Clorox Company v. Reckitt Benckiser Group PLC
3:19-cv-01452
| N.D. Cal. | Jul 12, 2019Background
- Clorox sued Reckitt (Lysol) for false advertising under the Lanham Act, California UCL, and FAL, challenging multiple Lysol ads that compared Lysol products to Clorox products.
- Complained-about ads include: a “Bleach Indicator Test” (apple browning), “Spray Away” ingredient/safety comparisons, ads claiming Lysol kills the #1 cause of colds vs. Clorox wipes, a gym “Strength Test” for wipes, and “No Scrubbing/10X” toilet-cleaner comparisons.
- Clorox alleges the ads mislead by comparing noncomparable products, using unreliable tests, omitting material distinctions (formulation, intended use, EPA approvals), and thereby harming Clorox’s sales and goodwill.
- Reckitt moved to dismiss under Rules 8, 9(b), and 12(b)(6), arguing lack of falsity, lack of actual deception/materiality, inadequate pleading of fraud, and lack of standing for state claims.
- The Court viewed disputed factual issues (comparability, test reliability, disclaimer legibility) as inappropriate to resolve on a motion to dismiss and evaluated sufficiency of pleadings under Twombly/Iqbal and Rule 9(b).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ads are literally false or likely to mislead under the Lanham Act | Reckitt’s ads convey false/implied messages (noncomparable product comparisons, unreliable tests, omitted material facts) that deceive consumers | Ads are accurate or not actionable: products are comparable (EPA approvals), disclaimers cure any ambiguity, no specific facts of consumer deception | Denied dismissal: Clorox plausibly pleaded falsity (both literal and "likely to mislead") for the challenged ads; factual disputes reserved for later stages |
| Whether Clorox pleaded materiality of alleged misrepresentations | Misrepresentations concern inherent product qualities (efficacy, safety, durability) that would influence purchases | Clorox lacks direct survey evidence or concrete proof of materiality | Denied dismissal: materiality sufficiently pleaded because statements attack inherent product characteristics likely to affect buying decisions |
| Whether Clorox pleaded commercial injury proximately caused by ads | Ads diverted sales and harmed goodwill/reputation | Allegations are conclusory; no specifics tying particular ads to lost sales | Denied dismissal: allegations of diverted sales and reputational injury are adequate at pleading stage |
| Whether Clorox has standing under California FAL and UCL | Clorox can assert UCL and FAL claims arising from competitive injury to business | FAL and UCL (unlawful prong) require plaintiff’s own reliance; Clorox did not allege its own reliance | Mixed: FAL and UCL unlawful-prong claims dismissed with prejudice for lack of standing; UCL unfair-prong claim survives (standing/reliance not required for unfair prong) |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading must state plausible claim; courts need not accept legal conclusions)
- Jarrow Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d 829 (elements of Lanham Act false advertising claim)
- Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134 (literal falsity and test reliability for advertising claims)
- William H. Morris Co. v. Grp. W., 66 F.3d 255 (proof of actual deception at trial; evidentiary burdens differ by stage)
- Williams v. Gerber Prod. Co., 552 F.3d 934 (reasonable consumer standard for California false-advertising claims)
- Skydive Arizona, Inc. v. Quattrocchi, 673 F.3d 1105 (materiality typically shown by consumer surveys; inherent-quality misrepresentations are material)
- Cel-Tech Commc’ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal.4th 163 (scope of UCL)
- Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988 (limits on judicial notice and incorporation-by-reference on motions to dismiss)