Products Liability Law Daily Wrap Up, JURISDICTION—HOUSEHOLD PRODUCTS—N.D. Cal.: Injured consumer’s claims against hair relaxer makers, retailers remanded to state court, (Dec 11, 2024)

By Pankhuri Bhatnagar, B.A. LL.B.

Diversity jurisdiction did not exist because the removing manufacturers failed to show that the non-diverse retailers were fraudulently joined.

In an action brought against several hair product makers and two store owners by a woman who suffered reproductive health issues allegedly due to the products’ harmful chemical content, a federal district court in California granted the consumer’s motion to remand. The court concluded that the woman had a viable cause of action against the stores from where she purportedly purchased the products at issue. Since the retailers were California citizens, the parties were not diverse (Jones v. L’Oreal USA, Inc., No. 24-cv-06845-SI (N.D. Cal. Dec. 6, 2024)).

Background. A woman used several hair relaxer products starting when she was 11 years old until the age of 42, including “Dark and Lovely” made by L’Oreal USA, Inc., L’Oreal USA Products, Inc., and SoftSheen-Carson, LLC (collectively, Loreal); “Just for Me,” “TCB,” and “Motions,” made by Strength of Nature, LLC and Godrej SON Holdings, Inc. (Godrej); and “Affirm” made by Avlon Industries, Inc. (Avlon). She claimed that these products contained chemicals that “pose an increased risk of hormone-related cancers and reproductive problems, including the development of uterine fibroids.” She was diagnosed with uterine fibroids in 2005 at the age of 27 and was compelled to leave her full-time job a few years later due to the symptoms. After an unsuccessful uterine ablation treatment, she underwent a total abdominal hysterectomy and later began menopause at the age of 34.

Citing serious and permanent physical and emotional injuries, the consumer brought suit against the aforementioned manufacturers and against Safeway, Inc. and The Vons Companies, Inc. (Vons) (collectively, retailers)—the two California stores from where she frequently purchased the products at issue. The complaint included claims for strict liability, breach of warranties, negligence, fraud, and unlawful business practices. L’Oreal removed the suit from the Alameda County Superior Court to the federal district court, stating that L’Oréal USA, Strength of Nature LLC, Godrej, and Avlon had no records of selling the subject hair relaxer products to Safeway or Vons in California, and that the retailers were fraudulently joined. Since both stores’ principal places of business were in California, there was complete diversity when their citizenship was disregarded, making jurisdiction under 28 U.S.C. § 1332(a) appropriate, the removal notice asserted. The consumer moved to remand.

Legal standard. “Diversity removal requires complete diversity, meaning that each plaintiff must be of a different citizenship from each defendant. In determining whether there is complete diversity, district courts may disregard the citizenship of a non-diverse defendant who has been fraudulently joined.” Grancare, LLC v. Thrower by & through Mills, 889 F.3d 543, 548 (9th Cir. 2018). “A defendant will be deemed fraudulently joined only if, after all disputed questions of fact and all ambiguities in the controlling state law are resolved in plaintiff’s favor, plaintiff could not recover against the non-diverse party.” Calero v. Unisys Corp., 271 F. Supp. 2d 1172, 1176 (N.D. Cal. 2003).

Analysis. The woman contended that removal was improper because: (1) the retailers were proper defendants and, thus, there was no diversity jurisdiction; (2) L’Oreal USA, Inc. was headquartered in both New York and California, and, thus, diversity was lacking; and (3) the removing companies failed to join the retailers in the removal. L’Oreal and Avlon argued that the complaint was vague and did not identify which hair relaxer products were purchased at which of the two stores, and that the woman could not prove that their products were purchased from either store. A L’Oreal employee’s declaration averred that L’Oreal USA did not have records of selling the subject hair relaxer products to Safeway or Vons for distribution to consumers between 1989 and 2020. Avlon’s president likewise declared that Avlon never authorized its Affirm® products “to be sold at general consumer retail locations such as Vons or Safeway grocery stores, in any state,” and that the Affirm® products are only sold to authorized distributors.

The woman responded with a declaration stating that when she was a child, her mother bought her hair relaxers at Safeway and Albertsons from 1989-1998 and would usually purchase the products “Just for Me” and “TCB.” From 1998-2000, the mother bought “Motions” and “Affirm” from Safeway and Albertsons, and when their family moved back to California in 2010, she got “Dark and Lovely” from Safeway in Sacramento. Based upon this evidence, the manufacturers could not claim that Safeway was fraudulently joined, the woman asserted. The court agreed, finding that there was a possibility that the consumer had a viable claim against Safeway since “[i]n a product liability action, every supplier in the stream of commerce or chain of distribution, from manufacturer to retailer, is potentially liable.” Edwards v. A.L. Lease & Co., 46 Cal. App. 4th 1029, 1033 (1996). The woman’s declaration stated that the products at issue were bought from Safeway, and the court was bound to resolve disputed facts in her favor on a motion to remand. Accordingly, the in-state defendant Safeway was not fraudulently joined, and this court lacked diversity jurisdiction. The manufacturers’ motions to dismiss were denied without prejudice to renewal in the state court.

The case is No. 24-cv-06845-SI.

Judge: Illston, S.

Attorneys: Christopher Ross Rodriguez (Singleton Schreiber, LLP) for Cynthia L. Jones. Dennis S. Ellis (Ellis George LLP) for L'Oreal USA, Inc.

Companies: L'Oreal USA, Inc.

MainStory: TopStory JurisdictionNews HouseholdProductsNews CaliforniaNews GCNNews