A federal judge in Newark, N.J., has ruled plaintiffs can pursue a class action suit alleging that Johnson & Johnson and Wal-Mart baby bath products are unfit for sale because they contain a banned chemical that could cause cancer.
U.S. District Judge Dennis Cavanaugh denied the companies' motions to dismiss for failure to state a claim, saying the plaintiffs had made a good enough case to seek economic damages on theories that the companies committed deceptive trade practices and breached an implied warranty.
The allegations about Johnson & Johnson's Baby Shampoo and Wal-Mart's Equate Tearless Baby Wash do not say anyone has been harmed, and two of the three allegedly hazardous chemicals in the products have not been banned by the Food and Drug Administration for use in cosmetics.
But since 1989 the FDA has banned use of the third chemical, methylene chloride, and that gives the plaintiffs standing to make a case that the sale of the products caused economic damages to purchasers, Cavanaugh ruled in Levinson v. Johnson & Johnson Consumer Companies, 09-3317.
The suit, on behalf of two women from St. Louis, is one of four putative class actions filed by law firm Keller Rohrback of Seattle against baby shampoo and soap manufacturers last year. The suits followed a March 2009 report by a Washington, D.C., health advocacy group, Campaign for Safe Cosmetics, that tests found traces of methylene chloride, formaldehyde and a chemical called 1,4-dioxane in various products.
The suit says independent testing also showed the chemicals were in the product and that the presence was not disclosed by the companies.
In their briefs, the companies did not dispute the allegation that the products contained traces of the chemicals. But they assert that no one was harmed and the suits don't allege that anyone had been harmed.
"Millions of parents and caregivers have bought and used Johnson's Baby Shampoo without any incident or injury to their children," Daniel Carroll of Drinker Biddle & Reath in Florham Park, N.J., said in a brief. And people continue to use the 50-year-old product around the world every day without harm, the brief added.
Cavanaugh ruled the plaintiffs lacked standing to bring claims for economic damages for the use of the two chemicals permitted in cosmetics by the FDA.
But the plaintiffs do have standing to sue over the presence of methylene chloride because it is subject to a specific legal prohibition, he held.
The deceptive trade practices claim survived because Cavanaugh chose to apply the law of Missouri, the plaintiffs' home state, rather than New Jersey law.
In New Jersey, consumer fraud claims arising from the sale of defective products are covered by the Product Liability Act, and liability under that act requires proof of harm.
"The Court does not agree that articulating a claim in terms of pure economic harm where the core issue is the potential injury arising as a consequence of the products' allegedly harmful chemicals converts the underlying defective product claim into an independent and unrelated consumer fraud issue," Cavanaugh ruled.
The principle comes from Sinclair v. Merck & Co., 195 N.J. 51 (2008), a New Jersey Supreme Court ruling that said claims that painkiller Vioxx caused risk of heart attacks could be pursued under the Product Liability Act, but not the Consumer Fraud Act.
The Missouri Merchandising Practices Act, however, does allow recovery for economic damages arising from any merchandise in trade or commerce. And because the plaintiffs are from Missouri, that state's law applies to the case, Cavanaugh ruled.
He also declined to disturb a claim for violation of a breach of implied warranty but did dismiss a claim for unjust enrichment.
According to the suits, the FDA banned the use of methylene chloride in 1989 because its presence threatens an elevated risk of cancer. If the substance occurs as a byproduct of other chemical reactions within a product, it can be removed by a process called "vacuum stripping," but the defendants chose not to do so, the suits say.
Similar suits are pending against Gerber Products Company, Kimberly-Clark and Proctor & Gamble Distributing.
Plaintiffs lawyer Gretchen Cappio says it's too early to tell, given the number of similar cases pending, what the damage claim or size of the class might be.
"We are heartened by Judge Cavanaugh's ruling," she says. "The court recognized that plaintiffs stated viable claims under Missouri state law and may proceed with their lawsuit."
Carroll declined to comment for Johnson & Johnson.
Wal-Mart counsel David Sellinger, of Greenberg Traurig in Florham Park, referred a reporter's call to Greg Rossiter, a spokesman for Wal-Mart, who says, "Wal-Mart sells millions of safe, affordable quality products to customers every day and while we can't comment specifically on this case, we're pleased that the judge had significantly narrowed the plaintiffs claims."