Jeff Jonah v. Kimberly-Clark Corporation et al

Northern District of California, cand-4:2015-cv-03243

OPPOSITION/RESPONSE (re [63] MOTION for Leave to File a Consolidated Amended Complaint) Defendants' Opposition to Plaintiffs' Motion for Leave to File Consolidated Amended Complaint filed by Kimberly-Clark Corporation, Kimberly-Clark Global Sales, LLC., Kimberly-Clark Worldwide, Inc.

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4 1 Amy P. Lally, SBN 198555 alally@sidley.com 2 Darlene M. Cho, SBN 251167 dcho@sidley.com 3 SIDLEY AUSTIN LLP 1999 Avenue of the Stars, 17th Fl. 4 Los Angeles, California 90067 Telephone: (310) 595-9500 5 Facsimile: (310) 595-9501 6 Naomi A. Igra, SBN 269095 nigra@sidley.com 7 SIDLEY AUSTIN LLP 555 California Street, Suite 2000 8 San Francisco, CA 94104 Telephone: (415) 772-1200 9 Facsimile: (415) 772-7400 10 Sheri Porath Rockwell, SBN 165726 sheri.rockwell@sidley.com 11 SIDLEY AUSTIN LLP 555 W. Fifth Street, Suite 4000 12 Los Angeles, CA 90013 Telephone: (213) 896-6000 13 Facsimile: (213) 896-6600 14 Attorneys for Defendants KIMBERLY-CLARK CORPORATION; 15 KIMBERLY-CLARK GLOBAL SALES, LLC; and KIMBERLY-CLARK 16 WORLDWIDE, INC. 17 UNITED STATES DISTRICT COURT 18 FOR THE NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION 19 JEFF JONAH, an individual, on behalf of) Case No. 15-cv-03243-PJH 20 himself, the general public and those similarly) (Related to Case No. 4:14-CV-01783-PJH) situated,) 21) Assigned to: Hon. Phyllis J. Hamilton Plaintiff,) 22) DEFENDANTS' OPPOSITION TO v.) PLAINTIFFS' MOTION FOR LEAVE TO 23) FILE CONSOLIDATED AMENDED KIMBERLY-CLARK CORPORATION;) COMPLAINT 24 KIMBERLY-CLARK WORLDWIDE, INC.;) KIMBERLY-CLARK GLOBAL SALES) Complaint Filed: June 9, 2015 25 LLC; and DOES 1 through 50) Trial Date: None Set) 26 Defendants.) 27 28 DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 JENNIFER DAVIDSON, an individual, on) behalf of herself, the general public and) 2 those similarly situated,)) 3 Plaintiff,) v.) 4) KIMBERLY-CLARK CORPORATION;) 5 KIMBERLY-CLARK WORLDWIDE, INC.;) KIMBERLY-CLARK GLOBAL SALES) 6 LLC; and DOES 1 through 50,)) 7 Defendants.)) 8) 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ii DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 Table of Contents Page 2 3 I. Introduction ................................................................................................................................1 4 II. Procedural Background ..............................................................................................................1 5 III. Applicable Standards .................................................................................................................4 6 IV. Argument ...................................................................................................................................4 7 A. Plaintiffs Have Unduly Delayed ....................................................................................4 8 B. Defendants Will Be Prejudiced by Plaintiffs' Amendment ...........................................7 9 C. Previous Amendments .................................................................................................10 10 D. Futility of Proposed Amendments ...............................................................................10 11 1. Proposed Amendments to Add Claims That Arise Under Laws Other Than California, Florida, Illinois, North Carolina, and Washington Law 12 Are Clearly Futile Without Regard to the Motion to Intervene .......................11 13 2. If the Court Denies Intervenors to Intervene, Claims Arising Florida, Illinois, North Carolina, and Washington Law Are Also Futile ......................11 14 3. Permitting the Addition of a Claim for Breach of Express Warranty 15 Pursuant to Cal. Com. Code § 2313 Would Be Futile .....................................12 16 a. The Express Warranties At Issue .........................................................12 17 b. Representations that Kimberly-Clark Flushable Wipes are "flushable" and "sewer and septic safe," "break up after flushing," or use a 18 patented technology are not promises about dispersing like toilet paper, the impact on municipalities or wastewater treatment plants, or 19 that they will never clog toilets ............................................................13 4. Permitting the Addition of a Claim for Breach of the Implied Warranty of 20 Merchantability Pursuant to Cal. Com. Code § 2314 Would Be Futile ..........16 21 5. In the Absence of a Potentially Viable Claim Under California Law, Plaintiffs' Proposed Federal Magnuson-Moss Warranty Act Claim is 22 Futile ................................................................................................................17 23 6. Plaintiffs' Unjust Enrichment Claim ...............................................................17 24 V. Conclusion ...............................................................................................................................18 25 26 27 28 i DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 TABLE OF AUTHORITIES 2 Page(s) 3 Cases 4 Acri v. Int'l Ass'n of Machinists & Aerospace Workers, 5 781 F.2d 1393 (9th Cir. 1986) .........................................................................................................4 6 Alsabur v. Autozone, Inc., No. CV 13-01689-KAW, 2014 WL 1340730 (N.D. Cal. Apr. 3, 2014) ...................................7, 10 7 Banga v. Experian Info. Sols., Inc., 8 No. C 09-04867 SBA, 2013 WL 1209946 (N.D. Cal. Mar. 25, 2013) ............................................7 9 Birdsong v. Apple, Inc., 590 F.3d 955 (9th Cir. 2009) .........................................................................................................17 10 11 Browning v. Unilever United States, Inc., No. SA-CV-16-2210-AG(KESx), 2017 WL 7660643 (C.D. Cal. Apr. 26, 2017) ..........................6 12 Bruton v. Gerber Prod. Co., 13 703 F. App'x 468 (9th Cir. 2017) ................................................................................................5, 6 14 Burr v. Sherwin Williams Co., 42 Cal. 2d 682 (1954) ....................................................................................................................16 15 16 In re Carrier IQ, Inc., 78 F. Supp. 3d 1051 (N.D. Cal. 2015) .....................................................................................11, 12 17 City of Los Angeles v. San Pedro Boat Works, 18 635 F.3d 440 (9th Cir. 2011) ...........................................................................................................4 19 Clemens v. DaimlerChrysler Corp., 534 F.3d 1017 (9th Cir. 2008) .................................................................................................16, 17 20 In re ConAgra Foods, Inc., 21 90 F. Supp. 3d 919 (C.D. Cal. 2015) .............................................................................................16 22 Daugherty v. Am. Honda Motor Co., 23 144 Cal. App. 4th 824 (2006) ........................................................................................................17 24 Foman v. Davis, 371 U.S. 178 (1962) .........................................................................................................................4 25 Harris v. Vector Mktg. Corp., 26 No. C-08-5198 EMC, 2009 WL 3710696 (N.D. Cal. Nov. 4, 2009)...............................................7 27 Hartford Cas. Ins. Co. v. J.R. Mktg., L.L.C., 28 61 Cal. 4th 988 (2015) .................................................................................................................5, 6 ii DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 Jackson v. Bank of Hawaii, 902 F.2d 1385 (9th Cir. 1990) .....................................................................................................4, 6 2 Khasin v. R.C. Bigelow, Inc., 3 No. 12-CV-02204-WHO, 2015 WL 5569161 (N.D. Cal. Sept. 21, 2015) ......................................6 4 Lucas v. Breg, Inc., 5 No. 15-CV-258-BAS-NLS, 2016 WL 127583 (S.D. Cal. Jan. 11, 2016)........................................9 6 McGlinchy v. Shell Chem. Co., 845 F.2d 802 (9th Cir. 1988) ...........................................................................................................9 7 Monticello v. Winnebago Indus. Inc., 8 369 F. Supp. 2d 1350 (N.D. Ga. 2005) ..........................................................................................17 9 Nabors v. Google, Inc., 10 No. 5:10–CV–03897 EJD (PSG), 2011 WL 3861893 (N.D. Cal. Aug. 30, 2011) ........................12 11 Osborne v. Subaru of Am., Inc., 198 Cal. App. 3d 646 (1988) .........................................................................................................16 12 Rugg v. Johnson & Johnson, 13 No. 17-CV-05010-BLF, 2018 WL 3023493 (N.D. Cal. June 18, 2018) .......................................15 14 Rugg v. Johnson & Johnson, 15 No. 17-CV-05010-BLF, 2019 WL 119971 (N.D. Cal. Jan. 7, 2019) ............................................15 16 Trazo v. Nestle USA, Inc., 113 F. Supp. 3d 1047 (N.D. Cal. 2015) .........................................................................................17 17 Vavak v. Abbott Labs., Inc., 18 No. SACV10-1995-JVS(RZx), 2011 WL 13130493 (C.D. Cal. Mar. 7, 2011) ............................16 19 Weiss v. Trader Joe's Co., No. 18-CV-01130-JLS(GJS), 2018 WL 6340758 (C.D. Cal. Nov. 20, 2018) ...............................15 20 21 Williams v. Beechnut Nutrition Corp., 185 Cal. App. 3d 135 (1986) .........................................................................................................12 22 Yastrab v. Apple Inc., 23 173 F. Supp. 3d 972 (N.D. Cal. 2016) ...........................................................................................13 24 Zeiger v. WellPet LLC, 304 F. Supp. 3d 837 (N.D. Cal. 2018) .....................................................................................11, 12 25 Statutes 26 27 Cal. Com. Code § 2313 ..................................................................................................................12, 15 28 Cal. Com. Code § 2314 ........................................................................................................................16 iii DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 Cal. Com. Code § 2607 ........................................................................................................................15 2 Federal Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq. .............................................. passim 3 New York General Business Law § 349 ............................................................................................3, 5 4 New York General Business Law § 350 ............................................................................................3, 5 5 Other Authorities 6 Fed. R. Civ. P. 12(b)(1)........................................................................................................................10 7 Fed. R. Civ. P. 15 ...............................................................................................................................4, 7 8 Fed. R. Civ. P. 42(a)(2) ..........................................................................................................................1 9 "Guidance Document for Assessing the Flushability of Nonwoven Disposable 10 Products" ("INDA Guidelines") ....................................................................................................14 11 Order in In the Matter of Nice-Pak Productions, Inc., available at 12 https://www.ftc.gov/system/files/documents/cases/151102nice-pakdo.pdf ....................................5 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iv DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 I. Introduction 2 Defendants do not oppose the consolidation of the Davidson and Jonah Actions pursuant to 3 Rule 42(a)(2)1 of the Federal Rules of Civil Procedure because the Jonah Action is simply a 4 duplicative action that Plaintiffs filed after this Court denied Davidson's motion for reconsideration 5 of its dismissal order. Davidson Dkt. 54. 6 However, Defendants oppose the addition of new allegations and the addition of hundreds of 7 new causes of action, i.e., under the consumer protection statutes of 48 additional states (in addition 8 to California) and the District of Columbia enumerated in Appendix 1 to Plaintiffs' Proposed 9 Consolidated Class Action Complaint (First and Ninth Causes of Action); a new claim for unjust 10 enrichment arising under the laws of 49 states and the District of Columbia enumerated in Appendix 11 1, i.e., all states except New York (Fifth Cause of Action); a new claim for violation of the Federal 12 Magnuson-Moss Warranty Act (Sixth Cause of Action); 47 new causes of action for breach of express 13 warranty enumerated in Appendix 2 (Seventh Cause of Action); and 47 new causes of action for 14 breach of the implied warranty of merchantability enumerated in Appendix 3 (Eighth Cause of 15 Action). Proposed Consolidated Class Action Complaint, Jonah Dkt. 63-2. 16 As explained herein, Defendants oppose Plaintiffs' motion for leave to file the Proposed 17 Consolidated Class Action Complaint because they have unduly delayed, permitting the amendment 18 would result in substantial prejudice to Defendants, Plaintiffs have previously had multiple 19 opportunities to amend, and because adding the claims would ultimately be futile. 20 II. Procedural Background 21 Five years ago, on March 13, 2014, Plaintiff Jennifer Davidson ("Davidson") commenced this 22 action by filing a putative class action complaint on behalf of "[a]ll persons who, between March 13, 23 2010 and the present, purchased, in California, any of the following products: Cottonelle® Fresh 24 Care Flushable Wipes & Cleansing Cloths, Scott Naturals® Flushable Moist Wipes, Huggies® 25 Pull-Ups® Flushable Moist Wipes, and U by Kotex® Refresh flushable wipes." Notice of 26 Removal, Dkt. 1, Ex. A, Davidson Complaint, ¶ 74. On August 8, 2014, this Court granted in 27 1 28 All references herein to the "Rule" are to the Federal Rules of Civil Procedure. 1 DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 part and denied in part Defendants' motion to dismiss and motion to strike, and ordered Davidson 2 to file an amended complaint within 28 days of the order, but specified that Davidson may not 3 assert new claims or add new parties without leave of court or stipulation. Davidson Dkt. 24. 4 Davidson filed an amended complaint and on December 19, 2014, the Court granted 5 Defendants' motion to dismiss the amended complaint without leave to amend. Davidson Dkt. 6 44. On May 15, 2015, the Court also denied Davidson's motion for reconsideration. Davidson 7 Dkt. 54. On June 11, 2015, Davidson appealed to the Ninth Circuit. Davidson Dkt. 55. 8 Meanwhile, on June 9, 2015, counsel for Davidson filed a putative class action complaint 9 on behalf of Plaintiff Jeff Jonah ("Jonah"). On July 20, 2015, Defendants filed a motion to 10 dismiss or strike the allegations in the Jonah complaint, or in the alternative, for a stay of the 11 Jonah action pending the appeal in Davidson. Jonah Dkt. 12. In response, Jonah filed an 12 amended complaint on August 3, 2015. Jonah Dkt. 24. On September 2, 2015, Defendants filed 13 a motion to dismiss or strike the allegations in the Jonah amended complaint, or in the alternative, 14 for a stay of the Jonah action pending the appeal in Davidson. Jonah Dkt. 27. On September 15 15, 2015, the parties agreed to stay the Jonah action pending the appeal of the related Davidson 16 action. Stipulation, Jonah Dkt. 29.2 17 On June 11, 2018, Defendants filed an answer to the first amended complaint in the Davidson 18 Action. Answer, Davidson Dkt. 69. On August 14, 2018, Defendants filed an answer to the Jonah 19 complaint. Answer, Jonah Dkt. 47 20 As reflected in the Parties' joint case management statement filed on August 9, 2018, 21 Defendants preserved their right to oppose any leave requested by Plaintiffs to amend their complaint 22 and to challenge any claims asserted in any consolidated complaint. See Joint Case Management 23 Statement, Davidson Dkt. 77, at p. 4 (Section 5); Joint Case Management Statement, Jonah Dkt. 40, 24 at p. 4 (Section 5). 25 On Dec. 19, 2018, Plaintiffs requested that the dates previously set be continued 26 2 On October 20, 2017, the Ninth Circuit reversed this Court's dismissal order and remanded for 27 further proceedings. On May 9, 2018, the Ninth Circuit denied Defendants' petition for rehearing en banc. On September 6, 2018, Defendants filed a petition for certiorari to the Supreme Court seeking 28 to overturn the Ninth Circuit's decision, which was denied on December 10, 2018. 2 DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 approximately six weeks to enable the parties to complete discovery. Davidson Dkt. 89, at p. 2. The 2 parties agreed to extend the deadline for Plaintiffs to amend the complaint to Jan. 25, 2019, the 3 deadline for Plaintiffs to file their motion for class certification to Mar. 27, 2019, Defendants' 4 deadline to oppose to May 6, 2019, and Plaintiffs' deadline to file a reply to June 5, 2019. Id. The 5 Court granted the extensions and set a hearing date of June 19, 2019 for Plaintiffs' motion for class 6 certification. Davidson Dkt. 90. 7 On January 25, 2019, Plaintiffs requested an extension of until Jan. 29, 2019 to file an 8 amended complaint. Davidson Dkt. 91. The Court granted the extension. Davidson Dkt. 92. 9 On January 29, 2019, Plaintiffs filed a motion for leave to file a consolidated amended 10 complaint. Davidson Dkt. 93; Jonah Dkt. 63.3 The Proposed Consolidated Class Action Complaint 11 alleges new causes of action under the consumer protection statutes of 48 additional states and the 12 District of Columbia enumerated in Appendix 1 (First and Ninth Causes of Action);4 a new claim for 13 unjust enrichment arising under the laws of 49 states and the District of Columbia enumerated in 14 Appendix 1, i.e., all states except New York (Fifth Cause of Action); a new claim for violation of the 15 Federal Magnuson-Moss Warranty Act (Sixth Cause of Action); 47 new causes of action for breach 16 of express warranty enumerated in Appendix 2 (Seventh Cause of Action); and 47 new causes of 17 action for breach of the implied warranty of merchantability enumerated in Appendix 3 (Eighth Cause 18 of Action). Proposed Consolidated Class Action Complaint, Jonah Dkt. 63-2. 19 On January 29, 2019, Intervenors Edward Colatorti (who alleges that he purchased Cottonelle 20 Wipes in California and Florida and Scott Wipes in Illinois), Angela Lewis (who alleges that she 21 purchased Cottonelle Wipes in California), RiSha Mattingly (who alleges that she purchased 22 Cottonelle Wipes and Scott Wipes in North Carolina), and Amber Walsh (who alleges that she 23 3 The Proposed Consolidated Class Action Complaint attached to Davidson's motion for leave 24 does not include the Appendices. See Davidson Dkt. 93-2. Accordingly, when citing to the Proposed Consolidated Class Action Complaint, Defendants refer to the draft attached to Jonah's motion for 25 leave to amend, which includes the Appendices. Jonah Dkt. 63-2. 4 Although Appendix 1 lists New York General Business Law §§ 349 and 350, it does not appear 26 as though Plaintiffs intend to pursue New York General Business Law §§ 349 and 350 claims under 27 either the First or Ninth Causes of Action. See Proposed Consolidated Class Action Complaint, Jonah Dkt. 63-2, ¶ 165 (omitting New York from "Consumer Deception Statute Subclass" and "Consumer 28 Deceptiveness/Unfairness/Unlawfulness Statute Subclass" definitions). 3 DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 purchased Cottonelle Wipes in Washington) filed a motion to intervene in the Davidson Action. 2 Davidson Dkt. 94. 3 III. Applicable Standards 4 Rule 15(a) of the Federal Rules of Civil Procedure governs the amendment of pleadings and 5 permits a party to amend a previously amended pleading "only with the opposing party's written 6 consent or the court's leave." Fed. R. Civ. P. 15(a). The grant or denial of leave to amend is within 7 the discretion of the district court. Foman v. Davis, 371 U.S. 178, 182 (1962). Moreover, "the district 8 court's discretion to deny leave to amend is particularly broad where plaintiff has previously amended 9 the complaint." City of Los Angeles v. San Pedro Boat Works, 635 F.3d 440, 454 (9th Cir. 2011) 10 (quoting Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989)). 11 In determining whether to grant leave to amend, the court considers factors such as "undue 12 delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by 13 amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the 14 amendment, futility of amendment." Foman, 371 U.S. at 182. 15 IV. Argument 16 A. Plaintiffs Have Unduly Delayed 17 Relevant to evaluating whether a party has unduly delayed in moving for leave to amend "is 18 whether the moving party knew or should have known the facts and theories raised by the amendment 19 in the original pleading." Jackson v. Bank of Hawaii, 902 F.2d 1385, 1388 (9th Cir. 1990). 20 "[A]mendments to assert new theories are not reviewed favorably when the facts and the theory have 21 been known to the party seeking amendment since the inception of the cause of action." Acri v. Int'l 22 Ass'n of Machinists & Aerospace Workers, 781 F.2d 1393, 1398 (9th Cir. 1986) (citing M/V Am. 23 Queen v. San Diego Marine Const. Corp., 708 F.2d 1483, 1492 (9th Cir. 1983); Stein v. United Artists 24 Corp., 691 F.2d 885, 898 (9th Cir. 1982)). 25 Plaintiffs provide no persuasive reason justifying their delay of nearly five years since the 26 Davidson Action was commenced to add new causes of action under the consumer protection statutes 27 of 48 additional states and the District of Columbia enumerated in Appendix 1 to the Proposed 28 4 DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 Consolidated Class Action Complaint (First and Ninth Causes of Action);5 a new claim for unjust 2 enrichment arising under the laws of 49 states and the District of Columbia enumerated in Appendix 3 1, i.e., all states except New York (Fifth Cause of Action); a new claim for violation of the Federal 4 Magnuson-Moss Warranty Act (Sixth Cause of Action); 47 new causes of action for breach of express 5 warranty enumerated in Appendix 2 (Seventh Cause of Action); and 47 new causes of action for 6 breach of the implied warranty of merchantability enumerated in Appendix 3 (Eighth Cause of 7 Action). Proposed Consolidated Class Action Complaint, Jonah Dkt. 63-2. The fact that Kimberly- 8 Clark Flushable Wipes are sold nationwide is certainly not new information. 9 Plaintiffs only claim their Proposed Consolidated Class Action Complaint reflects a "changing 10 landscape." Motion at 1. Specifically, Plaintiffs point to the fact that the Federal Trade Commission 11 obtained a consent order from Nice-Pak, Inc.,6 and that the California Supreme Court and the Ninth 12 Circuit issued their decisions in Hartford Cas. Ins. Co. v. J.R. Mktg., L.L.C., 61 Cal. 4th 988 (2015) 13 and Bruton v. Gerber Prod. Co., 703 F. App'x 468, 470 (9th Cir. 2017), respectively. None of these 14 events are new "facts and theories" that precluded Plaintiffs from seeking an amended pleading earlier 15 in this litigation. 16 First, Hartford does not represent a change in law and is expressly limited to the particular 17 facts and procedural history of the case. Hartford Cas. Ins. Co., 61 Cal.4th at 999 ("We emphasize 18 that our conclusion hinges on the particular facts and procedural history of this litigation."). The 19 narrow question presented in Hartford was "who is 'unjustly' enriched if independent [Cumis] 20 counsel representing the insured, but compensated by the insurer, are allowed to retain payments that 21 were unreasonable and unnecessary for the insureds' defense against any claim." Id. Under the 22 particular facts and procedural history of the case, and accepting that Cumis counsel's bills were 23 objectively unreasonable and unnecessary to the insured's defense in the underlying litigation and 24 5 Although Appendix 1 lists New York General Business Law §§ 349 and 350, it does not appear 25 as though Plaintiffs intend to pursue New York General Business Law §§ 349 and 350 claims under either the First or Ninth Causes of Action. See Proposed Consolidated Class Action Complaint, Jonah 26 Dkt. 63-2, ¶ 165 (omitting New York from "Consumer Deception Statute Subclass" and "Consumer 27 Deceptiveness/Unfairness/Unlawfulness Statute Subclass" definitions). 6 Decision and Order in In the Matter of Nice-Pak Productions, Inc., available at 28 https://www.ftc.gov/system/files/documents/cases/151102nice-pakdo.pdf. 5 DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 that they were not incurred for the benefit of the insured, "principles of restitution and unjust 2 enrichment dictate[d] that [Cumis counsel] should be directly responsible for reimbursing Hartford 3 for counsel's excessive legal bills," not the insured. Id. 4 As the district court observed in Khasin v. R.C. Bigelow, Inc., "[t]he only aspect of the 5 [Hartford] opinion that could be portrayed as a 'change' of law is narrowly confined to the question 6 of the unjust enrichment of insureds' counsel when counsel's fees are excessive and not incurred for 7 the benefit of the insured." Khasin v. R.C. Bigelow, Inc., No. 12-CV-02204-WHO, 2015 WL 8 5569161, at *1 (N.D. Cal. Sept. 21, 2015).7 9 Second, Plaintiffs fail to explain what in the FTC consent order with Nice-Pak, Inc. gives rise 10 to new facts and theories that could not have been raised at an earlier stage of this litigation. While 11 the FTC consent order provides a standard against which flushable wipes manufacturers can conform 12 their conduct when making certain claims regarding flushable wipes or any moist toilet tissue or cloth, 13 there is nothing in the order that provides a basis for a new cause of action that did not previously 14 exist. Notably, as Plaintiffs admit, the FTC closed its investigation into Kimberly-Clark flushable 15 wipes without any adverse finding against Defendants. See Proposed Consolidated Class Action 16 Complaint ¶ 106. 17 Finally, even assuming the Hartford decision and the FTC consent order gave rise to new facts 18 and theories previously unavailable to Plaintiffs (though they did not), Plaintiffs have still unduly 19 delayed. Plaintiffs do not explain why they waited approximately 40 months after the Hartford 20 decision and the FTC consent order was entered to seek leave to amend. Nor do they even explain 21 why they waited 8 months after the Ninth Circuit declined to hear Defendants' petition for en banc 22 review to seek leave to vastly expand this case. Jackson, 902 F.2d at 1388 (finding undue delay where 23 plaintiffs delayed seven months to file an amended complaint from the date they claimed to have 24 7 In Bruton, another case Plaintiffs cite, the Ninth Court reversed the district court's dismissal of 25 a claim for unjust enrichment/quasi-contract, citing to the Hartford decision as a decision that allowed an independent claim for unjust enrichment to proceed. Bruton v. Gerber Prod. Co., 703 F. App'x 26 468, 470 (9th Cir. 2017). As discussed above, however, Hartford is expressly limited to the particular 27 facts and procedural history of the case and did not create new law. See Browning v. Unilever United States, Inc., No. SA-CV-16-2210-AG(KESx), 2017 WL 7660643, at *3 (C.D. Cal. Apr. 26, 2017) 28 (holding that Bruton was not persuasive because it relied on an insurance case). 6 DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 analyzed all the requisite facts). 2 Because Plaintiffs provide no explanation as to why they could not have, with due diligence, 3 alleged the new claims they now seek to add in an earlier pleading, this Court should deny Plaintiffs 4 leave to add the new causes of action. See Harris v. Vector Mktg. Corp., No. C-08-5198 EMC, 2009 5 WL 3710696, at *2 (N.D. Cal. Nov. 4, 2009) (denying leave to amend under Rule 15, including 6 because plaintiffs failed to demonstrate due diligence in including facts in an earlier pleading) (citing 7 Jordan v. County of Los Angeles, 669 F.2d 1311, 1324 (9th Cir. 1982); Dow Corning Corp. v. General 8 Electric Co., 461 F. Supp. 519, 521 (S.D.N.Y. 1978)). 9 B. Defendants Will Be Prejudiced by Plaintiffs' Amendment 10 As Plaintiffs acknowledge, "prejudice is the crucial factor" in determining whether leave 11 should be granted. Harris, 2009 WL 3710696, at *1 (citing Eminence Capital, LLC v. Aspeon, Inc., 12 316 F.3d 1048, 1052 (9th Cir. 2003)). "Prejudice typically arises where the opposing party is 13 surprised with new allegations which require additional discovery or will otherwise delay resolution 14 of the case." Alsabur v. Autozone, Inc., No. CV 13-01689-KAW, 2014 WL 1340730, at *4 (N.D. Cal. 15 Apr. 3, 2014). The addition of new claims long after the commencement of the action that will alter 16 the nature of the litigation and require the defendant to undertake a new course of defense 17 demonstrates prejudice. Banga v. Experian Info. Sols., Inc., No. C 09-04867 SBA, 2013 WL 18 1209946, at *3 (N.D. Cal. Mar. 25, 2013) (denying leave to add new claims nearly three years after 19 the commencement of the action) (citing Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 20 1079 (9th Cir. 1990)). 21 While Plaintiffs are correct that no trial date has been set, this is so because the parties 22 mutually agreed that deadlines for the completion of fact and expert discovery and other pre-trial 23 deadlines should be set after this Court's order on class certification. See Joint Case Management 24 Statement, Davidson Dkt. 77, p. 10. Aside from the fact that no trial date has been set, this case is 25 well in its advanced stages with respect to pre-certification deadlines that have been set. In the nearly 26 five years since the Davidson action was commenced, this Court has already entertained two full and 27 robust rounds of pleadings challenges, Davidson Dkts. 24 & 44, and ruled on Davidson's motion for 28 reconsideration, Davidson Dkt. 54; Davidson appealed the Court's dismissal order to the Ninth 7 DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 Circuit; meanwhile, Plaintiff Jonah filed the Jonah case on June 9, 2015, a case Plaintiffs 2 acknowledge is largely duplicative of the Davidson action (undermining any claimed interest in 3 judicial efficiency or economy); the parties have participated in private mediation with the Honorable 4 Wayne Andersen of JAMS; and the cases have been "at issue" since June of 2018. The parties have 5 also engaged in substantial discovery, including the following: 6 • Davidson propounded and Defendants responded to Davidson's First Set of Requests for 7 Production, First Set of Interrogatories, and Second Set of Requests for Production. 8 • Defendants propounded and Davidson responded to Defendants' First Set of Requests for 9 Production, First Set of Interrogatories, First Set of Request for Admissions, Second Set 10 of Requests for Production, Second Set of Interrogatories, Second Set of Request for 11 Admissions. Defendants also served a Third Set of Request for Admissions, responses to 12 which are due on March 4, 2019. 13 • Defendants propounded and Jonah responded to Defendants' First Set of Requests for 14 Production, First Set of Interrogatories, First Set of Request for Admissions, Second Set 15 of Requests for Production, Second Set of Interrogatories, Second Set of Request for 16 Admissions. Defendants also served a Third Set of Request for Admissions, responses to 17 which are due on March 4, 2019. 18 • To date, Defendants have produced over 16,000 documents, totaling over 100,000 pages, 19 in response to Plaintiffs' discovery requests. 20 • To date, Jonah and Davidson have produced 50 documents, totaling just over 1,000 pages. 21 See Declaration of Darlene M. Cho, filed concurrently herewith, ¶ 2. 22 At this time, document discovery is winding down and Defendants have completed their 23 document production. See id. ¶ 3. Prior to Feb. 15, 2019, Defendants and Plaintiffs were in the midst 24 of scheduling depositions. See id. ¶ 4. 25 The current deadline for Plaintiffs to file their motion for class certification is Mar. 27, 2019 26 and the deadline for Defendants to file their opposition is May 6, 2019. Davidson Dkt. 90. Defendants 27 have been formulating their defense strategy and defending this case based on the case Plaintiffs have 28 presented in their pleadings. 8 DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 Against this backdrop, Plaintiffs now seek leave to add, just weeks before their motion for 2 class certification is due, literally hundreds of new causes of action. Plaintiffs quip that Defendants 3 will have "plenty of time" before their opposition to Plaintiffs' motion for class certification is due to 4 "take discovery and complete their depositions of all the Plaintiffs." Motion at 6. But Plaintiffs 5 ignore that the pleadings must again be placed at issue; and even before the motion for class 6 certification is filed, Defendants should be afforded an opportunity to file a pleadings challenges to 7 test the viability of any new claims or new allegations that the Court may grant Plaintiffs leave to add 8 and raise any potentially case-dispositive jurisdictional, procedural, and merits issues prior to the 9 critical stage of class certification. Once the pleadings are at issue, at a minimum, Defendants would 10 need to propound additional discovery on any new plaintiffs that the Court may grant leave to 11 intervene and as to any new claims or allegations that the Court may grant leave to amend. 12 Presently, Plaintiffs' motion for leave to file the Proposed Consolidated Class Action 13 Complaint and Intervenors' motion to intervene, Davidson Dkt. 94, are not scheduled to be heard 14 until Mar. 13, 2019. The practical effect is that until at least March 13, 2019, neither of the Parties 15 will have a complete sense as to what claims or plaintiffs are at issue or what evidence and information 16 they should gather and present to the Court to enable the Court to perform the "rigorous analysis" 17 necessary in deciding a motion for class certification. 18 Under these circumstances, granting Plaintiffs leave to add new claims and allegations (and 19 new plaintiffs, see accompanying Defendants' Opposition to Intervenors' Motion to Intervene) is 20 unduly prejudicial to Defendants and therefore, leave to amend should be denied. McGlinchy v. Shell 21 Chem. Co., 845 F.2d 802, 809 (9th Cir. 1988) (finding that the addition of new claims for fraud and 22 negligent interference with contract would be unduly prejudicial when the new claims would require 23 additional discovery, new depositions, and additional research and rewriting of briefs, noting that if 24 it were true that discovery had already covered all the issues presented by the new claims, then 25 plaintiffs' delay in seeking leave to amend would be "even more inexcusable"); see also Lucas v. 26 Breg, Inc., No. 15-CV-258-BAS-NLS, 2016 WL 127583, at *3 (S.D. Cal. Jan. 11, 2016) (denying 27 motion for leave to add new plaintiffs where doing so would require defendants to scramble to 28 complete additional discovery and hastily prepare for unexpected depositions that would undermine 9 DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 the research, analysis, and preparation that defendants were already conducting). 2 C. Previous Amendments 3 In addition to Plaintiffs' undue delay in seeking leave to amend and the prejudice to 4 Defendants that would result if leave is granted, this Court should exercise its broad discretion to deny 5 leave to amend because Plaintiffs have had multiple opportunities to assert the new claims in prior 6 pleadings. Alsabur, 2014 WL 1340730 at *5 ("courts have broader discretion in denying motions for 7 leave to amend after leave to amend has already been granted") (citing Chodos v. West Publishing 8 Co., 292 F.3d 992, 1003 (9th Cir. 2002)). 9 Plaintiffs have collectively filed a total of four complaints concerning the subject matter of 10 this lawsuit against Defendants. See Davidson Complaint, Notice of Removal, Davidson Dkt. 1, 11 Ex. A thereto (original complaint filed Mar. 13, 2014); Davidson Dkt. 26 (first amended complaint 12 filed Sept. 5, 2014); Jonah Complaint, Notice of Removal, Davidson Dkt. 1, Ex. A thereto 13 (original complaint filed June 9, 2015); Jonah Dkt. 24 (first amended complaint filed Aug. 3, 2015). 14 The filing of the Jonah Action effectively added a new California plaintiff and added a new cause of 15 action for negligent misrepresentation that had not been pled in either the original or amended 16 complaint filed in Davidson. Plaintiffs' new claims for violations of various consumer protection 17 statutes, for unjust enrichment, for violation of the Federal Magnuson-Moss Warranty Act, for breach 18 of express warranty and breach of the implied warranty of merchantability are claims that Plaintiffs 19 could have sought leave to amend in an earlier pleading. Plaintiffs cite no new "facts" that they have 20 learned that justify their delay in raising them. Accordingly, leave to amend to include these claims 21 should be denied. See Alsabur, 2014 WL 1340730 at *5 (denying leave to amend to assert fraud and 22 breach of contract claims where the factual basis for the claims were known at the time prior 23 amendments were permitted). 24 D. Futility of Proposed Amendments8 25 Attached hereto as Exhibit A is a chart summarizing Defendants' understanding of the causes 26 8 Given the procedural context in which this arises, and because Defendants are not entitled to a 27 reply brief here as they would under Rule 12(b)(1) or (b)(6) or a motion for judgment on the pleadings, Defendants limit their futility discussions to the claims as to which Defendants believe are clearly 28 futile. In the event the Court grants leave to add any of the new allegations, claims, or proposed 10 DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 of action, the identity of the plaintiffs (and intervenors) that purport to assert the cause of action, and 2 the class or subclasses on whose behalves the claims are asserted.9 As discussed below, because 3 permitting leave to assert many of the causes of action would be futile (in that they would be non- 4 viable), leave to add them should be denied. 5 1. Proposed Amendments to Add Claims That Arise Under Laws Other Than California, Florida, Illinois, North Carolina, and Washington Law 6 Are Clearly Futile Without Regard to the Motion to Intervene 7 Plaintiffs propose to add dozens of claims under the laws of states in which no Plaintiff (or 8 Intervenor) claims to have resided or purchased Kimberly-Clark flushable wipes. Permitting the 9 addition of such claims would clearly be futile because there is no named plaintiff or proposed 10 plaintiff who could state a viable claim. See, e.g., Zeiger v. WellPet LLC, 304 F. Supp. 3d 837, 847 11 (N.D. Cal. 2018) (dismissing nationwide class allegations in the absence of named representatives 12 from any other states); In re Carrier IQ, Inc., 78 F. Supp. 3d 1051, 1075 (N.D. Cal. 2015) (plaintiffs 13 did not have standing to assert claims from states in which they do not reside or did not purchase their 14 mobile device). 15 Accordingly, the Court should deny Plaintiffs leave to allege the following claims: 16 • As to the First Cause of Action, claims other than those arising under California or 17 Illinois law;10 and 18 • As to the Fifth, Sixth, Seventh, Eighth, and Ninth Causes of Action, claims other than 19 those arising under California, Florida, Illinois, North Carolina, or Washington law. 20 2. If the Court Denies Intervenors to Intervene, Claims Arising Florida, Illinois, North Carolina, and Washington Law Are Also Futile 21 As outlined in Defendants' concurrently-filed Opposition to Intervenor's motion to intervene 22 in the Davidson Action, Intervenors should not be permitted to intervene in this action because their 23 24 intervenors, Defendants reserve their right to seek to dismiss or strike any new allegations or claims 25 and to move for the dismissal of any intervenors on any permissible ground. 9 For the Court's ease of reference, in Exhibit A, Defendants have attempted to reorganize the 26 chart set forth in Paragraph 165 of the Proposed Consolidated Class Action Complaint by cause of 27 action. 10 It is Defendant' understanding that Plaintiffs do not seek leave to add any claims arising under 28 Florida, North Carolina, and Washington law under the first cause of action. See Exhibit A hereto. 11 DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 motion is untimely; Intervenors seek to assert claims that do not present common questions of law or 2 fact with the Davidson action; their intervention will unduly delay and prejudice Defendants; and 3 judicial economy will not be served by their intervention. If the Court denies Intervenors leave to 4 intervene, there is no named plaintiff with standing to assert claims arising under Florida, Illinois, 5 North Carolina and Washington law. See, e.g., Zeiger, 304 F. Supp. 3d at 847; In re Carrier IQ, Inc., 6 78 F. Supp. 3d at 1075. Accordingly, for the same reasons described above, if the Court denies 7 Intervenors' motion to intervene, the Court should deny Plaintiffs leave to allege the following claims: 8 • As to the First Cause of Action, claims arising under Illinois law; and 9 • As to the Fifth, Sixth, Seventh, Eighth, and Ninth Causes of Action, claims arising 10 under Florida, Illinois, North Carolina, or Washington law. 11 3. Permitting the Addition of a Claim for Breach of Express Warranty Pursuant to Cal. Com. Code § 2313 Would Be Futile 12 To plead an action for breach of express warranty under California law, "a plaintiff must 13 allege: (1) the exact terms of the warranty; (2) reasonable reliance thereon; and (3) a breach of 14 warranty which proximately caused plaintiff's injury." Nabors v. Google, Inc., No. 5:10–CV–03897 15 EJD (PSG), 2011 WL 3861893, *4 (N.D. Cal. Aug. 30, 2011); Williams v. Beechnut Nutrition Corp., 16 185 Cal. App. 3d 135, 142 (1986). 17 Generously construing the allegations of the Proposed Consolidated Class Action Complaint, 18 the alleged express warranty claim fails under California law because none of the statements that are 19 specifically alleged can be reasonably construed to convey the purported meanings Plaintiffs claim 20 they do, and Plaintiffs have not otherwise pled facts demonstrating that the representations or 21 warranties were false or breached by Defendants. 22 a. The Express Warranties At Issue 23 For context, Defendants first distill down the express warranties at issue. Plaintiffs' claims 24 ultimately boil down to three representations, and which form the basis of Plaintiffs' proposed cause 25 of action for breach of express warranty. They are that Kimberly-Clark flushable wipes are: 26 • "Flushable," e.g., Proposed Consolidated Class Action Complaint ¶¶ 26, 29, 32, 33, 27 34, 36, 41; 28 12 DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 • "Sewer and septic safe," "Sewer- and septic-safe," or "Septic safe," e.g., id. ¶¶ 30, 33, 2 35, 41; or 3 • "Break[s] up after flushing," e.g., id. ¶¶ 30, 31, 32, 33, 35, 41; 4 and use: 5 • "[A] patented dispersible technology, which means that when used as directed they 6 break up after flushing and clear properly maintained toilets, drainlines, sewers, 7 pumps, and septic and municipal treatment systems," id. ¶ 31; or 8 • "[A] patented SafeFlush Technology ® that starts to break down immediately after 9 flushing, making them disposable and safe for septic systems," id. ¶ 31; or 10 • "[P]atented technology that allows them to lose strength and break up when moving 11 through the system after flushing," id. ¶ 41. 12 To the extent Plaintiffs claim that Defendants made statements that are "similar" to or 13 "designed to be consistent" with statements that are specifically alleged, e.g., id. ¶¶ 27, 31, 248, such 14 allegations do not specify the "exact terms" of the purported warranty and do not state a viable claim 15 for breach of express warranty. Yastrab v. Apple Inc., 173 F. Supp. 3d 972, 982 (N.D. Cal. 2016) 16 (dismissing express warranty claim where plaintiffs did not identify a specific and unequivocal 17 written statement constituting an explicit guarantee that functionality would not be affected by future 18 software updates) (internal quotations omitted). 19 b. Representations that Kimberly-Clark Flushable Wipes are 20 "flushable" and "sewer and septic safe," "break up after flushing," or use a patented technology are not promises about dispersing like 21 toilet paper, the impact on municipalities or wastewater treatment plants, or that they will never clog toilets 22 Plaintiffs repeatedly state the vague assertion that Kimberly-Clark flushable wipes are not 23 "suitable" for disposal by flushing down the toilet. See, e.g., Proposed Consolidated Class Action 24 Complaint ¶¶ 1, 2, 27, 31, 38, 39, 41, 42, 43, 44, 46, 47, 48, 54, 65; see also id. ¶ 39 (alleging that 25 Defendants promised flushable wipes that are "suitable to flush in all instances" and "in any home 26 and in any location."). Almost five years into this litigation, Plaintiffs' liability theory remains vague 27 and unclear. Although Plaintiffs do not dispute that Kimberly-Clark flushable wipes have complied 28 13 DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 with the then-applicable "Guidance Document for Assessing the Flushability of Nonwoven 2 Disposable Products" ("INDA Guidelines"), Plaintiffs claim that compliance with INDA Guidelines 3 is insufficient substantiation to label the wipes as "flushable" because the evidence required under 4 INDA Guidelines is not "scientifically accepted or robust." Id. ¶¶ 54, 73-84. Thus, Plaintiffs identify 5 a host of other criteria that they believe better scientifically substantiates whether flushable wipes are 6 "flushable." 7 Generously construing prior and the proposed allegations, it may be that by "suitable" 8 Plaintiffs mean that Kimberly-Clark flushable wipes: 9 • Never clog plumbing pipes or no more frequently than toilet paper, e.g., Proposed 10 Consolidated Class Action Complaint ¶¶ 1, 38, 40, 41, 43, 44, 48; 11 • Never damage plumbing pipes or septic pumps or no more frequently than toilet paper, 12 e.g., id. ¶¶ 1, 38, 40, 41, 43, 44, 48; 13 • Disperse like or as quickly as toilet paper would disperse when flushed, e.g., id. ¶¶ 1, 14 38, 40, 41, 43, 44, 48, 57, 58, 66; 15 • Break down in septic tanks, e.g., id. ¶¶ 1, 38, 43, 48; 16 • Do not catch on screens in municipal sewage lines and must be removed from the 17 sewer system for disposal in landfills, e.g., id. ¶¶ 1, 38, 43, 48, 57, 88, 89; 18 • Do not damage municipal sewage lines and pumps due to the proclivity of the wipes 19 to tangle with each other, tree branches, rocks, and other non-flushable items, and form 20 large masses or ropes, e.g., id. ¶¶ 1, 38, 40, 41, 43, 48, 57, 88, 89; 21 • Would not violate Section 714.1 of the "Universal Plumbing Code, e.g., id. ¶¶ 1, 55, 22 56; 23 • Are regarded as flushable by municipal sewage system operators, e.g., id. ¶¶ 38, 41, 24 43, 48, 58-64; and/or 25 • Dissolve regardless of the conditions or temperature in which the ionic solution is 26 activated, e.g., id. ¶¶ 38, 39, 43, 48, 68, 69. 27 28 14 DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 The Court should deny leave to add a claim for breach of express warranty because 2 representations that flushable wipes are "flushable" and "sewer and septic safe," "break up after 3 flushing," or use a patented technology do not plausibly promise or warrant that wipes will never clog 4 or damage plumbing pipes, septic pumps, or tanks or no more than toilet paper would; that they will 5 disperse within any particular amount of time after entering the toilet bowl or on the way to the 6 wastewater treatment facility or under any particular condition or temperature (though Plaintiffs do 7 admit the wipes do disperse, Proposed Consolidated Class Action Complaint ¶ 76); have any 8 particular impact once the wipes disappear from the toilet bowl; or regarding any different views that 9 wastewater or sewage system operators may have regarding what constitutes sufficient substantiation 10 for the flushable representation. 11 In other words, among other deficiencies,11 the claim for breach of express warranty fails as 12 alleged because Plaintiffs have not alleged an "affirmation of fact or promise" or a "description of the 13 goods" to which Kimberly-Clark flushable wipes did not conform. Cal. Com. Code § 2313(1)(a) & 14 (b); Rugg v. Johnson & Johnson, No. 17-CV-05010-BLF, 2018 WL 3023493, at *4 (N.D. Cal. June 15 18, 2018) (dismissing express warranty claim where plaintiffs failed to allege facts showing that 16 products were not hypoallergenic under a plausible definition of that term); Rugg v. Johnson & 17 Johnson, No. 17-CV-05010-BLF, 2019 WL 119971, at *4 (N.D. Cal. Jan. 7, 2019) (in later 18 proceedings, accepting as reasonable and plausible plaintiffs' proposed definition of "hypoallergenic" 19 as "not contain[ing] skin allergens in an amount that can be reasonably be expected to induce an 20 allergic response in a significant number of people," but stating that other allegations regarding the 21 "scientific and regulatory definition of 'hypoallergenic,'" the bewildering amount of information 22 regarding "Category 1 skin sensitizers," and that "hypoallergenic" products all contain known skin 23 or eye irritants, carcinogens, teratogens, mutagens, or pollutants," raised a disconnect with the 24 proposed definition); Weiss v. Trader Joe's Co., No. 18-CV-01130-JLS(GJS), 2018 WL 6340758, at 25 26 11 Though not evident on the face of the Proposed Consolidated Class Action Complaint, there 27 are other deficiencies with respect to the express warranty claim, including the lack of notice to the seller, Cal. Com. Code § 2607, and Defendants' reimbursements to customers who actually 28 experienced damage to plumbing or septic tanks. 15 DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 *7–8 (C.D. Cal. Nov. 20, 2018) (express warranty claim premised on a promise that alkaline water 2 would provide superior health benefits to typical water failed where plaintiffs failed to identify 3 anything in the labeling or advertising making such promises); Vavak v. Abbott Labs., Inc., No. 4 SACV10-1995-JVS(RZx), 2011 WL 13130493, at *4 (C.D. Cal. Mar. 7, 2011) (dismissing express 5 warranty claim where allegation that product contained beetles and beetle larvae did not actually 6 contradict statements that formula builds "immune support," "strong bones", and "brain and eyes"). 7 4. Permitting the Addition of a Claim for Breach of the Implied Warranty 8 of Merchantability Pursuant to Cal. Com. Code § 2314 Would Be Futile 9 Privity is a requirement to state a viable claim for breach of the implied warranty of 10 merchantability under Cal. Com. Code § 2314. See Clemens v. DaimlerChrysler Corp., 534 F.3d 11 1017, 1021 (9th Cir. 2008) ("Under California Commercial Code section 2314, ... a plaintiff asserting 12 breach of warranty claims must stand in vertical contractual privity with the defendant."); Osborne v. 13 Subaru of Am., Inc., 198 Cal. App. 3d 646, 656 (1988). Plaintiffs appear to acknowledge the privity 14 requirement under California law, but citing to dicta in Clemens suggest there is an exception "when 15 the plaintiff relies on written labels or advertisements of a manufacturer." See Proposed Consolidated 16 Class Action Complaint, Appendix 3 ("California"). As one California district court noted, "[w]hile 17 the Ninth Circuit in Clemens suggested that the exception is available if a consumer relies on a 18 manufacturer's written labels or advertisements, . . . the California Supreme Court case [Clemens] 19 cited for this proposition explicitly held that the vertical privity exception for representations on labels 20 or advertisements '[is] applicable only to express warranties.'" In re ConAgra Foods, Inc., 90 F. 21 Supp. 3d 919, 986 & n.201 (C.D. Cal. 2015) (quoting Burr v. Sherwin Williams Co., 42 Cal. 2d 682, 22 696 (1954)). In other words, Burr, upon which the Clemens court, does not support the existence of 23 a privity exception in the context of an implied warranty of merchantability. 24 Because Plaintiffs (and California Intervenors) do not allege that they purchased Kimberly- 25 Clark flushable wipes from Defendants, see Proposed Consolidated Class Action Complaint, ¶¶ 108, 26 115, 130, 136, their claim under Cal. Com. Code § 2314 is not viable for lack of privity. Therefore, 27 it would be futile to permit Plaintiffs to assert an implied warranty claim under California law. 28 16 DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 5. In the Absence of a Potentially Viable Claim Under California Law, Plaintiffs' Proposed Federal Magnuson-Moss Warranty Act Claim is 2 Futile 3 The Federal Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq. ("Magnuson-Moss") 4 authorizes civil actions by consumers to enforce the terms of an implied or express warranty under 5 state law. Daugherty v. Am. Honda Motor Co., 144 Cal. App. 4th 824, 833 (2006). It requires the 6 application of state warranty laws; it does not create additional federal law protections or expand a 7 plaintiff's rights under state warranty law. Monticello v. Winnebago Indus. Inc., 369 F. Supp. 2d 1350, 8 1356 (N.D. Ga. 2005); Daugherty, 144 Cal. App. 4th at 833. 9 As discussed above, because Plaintiffs (and California Intervenors) have not alleged a viable 10 claim for breach of express warranty or implied warranty under state law, their Magnuson-Moss claim 11 would necessarily fail as a matter of law. Daugherty, 144 Cal. App. 4th at 833 ("[T]he trial court 12 correctly concluded that failure to state a warranty claim under state law necessarily constituted a 13 failure to state a claim under Magnuson-Moss."); Birdsong v. Apple, Inc., 590 F.3d 955, 958 & n.2 14 (9th Cir. 2009) ("[T]he federal Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301, et seq. require[s] 15 the plaintiffs to plead successfully a breach of state warranty law. Thus, because we conclude that the 16 plaintiffs have failed to state a claim for breach of an express or implied warranty, their claims under 17 these two statutes are also properly dismissed."); Clemens, 534 F.3d at 1022 ("[T]his court's 18 disposition of the state law warranty claims determines the disposition of the Magnuson-Moss Act 19 claims."). 20 6. Plaintiffs' Unjust Enrichment Claim 21 While Defendants do not concede that Plaintiffs have a viable unjust enrichment claim and 22 the law is still uncertain in California as to whether a standalone unjust enrichment claim would be 23 appropriate in this case, to the extent the Court is inclined to permit Plaintiffs to assert a claim for 24 unjust enrichment under California law at this stage of the proceedings, the claim should be limited 25 to include only restitutionary disgorgement but not nonrestitutionary disgorgement. Trazo v. Nestle 26 USA, Inc., 113 F. Supp. 3d 1047, 1051 (N.D. Cal. 2015) ("nonrestitutionary disgorgement is not the 27 appropriate remedy for a quasi-contract claim based on alleged mislabeling of a consumer product"). 28 17 DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH 4 1 V. Conclusion 2 For the reasons stated above, and as may be supplemented with oral argument at the scheduled 3 hearing, Defendants respectfully request that Plaintiffs' motion for leave to file the Proposed 4 Consolidated Class Action Complaint be denied. If the Court grants Plaintiffs leave to file the 5 Proposed Consolidated Class Action Complaint in any respect, Defendants request that they be 6 permitted at least twenty-one (21) days from the date the Order is entered to file a response to the 7 consolidated complaint and assert any jurisdictional, substantive, or procedural bases to challenge the 8 claims. 9 Dated: February 17, 2019 SIDLEY AUSTIN LLP Amy P. Lally 10 Darlene M. Cho 11 By: /s/ Amy P. Lally 12 Amy P. Lally Attorneys for Defendants 13 Kimberly-Clark Corporation, Kimberly-Clark Global Sales LLC and Kimberly-Clark 14 Worldwide, Inc. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18 DEFENDANTS' OPPOSITION TO PLAINTIFFS' MOTION FOR LEAVE TO FILE CONSOLIDATED AMENDED COMPLAINT CASE NOS. 15-CV-03243- PJH; 4:14-CV-01783-PJH