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In re Monat Hair Care Products Marketing, Sales Practices & Products Liability Litigation

United States District Court, S.D. Florida, Miami Division

October 23, 2019




         THIS CAUSE comes before the Court on Defendants' Motion to Dismiss Plaintiffs' First Amended Master Consolidated Class Action Complaint [ECF No. 114] (“Motion”). The Court has reviewed the Motion and the applicable law and is otherwise fully advised. For the reasons that follow, the Motion is granted in part and denied in part.

         I. BACKGROUND[1]

         This action is about hair care products that did not perform as promised. Rather than promoting healthy hair growth, Plaintiffs contend that the products at issue cause hair loss and scalp irritation.

         A. Defendants and The Products

         Defendants Monat Global Corp. (“Monat”), Alcora Corporation (“Acora”), and B&R Products (“B&R”) (collectively “Defendants”) comprise a family-controlled beauty conglomerate that designs, manufactures, markets, and distributes the eight hair-treatment systems at issue in this action (the “Products”). Compl. ¶ 1, [ECF No. 99]. Alcora-the umbrella organization for Monat and B&R-is owned, controlled, and operated by the Urdaneta family. Id. ¶¶ 24, 26. Monat, a multinational company that markets and sells the Products, is a wholly owned subsidiary of Alcora. Id. ¶ 23. B&R is also a subsidiary of Alcora and is the sole manufacturer of the Products. Id. ¶ 25. The Urdaneta family controls the operations of each of the Defendants.[2] Id.

         The Products contain the same four key ingredients: Proctine™, Rejuvenique™, Cipixyl™, and Crodasorb™ (the “Key Ingredients”). Id. ¶¶ 60, 62. The Key Ingredients are a proprietary mix of several ingredients not listed on the Products' labels. Id. ¶ 61.

         B. Defendants' Marketing and Representations

         Defendants sell the Products via Monat's website or through sales agents called Market Partners.[3] Id. ¶ 99. Defendants require their Market Partners to use approved marketing material when selling the Products. Id. ¶ 103.

         In their marketing material, Defendants represent that the Products are clinically tested and proven to promote hair growth, prevent aging, and reduce hair loss. Id. ¶ 73. Defendants claim, among other things, that the Key Ingredients reduce the production of hormones contributing to thinning hair and increase follicle strength. In addition, Defendants' marketing material states that the Products are approved by the Food and Drug Administration (“FDA”) and do not contain any “toxic” ingredients such as parabens, sulfates, cyclic silicones, BHT, DEA/MEA, polyethylene glycol, phthalates, phenoxyethanol, petrolatum, mineral oil, paraffin wax, triclosan, plastic microbeads, formaldehyde releasers, gluten, harmful colors, or harmful fragrances. Id. ¶¶ 64, 81, 82. Despite Defendants' representations to the contrary, the Products contain several harsh chemicals, including Cocomidopropyl Betaine, Benzyl Alcohol, Red Clover Leaf Extract, Butylene Glycol, ethanol, and sulfates. Id. ¶¶ 176-178. Defendants' marketing material includes “before” and “after” photos depicting “customers” with unruly hair before use of the Products and long shiny hair after use. But these photos are stock images purchased by Defendants-not real customers. Id. ¶ 69.

         C. Customer Complaints

         By 2016, the Better Business Bureau (“BBB”) had received over 825 complaints by customers about Defendants, over 630 of which related to the Products. Id. ¶ 123. In the complaints, customers stated that the Products caused their hair to fall out and caused sores and lesions on their scalps. Id. ¶ 124. In addition, between August 29, 2017, and March 27, 2019, the FDA received 237 adverse incident reports from customers related to the Products. Id. ¶ 146. Like the BBB complaints, the FDA adverse incident reports indicate that the Products caused the customers' hair loss, head sores, and severe skin reactions. Id.

         When customers complained directly to Defendants about the Products, Defendants told them that the various adverse reactions were part of an intended “detox process.” Id. ¶ 149. Defendants encouraged the upset customers to continue using the Products for at least 90 days, while the scalp “detoxed.” Id. Monat's President later acknowledged that the purported detoxification process was not scientifically supported. Id. ¶ 157.

         D. The FDA Inspection

         In March of 2018, the FDA inspected Defendants' manufacturing facilities. Id. ¶ 168. Following the inspection, the FDA issued a report (the “FDA Report”) noting, in part, that the Products “may have become contaminated with filth” during manufacture. Id. at ¶ 170. In addition, the FDA Report stated that Defendants failed “to sample and test raw materials for conformance with specifications to ensure the absence of filth, microorganisms, and or other adulterants prior to processing or usage.” Id. at ¶ 171.

         E. Plaintiffs

         Plaintiffs are eighteen former users of the Products who claim that the Products did not perform as promised and caused them to suffer hair loss, scalp irritation, and severe skin reactions. Plaintiffs allege that (1) inclusion of the Key Ingredients and lack of biocides in the Products constitutes a design defect, (2) contamination of the Products in Defendants' facilities resulted in a manufacturing defect, and (3) the Products are more dangerous than a reasonable consumer would expect based on their packaging and advertising. Plaintiffs also contend that Defendants misrepresented the efficacy of the Products. Plaintiffs seek to represent a nationwide class of all consumers who have suffered economic damages and bodily injury resulting from their use of the Products.

         F. Procedural Background[4]

         On December 20, 2018, Plaintiffs filed their First Amended Consolidated Master Class Action Complaint asserting claims for (1) violation of Florida's Deceptive and Unfair Trade Practices Act (“ F D U T PA ”), (2) violation of the Magnuson-Moss Warranty Act, (3) breach of implied warranty of merchantability, (4) violation of express warranty, (5) negligence, (6) negligence-failure to warn, (7) strict liability-design defect, (8) strict liability-failure to warn, (9) strict liability-manufacturing defect, (10) unjust enrichment, and, in the alternative, (11-26) violations of various state consumer protection laws.[5] Defendants have moved to dismiss arguing Plaintiffs (1) fail to allege a product defect or causation, (2) have no standing to bring a claim for ...

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