Guido v. L'Oreal, USA, Inc.

Citations: 284 F.R.D. 468; 2012 U.S. Dist. LEXIS 65200; 2012 WL 1616912Docket: Nos. CV 11-1067 CAS (JCx), CV 11-5465 CAS (JCx)

Court: District Court, C.D. California; May 7, 2012; Federal District Court

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On February 1, 2012, a motion for class certification was filed in a case initiated by plaintiffs Jill Guido and Natalie Lefebvre against L’Oreal, USA, Inc. and L’Oreal USA Products, Inc. The plaintiffs originally filed their complaint on February 3, 2011, in the Central District of California, later amending it on April 1, 2011. Concurrently, plaintiffs Catherine Altamura and Lisa Pearly filed a similar complaint in New York but later dismissed it and refiled in California on June 30, 2011. The cases were consolidated for pretrial purposes on September 19, 2011. In April 2012, Guido was dismissed as a named plaintiff, and Lefebvre was intended to be dismissed with prejudice.

The complaints involve allegations on behalf of classes of California and New York residents who purchased Garnier Fructis Sleek & Shine Anti-Frizz Serum. Plaintiffs claim that the defendants failed to properly label the product regarding its flammability and made misleading representations about its safety near heat sources. The motion for class certification seeks to establish a California class under various state consumer protection laws and a New York class under state deceptive practices laws for purchases made from February 4, 2008, to the present.

During the Class Period, approximately 9.9 million units of the Serum were sold nationally. The product, launched in 2004 at a consistent retail price of $5.99, has undergone three changes in labeling since its introduction, including a flammability warning that was present in the original label. In late 2006, an ingredient was removed to comply with California regulations. The court held a hearing on the motion on May 7, 2012, following opposition from the defendants and a reply from the plaintiffs.

In 2007, Garnier changed the design of its product bottle from round to bell-shaped and eliminated the flammability warning. Both the 2004 and 2007 bottle versions include identical usage instructions, which direct consumers to apply the product to towel-dried or dry hair without rinsing and to use the Garnier Fructis Sleek and Shine System for optimal results. The labels list cyclopentasiloxane and dimethiconol as ingredients, with plaintiffs asserting these, rather than the denatured alcohol removed in 2006, as the source of flammability. Conversely, defendants argue that denatured alcohol was the sole flammable ingredient in any version of the product.

The legal standard for class actions emphasizes judicial efficiency and the protection of individual rights. Federal Rule of Civil Procedure 23 outlines the requirements for class certification, which include demonstrating numerosity, commonality, typicality, and adequacy of representation. If these prerequisites are met, the court assesses whether the class can be maintained under Rule 23(b), particularly focusing on whether common questions of law or fact predominate over individual issues and if a class action is the most effective means for resolving the dispute. The predominance inquiry evaluates the cohesiveness of the class, while the superiority analysis considers individual interests, existing litigation, forum desirability, and management challenges.

A Rule 23(b)(3) class action is inappropriate if individual claims or defenses of class members necessitate separate adjudication. The party seeking class certification must demonstrate compliance with Rule 23, including proving the existence of numerous parties and common legal or factual questions. This requires a district court to conduct a rigorous analysis that may overlap with the merits of the claims.

The plaintiffs claim their case is based on consumer protection laws suitable for class certification, while the defendants argue that these claims are effectively products liability claims, which are not conducive to class treatment. Defendants contend that the plaintiffs reframe products liability claims as restitutionary claims under the Unfair Competition Law (UCL), excluding those with actual physical injuries and focusing instead on alleged overpayment for the Serum. They assert that the named plaintiffs fail to show economic loss, and that reliance must be demonstrated for claims under the UCL and General Business Law (GBL).

In response, plaintiffs argue that they have established economic injury, asserting they would not have purchased the Serum at its price had they known about its flammable nature. They claim a loss in value and usefulness, which they argue suffices for standing under the UCL and GBL. The court concludes that plaintiffs have adequately alleged economic injury, satisfying Article III standing for themselves and the putative classes. Importantly, a class cannot be certified if it includes members lacking Article III standing, which requires an injury in fact, traceability to the challenged conduct, and likelihood of redress.

In a class action lawsuit, standing is satisfied when at least one named plaintiff meets the necessary requirements; it is not required for all plaintiffs or class members to demonstrate standing. Economic injury under California's Unfair Competition Law (UCL) is sufficient for Article III standing if the plaintiff shows they "lost money or property as a result of the unfair competition" and establishes a causal link between the UCL violation and the economic harm. The named plaintiffs in this case asserted that they would have paid less for a product or would not have purchased it if they had known of its flammability, indicating a loss in value and usefulness of the product. The court cited previous cases affirming that economic injury suffices for standing and that individual proof of deception, reliance, or injury is not necessary for absent class members under the UCL.

The court dismissed the defendants' argument that every class member must demonstrate reliance, emphasizing that a presumption of reliance can arise when a misrepresentation is shown to be material. The plaintiffs need only demonstrate that the defendants' omissions and misrepresentations were material to pursue a UCL claim on behalf of the class without needing individualized proof of reliance.

Regarding Rule 23(a) requirements, particularly numerosity, the court found that the proposed classes from California and New York were sufficiently large, estimating approximately 1.1 million units sold in California and 800,000 units in New York based on census data. This data supports the conclusion that joinder of individual class members would be impractical, satisfying the numerosity requirement.

Commonality requires plaintiffs to prove that class members have experienced the same injury and that their claims are based on a common issue capable of classwide resolution, meaning that resolving the issue will simultaneously address each claim's validity. Plaintiffs assert that determining whether the defendants’ omissions and advertising of Serum were material and misleading addresses a central issue for all claims: whether Serum was promoted in a way likely to deceive consumers due to inadequate hazard disclosures. They argue that the two types of Serum bottles sold lacked warnings about flammability, a claim consistent across the nation, thus satisfying commonality. 

Defendants counter that there is no commonality even among the named plaintiffs, asserting that claims under the UCL necessitate a connection between the defendant's actions and the class members’ reasons for purchasing the product. They argue that some class members bought Serum for reasons unrelated to the alleged misconduct, such as effectiveness and price, undermining the basis for class certification. Defendants cite previous cases where class certification was denied due to lack of concern about the omitted information at the time of purchase. 

The Court concludes that plaintiffs have met the commonality requirement, identifying key factual and legal questions: the legality and truthfulness of Serum's marketing under various consumer protection laws, the potential deception of usage instructions in light of flammability, and whether a reasonable consumer would expect appropriate hazard warnings on the product as mandated by existing regulations.

Key issues include whether plaintiffs had a reasonable expectation that Serum was safe around flames, whether defendants tested Serum according to FDA guidelines, and whether they had a duty to disclose its flammability. The court must determine if defendants foresaw consumers using Serum near heat sources and whether they concealed material information about its flammability. The actual flammability of Serum and its true market value are also in question. Since Serum was uniformly packaged and sold nationwide, resolving these issues will address central claims for all class members.

Defendants argued that commonality is not met due to various reasons for purchase among class members; however, plaintiffs' testimonies indicated that knowledge of Serum's flammability would have affected their purchase decisions. Under the Unfair Competition Law (UCL), material misrepresentation leads to a presumption of reliance. The focus of a UCL claim is on the defendant's conduct rather than individual purchase motivations. Relief under the UCL does not require proof of individual deception, reliance, or injury. 

Thus, the issues regarding defendants' alleged misrepresentations about Serum’s flammability are suitable for classwide determination. The court also addresses the typicality requirement, which ensures the interests of named representatives align with those of the class. Typicality is satisfied if plaintiffs' claims are reasonably co-extensive with those of absent class members, even if not identical. The court concludes the commonality requirement is met.

Plaintiffs argue that typicality is met because their claims, along with those of proposed class members, stem from the same alleged misconduct by defendants related to the mislabeling and false marketing of Serum. They assert that all parties experienced similar economic injuries due to purchasing a product they otherwise would not have bought if not for the defendants’ misrepresentations. Plaintiffs emphasize that the success of their claims relies on proving the same facts and legal standards applicable to the entire class.

Defendants counter that the claims are not typical, citing that named plaintiffs did not "pay a premium" for Serum and therefore cannot represent those who did. They further argue that the named plaintiffs did not express concern over Serum's flammability and face unique defenses, such as one plaintiff admitting to reading the warning label and neither relying on the absence of a flammability warning during their purchase.

The court finds that plaintiffs have satisfied the typicality requirement. Each named plaintiff testified they would not have purchased Serum or would have paid less had they known of its flammable nature. Plaintiffs allege to have suffered the same economic injury and seek similar damages, aligning their interests with those of the class. California law allows for recovery of a "price premium" without needing to quantify it or identify cheaper alternatives with proper warnings. The court acknowledges that economic harm arises from consumers being misled into paying more than they would have for accurately labeled products, regardless of whether the products are deemed functionally equivalent. The court critiques the defendants' narrow view of economic injury, asserting that the plaintiffs provided sufficient evidence of being deceived into purchasing an inadequately labeled product.

Variations in premium amounts among class members do not impede class certification, as differences in damages calculations alone are insufficient to defeat it. The plaintiffs’ claims are considered reasonably aligned with those of absent class members, meeting the typicality requirement. The typicality standard is flexible and allows for some factual differences between claims. In assessing adequacy of representation, the court finds no conflicts of interest between the named plaintiffs and other class members, and confirms that both parties are committed to vigorously pursuing the case. Thus, the adequacy requirement under Rule 23(a) is satisfied.

Under Rule 23(b)(3), class certification is appropriate if the Rule 23(a) criteria are met and if common questions of law or fact predominate over individual issues, making a class action the superior method for resolving the dispute. The predominance inquiry focuses on whether central issues are common to the class, which can justify a class action even if some issues must be tried separately. The court will assess the entire action and the issues involved pragmatically. The plaintiffs argue that predominance is easily established since all class members were subject to the same deceptive marketing practices, asserting that no significant individual issues exist and that common issues prevail over their claims under various consumer protection laws.

Defendants argue that no presumption of reliance exists for class members, asserting that individual reliance varies due to the product's multiple representations, making class treatment unsuitable. They reference the case of Pfizer Inc. v. Sup. Ct. Galfano to support their position, emphasizing that unlike cases with clear affirmative misrepresentations, this case does not claim the product failed to perform as advertised. Consequently, they contend that each plaintiff must demonstrate reliance on an omission, leading to numerous individual inquiries.

The Court, however, finds that common issues prevail over individual issues, aligning with the requirements of Rule 23(a). It identifies that whether the defendants' alleged omissions and misrepresentations violate the Unfair Competition Law (UCL), Consumers Legal Remedies Act (CLRA), Song-Beverly Act, and General Business Law (GBL) involves shared factual and legal questions. The UCL prohibits unlawful, unfair, or fraudulent business practices and misleading advertising. To qualify under the fraudulent prong, plaintiffs need only show that the public is likely to be deceived by the advertising, which can be evidenced through the impact on the reasonable consumer.

A business practice is deemed unfair if it is immoral, unethical, or injurious to consumers. False advertising, a key theory in this case, cannot be lawful under the UCL. The determination of whether misrepresentations constitute false advertising can also be established with common evidence. Notably, relief under the UCL's various prongs can be obtained without individualized proof of deception, reliance, or injury, as long as named plaintiffs demonstrate injury and causation. The UCL aims to uphold fair competition and protect consumers from market distortions, indicating harm occurs when a buyer pays more than expected. The named plaintiffs have claimed economic injury linked to the UCL violation, suggesting a sufficient inference of causation. Thus, common issues of fact and law dominate the plaintiffs’ UCL claim.

The CLRA is designed to protect consumers from unfair and deceptive business practices and aims to provide efficient remedies for such protection, as outlined in Cal. Civ. Code § 1760. Consumers can seek relief if they suffer damages due to unlawful methods or acts, as stated in Cal. Civ. Code § 1780(a). Materiality of omissions can be a basis for claims, and this concept is suitable for class action treatment, as established in various cases including Parkinson v. Hyundai Motor America and Mass. Mut. The requirement for causation does not hinder class treatment, as common issues predominate regarding claims of failure to disclose design defects.

For violations under the Song-Beverly Act, plaintiffs must demonstrate that the goods sold were not merchantable, per Cal. Civ. Code § 1792 et seq. A common question arises from allegations that defendants misrepresented a product as safe for use, which is suitable for class resolution.

In New York, under GBL § 349 and § 350, to recover for deceptive practices or false advertising, a plaintiff must show that the act was consumer-oriented, misleading in a material respect, and resulted in injury. The standard for misleading conduct is objective, requiring that a reasonable consumer would be misled. Importantly, a claim under § 349 does not necessitate proof of reliance, while § 350 does.

Under New York law, a presumption of reliance exists when a defendant controls relevant information that a consumer cannot easily discover. This principle supports plaintiffs who allege they overpaid for a product based on misleading marketing. In this case, it can be established that common proof will show whether plaintiffs would have purchased the product had they known it was flammable, indicating that common issues outweigh individualized ones regarding all claims.

Regarding class action suitability under Rule 23(b)(3), four factors are relevant: (A) the interests of class members in controlling separate actions, (B) existing litigation related to the controversy, (C) the desirability of concentrating litigation in a particular forum, and (D) the management difficulties of a class action. Plaintiffs argue that these factors favor class certification, citing the impracticality of individual claims for numerous members and the efficiency of resolving liability based on defendants' potentially misleading advertisements and packaging. 

Defendants counter that mass torts may not be appropriate for class action treatment, arguing that assessing individual plaintiffs' states of mind regarding flammability and warning labels would be overly complex. However, the court concludes that class litigation is superior in this case, noting that enforcing consumer protection laws through class actions is encouraged, and the low price of the product makes individual claims unrealistic, solidifying the case for a class action as the best approach for adjudication.

Adjudicating class claims is significantly less burdensome than individual prosecutions, as established in Menagerie Prods. v. Citysearch, which noted no class members had initiated other related litigation. Concentrating the case in this Court promotes efficiency and consistency, satisfying the superiority requirement of Rule 23(b)(3). 

Under Rule 23(g)(1), the Court must appoint class counsel based on specific criteria: prior work on claims, experience in class actions and complex litigation, knowledge of applicable law, and available resources. The Court finds KamberLaw, LLP and Parisi Havens LLP meet these criteria, having represented plaintiffs throughout the litigation, possessing substantial class action experience, and having adequate resources to represent the classes effectively. 

The Court grants the plaintiffs’ motion for class certification, establishing two certified classes: the California Class, comprising all California residents who purchased Garnier Fructis Sleek & Shine Anti-Frizz Serum from February 2, 2008, to the present, and the New York Class, for New York residents who made similar purchases from February 4, 2008, to the present. Exclusions from both classes include defendants, court employees and their families, and attorneys or employees of law firms associated with the plaintiffs.

Persons who have sustained physical injury due to the defects in question are excluded from the class. The plaintiffs originally included Texas residents in their suit but have voluntarily dismissed those claims. The motion in Case No. CV 11-1067 CAS (JCx) is considered filed in both consolidated cases. Defendants manufactured a new bottle in 2011 that closely resembles the 2007 version. When evaluating class certification under Rule 23, district courts must conduct a rigorous analysis to confirm compliance with Rule 23(a) prerequisites, which may involve examining the merits of the plaintiffs' claims. The court does not need to determine whether the product is flammable at this stage, as this is not relevant to assessing classwide proof methods concerning misleading advertising claims. 

The court is required to address merits only as they relate to Rule 23 requirements, leading to the overruling of defendants' objections to the Parasmo Declaration regarding merits discovery refusals. Defendants' reliance on the Webb case, which asserted that each class member must demonstrate standing, is deemed unpersuasive. The court has previously rejected Webb as non-binding and noted that it was decided before significant Ninth Circuit rulings that allow class standing if at least one named plaintiff meets the requirements. In support of their position, defendants presented a declaration from Dominique M. Hanssens, who argues that it is speculative to assume the impact of misleading warnings is uniform across all consumers.

Hanssens' declaration, which claims that the absence of a flammability warning does not justify a premium price for Serum, has been deemed irrelevant to class certification by the Court. Plaintiffs objected to her opinions based on their lack of relevance to the materiality of the defendants' alleged misrepresentations regarding the product's flammability. The Court affirms that materiality is determined by whether a reasonable person would consider the information significant when deciding to purchase the product. Testimonies from plaintiffs indicate they would not have bought Serum or would have paid less had they known about its flammability, supporting a classwide inference of causation between the alleged misconduct and economic harm.

The Court sustains plaintiffs' objections to Hanssens' declaration, referencing relevant precedents. It distinguishes previous cases cited by the defendants, such as Sanchez, which argued that individual purchasing motivations affect commonality under California's Unfair Competition Law (UCL). However, the Court notes that the reasoning from In re Tobacco II, which allows for restitution without individual proof of deception or injury, is applicable here. Unlike in Mazza, where class members might not have seen misleading advertisements, the alleged misrepresentations and omissions in this case pertain to the product's labeling, which all class members encountered. Hence, the Court finds that the class members were sufficiently exposed to the alleged misleading information.

The Court rejects the defendants’ argument that the named plaintiffs are subject to unique defenses. Despite varied purchasing considerations mentioned in the plaintiffs’ testimony, they maintain that they would not have purchased the Serum, or would have paid less, had they known about its flammable nature. The defendants failed to demonstrate that any individual defenses undermine the typicality of the claims. At oral argument, defendants questioned whether Altamura could serve as a class representative, suggesting her deposition indicated she would have used Serum differently if aware of its flammability, thus implying she would still have purchased it. However, the Court finds this argument unpersuasive, noting that Altamura’s statements were made in a hypothetical context. She consistently stated she would not have purchased the product if she had known it was dangerous when used with heated styling tools. Furthermore, the defendants' claim that plaintiffs lack Article III standing due to insufficient injury is also rejected by the Court.

Unlawful business practices under the Unfair Competition Law (UCL) encompass any business practice that is legally prohibited. Violations of federal, state, or local laws can form the basis for a UCL claim, meaning that liability from other claims can support a UCL violation. Defendants argued that the case Hooper v. HM Mane Solutions forecloses the plaintiffs' claims under the General Business Law (GBL). However, this assertion is incorrect. In Hooper, the court did not certify a class action regarding a hair product due to lack of injury, noting that the plaintiffs’ argument was based solely on the act of purchasing or using the product. In contrast, the plaintiffs in the current case claim to have suffered economic injury, making it distinguishable from Hooper.