Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Manufacturer unable to dispose of “flushable” wipe class action, (Aug 12, 2014)

By Greg Hammond, J.D.

Kimberly-Clark Corporation, the manufacturer of four cleansing cloths/wipes, failed to obtain dismissal of a class action suit, alleging that the company falsely advertised its wipes were flushable. In partially denying the company’s motion to dismiss, the federal district court in Oakland, California determined that the consumer had subject matter jurisdiction and stated a sufficient claim under the California False Advertising Law (FAL) and the Consumer Legal Remedies Act (CLRA) (Davidson v. Kimberly-Clark Corp., August 8, 2014, Hamilton, P.).

Background. Kimberly-Clark is the manufacturer of Scott Naturals® Flushable Moist Wipes, Cottonelle® Fresh Care Flushable Wipes and Cleansing Cloths, Huggies® Pull-Ups® Flushable Moist Wipes, and U by Kotex® Refresh flushable wipes. Jennifer Davidson, a consumer of Scott Naturals, filed a class action suit against Kimberly-Clark, alleging that the company deceptively advertised the four products as “flushable.” Davidson alleged that: (1) she believed the product was specially designed to be suitable for flushing, without causing problems to her plumbing or at a water treatment plant; (2) after several uses, she had serious doubts that the wipes were truly flushable; (3) she stopped using the wipes and has not purchased any “flushable” wipes since that time; and (4) she would not have purchased the wipes had Kimberly-Clark not misrepresented the true nature of the “flushable” products. Kimberly-Clark moved to dismiss the complaint.

Standing. In its first argument, Kimberly-Clark contended that Davidson lacked standing. Specifically, the corporation argued: (1) Davidson failed to allege she suffered injury-in-fact; (2) there was an insufficient likelihood that she would be harmed again, in regard to her request for injunctive relief; and (3) she lacked standing to represent absent class members with regard to the Cottonelle, Huggies, and Kotex wipes, because she never purchased those three products.

The court partially agreed and partially disagreed with Kimberly-Clark’s arguments. It found that Davidson had Article III and statutory standing to bring her deceptive advertising claims, as she sufficiently alleged that she would not have paid a premium for the wipes had Kimberly-Clark not misrepresented the product as “flushable.” However, the court determined that Davidson did not have standing to seek injunctive relief, as she had no plans to purchase the same product in the future. The issue of whether Davidson had standing to represent class members who purchased the other three products could not be decided at the current stage of litigation, and was deferred to the class certification stage.

Failure to state a claim. Kimberly-Clark also argued that the complaint should be dismissed for failure to state a claim because (1) Davidson failed to plead her claims with the particularity required under Federal Rule of Civil Procedure 9(b), and (2) she failed to plead sufficient facts to demonstrate an actionable omission under the CLRA or FAL. The court agreed with Kimberly-Clark’s first argument, noting that Davidson failed to plead facts demonstrating she relied on any the company’s advertisements or websites. Although the court dismissed the CLRA and FAL claims, it granted Davidson leave to amend her complaint. The court was unable to determine whether the “omissions” claim was viable at the current stage of litigation, and consequently denied Kimberly-Clark’s motion to dismiss that claim.

The case number is C 14-1783 PJH.

Attorneys: Seth Adam Safier (Gutride Safier LLP) for Jennifer Davidson. Amy P. Lally (Sidley Austin Brown & Wood LLP) for Kimberly-Clark Corp.

Companies: Kimberly-Clark Corp.

Cases: Advertising StateUnfairTradePractices CaliforniaNews