Arroyo v. Chattem, Inc.
926 F. Supp. 2d 1070
N.D. Cal.2012Background
- Putative class action alleging Dexatrim contains hexavalent chromium and misleads consumers about safety.
- Dexatrim Max Complex 7 purchased February 2011 at CVS in California; product is part of Dexatrim brand by Chattem, Inc.
- Plaintiff asserts marketing promotes safety while concealing hexavalent chromium; claims statements and packaging misrepresent safety.
- Plaintiff seeks to represent a class for economic injuries from purchase based on alleged deception and failure to warn.
- Court previously granted motion to dismiss with leave to amend; FAC retained same four claims (negligent misrepresentation, fraudulent concealment, CLRA, and UCL) and again movant seeks dismissal under Rule 12(b)(1) and 12(b)(6).
- Court now analyzes standing and sufficiency of claims, ultimately granting dismissal with prejudice for lack of particularity in reliance/materiality.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plaintiff has Article III standing. | Arroyo alleges economic injury from purchasing tainted Dexatrim. | Plaintiff lacked concrete injury from undisclosed hexavalent chromium. | Plaintiff has standing; injury alleged is economic loss from purchase. |
| Whether FAC pleads fraud claims with Rule 9(b) particularity. | Claims grounded in fraud; should not require 9(b) pleading of materiality and reliance. | 9(b) applies; need detailed who, what, when, where, how for materiality and reliance. | 9(b) applies; FAC lacks sufficient particularity to plead materiality and reliance. |
| Whether materiality and reliance are sufficiently pled to support fraud-based claims. | Hexavalent chromium presence is a material fact; Plaintiff relied on misrepresentations and omissions. | No specific facts showing what level of Cr(VI) changes safety; lack of proven reliance. | FAC fails to plead materiality and reliance with particularity; claims dismissed. |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (standing requires injury in fact, traceability, redressability)
- Maya v. Centex Corp., 658 F.3d 1060 (9th Cir. 2011) (standing; concrete, particularized injury; threshold challenge)
- White v. Lee, 227 F.3d 1214 (9th Cir. 2000) (standing challenges may be raised on Rule 12(b)(1) motion)
- Salmon Spawning & Recovery Alliance v. Gutierrez, 545 F.3d 1220 (9th Cir. 2008) (standing elements for injury; traceability; redressability)
- Valley Forge Christian Coll. v. American United for Separation of Church & State, Inc., 454 U.S. 464 (U.S. 1982) (standing/redressability; broad constitutional considerations)
- Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) (when claims are grounded in fraud, Rule 9(b) applies to the complaint)
- Cooper v. Pickett, 137 F.3d 616 (9th Cir. 1997) (the who, what, when, where, and how of fraud must be pleaded)
- Glenn K. Jackson Inc. v. Roe, 273 F.3d 1192 (9th Cir. 2001) (materiality and reliance required for fraud claims)