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Estrada v. Johnson & Johnson

United States District Court, D. New Jersey

July 14, 2017

MONA ESTRADA, on behalf of herself and all others similarly situated, Plaintiff,
v.
JOHNSON & JOHNSON and JOHNSON & JOHNSON CONSUMER COMPANIES INC., Defendants.

          OPINION

          Hon. Freda L. Wolfson United States District Judge

         In this putative consumer class action, which has been transferred to this Court as part of the In re Johnson & Johnson MultiDistrict Litigation (“MDL”), Plaintiff Mona Estrada (“Plaintiff”) accuses Defendants Johnson & Johnson (“J&J”) and Johnson & Johnson Consumer Companies (“J&J Consumer”) (collectively, “Defendants”) of engaging in unfair and illegal business practices by manufacturing, marketing, and distributing baby powder products without informing consumers that use of baby powder by women in the genital area leads to an increased risk of developing ovarian cancer. Plaintiff asserts various California state law consumer-fraud related claims against Defendants.

         Presently before the Court is Defendants' Motion to Dismiss Plaintiff's First Amended Class Action Complaint (the “FAC” or “Complaint”) for lack of standing and failure to state a claim on which relief can be granted. For the reasons set forth below, the Court grants Defendants' Motion on the basis that Plaintiff lacks standing to bring suit, and therefore, all of Plaintiff's claims are dismissed. However, Plaintiff is given leave to amend her Complaint, consistent with this Opinion, within thirty-days (30) from the date of the Order accompanying this decision.

         I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

         For the purposes of the instant Motion, the Court will recount only relevant facts from the Complaint, taking them as true. Plaintiff is a resident of Stockton, California. FAC ¶ 11. Defendant J&J is a New Jersey corporation with its principal place of business in New Brunswick, New Jersey. Id. at ¶ 12. Defendant J&J Consumer is a New Jersey corporation that operates as a subsidiary to J&J. Id. at ¶ 13.

         Defendants research, develop, market, and sell consumer products, including Johnson's® Baby Powder (“Baby Powder”), throughout the United States, including California. Id. at ¶ 13. Baby Powder is comprised almost entirely of talc, [1] with a small amount of fragrance. Id. at ¶ 1. According to Plaintiff, Defendants developed Baby Powder in 1893, and manufacture, distribute, market, and sell Baby Powder “as a daily use powder intended to eliminate friction on the skin and to absorb unwanted excess moisture for both babies and women.” Id. at ¶ 14.

         Plaintiff's allegations center on Defendants' marketing of Baby Powder to women. In that regard, Plaintiff alleges that Defendants market Baby Powder to women specifically - encouraging women to dust themselves with Baby Powder to maintain freshness and cleanliness, and to mask odors - despite the fact that the use of Baby Powder by women in the genital area results in an increased risk of developing ovarian cancer. Id. at ¶¶ 1, 15. Plaintiff avers that Defendants failed to disclose the risks associated with the use of Baby Powder by women, and continued to market the product as safe despite knowledge of those risks. Id. at ¶ 1. In support of her allegations regarding the increased cancer risk associated with Baby Powder, Plaintiff cites numerous clinical studies that have been conducted since 1961. See Id. at ¶¶ 24-60. Plaintiff alleges that since at least 1982, Defendants have been aware of the studies associating talcum powder with an elevated risk of ovarian cancer. See Id. at ¶¶ 67-72.

         On April 28, 2014, Plaintiff filed her original complaint in this matter in the United States District Court for the Eastern District of California. ECF No. 1. On March 27, 2015, the Honorable Troy L. Nunley, U.S.D.J., dismissed Plaintiff's original complaint for lack of Article III standing, finding that Plaintiff failed to allege an injury-in-fact. Estrada v. Johnson & Johnson, No. 14-01051, 2015 WL 1440466, at *5 (E.D. Cal. Mar. 27, 2015). Specifically, Judge Nunley found that Plaintiff failed to allege an “economic injury to meet Article III standing because Plaintiff did not allege specific misrepresentations by Defendants, received the benefit-of-the-bargain, and did not allege any alternative product that she would have purchased.” Id. at *5.

         On April 24, 2015, Plaintiff filed the FAC, asserting four causes of action against Defendants. ECF No. 27. Plaintiff brings these claims individually and on behalf of putative classes of consumers who have purchased Baby Powder manufactured and sold by Defendants. FAC ¶ 7. Count I of the FAC seeks injunctive and equitable relief, on the grounds that Defendants violated the Consumers Legal Remedies Act (“CLRA”), California Civil Code § 1750, et seq., by failing to disclose the increased risk of ovarian cancer associated with consumption of Baby Powder on its product labels and packages, and by representing that Baby Powder is clinically proven to be safe, gentle, and mild. Id. at ¶ 90. Count II of the FAC asserts claims pursuant to California's Unfair Competition Law (“UCL”), California Business and Professions Code § 17200, et seq., alleging that Defendants committed unlawful business practices by making misrepresentations and omitting material facts regarding the safety of Baby Powder. Id. at ¶¶ 96-97. Count III of the FAC asserts a related claim for negligent misrepresentation. Id. at ¶¶ 107-108. Finally, Count IV of the FAC asserts a claim for breach of the implied warranty of merchantability, alleging that Defendants impliedly warranted Baby Powder to be safe, despite the fact that it is unsafe and not merchantable. Id. at ¶¶ 114-117.

         The FAC alleges that as a result of Defendants' misrepresentations and omissions, Plaintiff suffered economic injury in the form of the purchase price of Baby Powder. Alternatively, the FAC alleges that had Plaintiff known of the increased cancer risk associated with Baby Powder, she would have purchased an alternative cornstarch-based product rather than Baby Powder. Plaintiff does not allege that she suffered any physical harm as a result of consuming Baby Powder.

         On May 18, 2015, Defendants filed a motion to dismiss the FAC in the Eastern District of California. ECF No. 29. That motion was fully briefed before Judge Nunley. ECF No. 29-31. However, on October 5, 2016, the case was transferred to this Court by the Multi-District Litigation Panel as part of the In re Johnson & Johnson MDL assigned to me. ECF No. 39. Thereafter, Defendants filed the instant Motion to Dismiss on December 22, 2016. ECF No. 47.

         Defendants move to dismiss the FAC on several grounds, including that Plaintiff lacks Article III standing to bring the present action, and fails to state a claim on which relief can be granted. Because the Court finds that Plaintiff lacks Article III standing to bring the present action, it need not reach Defendants' other theories.

         II. LEGAL STANDARD

         Standing under Article III of the United States Constitution is an element of subject matter jurisdiction. See Hartig Drug Co. Inc. v. Senju Pharm. Co., 836 F.3d 261, 269 (3d Cir. 2016). Under Rule 12(b)(1), “a court must grant a motion to dismiss if it lacks subject-matter jurisdiction to hear a claim.” In re Schering Plough Corp. Intron/Temodar Consumer Class Action, 678 F.3d 235, 243 (3d Cir. 2012). “A motion to dismiss for want of standing is . . . properly brought pursuant to Rule 12(b)(1), because standing is a jurisdictional matter.” Ballentine v. United States, 486 F.3d 806, 810 (3d Cir. 2007). In evaluating whether a complaint adequately pleads the elements of standing, courts apply the standard of reviewing a complaint pursuant to a Rule 12(b)(6) motion to dismiss for failure to state a claim. In re Schering Plough Corp., 678 F.3d at 243.

         In reviewing a motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6), the court “accept[s] all factual allegations as true, construe[s] the complaint in the light most favorable to the plaintiff, and determine[s] whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.” Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (citation and quotations omitted). As such, a motion to dismiss for failure to state a claim upon which relief can be granted does not attack the merits of the action, but merely tests the legal sufficiency of the complaint. Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009); see also Fed. R. Civ. P. 8(a)(2) (“A pleading that states a claim for relief must contain . . . a short and plain statement of the claim showing that the pleader is entitled to relief.”). In other words, to survive a motion to dismiss for failure to state a claim, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

         However, “the tenet that a court must accept as true all the allegations contained in the complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555). A plaintiff must show that there is “more than a sheer possibility that the defendant has acted unlawfully.” Id. (citing Twombly, 550 U.S. at 556). This plausibility determination is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679. In other words, for the plaintiff to prevail, the “complaint must do more than allege the plaintiff's entitlement to relief”; it must “‘show' such an entitlement with its facts.” Fowler, 578 F.3d at 211 (quoting Phillips, 515 F.3d at 234-35).

         The Third Circuit has cautioned, however, that Twombly and Iqbal “do not provide a panacea for defendants”; rather, “they merely require that plaintiff raise a ‘plausible claim for relief.'” Covington v. Int'l Ass'n of Approved Basketball Officials, 710 F.3d 114, 118 (3d Cir. 2013) (quoting Iqbal, 556 U.S. at 679). Thus, factual allegations must be more than speculative, but the pleading standard “is not akin to a ‘probability requirement.'” Id. (quoting Iqbal, 556 U.S. at 678).

         III. DISCUSSION

         A. Article III Standing

         Article III of the United States Constitution confines the scope of federal judicial power to the adjudication of “cases” or “controversies.” U.S. Const. art. III, § 2. This “bedrock requirement, ” Valley Forge Christian Coll. v. Ams. United for Separation of Church & State, Inc., 454 U.S. 464, 471 (1982), protects the system of separation of powers and respect for the coequal branches by restricting the province of the judiciary to “decid[ing] on the rights of individuals.” Marbury v. Madison, 1 Cranch 137, 5 U.S. 137, 2 L.Ed. 60 (1803). Indeed, “‘[n]o principle is more fundamental to the judiciary's proper role in our system of government than the constitutional limitation of federal-court jurisdiction to actual cases or controversies.'” Raines v. Byrd, 521 U.S. 811, 818 (1997) (quoting Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 37 (1976)); see Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016) (“In order to remain faithful to this tripartite structure, the power of the Federal Judiciary may not be permitted to intrude upon the powers given to the other branches.”).

         The courts have developed several justiciability doctrines to enforce the “case” or “controversy” requirement. See Warth v. Seldin, 422 U.S. 490, 498 (1975). Among those doctrines, “[t]he Art[icle] III doctrine that requires a litigant to have ‘standing' to invoke the power of a federal court is perhaps the most important . . . .” Allen v. Wright, 468 U.S. 737, 750 (1984). The seminal standing question is “whether the plaintiff has ‘alleged such a personal stake in the outcome of the controversy' as to warrant his invocation of federal-court jurisdiction and to justify exercise of the court's remedial powers on his behalf.” Seldin, 422 U.S. at 498-99 (quoting Baker v. Carr, 369 U.S. 186, 204 (1962)).

         To satisfy the “irreducible constitutional minimum” of Article III standing, the plaintiff must establish three well-settled elements:

First, the plaintiff must have suffered an injury in fact-an invasion of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical.
Second, there must be a causal connection between the injury and the conduct complained of-the injury has to be fairly traceable to the challenged action of the defendant, and not the result of the independent action of some third party not before the court.
Third, it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.

Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992) (internal quotations, alterations, and citations omitted); see Spokeo, 136 S.Ct. at 1547 (“The plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.”). Although the plaintiff bears the burden of establishing each of these three elements, the Third Circuit has stressed that the “injury-in-fact element is often determinative.” Toll Bros. v. Twp. of Readington, 555 F.3d 131, 138 (3d Cir. 2009); see also Spokeo, 136 S.Ct. at 1547 (“This case primarily concerns injury in fact, the ‘[f]irst and foremost' of standing's three elements.”) (quoting Steel Co. v. Citizens for Better Environment, 523 U.S. 83, 103 (1998)). To satisfy the injury-in-fact requirement, the injury must be “particularized, ” such that it affects the plaintiff in a “personal and individual way.” Lujan, 504 U.S. at 560 n. 1. The Supreme Court has emphasized that the injury must also be “concrete in both a qualitative and temporal sense”; i.e., the “complainant must allege an injury to himself that is ‘distinct and palpable, ' as opposed to merely ‘[a]bstract, ' and the alleged harm must be actual or imminent, not ‘conjectural' or ‘hypothetical.'” Whitmore v. Arkansas, 495 U.S. 149, 155 (1990) (internal quotations and citations omitted). To that end, allegations of a potential future injury, or the mere possibility of a future injury, will not establish standing. See Id. at 158; Reilly v. Ceridian Corp., 664 F.3d 38, 42 (3d Cir. 2011) (“Allegations of ‘possible future injury' are not sufficient to satisfy Article III.”).

         Additionally, the injury-in-fact test “requires more than an injury to a cognizable interest. It requires that the party seeking review be himself among the injured.” Sierra Club v. Morton, 405 U.S. 727, 734-35 (1972); see In re Horizon Healthcare Servs. Inc. Data Breach Litig., 846 F.3d 625, 633 (3d Cir. 2017). Put differently, “[w]hile it does not matter how many persons have been injured by the challenged action, the party bringing suit must show that the action injures him in a concrete and personal way.” Lujan, 504 U.S. at 581. The requirement that that the injury affect the plaintiff in a personal and individual way “preserves the vitality of the adversarial process by assuring both that the parties before the court have an actual, as opposed to professed, stake in the outcome, and that ‘the legal questions presented . . . will be resolved, not in the rarified atmosphere of a debating society, but in a concrete factual context conducive to a realistic appreciation of the consequences of judicial action.'” Id. (quoting Valley Forge, 454 U.S. at 472).

         The standing inquiry “requires careful judicial examination of a complaint's allegations to ascertain whether the particular plaintiff is entitled to an adjudication of the particular claims asserted.” Allen, 468 U.S. at 752. To that end, at the pleading stage, “[a]lthough general factual allegations of injury resulting from the defendant's conduct may suffice, the complaint must still ‘clearly and specifically set forth facts sufficient to satisfy' Article III.” Reilly, 664 F.3d at 41 (quoting Whitmore, 495 U.S. at 155); see Finkelman v. Nat'l Football League, 810 F.3d 187, 193 (3d Cir. 2016) (“Plaintiffs do not allege an injury-in-fact when they rely on a ‘chain of contingencies' or ‘mere speculation.'”) (citation omitted).

         B. Statutory Standing

         In addition to satisfying the federal standing requirements under Article III, Plaintiff must also demonstrate statutory standing under the UCL and the CLRA. The UCL broadly prohibits “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising . . . .” Cal. Bus. & Prof. Code § 17200. The CLRA prohibits unfair and deceptive business practices, including various forms of misrepresentation. See Cal. Civ. Code § 1770.

         To establish standing to bring a claim under either the UCL or the CLRA, a plaintiff must “meet an economic injury-in-fact requirement, which demands no more than the corresponding requirement under Article III of the U.S. Constitution.” Reid v. Johnson & Johnson, 780 F.3d 952, 958 (9th Cir. 2015). “To adequately plead a CLRA claim, a plaintiff must allege that she relied on the defendant's alleged misrepresentation and that she suffered economic injury as a result.” Doe v. SuccessfulMatch.com, 70 F.Supp.3d 1066, 1075 (N.D. Cal. 2014); see Cal. Civ. Code § 1780(a) (“Any consumer who suffers any damage as a result of the use or employment by any person of a method, act, or practice declared to be unlawful by Section 1770 may bring an action against that person . . . .”). Similarly, under the UCL, a plaintiff must demonstrate that she “suffered injury in fact and has lost money or property as a result of the unfair competition.” Cal. Bus. & Prof. Code § 17204.

         Where a UCL claim is premised on the basis of a misrepresentation, a plaintiff “must have actually relied on the misrepresentation, and suffered economic injury as a result of that reliance . . . .” Doe, 70 F.Supp.3d at 1075 (citing In re Tobacco II Cases, 46 Cal.4th 298, 326 (2009)). To demonstrate actual reliance, a plaintiff must allege that “the defendant's misrepresentation or nondisclosure was ‘an immediate cause' of the plaintiff's injury-producing conduct[, ] . . . by showing that in its absence the plaintiff ‘in all reasonable probability' would not have engaged in the injury-producing conduct.” In re Tobacco II Cases, 46 Cal.4th at 326 (citation omitted). “While a plaintiff need not demonstrate that the defendant's misrepresentations were ‘the sole or even the predominant or decisive ...


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