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Petrosino v. Stearn's Products, Inc.

United States District Court, S.D. New York

March 30, 2018

ELIZABETH PETROSINO, individually on behalf of herself and others similarly situated Plaintiff,
v.
STEARN'S PRODUCTS, INC. D/B/A DERAE®, Defendants.

          OPINION & ORDER

          NELSON S. ROMAN, United States District Judge

         Plaintiff Elizabeth Petrosino, on behalf of herself and others similarly situated, commenced this action against Steam's Products, Inc., D/B/A Dera E®. (See Amended Compl., ECF No. 19.) Plaintiff brings claims sounding in: (1) violation of New York General Business Law § 349; (2) violation of New York General Business Law § 350; (3) breach of express warranty; (4) violation of state consumer protection statutes; and (5) injunctive relief. Before the Court are Defendant's Motion to Dismiss the Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and (6), and Defendant's Motion to Stay the case pursuant to the primary jurisdiction doctrine. For the following reasons, Defendant's Motion to Dismiss is GRANTED in part and DENIED in part with leave to amend. The Motion to Stay is DENIED in its entirety.

         BACKGROUND

         Plaintiff commenced this putative class action suit on August 31, 2016, in the Supreme Court of the State of New York, County of Dutchess, (Notice of Removal, Exh. A, Complaint, ECF No. 1) claiming that Defendant allegedly uses deceptive and misleading labeling on their cosmetic products. (Amended Compl. (“Compl.”) ¶ 1, ECF No. 19.) Defendant removed this action on October 3, 2016 pursuant to the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). (Notice of Removal ¶ 2.)[1] On December 1, 2016, Plaintiff filed an Amended Complaint seeking injunctive relief, punitive damages and claiming violations of New York General Business Law (“GBL”) §§ 349 and 350, breach of express warranty, and violations of the consumer protection statues of all fifty states.[2]

         Defendant Stearn's Products, Inc. (“Stearn's”), produces and markets a line of cosmetic products throughout the United States. (Id. ¶ 6.) The packaging and labels of the cosmetics bear a mark with the word “natural” surrounded by the phrases “cruelty free, ” “paraben-free” and “100% vegan.” (Id. ¶ 6.) The word “natural”, Plaintiff asserts, appears “in a prominent location” on the labels and packages of all the products. (See Id. ¶19.) Plaintiff purchased three of Defendant's products in New York: (1) Defendant's Derma-e Anti-Wrinkle Vitamin A Retinyl Palmitate Crème; (2) theDerma-e Firming DMAE Moisturizer; and (3) the Derma-e Hydrating Night Crème. (Id. ¶ 32.)

         Plaintiff asserts that the word “natural, ” as used by Defendant on the labels and packaging of their cosmetic products, is misleading. Plaintiff posits that the reasonable consumer would understand “natural” to mean that the products do not contain synthetic or artificial ingredients. (Id. ¶ 17.) Despite the use of the word “natural, ” many of Defendants products contain a combination of 22 synthetic and/or artificial ingredients. (Id. ¶¶ 7-8.) Accordingly, Plaintiff alleges that the use of the term “natural” on the cosmetic's labels and packaging deceives or misleads the reasonable consumer because a reasonable consumer would understand “natural” to mean “that [the product] does not contain any synthetic or artificial ingredients.” (See Id. ¶¶ 9, 13, 17, 22.)

         Further, Plaintiff asserts that Defendant's use of the word “natural” on the cosmetic's labels and packaging induced consumers, including Plaintiff and class members, to pay a premium for the products. (Id. ¶ 18.) Specifically, Plaintiff and the class relied on the representation in purchasing the products at a premium price above comparable alternatives that are not represented to be natural. (Id.) Such a representation is especially effective because consumers have become increasingly concerned with the effects of synthetic and chemical ingredients in beauty products. Plaintiff alleges that Defendant capitalized on consumer's concerns by marketing their products as being natural when, in fact, they contain a number of synthetic ingredients. (Id. ¶¶ 5-6.) If it had not been for the representation on the labels and packaging, Plaintiff and the class members would not have been willing to purchase the product at that the “premium price.” (Id.) Plaintiff further posits that Defendant did not disclose that some of the ingredients in their cosmetics are synthetic and/or artificial. (Id. ¶ 17.)

         Plaintiff alleges that Defendant's deceptive representation and omission are material because a reasonable person would attach importance to such information and would be induced to act upon such information in making purchasing decisions. (Id. ¶ 20.) Plaintiff and class members reasonably relied to their detriment on Defendant's misleading representations and omissions. (Id. ¶ 22.) Further, these “false, misleading, and deceptive misrepresentations and omissions are likely to continue to deceive and mislead reasonable consumers and the general public.” (Id.) Notwithstanding, “Plaintiff would purchase the Products again if the ingredients were changed so that they indeed were ‘Natural.'” (Id. ¶¶ 47, 49.)

         The “natural” mark, Plaintiff alleges, appears on all of the cosmetic products within the Defendant's “product portfolio” subject to this suit. Further, she alleges that the three products she purchased are substantially and sufficiently similar to the rest of the Defendant's cosmetic products that she did not purchase. The product's similarity, she posits, authorizes her to bring this class action suit on behalf of those similarly situated because Defendant's customers were “uniformly impacted” by Defendant's purportedly misleading labeling. (Id. ¶¶ 32, 35.)

         Plaintiff claims that she and the alleged class suffered injuries as a result of the representation and omission. Specifically that they: (1) “Paid a sum of money for Products that were not what Defendant represented”; (2) “Paid a premium price for Products that were not what Defendant Represented”; (3) “Were deprived of the benefit of the bargain because the Products they purchased were different from what Defendant warranted”; and (4) “Were deprived of the benefit of the bargain because the Products they purchased had less value than what Defendant represented.” (Id. ¶ 24.)

         STANDARD ON A MOTION TO DISMISS

         On a motion to dismiss for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1), dismissal of a case is proper “when the district court lacks the statutory or constitutional power to adjudicate it.” Nike, Inc. v. Already, LLC, 663 F.3d 89, 94 (2d Cir. 2011) (quoting Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000)). A plaintiff has the burden of proving subject matter jurisdiction by preponderance of the evidence. Liranzo v. United States, 690 F.3d 78, 84 (2d Cir. 2012); Morrison v. Nat'l Austl. Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008) (quoting Makarova, 201 F.3d at 113). “‘[J]urisdiction must be shown affirmatively, and that showing is not made by drawing from the pleadings inferences favorable to the party asserting it.'” Morrison, 547 F.3d at 170 (quoting APWU v. Potter, 343 F.3d 619, 623 (2d Cir. 2003)).

         On a motion to dismiss for “failure to state a claim upon which relief can be granted, ” pursuant to Federal Rule of Civil Procedure 12(b)(6), dismissal is proper unless the complaint “contain[s] sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); accord Hayden v. Paterson, 594 F.3d 150, 160 (2d Cir. 2010). “Although for the purposes of a motion to dismiss [a court] must take all of the factual allegations in the complaint as true, [it is] ‘not bound to accept as true a legal conclusion couched as a factual allegation.'” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). “While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.” Id. at 679.

         When there are well-pleaded factual allegations in the complaint, “a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Id. A claim is facially plausible when the factual content pleaded allows a court “to draw a reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678. Ultimately, determining whether a complaint states a facially plausible claim upon which relief may be granted must be “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679.

         DISCUSSION

         Defendant moves to dismiss the Amended Complaint for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. The Court takes the arguments and claims in turn. Defendant's motion is denied.

         I. Standing

         Defendant asserts that Plaintiff lacks standing to seek prospective injunctive relief and to bring a class action suit with respect to products she did not purchase. (Mem. of Points and Authorities in Supp. of Stearn's Products, Inc.'s Mot. to Dismiss the Amended Compl. (“Def. Mot.”) 10-12, ECF No. 40.)

         a. Standing to Seek Prospective Injunctive Relief

         Plaintiff seeks class-wide injunctive relief pursuant to Federal Rules of Civil Procedure 23(b)(1) and (2). (Compl. ¶ 47.) Defendant argues that injunctive relief is improper because Plaintiff does not allege that she would purchase the products in question again, but rather, that she would only purchase the products again if Defendants changed the ingredients as to make the “natural” label truthful. (Def. Mot. 10-11.) Plaintiff argues that she has standing to seek injunctive relief because a claim for injunctive relief pursuant to New York consumer protection statutes only requires allegations that a product's labeling or marketing is misleading to a reasonable consumer. (Mem. of Law in Opp. to Def. Mot. to Dismiss (“Pl. Opp.”) 4, ECF No. 41.)

         A plaintiff fulfills the federal constitutional requirements for Article III standing by alleging an actual case or controversy. Buonasera v. Honest Co., Inc., 208 F.Supp.3d 555, 564 (S.D.N.Y. 2016). In order to satisfy this jurisdictional requirement, “(1) the plaintiff must have suffered an injury-in-fact; (2) there must be a causal connection between the injury and the conduct at issue; and (3) the injury must be likely to be redressed by a favorable decision.” Nicosia v. Amazon.com, Inc., 834 F.3d 220, 239 (2d Cir. 2016) (quoting Jewish People for the Betterment of Westhampton Beach v. Vill. of Westhampton Beach, 778 F.3d 390, 394 (2d Cir. 2015)). Plaintiff must demonstrate standing for each claim and form of relief sought. Id. A named Plaintiff seeking to represent a class must abide by these same standing requirements. Id. (citing Lewis v. Casey, 518 U.S. 343, 357 (1996)).

         “A plaintiff lacks standing for injunctive relief where the complaint fails to establish a real or immediate threat of injury.” Izquierdo v. Mondelez International, Inc., No. 16-cv-04697 (CM), 2016 WL 6459832, at *5 (S.D.N.Y. Oct. 26, 2016) (quotations and citation omitted). When seeking injunctive relief, Plaintiff may not rely on a past injury, but rather, must “demonstrate that she is likely to be harmed again in the future in a similar way.” Nicosia, 834 F.3d at 239. As both the Supreme Court and Second Circuit articulated, “threatened injury must be certainly impending to constitute injury in fact, and [] [a]llegations of possible future injury are not sufficient.” American Civil Liberties Union v. Clapper, 785 F.3d 787, 800 (2d Cir. 2015) (quotations omitted) (citing Clapper v. Amnesty Intern. USA, 568 U.S. 398, 409 (2013)); see also City of Los Angeles v. Lyons, 461 U.S. 95, 111 (1983) (“[This] equitable remedy is unavailable absent a ...


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