Antitrust Law Daily Wrap Up, ADVERTISING—NDCal: Label Claims Concerning Efficacy of Hand Sanitizer Products May Be Deceptive , (Apr 17, 2013)

By Jody Coultas, J.D.

A hand sanitizing product purchaser stated California consumer protection law claims against hand sanitizing product manufacturers based on allegedly false and misleading label statements, according to the federal district court in San Francisco (Hwang v. Ohso Clean, Inc., April 16, 2013, Spero, J.)

The purchaser alleged that the companies misrepresented the efficacy of their sanitizing products. The products displayed labels stating that the products killed 99.9% of germs, including MRSA, Salmonella, Staph, E.coli; killed 99.9% of the harmful germs that can make people sick; and sanitize hands when people can’t wash with soap and water. In their motion to dismiss, the companies argued that the claims were preempted by the FDCA and federal law.

Claims based on parallel state laws that mirror the relevant sections of the FDCA are not preempted. In this case, the relevant sections of the FDCA covered the FDA’s authority over topical antimicrobial products, such as hand sanitizers and antimicrobial hand washes.

These state law claims were not preempted by the FDCA, according to the court, because they did not require the court to interpret any provision of the FDCA or federal regulations. Claims based on whether labels are false do not give rise to implied preemption.

The doctrine of primary jurisdiction did not apply to the purchaser’s claims, according to the court. The companies argued that the decision in Pom Wonderful LLC v. Coca- Cola Company, 679 F.3d 1170 (9th Cir. 2012) supported their argument for preemption. However, that decision was based on the primary jurisdiction doctrine, rather than preemption. The doctrine directs courts to decline to rule on a claim that is within the purview of the FDA if the issue has not yet been addressed by the FDA. In this case, the issue was whether the labels were factually correct. Ruling on whether the labels were false or misleading would not usurp the expertise of the FDA.

The issue of whether the complaint alleged misrepresentations would be material to a reasonable consumer was not suitable for determination on a motion to dismiss. Issues of choice of law and class certification were also premature.

Because the purchaser failed to meet the notice requirement of the California Consumers Legal Remedies Act (CLRA), the court granted the purchaser leave to amend the claim once the notice requirement was met. The CLRA limits damage claims by imposing a pre-filing notice requirement. Courts have split on whether a plaintiff whose CLRA claim for damages is dismissed for failure to give notice may subsequently amend to add a claim for damages once it has been demonstrated that proper notice has been given and the requisite 30 days have passed. Some courts have granted leave to amend because dismissing the claim with prejudice would be "draconian." The court in this case followed that reasoning.

The case is No. C-12-06355 JCS.

Attorneys: Kiley Lynn Grombacher (Marlin & Saltzman LLP) for Won Kyung Hwang. Daniel C. DeCarlo (Lewis Brisbois Bisgaard & Smith LLP) for Ohso Clean, Inc.

Cases: Advertising CaliforniaNews