Thursday, August 24, 2023

FYI: 9th Cir Rejects Consumer Survey Results in UDAP Putative Class Action, Upholds Dismissal

The U.S. Court of Appeals for the Ninth Circuit recently affirmed the dismissal of a consumer's California consumer protection claims based on a consumer survey that purported to show that certain product labels were deceptive.


In so ruling, the Ninth Circuit rejected the results of the consumer survey, and held that when a front label is ambiguous, the ambiguity can be resolved by reference to the back label.


A copy of the opinion is available at:  Link to Opinion


In 2019, a consumer purchased shampoo and conditioner related products named ""Pantene Pro-V Nature Fusion."  The products' front label displayed the words "Nature Fusion" in bold, capitalized letters, an image of an avocado on a green leaf, and an image of what appears to be a gold vitamin with the word "PRO-V" on it.


The consumer alleged that the packaging represented that the product was a natural, when, in fact, the product contained nonnatural and synthetic ingredients, harsh and potentially harmful ingredients. The consumer alleged that if the products were not from nature or otherwise natural, he would not have purchased the products or paid a price premium for the products.


The consumer ultimately filed a lawsuit against the company and asserted claims under California's Unfair Competition Law ("UCL"), California's False Advertising Law ("FAL"), and California's Consumers Legal Remedies Act ("CLRA"). The consumer's lawsuit was heavily supported by a third-party survey of more than 400 consumers regarding their impressions of the products' front labels.


Notably, the survey only assessed the products' front label.


The survey results showed that, when given pictures of the front of the products, 74.9% of consumers thought the label conveyed that the shampoo contained more natural than synthetic or artificial ingredients, and 77.4% of consumers thought the same about the conditioner. Additionally, 52.6% of the surveyed consumers believed the phrase "Nature Fusion," meant that the product did not contain synthetic ingredients; 49.1% of consumers thought that the phrase "Nature Fusion" meant that the product contained only natural ingredients; and 69.2% of consumers thought that the phrase "Nature Fusion" meant that the product contained both natural and synthetic ingredients.


The consumer plaintiff filed a lawsuit alleging violation of the UCL, FAL and CLRA. The company (defendant) moved to dismiss plaintiff's complaint for failure to state a claim. The trial court held that plaintiff's complaint did not "allege sufficient facts to show that a reasonable consumer would be deceived by defendant's labeling." Plaintiff appealed.


On appeal, the Ninth Circuit noted that plaintiff's claims under the UCL, FAL, and CLRA are governed by the "reasonable consumer" standard which requires consumers to shows that members of the public are "likely to be deceived." Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008). The important question under the "reasonable consumer" test is whether the product labeling and ads promoting the products have a meaningful capacity to deceive consumers.


The Court of Appeals first analogized the issue to a recent case where they held that the label "100% New Zealand Manuka Honey" was not likely to deceive a reasonable consumer into believing that the product contained only honey from the Manuka flower. Moore v. Trader Joe's Co., 4 F.4th 874 (9th Cir. 2021).  Similar to Trader Joe's, the Ninth Circuit here noted that the term "Nature Fusion" is not inherently deceptive but there is ambiguity as to what "Nature Fusion" means in the context of its packaging.


However, the Ninth Circuit held, this ambiguity did not arise to "deception" because the survey relied upon by the plaintiff did not allow the consumers to view the back ingredient list to derive the meaning of "Nature Fusion." Although the back ingredient list does not allow a defendant to deceive a consumer on the front label and rectify the deception on the back ingredient list, the front label must be unambiguously deceptive for a defendant to be precluded from insisting that the back label be considered together with the front label. Ebner v. Fresh, Inc., 838 F.3d at 966. (9th Cir. 2016).


In analyzing this issue, the Court noted that the "Nature Fusion" label did not promise that the product is wholly natural. Although the front label represented that something about the product bears a relationship to nature, the front label did not make any affirmative promise about what proportion of the ingredients are natural. Instead, "Nature Fusion" could mean any of a number of things: that the products are made with a mixture of natural and synthetic ingredients, that the products are made with a mixture of different natural ingredients, or something else entirely.


The consumer argued that the ingredients list included many ingredients that are synthetic and that a reasonable consumer would not think are natural. The ingredient list clarifies that the products contain natural and synthetic ingredients As a result, the Court of Appeals held that when a front label is ambiguous, the ambiguity can be resolved by reference to the back label. Although the product labeling was considered ambiguous, the back label effectively addressed this ambiguity.


Next, the Ninth Circuit addressed the survey commissioned by plaintiff's counsel and relied upon in plaintiff's complaint. Notably, the Court noted, the participants of the survey did not view the back label of the products. Additionally, the survey showed that the survey respondents were split nearly 50/50 on the question of whether the products contain a mixture of natural and nonnatural ingredients, or if they instead contain all or substantially all natural ingredients. The Court of Appeals noted that this further supported that the products are ambiguous not misleading.


In conclusion, the Ninth Circuit held that after reviewing the front and back label, no reasonable consumer would think that the products are either completely or substantially natural. Based on the forgoing, the survey results included in the consumer's complaint did not plausibly show the term Nature Fusion" is misleading. Accordingly, the Ninth Circuit affirmed the trial court's dismissal.




Ralph T. Wutscher
Maurice Wutscher LLP
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