Antitrust Law Daily Wrap Up, ADVERTISING—DNH: Colgate-Palmolive’s Motion to Dismiss Claims Relating to Softsoap Antibacterial Based on Primary Jurisdiction Doctrine Denied, (Mar 20, 2013)

By Peter Reap, J.D., LLM

A consolidated consumer class action filed against Colgate-Palmolive Company, the maker of Softsoap Antibacterial, was not an appropriate case in which to apply the primary jurisdiction doctrine to stay or dismiss the action on the ground that the Food and Drug Administration (FDA) had primary jurisdiction over certain factual questions over triclosan, the active ingredient in Softsoap Antibacterial, the federal district court in Concord, New Hampshire, has ruled (In re: Colgate-Palmolive Antibacterial Hand Soap Marketing and Sales Practices Litigation, March 18, 2013, Barbadoro, P.). Thus, Colgate’s motion was denied.

Background. The plaintiffs asserted that numerous scientific studies over the last 15 years have raised doubts about the safety and effectiveness of triclosan. For example, they claimed that studies showed that repeated use of triclosan hand soap can produce bacteria that are resistant to the chemical.

The FDA has been studying the safety and effectiveness of triclosan in consumer hand soaps since the 1970s. In 1994, the agency announced that it lacked sufficient evidence to determine whether triclosan is safe and effective for use in consumer hand soaps, and it has not updated its assessment since then, though its review is ongoing.

In light of the data questioning triclosan’s safety and effectiveness, the plaintiffs argued that Colgate’s marketing strategy misled consumers. In particular, the plaintiffs claim that:

–Colgate’s use of the “Softsoap Antibacterial” brand is false or misleading because it implies that antibacterial soaps with triclosan are more effective than non-triclosan liquid hand soaps or regular soap and water;

–Assertions that Softsoap Antibacterial “kills 99% of common germs” and “eliminates 99% of germs” are false or misleading because it does not actually kill 99% of germs;

–The assertion that Softsoap Antibacterial is “dermatologist tested” is false or misleading because it was not dermatologist tested;

These, and similar allegations provided the basis for the plaintiffs’ consumer protection, breach of warranty, and unjust enrichment claims. They alleged violations of the consumer protection statutes of California, Florida, Illinois, Nevada, and New Jersey.

The plaintiffs sought monetary damages, restitution, and disgorgement of revenues. They originally sought injunctive relief as well, but in light of Colgate’s disclosure that the company has ceased manufacturing and distributing consumer products containing triclosan, the plaintiffs voluntarily abandoned their requests for injunctive relief.

The Primary Jurisdiction Doctrine

The primary jurisdiction doctrine applies when a claim that is originally cognizable in either the courts or an administrative agency requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body.

When a court encounters a factual issue that is within an agency’s special competence, it may suspend the judicial process pending referral of such issues to the administrative body for its views. There is, however, no fixed formula for determining when a court should refer a case, the court noted.

The First Circuit considers three related factors in determining whether to apply the doctrine: (1) whether an important issue in the case lies at the heart of an administrative agency’s task; (2) whether the issue requires the agency’s technical expertise; and (3) whether, though perhaps not determinative, the agency determination would materially aid the court. These factors animate the purposes of the primary jurisdiction doctrine and must be balanced against the potential for delay inherent in the decision to refer an issue to an administrative agency.

Whether an important issue in the case was at the heart of the agency’s regulatory authority. The first factor was whether an issue in the case lied at the heart of an administrative agency’s task.

The FDA’s mandate includes the responsibility to ensure the safety, effectiveness, and proper labeling of over-the-counter (OTC) drugs. In 1972, the agency categorized all OTC drugs into therapeutic classes and identified “OTC Topical Antimicrobial Products,” including consumer antibacterial products containing triclosan, as one such class.

The FDA also established procedures for developing monographs to identify the conditions under which the drugs in each class would be considered safe, effective, and not misbranded. In 1978, the FDA issued its first tentative final monograph (“TFM”) covering triclosan products. It has reopened the record to further address triclosan products more than once since then.

In 2009, the FDA announced that it would reissue a 1994 TFM in multiple segments addressing topical antimicrobial drug products intended for use by consumers, health care professionals, and food handlers separately. The agency has been unable to provide “a detailed timeline for completion of this process,” but claims to be “working diligently to publish the proposed rule.”

Turning to the case at issue, the plaintiffs seek to prove that Colgate made implied claims that Softsoap Antibacterial was superior to other products; that it misrepresented Softsoap Antibacterial’s effectiveness; and that it misled consumers with unsubstantiated claims about its products. To resolve those claims, the court will examine the state of scientific knowledge in the past, when Colgate made its advertising and labeling claims relating to Softsoap Antibacterial’s safety and effectiveness, the court observed.

The FDA’s monograph process, in contrast, was forward-looking, the court determined. It will determine the permissible content of future product labels. It will establish the permissible concentrations of triclosan in consumer hand soaps, if it permits use of the ingredient at all.

The FDA will not draw any factual conclusions about Colgate’s past conduct. The agency will not address whether Colgate’s past advertising claims were substantiated. Nor will the FDA’s monograph shed light on what information Colgate knew or could have known at the time it made the advertising and labeling claims at issue in this case, the court determined.

Accordingly, although the FDA’s conclusions could touch on some issues in this case, the case did not turn on factual disputes that lay at the heart of the FDA’s regulatory authority. The first factor thus weighed against applying the primary jurisdiction doctrine.

The need for agency expertise. The court next considered whether agency expertise was necessary to decide a technical factual question in the case.

The central issues that would have to be answered to resolve plaintiffs’ damage claims did not require the expertise of the FDA, the court held.

First, the plaintiffs’ claims that Colgate’s advertising statements were unsubstantiated would require a factfinder to measure the statements that Colgate made about Softsoap Antibacterial against the scientific evidence that was available to Colgate when it made its claims. This type of historical fact finding was well within the competence of a court to conduct.

Second, plaintiffs’ claims that Colgate made false and misleading statements about Softsoap Antibacterial would depend to a significant extent on how consumers interpreted Colgate’s statements. The FDA did not have technical expertise related to questions of fraud and deceit, in the court’s view.

Third, where (as here) marketing claims related to the comparative safety or efficacy of a drug, the FTC, and not the FDA, generally had enforcement authority. Since both federal courts and the FTC were competent to decide whether labeling and advertising statements were false or misleading, the FDA’s special expertise was not required to resolve these issues. Thus, the second factor also weighed against applying the primary jurisdiction doctrine.

Whether an agency decision would materially aid the court. Colgate failed to show how a decision by the FDA would materially aid the court in resolving the plaintiffs’ claims, the court decided. Colgate failed to show how the forthcoming monograph would materially aid or be of great help to the court in resolving the issues in the case.

Prospects for a timely resolution of the case if the issue is referred. Any minimal value that an FDA ruling might have on the resolution of this case was greatly outweighed by the harm that the plaintiffs will suffer if the action is delayed, potentially for several years, until the FDA made a determination concerning the effectiveness of hand soaps containing triclosan, the court reasoned.

Once a TFM was issued, the agency would require a minimum of fourteen more months to prepare the final monograph in accordance with the procedures set out in the regulations.

Moreover, the final monograph was not the end of the road: It could be appealed to the federal courts, and the Commissioner had discretion to stay the effective date for all or part of the monograph pending final court adjudication. This long unavoidable delay in issuing a final monograph on consumer antiseptics weighed strongly in favor of rejecting the primary jurisdiction doctrine here, the court determined.

The case is No. 12-md-2320-PB.

Attorneys: David A. Anderson (Pierce Atwood LLP) for Colgate-Palmolive Company. Lucy J. Karl (Shaheen & Gordon) for plaintiffs.

Companies: Colgate-Palmolive Company.

Cases: Advertising StateUnfairTradePractices NewHampshireNews