Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—S.D.N.Y.: FDCA preemption protects Unilever from claims that labeling of its deodorant products violated consumer protection and state laws, (Sep 10, 2015)

By Michael Menzhuber, J.D., LL.M.

A motion to dismiss claims that Unilever United States, Inc.’s (Unilever) packaging of its AXE and Degree brand deodorants violated consumer protection laws of New York and certain other states, as well as the common law of every state, was granted by the federal district court in New York City. The court granted the motion to dismiss after determining that all of the claims were completely preempted by the Food, Drug and Cosmetic Act (FDCA) (Bimont v. Unilever United States, Inc., September 9, 2015, Oetken, J.).

Background. Consumers brought a putative class action against Unilever that alleged violations of the consumer protection laws of several states, breach of warranty, negligent misrepresentation, and unjust enrichment. The basis for the action was the plaintiffs’ contention that Unilever’s packaging of its AXE and Degree brand deodorants: (1) misstated the “actual weight of usable product” in each stick of deodorant; (2) misstated the “total net weight (including usable and unusable portions of deodorant . . . )”; and contained “non-functional slack-fill”. Unilever moved to dismiss the action on the ground that all of the plaintiffs’ causes of action were completely preempted by the FDCA.

Food, Drug and Cosmetic Act (FDCA) Preemption. The court noted case decisions that held that state claims are preempted if they: (1) impose any non-identical requirement on conduct that could be regulated by the Food and Drug Administration (FDA); (2) impose any non-identical requirement on conduct whose subject matter has been regulated by the FDA; and (3) impose an conflicting requirement on conduct that has been regulated by the FDA. The court further noted that, under the first and second rules, the plaintiffs’ claims would be preempted but, under the third rule, they would likely survive. However, the court determined that this third rule was not correct because it was inconsistent with the FDCA’s preemption statute which forbids states to impose requirements that are not “identical” to those within those areas that the FDA has already specifically regulated.

Non-Function Slack Fill. The plaintiffs alleged that Unilever sells its deodorants in plastic containers that are larger than they functionally need to be in order to give the appearance that they contain more deodorant than they actually contain. The court noted that, in order to escape preemption by the FDCA, these claims must attempt to impose requirements that are either: (1) identical to federal law; or (2) outside the scope of federal law.

The court found that the FDA passed slack-fill regulations for food product but said nothing about drug and cosmetic packaging. The court, therefore, determined that the question was: (1) whether this constituted an FDA determination that slack-fill in drug and cosmetic packaging was permissible; or (2) whether slack-fill in drug and cosmetic packaging was outside the scope of federal requirements. The court determined that, given the prevailing case law on FDCA preemption, it was clear that the FDA had regulated slack fill but declined to interpret the general misbranding statute so as to cover slack-fill in drugs and cosmetics.

The court concluded that, under a strict approach to FDCA preemption, the fact that the FDA was given a specific invitation to regulate slack-fill in foods, drugs, and cosmetics, but chose to regulate only slack-fill in foods, was sufficient to bar the plaintiffs’ claims. The court further concluded that, even under a more lenient approach, the plaintiffs’ claims still failed because the FDA’s failure to regulate in this area was strong evidence that it considered the issue but decided that slack-fill in drug and cosmetic products was insufficiently misleading to warrant regulation.

Total Net Weight. The plaintiffs claimed that net weight statements on the deodorant products was false. Unilever argued that the alleged discrepancies between the actual net weight and the list net weight fell within the permissible range established by federal law. The plaintiffs conceded that National Institute of Standards and Technology (NIST) standards for regulating the permissible variation applied. However, they contended that nothing in the regulations contemplated intentional and systematic underfilling.

The court noted that the plaintiffs did not identify anything in federal law to suggest that manufacturers could not do what they alleged that Unilever had done. It, therefore, determined that the mere fact that underfilling is intentional ought not to control the outcome.

Usable Net Weight. The plaintiffs claimed that the net weight labeling on the deodorants was misleading because some of the deodorant was imbedded under the plastic platform on which the deodorant stick stands and was, therefore, unusable. While they conceded that federal law does not explicitly require that “usable” net weight be disclosed, they noted that the FDCA: (1) allows manufacturers to supplement their net weight labels; and (2) requires packaging to enable consumers to obtain accurate information as to the quantity of the contents.

The court determined that neither of these contentions supported the plaintiffs’ case. It concluded that mere fact that federal law allows more detail does not mean that it requires more detail. It noted that, under the stricter approach to federal preemption, the plaintiffs’ claims failed because the FDA could have regulated in this area but did not. It further noted that, under the more lenient approach, the plaintiffs’ claims failed because the FDA has promulgated regulations in this area but decided not to require usable net weight disclosures.

Other Claims. With respect to the plaintiffs’ false advertising claims, the court noted that they likely would not be preempted if they were based on advertising apart from the product labeling or packaging. However, the court found that the plaintiffs did not plead facts sufficient to give rise to the inference that any of Unilever’s non-labeling advertisements were false.

The court also determined that the plaintiffs’ warranty, negligent misrepresentation, and unjust enrichment claims were preempted for essentially the same reasons that their state law false advertising claims were.

The case is No. 14-CV-7749 (JPO).

Attorneys: C.K. Lee (Lee Litigation Group, PLLC) for Timba Bimont. Desiree Marie Ripo (Winston & Strawn LLP) for Unilever United States, Inc.

Companies: Unilever United States, Inc.

Cases: ConsumerProtection NewYorkNews