United States District Court Judge Claudia Wilken (Northern District of California) granted a motion to dismiss plaintiffs' Second Amended Complaint in a consumer class action alleging various defendants knowingly manufactured and sold bath products for children that contain probable carcinogens and other unsafe substances. Herrington v. Johnson & Johnson Consumer Companies, Inc., 2010 WL 3448531 (Sept. 1, 2010). The Court found the allegations related to the risk of harm too remote to satisfy the plaintiffs' Article III burden:
Plaintiffs do not cite controlling authority that the “risk of harm” injury employed to establish standing in environmental cases applies equally to product liability actions. At least two out-of-circuit cases are instructive on the nature of the increased risk of harm necessary to create an injury-in-fact. In Sutton v. St. Jude Medical S.C., Inc., a product liability case, the Sixth Circuit concluded that a plaintiff had standing when he alleged that the implantation of a medical device exposed him to “a substantially greater risk” of harm. 419 F.3d 568, 570-75 (6th Cir.2005). In Public Citizen, Inc. v. National Highway Traffic Safety Administration, the D.C. Circuit, addressing a petitioner's standing to challenge agency action, expressed doubts about finding that any increased risk of harm inflicted an injury-in-fact. 489 F.3d 1279, 1293-96 (D.C.Cir.2007). The court recognized that, under its precedent, standing was appropriate in such cases “when there was at least both (i) a substantially increased risk of harm and (ii) a substantial probability of harm with that increase taken into account.” Id. at 1295. These cases and Central Delta suggest that, to the extent that an increased risk of harm could constitute an injury-in-fact in a product liability case such as this one, Plaintiffs must plead a credible or substantial threat to their health or that of their children to establish their standing to bring suit.
Plaintiffs have not alleged such a threat. In essence, they complain that (1) 1,4-dioxane and formaldehyde are probable human carcinogens; (2) “scientists believe there is no safe level of exposure to a carcinogen,” 2AC ¶ 68; (3) children are generally more vulnerable to toxic exposure than adults; and (4) 1,4-dioxane and formaldehyde have been detected in Defendants' products. However, Plaintiffs do not allege that 1,4-dioxane and formaldehyde are in fact carcinogenic for humans. Nor do they plead that the amounts of the substances in Defendants' products have caused harm or create a credible or substantial risk of harm. This contrasts with the showing in Central Delta, in which the landowners cited the defendant agency's own reports, which predicted that “the majority of the months during which the standard would be exceeded are projected to be peak-irrigation months during plaintiffs' growing seasons.” Central Delta, 306 F.3d at 948. The plaintiffs also cited reports showing “the negative effects of increased salinity on the various crops that they grow” and themselves reported that “their harvests were damaged in the past due to high salinity in the water.” Id. Here, Plaintiffs do not plead facts to suggest that a palpable risk exists. They only allege that 1,4-dioxane and formaldehyde may be carcinogenic for humans, that there could be no safe levels for exposure to carcinogens and that Defendants' products contain some amount of these substances. Indeed, as Plaintiffs plead, the Consumer Product Safety Commission (CPSC) has stated that, although the presence of 1,4-dioxane “is cause for concern,” the CPSC is merely continuing “to monitor its use in consumer products.” 2AC ¶ 64. The risk Plaintiffs plead is too attenuated and not sufficiently imminent to confer Article III standing.
Opinion, at 3. The Court granted leave to amend, so it is unclear whether the plaintiffs can meet the challenging task of alleging facts that will satisfy their Article III standing.
The Court also offered some interesting remarks about Rule 9(b) as it pertains to the plaintiffs' fraud and UCL claims:
Herrington and Haley cite In re Tobacco II Cases, 46 Cal.4th 298, 93 Cal.Rptr.3d 559, 207 P.3d 20 (2009), to argue that they are not required to allege which representations they specifically saw. There, addressing the allegations necessary to plead reliance to establish standing to bring a UCL claim, the California Supreme Court stated that “where ... a plaintiff alleges exposure to a long-term advertising campaign, the plaintiff is not required to plead with an unrealistic degree of specificity that the plaintiff relied on particular advertisements or statements.” Id. at 328, 93 Cal.Rptr.3d 559, 207 P.3d 20; see also Morgan, 177 Cal.App.4th at 1257-58, 99 Cal.Rptr.3d 768. However, Plaintiffs have not plead that they viewed any of Defendants' advertising, let alone a “long-term advertising campaign” by Defendants. Even if they did, In re Tobacco II merely provides that to establish UCL standing, reliance need not be proved through exposure to particular advertisements; the case does not stand for, nor could it, a general relaxation of the pleading requirements under Rule 9(b). See, e.g ., In re Actimmune Mktg. Litig., 2009 WL 3740648, at *13 (N.D.Cal.).
As for alleged non-disclosures, a modified pleading standard applies “on account of the reduced ability in an omission suit ‘to specify the time, place, and specific content’ relative to a claim involving affirmative misrepresentations.” In re Apple & AT & TM Antitrust Litig., 596 F.Supp.2d 1288, 1310 (N.D.Cal.2008) (quoting Falk v. Gen. Motors Corp., 496 F.Supp.2d 1088, 1099 (N.D.Cal.2007)). Herrington and Haley's primary complaint is that Defendants did not disclose information concerning the presence of 1,4-dioxane and formaldehyde. See, e.g., 1AC ¶¶ 32, 198. Their failure to plead the time and place of these omissions will not defeat their claims. And reliance on these nondisclosures could be presumed if their allegations suggested that the omitted facts were material. See, e.g., Blackie v. Barrack, 524 F.2d 891, 906 (9th Cir.1975). However, Herrington and Haley have not made such allegations. Although they plead that they would not have purchased Defendants' products had they known of the presence of 1,4-dioxane and formaldehyde, a fact is material if a reasonable person “would attach importance to its existence or nonexistence in determining” whether to purchase the product. Morgan, 177 Cal.App.4th at 1258, 99 Cal.Rptr.3d 768 (citation and internal quotation marks omitted). Because Herrington and Haley have not averred facts that show that the levels of these substances caused them or their children harm, under the objective test for materiality, the alleged non-disclosures are not actionable.
Opinion, at 8. Hmmm. It's just a tiny bit of formaldehyde in your baby's bubble bath. It's not a material fact.