Antitrust Law Daily Wrap Up, ADVERTISING—DNH: Dial May Be Liable For Falsely Advertising Antibacterial Soap As Better Than Regular Soap, (Mar 29, 2013)

By Jody Coultas, J.D.

Antibacterial hand-wash purchasers stated Arkansas, California, Illinois, and Ohio consumer protection law claims against The Dial Corporation for allegedly misrepresenting the antibacterial properties of its Dial Complete hand-wash, the federal district court in Concord, New Hampshire has ruled (In re: Dial Complete Marketing and Sales Practices Litigation, March 26, 2013, McAuliffe, S.).

The active ingredient in Dial Complete is a compound known as triclosan, which is a form of pesticide. Marketing for Dial Complete included claims that it “kills 99.99% of germs”; that it kills 99.9% of illness-causing bacteria; that it is “doctor recommended”; that it “kills more germs than any other liquid hand soap”; and that it has been “shown to help reduce disease transmission by 50% compared to washing with a plain soap.”

The purchasers alleged that (1) the claims were false and deceptive because there was no scientific proof and (2) Dial Complete was not more effective than soaps that did not contain triclosan. There was only one in-house study conducted, and the advertising and packaging materials failed to disclose that the study was allegedly incomplete, unreliable, and insufficient to support the claims.

The purchasers produced sufficient facts to meet the heightened pleading standard of Federal Rule of Civil Procedure 9(b), according to the court. Dial argued that the claims failed to meet the heightened pleading standard because the purchasers failed to allege the existence of a single study that refuted the challenged claims made about Dial Complete. However, at this stage, the purchasers were only required to plead sufficient facts to support their assertion that Dial knowingly misrepresented the antibacterial efficacy of its Dial Complete product line. The purchasers submitted various scientific studies and the FDA’s own conclusion that triclosan did not provide any extra health benefits over soap and water to support their claims.

Because the primary jurisdiction doctrine did not apply, the court declined to dismiss the claims or refer the case to the Food and Drug Administration. The primary jurisdiction doctrine applies where a case involves issues that fall within the special competence of an administrative agency. Courts must consider whether a ruling on the issue might disturb the regulatory regime of the agency in question and whether the goal of national uniformity in the interpretation and application of a federal regulatory regime would be best served by permitting the agency to rule on the issue. In this case, the issues of whether scientific data supported Dial’s marketing claims and how a reasonable consumer would interpret those claims did not require the expertise of the FDA. Dial failed to show that FDA action would aid the court in resolving the claims.

The purchasers also presented sufficient allegations to state consumer protection claims under the relevant statutes, according to the court. With regard to claims under the Arkansas statute, the purchasers adequately alleged that Dial’s wrongful conduct caused them to suffer an actual injury, not simply diminution in the value of the product they purchased. The fact that the purchasers did not buy Dial Complete directly from Dial was not fatal to the California Consumer Legal Remedies Act claim. Dial had sufficient prior notice of the claims under the Ohio Consumer Sales Practices Act.

The case is No. 11-md-2263-SM.

Attorneys: Eric D. Holland (Holland Groves Schneller Stolze, LLC) for Michelle Carter. Allison W. Reimann (Sidley Austin LLP) for The Dial Corporation.

Company: The Dial Corporation

Cases: Advertising StateUnfairTradePractices NewHampshireNews