Court Opinion

ID: 9400840
Source: CourtListenerOpinion
Date Created: 2023-06-09 17:01:23.683673+00
Date Added: 2024-06-11T17:19:48.444279
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

SEAN MCGINITY,                             No. 22-15080

                Plaintiff-Appellant,         D.C. No.
                                          4:20-cv-08164-
 v.                                            YGR

THE PROCTER & GAMBLE
COMPANY,                                     OPINION

                Defendant-Appellee.

        Appeal from the United States District Court
           for the Northern District of California
      Yvonne Gonzalez Rogers, District Judge, Presiding

           Argued and Submitted March 29, 2023
                San Francisco, California

Before: Ronald M. Gould, Marsha S. Berzon, and Sandra
               S. Ikuta, Circuit Judges.

                     Filed June 9, 2023

                 Opinion by Judge Gould;
                Concurrence by Judge Gould
2            MCGINITY V. THE PROCTER & GAMBLE CO.

                          SUMMARY*

                       Product Labeling

    The panel affirmed the district court’s Fed. R. Civ. P.
12(b)(6) dismissal of Sean McGinity’s action alleging that
The Procter & Gamble Company (“P&G”) violated
California consumer protection laws by labeling some of its
products with the words “Nature Fusion” in bold, capitalized
text, with an image of an avocado on a green leaf.
    McGinity contended that P&G’s packaging “represents
that the Products are natural, when, in fact, they contain non-
natural and synthetic ingredients, harsh and potentially
harmful ingredients, and are substantially unnatural.”
McGinity stated that if he had known when he purchased
them that the products were not “from nature or otherwise
natural,” he would not have purchased the products or paid
a price premium for the products. McGinity asserted claims
under California’s Unfair Competition Law (“UCL”),
California’s False Advertising Law (“FAL”), and
California’s Consumers Legal Remedies Act (“CLRA”).
    McGinity’s claims under the UCL, FAL, and CLRA are
governed by the “reasonable consumer” standard. The panel
held that there was some ambiguity as to what “Nature
Fusion” means in the context of its packaging, and it must
consider what additional information other than the front
label was available to consumers of the P&G products. The
panel rejected McGinity’s contention that circuit precedent

*
 This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
           MCGINITY V. THE PROCTER & GAMBLE CO.            3

precluded P&G from relying on the back ingredient list to
derive the meaning of “Nature Fusion.” Here, the front label
containing the words “Nature Fusion” was not misleading—
rather, it was ambiguous. Upon seeing the back label, it
would be clear to a reasonable consumer that avocado oil is
the natural ingredient emphasized in P&G’s labeling and
marketing.
     McGinity relied heavily on the results of the consumer
survey that his counsel had commissioned from a third
party. The panel held that although it accepted the
allegations concerning the survey as true at this stage of
litigation, the survey was not particularly instructive or
helpful in deciding this case. Here, the survey participants
did not have access to the back label of the products. This
omission to a degree undermined the extent to which the
panel could fairly rely on the survey results as being
instructive of how the “reasonable consumer” understood
the phrase “Nature Fusion” in the context of the
products. Rather than demonstrating that the phrase “Nature
Fusion” was misleading, the survey results confirmed that it
was ambiguous. With the entire product in hand, the panel
concluded that no reasonable consumer would think that the
products were either completely or substantially natural.
The survey results did not make plausible the allegation that
the phrase “Nature Fusion” was misleading.
    Judge Gould, joined by Judge Berzon, concurred.
Although McGinity did not successfully show that P&G’s
“Nature Fusion” labeling was deceptive as a matter of law,
he wrote separately to express his view that P&G’s labeling
nonetheless resembled a concerning practice known as
“greenwashing.” Greenwashing refers to a set of deceptive
marketing practices in which an entity publicly
misrepresents or exaggerates the positive environmental
4           MCGINITY V. THE PROCTER & GAMBLE CO.

impact or attributes of a product. Here, although there was
only one natural ingredient in the products, the word
“Nature” was in bold, capitalized text on the front labels and
was one of the largest words on the bottles, second only to
the brand name, “Pantene.”

                        COUNSEL

George V. Granade (argued), Reese LLP, Los Angeles,
California; Michael Reese, Reese LLP, New York, New
York; for Plaintiff-Appellant.
Anne M. Voigts (argued), King & Spalding LLP, Palo Alto,
California; John P. Hooper, King & Spalding LLP, New
York, New York; George R. Morris, Deputy Attorney
General; Office of the California Attorney General; San
Francisco, California; for Defendant-Appellee.
            MCGINITY V. THE PROCTER & GAMBLE CO.             5

                         OPINION

GOULD, Circuit Judge:

    Plaintiff-Appellant Sean McGinity sued Defendant-
Appellee The Procter & Gamble Company (“P&G”),
alleging that P&G violated California consumer protection
laws by labeling some of its products with the words “Nature
Fusion” in bold, capitalized text, with an image of an
avocado on a green leaf. After the district court dismissed
McGinity’s second amended complaint for failure to state a
claim under Federal Rule of Civil Procedure 12(b)(6),
McGinity appealed. We have jurisdiction under 28 U.S.C.
§ 1291, and we affirm.
 I. FACTUAL AND PROCEDURAL BACKGROUND
A. The products
    In June 2019, Sean McGinity purchased “Pantene Pro-V
Nature Fusion” shampoo and conditioner at a Safeway
grocery store in Santa Rosa, California. The shampoo and
conditioner are products manufactured, marketed, sold, and
labeled by P&G. The products’ front labels display 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.
    McGinity contends that P&G’s packaging “represents
that the Products are natural, when, in fact, they contain non-
natural and synthetic ingredients, harsh and potentially
harmful ingredients, and are substantially unnatural.”
McGinity has stated that he purchased the products, and paid
a premium for them, because he wanted to buy “natural”
personal care products. If McGinity had known when he
purchased them that the products were not “from nature or
6          MCGINITY V. THE PROCTER & GAMBLE CO.

otherwise natural,” he would not have purchased the
products or paid a price premium for the products.
    McGinity’s counsel commissioned an independent third
party to conduct a survey of more than 400 consumers
regarding their impressions of the products’ front labels.
Survey participants did not have access to the products’ back
labels. 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/artificial ingredients, and 77.4% of consumers
thought the same about the conditioner. When asked about
the phrase “Nature Fusion,” 52.6% of consumers thought
that 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.
B. Procedural history
    McGinity asserted claims under California’s Unfair
Competition Law (“UCL”), California’s False Advertising
Law (“FAL”), and California’s Consumers Legal Remedies
Act (“CLRA”). P&G moved to dismiss McGinity’s original
complaint under Federal Rule of Civil Procedure 12(b)(6).
The district court granted the motion to dismiss with leave
to amend. McGinity later filed his amended complaint,
which P&G again moved to dismiss under Rule 12(b)(6).
The district court stated that McGinity’s original and
amended complaints failed for the same reason: the
complaints did not “allege sufficient facts to show that a
reasonable consumer would be deceived by P&G’s
           MCGINITY V. THE PROCTER & GAMBLE CO.            7

labeling.” The district court dismissed McGinity’s second
amended complaint, and he appealed.
              II. STANDARD OF REVIEW
    “We review de novo the district court’s grant of a motion
to dismiss under Rule 12(b)(6), accepting all factual
allegations in the complaint as true and construing them in
the light most favorable to the nonmoving party.” Ebner v.
Fresh, Inc., 838 F.3d 958, 962 (9th Cir. 2016) (quoting
Skilstaf, Inc. v. CVS Caremark Corp., 669 F.3d 1005, 1014
(9th Cir. 2012)). Determining whether a complaint states a
plausible claim for relief is a “context-specific task,”
requiring “the reviewing court to draw on its judicial
experience and common sense.” Ashcroft v. Iqbal, 556 U.S.
662, 679 (2009). If support exists in the record, a dismissal
may be affirmed on any proper ground. See Johnson v.
Riverside Healthcare Sys., LP, 534 F.3d 1116, 1121 (9th Cir.
2008); Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir.
2004); Papa v. United States, 281 F.3d 1004, 1009 (9th Cir.
2002).
                    III. DISCUSSION
A. Deceptive or misleading practice
    Appellant’s claims under the UCL, FAL, and CLRA are
governed by the “reasonable consumer” standard. Williams
v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008).
That standard requires that Appellants “show that members
of the public are likely to be deceived.” Id. (internal
quotation marks and citation omitted). The California
Supreme Court has recognized that these statutes prohibit
explicitly false advertising and advertising that is “either
actually misleading[,] or which has a capacity, likelihood[,]
or tendency to deceive or confuse the public.” Id. (quoting
8           MCGINITY V. THE PROCTER & GAMBLE CO.

Kasky v. Nike, Inc., 27 Cal.4th 939, 951 (2002)). The
reasonable consumer standard requires more than a mere
possibility that the label “might conceivably be
misunderstood by some few consumers viewing it in an
unreasonable manner.” Ebner, 838 F.3d at 965 (quoting
Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496, 508
(2003)). Rather, the reasonable consumer standard requires
a probability “that a significant portion of the general
consuming public or of targeted consumers, acting
reasonably in the circumstances, could be misled.” Id.
(citation omitted). The touchstone under the “reasonable
consumer” test is whether the product labeling and ads
promoting the products have a meaningful capacity to
deceive consumers.
    In Moore v. Trader Joe’s Co., we 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. 4
F.4th 874, 876–77 (9th Cir. 2021). We reasoned that there
was “some ambiguity as to what 100% mean[t] in the phrase,
‘100% New Zealand Manuka Honey’”: it could mean, as
examples, that the Manuka flower was the only source of the
honey, that the Manuka flower was the primary source of the
honey, or that 100% of the honey was from New Zealand.
Id. at 882. Because of this ambiguity, we explained that
“reasonable consumers would necessarily require more
information before they could reasonably conclude Trader
Joe’s label promised a honey that was 100% derived from a
single, floral source.” Id. This additional information could
be something on the rest of the packaging (e.g., the
ingredient list), the relative price of the product, or in the
context of honey, general knowledge about how honey is
made. See id. at 882–85. While the reasonable consumer is
             MCGINITY V. THE PROCTER & GAMBLE CO.                  9

not expected to be an expert in honey production, the
reasonable consumer should know that beekeepers cannot
force bees to gather honey from only certain types of
flowers. Id. at 883. We agreed with the district court’s
conclusion that other available information about Trader
Joe’s Manuka Honey would dissuade a reasonable consumer
from thinking that the product was derived only from
Manuka flower nectar. Id. at 882–883.
    Here, like in Trader Joe’s, there is some ambiguity as to
what “Nature Fusion” means in the context of its packaging.
Appellants argue that the phrase could be interpreted to
mean that the product contains a mixture of natural
ingredients, while Appellees argue that the phrase should be
interpreted to mean that the product contains a mixture of
both natural and synthetic ingredients. The ambiguity of the
phrase is further shown by the nearly 50/50 split in survey
responses interpreting whether the phrase means that the
products are all-natural and lack synthetic ingredients.1 At
the same time, nearly 70% of survey respondents said yes
when asked whether the phrase meant that the products
contain both natural and synthetic ingredients. This
ambiguity means that, like in Trader Joe’s, we must consider
what additional information other than the front label was
available to consumers of the P&G products. See id.
McGinity contends that circuit precedent precludes P&G
from relying on the back ingredient list to derive the meaning
of “Nature Fusion.” We disagree.

1
  According to the survey, 52.6% of consumers thought that 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.
10          MCGINITY V. THE PROCTER & GAMBLE CO.

    Whether a back label ingredients list “can ameliorate any
tendency of [a] label to mislead” depends on whether the
“back label ingredients list . . . conflict[s] with” or
“confirm[s]” a front label claim. Moore v. Mars Petcare US,
Inc., 966 F.3d 1007, 1017 (9th Cir. 2020) (citation omitted).
In other words, if a defendant does commit an act of
deception on the front of a product, then “the presence of
fine print revealing the truth is insufficient to dispel that
deception.” See Ebner, 838 F.3d at 966. However, 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. See id. (considering the rest of
the product’s packaging when there was “no deceptive act to
be dispelled” on the front).
     In Williams v. Gerber Products, we held that the back
ingredient label on Gerber’s “Fruit Juice Snacks” could not
cure the misleading nature of the front and side of the
package. 552 F.3d at 939. The front label of Gerber’s fruit
juice snacks contained the phrase “fruit juice snacks,”
pictures of fruits, and the side label stated that the product
was made “with real fruit juice and other all natural
ingredients.” Id. at 936. However, when consumers turned
the package over, they would discover that the product did
not contain juice from any of the fruits pictured on the front
and that the first two ingredients listed, showing their
prominent role in the manufacturing of the product, were
corn syrup and sugar. Id. We explained that the purpose of
the ingredients list should be to confirm the representations
on the front or other parts of a package. Id. at 939–40. We
stated: “We do not think that the FDA requires an ingredient
list so that manufacturers can mislead consumers and then
rely on the ingredient list to correct those misinterpretations
and provide a shield for liability for the deception. Instead,
             MCGINITY V. THE PROCTER & GAMBLE CO.                   11

reasonable consumers expect that the ingredient list contains
more detailed information about the product that confirms
other representations on the packaging.” Id. (emphasis
added).
    Here, the front label containing the words “Nature
Fusion” is not misleading—rather, it is ambiguous.2 Unlike
a label declaring that a product is “100% natural” or “all
natural,” the front “Nature Fusion” label does not promise
that the product is wholly natural. Although the front label
represents that something about the product bears a
relationship to nature, the front label does not make any
affirmative promise about what proportion of the ingredients
are natural. Instead, as the parties point out, “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.
    We hold that when, as here, a front label is ambiguous,
the ambiguity can be resolved by reference to the back label.
In addition to the ingredient lists, the back labels of the
Nature Fusion shampoo and conditioner contain the phrases
“Smoothness Inspired by Nature” and “NatureFusion®
Smoothing System With Avocado Oil.” Upon seeing the
back labels, it would be clear to a reasonable consumer that
the avocado oil is the natural ingredient emphasized in
P&G’s labeling and marketing. The ingredients list, which
McGinity alleges includes many ingredients that are
synthetic and that a reasonable consumer would not think are

2
  The image of the avocado on a green leaf is truthful because the
products do contain avocado oil. The back label ingredient list thus
“confirms” the avocado image on the front label. See Williams, 552 F.3d
at 939-40.
12          MCGINITY V. THE PROCTER & GAMBLE CO.

natural, clarifies that the rest of the ingredients are artificial
and that the products thus contain both natural and synthetic
ingredients.
B.      The consumer survey
    McGinity relies heavily on the results of the consumer
survey that his counsel had commissioned from a third party.
Although we accept the allegations concerning the survey as
true at this stage of litigation, the survey is not particularly
instructive or helpful to us in deciding this case.
    The consumer survey in Becerra v. Dr Pepper/Seven Up,
Inc. was similarly unhelpful. 945 F.3d 1225 (9th Cir. 2019).
In Becerra, the survey concerned consumers’ understanding
of the word “diet” in the context of Diet Dr. Pepper soda
products. Id. at 1230. Becerra alleged that the survey in that
case showed that “consumers expect a diet soft drink to
either help them lose weight, or help maintain or not affect
their weight.” Id. at 1230. However, we agreed with the
district court that it was difficult to tell what questions were
asked in the survey. Id. at 1230–31. Because the survey did
not adequately address the crux of the issue (whether the
reasonable consumer would understand the word “diet” in
the context of Diet Dr. Pepper as a relative claim about the
calorie or sugar content), we held that the survey did not
“make plausible the allegation that reasonable consumers are
misled by the term ‘diet.’” Id. at 1231.
    Here, the survey participants did not have access to the
back label of the products. This omission to a degree
undermines the extent to which we can fairly rely on the
survey results as being instructive of how the “reasonable
consumer” understands the phrase “Nature Fusion” in the
context of the products. As in Becerra, the survey here does
not adequately address the primary question in this case.
           MCGINITY V. THE PROCTER & GAMBLE CO.           13

    Rather than demonstrating that the phrase “Nature
Fusion” is misleading, the survey results confirm that it is
ambiguous. Looking only at the front label, survey
respondents were split nearly 50/50 on the question of
whether the products contain a mixture of natural and non-
natural ingredients, or if they instead contain all or
substantially all natural ingredients. Given that ambiguity,
the survey is not informative as to whether the labeling of
the products is misleading as a whole. Had the survey
participants had access to the products’ back labels, they
would have had an immediate answer to this question—they
could see that the products contain avocado oil, a natural
ingredient, as well as many synthetic ingredients. Although
a back label cannot contradict deceptive statements made on
the front label, the back label can be used to interpret what
is conveyed by the labeling when the front label is
ambiguous, as here. With the entire product in hand, we
conclude, no reasonable consumer would think that the
products are either completely or substantially natural. The
survey results do not make plausible the allegation that the
phrase “Nature Fusion” is misleading.
    As shown by both Becerra and this case, it is important
that potential or current litigants draft questions for
consumer surveys with utmost care. Although the particular
survey proved noninformative in the context of this case and
the results of the survey, consumer surveys may well be
relevant and helpful in other cases. “Consumer surveys offer
opportunities for the court … to see current consumer
understandings of [] products as well as identify points of
ambiguity, confusion, or blatant falsity amongst the
labeling.” Jessica Guarino et. al., What the Judge Ate for
Breakfast: Reasonable Consumer Challenges in Misleading
14         MCGINITY V. THE PROCTER & GAMBLE CO.

Food Labeling Claims, 35 Loy. Consumer L. Rev. 82, 135
(2023).
                   IV. CONCLUSION
   We affirm the decision of the district court dismissing
McGinity’s claims for failure to state a claim under Federal
Rule of Civil Procedure 12(b)(6).
     AFFIRMED.

GOULD, Circuit Judge, joined by BERZON, Circuit Judge,
concurring:

    Although we hold that McGinity has not successfully
shown that P&G’s “Nature Fusion” labeling is deceptive as
a matter of law, I write separately to express my view that
P&G’s labeling nonetheless resembles a concerning practice
known as “greenwashing.” Greenwashing refers to “a set of
deceptive marketing practices in which an entity publicly
misrepresents or exaggerates the positive environmental
impact or attributes of a product[.]” Amanda Shanor &
Sarah E. Light, Greenwashing and the First Amendment,
122 Colum. L. Rev. 2033, 2037 (2022); see also id. at 2056–
57. The practice of greenwashing has resulted from the
increasing number of American consumers who want to buy
environmentally friendly, or “green,” products. See 16
C.F.R. § 260.1 (“the Green Guides”).
   Greenwashing is not limited to environmental effects
and is also used to describe the misleading or false labeling
             MCGINITY V. THE PROCTER & GAMBLE CO.                   15

of a wide range of consumer products.1 For example, the
practice of greenwashing also affects “the way consumers
buy cosmetic and personal products.” Alexa Riccolo, The
Lack of Regulation in Preventing Greenwashing of
Cosmetics in the U.S., 47 J. Legis. 120, 122 (2021). In the
context of cosmetics and personal care products (e.g.,
shampoos and conditioners), the term is used to describe
products that have “natural” labeling “but actually contain
chemicals[.]” Id.
     The Federal Trade Commission issued the Green Guides
to help companies avoid making misleading environmental
claims. The Green Guides discourage marketers from
making broad environmental benefit claims like “green” or
“eco-friendly” because they are “difficult to interpret and
likely convey a wide range of meanings.” See 16 C.F.R.
§ 260.4. The Green Guides also state that companies
“should not imply that any specific benefit is significant if it
is, in fact, negligible.” 16 C.F.R. § 260.4(c). While the
Green Guides do not explicitly comment on use of the words
“nature” or “natural,” they give general principles that all
marketers can use to avoid deceiving consumers
unintentionally or from mere negligence. See, e.g., 16

1
  The far-reach of greenwashing is well-illustrated in “The Six Sins of
Greenwashing,” an influential 2007 study published by TerraChoice
Environmental Marketing. In this study, TerraChoice sent research
teams to “big box” stores to record every product-based human health or
environmental claim they observed. TerraChoice identified over 50
product categories in which false or misleading claims were found,
including everything from televisions, to household cleaning products,
to personal care products such as shampoo and conditioner.
TerraChoice, The “Six Sins of Greenwashing”: A Study of
Environmental Claims in North American Consumer Markets 9 (2007),
https://perma.cc/7BTD-Z2U7.
16          MCGINITY V. THE PROCTER & GAMBLE CO.

C.F.R. §§ 260.9 (addressing claims that a product is “free
of” specified substances or chemicals), 260.10 (addressing
claims that a product is “non-toxic”).
    Here, although there is only one natural ingredient in the
products, the word “Nature” is in bold, capitalized text on
the front labels and is one of the largest words on the bottles,
second only to the brand name, “Pantene.” As a consumer
hoping to purchase natural personal care products, McGinity
was drawn to the emphasis on “Nature” and thought that the
labeling meant that the products were “of, by, and from
‘Nature.’” McGinity alleges that “Nature Fusion” conveyed
to him that the products were made of predominantly natural
ingredients when they were, in fact, made of almost entirely
synthetic ingredients. The phrase “Nature Fusion” may be
more ambiguous and less deceptive than “green” or “eco-
friendly,” but I still note how the use of such a phrase sounds
alarm bells similar to those sounded in the Green Guides.