display panel of that label[.]”). Because Fresh
complied with federal and state law requiring a net weight
statement on Sugar’s label, this conduct cannot form the basis
of an unfair competition claim. Cal-Tech Commc’ns, Inc.,
973 P.2d at 541–42.
Plaintiff’s other label claim is based on Fresh’s omission
of any supplemental or clarifying statement about product
accessibility. This omission, Plaintiff argues, renders the
existing net weight label deceptive and misleading. Unlike a
claim seeking to alter the net weight declaration itself, this
claim does not fall within the safe harbor because there is no
law expressly permitting the omission of supplemental
statements. See Davis v. HSBC Bank Nev., N.A., 691 F.3d
1152, 1167 (9th Cir. 2012) (“[T]o fall under a safe harbor, the
omission of the annual [fee] disclosure from Defendants’
advertisements must be expressly permitted by some other
provision. It is not enough if [federal law] merely fail[s] to
prohibit such an omission.”). For that matter, federal
regulations governing cosmetic labeling expressly permit
“supplemental statements at locations other than the principal
EBNER V. FRESH, INC. 9
display panel(s) describing in nondeceptive terms the net
quantity of contents . . . .” 21 C.F.R. § 701.13(q). Likewise,
the FPLA, Cal. Bus. & Prof. Code § 12601 et seq., permits
supplemental statements “describing in nondeceptive terms
the net quantity of contents[.]” Cal. Bus. & Prof. Code
§ 12605. Because the omission of supplemental statements
is not expressly and affirmatively permitted by law,
Plaintiff’s claim that the net weight label is nonetheless
deceptive due to the lack of a supplemental statement
explaining product accessibility is not precluded by the safe
harbor doctrine.
2. Federal Preemption Under the FDCA
As an additional ground for dismissing the label-based
claims, the district court held that Plaintiff’s claim that Fresh
was required to include supplemental statements regarding
product accessibility was preempted by the FDCA. We
disagree.
The relevant FDCA provision states:
[N]o State . . . may establish or continue in
effect any requirement for labeling or
packaging of a cosmetic that is different from
or in addition to, or that is otherwise not
identical with, a requirement specifically
applicable to a particular cosmetic or class of
cosmetics under this chapter.
21 U.S.C. § 379s(a). Importantly, § 379s “does not preempt
state laws that allow consumers to sue cosmetics
manufacturers that label or package their products in
violation of federal standards.” Astiana v. Hain Celestial
10 EBNER V. FRESH, INC.
Grp., Inc., 783 F.3d 753, 757 (9th Cir. 2015) (emphasis
added).
Fresh argues that any state-law claim requiring it to
include supplemental statements about product accessibility
is preempted by the FDCA because federal law does not
impose any such requirement on cosmetics manufacturers.
This argument misconstrues Plaintiff’s claim. In challenging
Fresh’s omission of supplemental statements about product
weight, Plaintiff seeks to enforce § 111730 of California’s
Sherman Food, Drug, and Cosmetic Law (“Sherman Law”),
Cal. Health & Safety Code § 109875 et seq. Section 111730
states that “[a]ny cosmetic is misbranded if its labeling is
false or misleading in any particular.” Cal. Health & Safety
Code § 111730. The language in the Sherman Law is
virtually identical to the language in the FDCA, which states
that a “cosmetic shall be deemed to be misbranded if its
labeling is false or misleading in any particular.” 21 U.S.C.
§ 362(a). In other words, both the federal FDCA and
California’s Sherman Law prohibit the false or misleading
labeling of a cosmetic. Viewed in this light, Plaintiff “is not
asking [Fresh] to modify or enhance any aspect of its
cosmetics labels that are required by federal law.” Astiana,
783 F.3d at 758. Rather, the state-law duty that Plaintiff
seeks to enforce under the Sherman Law is identical to
Fresh’s federal duty under the FDCA: the duty to avoid false
or misleading labeling. Whether or not the lack of a
supplemental statement rendered the accurate net weight label
deceptive goes to the merits of the claim, not the question of
federal preemption. See id. at 758 n.3 (“To the extent [the
defendant] claims that no consumer would be deceived . . .
this argument goes to the merits of [plaintiff’s] assertion that
she was deceived by the allegedly false or misleading label,
not the question of federal preemption.”). Because the
EBNER V. FRESH, INC. 11
Sherman Law does not amount to something “different from
or in addition to” what federal law already requires, under
21 U.S.C. § 379s, preemption does not bar Plaintiff’s claim.
3. Reasonable Consumer Standard
Although we conclude that neither the safe harbor
doctrine nor FDCA preemption bars Plaintiff’s supplemental
statement claim, this label claim ultimately fails on the merits
because Plaintiff cannot plausibly allege that the omission of
supplemental disclosures about product weight rendered
Sugar’s label “false or misleading” to the reasonable
consumer. Plaintiff’s claims under the California consumer
protection statutes are governed by the “reasonable
consumer” test. Williams v. Gerber Prods. Co., 552 F.3d
934, 938 (9th Cir. 2008). Under this standard, Plaintiff must
“show that ‘members of the public are likely to be
deceived.’” Id. (citation omitted); Freeman v. Time, Inc.,
68 F.3d 285, 289 (9th Cir. 1995). This requires more than a
mere possibility that Sugar’s label “might conceivably be
misunderstood by some few consumers viewing it in an
unreasonable manner.” Lavie v. Procter & Gamble Co.,
129 Cal. Rptr. 2d 486, 495 (Ct. App. 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.
Plaintiff’s claim that the reasonable consumer would be
deceived as to the amount of lip product in a tube of Sugar is
not plausible. It is undisputed that the Sugar label discloses
the correct weight of included lip product. Dispenser tubes
that use a screw mechanism to push up a solid bullet of lip
12 EBNER V. FRESH, INC.
product1 are commonplace in the market. The reasonable
consumer understands the general mechanics of these
dispenser tubes and further understands that some product
may be left in the tube to anchor the bullet in place.
Moreover, the allegations of the FAC make clear that even
after the plastic stop device prevents more product from
advancing up the tube, the consumer can still see the surface
of the remaining bullet. Although the consumer may not
know precisely how much product remains, the consumer’s
knowledge that some additional product lies below the tube’s
opening is sufficient to dispel any deception; at that point, it
is up to the consumer to decide whether it is worth the effort
to extract any remaining product with a finger or a small tool.
A rational consumer would not simply assume that the tube
contains no further product when he or she can plainly see the
surface of the bullet. And even if “some consumers might
hazard such an assumption,” the Sugar tube is not false and
deceptive merely because the remaining product quantity may
be “‘unreasonably misunderstood by an insignificant and
unrepresentative segment of the class of persons. . .’” that
may purchase the product. Davis, 691 F.3d at 1162 (quoting
Lavie, 129 Cal. Rptr. 2d at 494). Plaintiff has not alleged,
and cannot allege, facts to state a plausible claim that the
Sugar label is false, deceptive, or misleading. Thus, the
district court did not err in dismissing the label-based claims.
B.
Next, Plaintiff alleges that Sugar’s oversized and weighty
packaging and tube design are unfair, deceptive, and
misleading under the FAL, CLRA, and UCL. As part of her
1
We use the term “bullet of lip product” to describe the cylindrical mass
of lip product that is dispensed from the top of the tube.
EBNER V. FRESH, INC. 13
UCL claim, Plaintiff also alleges unlawful acts in violation of
the Sherman Law, which proscribes “misleading” cosmetics
containers, Cal. Health & Safety Code § 111750, and the
FPLA, which provides that no container shall have a false
bottom that “facilitate[s] the perpetration of deception or
fraud,” Cal. Bus. & Prof. Code § 12606(a).
Like the label-based claims, Plaintiff’s design and
packaging claims under these statutes are governed by the
reasonable consumer test.2 Williams, 552 F.3d at 938 (citing
Freeman, 68 F.3d at 289). Plaintiff alleges that the tube’s
screw mechanism, the 5.35 gram metallic bottom, and the
oversized tube and cardboard packaging all contribute to the
misleading impression of a larger quantity of lip product than
is actually included. These claims fail for largely the same
reasons that the label-based claims fail. As explained above,
an accurate net weight label is affixed to every Sugar tube
and its accompanying cardboard box. Just as the reasonable
consumer understands that additional product may remain in
the dispenser tube after the screw mechanism prevents further
advancement of the lip bullet, the reasonable consumer also
understands that some additional weight at the bottom of the
2
Having dismissed Plaintiff’s label-based FAL claim on safe harbor and
preemption grounds, the district court dismissed any remaining part of the
FAL claim on the ground that Sugar’s packaging does not constitute an
untrue or misleading “statement” prohibited by the FAL. This ruling was
in error. The FAL prohibits unfair, deceptive, untrue, or misleading
advertising, and this Court has previously concluded that a product’s
packaging may form the basis of an FAL claim. See Williams, 552 F.3d
at 938–40 (reversing district court’s dismissal of an FAL claim where
defendant’s packaging for its fruit juice snack product included pictures
of different fruits “potentially suggesting (falsely) that those fruits or their
juices are contained in the product”). However, as explained below, the
FAL claim ultimately fails because Plaintiff has not alleged a plausible
claim for relief.
14 EBNER V. FRESH, INC.
tube – not consisting of product – may be required to keep the
tube upright.
Sugar sells for approximately $22.50 to $25.00 a unit.
When viewed in the proper context of the high-end cosmetics
market, Sugar’s elaborate packaging and the weighty feel of
the tube is commonplace and even expected by a significant
portion of Fresh’s “targeted consumers.” Lavie, 129 Cal.
Rptr. 2d at 495. Because of the widespread nature of this
practice, no reasonable consumer expects the weight or
overall size of the packaging to reflect directly the quantity of
product contained therein. Because Plaintiff cannot plausibly
allege that Sugar’s design and packaging is deceptive, the
district court did not err in dismissing the packaging-based
claims.
C.
Finally, Plaintiff claims that the Sugar tube violates
§ 12606(b) of the FPLA, which deems a container
misleading if it contains nonfunctional slack fill. Cal. Bus. &
Prof. Code § 12606(b). Slack fill is defined as “the difference
between the actual capacity of a container and the volume of
product contained therein.” Id. “Nonfunctional slack fill is
the empty space in a package that is filled to substantially less
than its capacity for reasons other than” one or more of the 15
enumerated reasons listed in the statute. Id.
The FAC alleges that “the significant portion of product
falling below the mechanical stop device constitutes
nonfunctional slack fill.” This cannot constitute “slack fill”
because under the plain language of the statute, slack fill
means the portion of the container without product, i.e.,
empty space. Thus, the lip product falling below the stop
EBNER V. FRESH, INC. 15
device does not meet the definition of actionable slack fill.
The district court correctly concluded that the FAC fails to
allege a violation of § 12606(b).
IV.
Plaintiff also contends that she should have been given
leave to amend her FAC. Although, under Federal Rule of
Civil Procedure 15(a)(2), leave to amend should be “freely”
given, that liberality does not apply when amendment would
be futile. See Doe, 58 F.3d at 497 (leave to amend should be
freely given, “unless [the court] determines that the pleading
could not possibly be cured by the allegation of other facts”).
Such is the case here. As the above analysis in Part III
demonstrates, any further amendment would be futile.
Finally, Plaintiff also pleads a cause of action for unjust
enrichment. The FAC recognizes, however, that “[u]njust
enrichment is a component of recovery under the statutes
[UCL, CLRA, FAL, and FPLA] cited above.” Thus, here,
unjust enrichment is asserted as a remedy for the statutory
violations alleged in the FAC. Because we have concluded
that the FAC fails to state a claim under any of these statutes,
the unjust enrichment cause of action has been mooted.
• ! •
For the foregoing reasons, the judgment of the district
court is AFFIRMED.