Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Consumer able to show actual injury in “flushable” wipe class action, (Jan 8, 2015)

By Linda O’Brien, J.D., LL.M.

In an unfair business practices action against the manufacturers of two personal hygiene cleansing wipes, a consumer alleged sufficient facts showing that he was injured-in-fact by the misrepresentation that the products were “flushable” when the wipes were not in fact flushable, the federal district court in San Francisco has decided. However, the consumer lacked standing to seek injunctive relief or pursue claims for a product he did not purchase (Machlan v. Procter & Gamble Company, January 6, 2015, Donato, J.).

Procter & Gamble (P&G) and Nehemiah Manufacturing Company make and market Charmin Freshmates and Pampers Kandoo brands of flushable wipes. David Machlan, a consumer of Pampers Kandoos, filed a putative class action suit in state court against P&G and Nehemiah, alleging that the companies deceptively marketed the two products as “flushable,” in violation of California’s Unfair Competition Law (UCL), False Advertising Law (FAL), and Consumer Legal Remedies Act (CLRA).

Specifically, Machlan alleged that the defendants did not tell consumers that the wipes were not suitable for disposal by flushing down a toilet, as they routinely damage pipes, septic systems, and sewage pumps; do not biodegrade like toilet paper; and are not regarded by municipal sewage systems as appropriate to flush down a toilet. He also claimed that he would not have purchased the wipes had the defendants not misrepresented the true nature of the “flushable” products.

After P&G and Nehemiah jointly removed the action to the federal district court, P&G moved to dismiss the complaint.

Standing. The court determined that Machlan sufficiently alleged injury-in-fact to establish standing to pursue claims against the defendants for Pampers wipes that he purchased. P&G’s arguments that the plaintiff did not allege that he was unable to flush the wipes or that the wipes caused a clog in his toilet were rejected as a hyper-literal and nonsensical reading of the complaint. The court noted that Machlan alleged that he immediately had problems flushing the wipes and, after he unclogged the toilet, he observed that the toilet paper was partially decomposed while the wipes were completely intact. The plaintiff’s claim that the wipes were represented to be “flushable,” the wipes could not be flushed without clogging his toilet, and he would not have purchased and paid a premium for the product absent the alleged misrepresentation was sufficient to show an injury-in-fact, according to the court.

Product not purchased. However, the plaintiff lacked standing to pursue any claims about a product he did not buy. Machlan, the sole named plaintiff in the case, must allege that he was personally injured and not that an injury was suffered by other, unidentified members of the class he purported to represent. Moreover, Machlan’s claims against P&G for the Charmin and Pampers wipes were not substantially similar. Machlan purchased only the Pampers wipes. Since he alleged that both P&G and Nehemiah developed the Pampers wipes and only P&G manufactured the Charmin wipes, questions were raised as what role each defendant played with respect to the wipes and the representations that were made, the court noted.

Injunctive relief. The court found that the plaintiff lacked standing under Article III to pursue injunctive relief in federal district court. Machlan asserted that he (1) was deceived about the true nature of the “flushable” wipes marketed by the defendants, (2) paid a premium for the wipes, and (3) subsequently learned that the wipes were not in fact suitable for flushing and ceased flushing the wipes. The court noted that, even if the plaintiff indicated his intention to buy the wipes again and continued to purchase the wipes, the nature of his alleged injury – deception – was that he personally could not be harmed in the same manner again. Thus, Machlan did not have standing to seek an injunction prohibiting the defendants from continuing to engage in the unfair business practices alleged in the complaint.

However, the UCL allows an injured plaintiff to obtain an injunction from the state court that prevents future harm to other unsuspecting consumers. Injunctive relief is an important remedy under California’s consumer protection laws and the court has discretion to order a remand rather than dismissal of the injunctive relief portions of the plaintiff’s claims. Therefore, the claims that sought injunctive relief under the UCL, FAL, and CLRA were remanded to the state court to determine whether injunctive relief was appropriate for the plaintiff’s claims.

The case is No. 14-cv-01982-JD.

Attorneys: Seth Adam Safier (Gutride Safier LLP) for David Machlan. Emily Johnson Henn (Covington & Burling LLP) for Procter & Gamble Company. William Charles Wilka (Dudnick Detwiler Rivin & Stikker LLP) for Nehemiah Manufacturing Company.

Companies: Procter & Gamble Company; Nehemiah Manufacturing Company

Cases: Advertising StateUnfairTradePractices CaliforniaNews