Drake v. Procter & Gamble Company

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ILLINOIS

MICHAEL DRAKE, )

Plaintiff,

vs. Case No. 21-cv-279-DWD

THE PROCTER & GAMBLE

COMPANY, )

Defendant.

MEMORANDUM AND ORDER

DUGAN, District Judge:

This matter is before the Court on the Motion to Stay, Transfer, or Dismiss filed by

Defendant, The Procter & Gamble Company (“P&G”) (Doc. 34). This case is one of four

duplicative class actions filed against P&G currently pending in federal courts in New

York.! Defendant asks the Court to transfer, dismiss, or stay all proceedings and

deadlines in this action pending resolution of the previously filed, substantially-related

class action currently pending in the Southern District of New York, ie., Nieves v. The

Procter & Gamble Co., No. 7:21-cv-186-CS (“the SDNY Action.”). Plaintiff Michael Drake

opposes the motion, arguing that a stay or dismissal is unwarranted and would prejudice

Plaintiff and the Illinois plaintiffs, and that venue in the Southern District of New York is

not appropriate or otherwise warranted by convenience or the interest of justice.

LA fifth punitive class action was filed against Defendant in the Eastern District of Missouri, i.e. Helterbrand

v. P&G, No. 4:21-cv-855. However, by order dated September 22, 2021, Helterbrand was remanded to the

Circuit Court of St. Louis County, Missouri (Doc. 45-3). Court documents are public records of which the

Court can take judicial notice. See Spiegel v. Kim, 952 F.3d 844, 847 (7th Cir. 2020).

Background

Plaintiff is an Illinois resident who alleges that he purchased Defendant's “Crest

Gum & Enamel Repair” toothpaste in Illinois, and that the toothpaste contained false and

misleading representations (Doc. 1-1). Defendant is a resident of Ohio (Doc. 1). Plaintiff

filed his complaint in the Third Judicial Circuit Madison County, Illinois on February 1,

2021 (Doc. 1-1). Defendant removed the action to this Court on March 12, 2021 asserting

diversity jurisdiction under 28 U.S.C. § 1332(d)(2)(A) (Doc. 1). In his complaint, Plaintiff

alleges that Defendant made false and misleading representations concerning two of its

products: Crest Gum & Enamel Repair (both, the “intensive clean” and “advanced

whitening” varieties) and its Oral-B Gum & Enamel Repair toothpaste.? Plaintiff brings

three counts against Defendant for violations of the Illinois Consumer Fraud and

Deceptive Business Practice Act, 815 ILCS § 505/1, et seq., and for unjust enrichment (Doc.

1-1). Plaintiff seeks to certify a class consisting of “[a]ll persons in the state of Illinois who

purchased one or more of the Class Products in Illinois during the Class Period.” Plaintiff

seeks an award of compensatory damages, injunctive relief, punitive damages, and

attorney’s fees.

On January 9, 2021, and one-month prior to Plaintiff initiating this lawsuit,

plaintiff Carmen Nieves filed a punitive class action against Defendant in the Southern

District of New York. See Nieves v. The Procter & Gamble Co., No. 7:21-CV-00186 (S.D.N.Y.).

2Defendant filed a Motion to Dismiss Plaintiffs Complaint (Doc. 24), arguing in part, that Defendant has

never sold its Oral-B Gum & Enamel Repair toothpaste in Illinois or the United States (Doc. 24, at p. 17).

This motion to dismiss is still pending, and the Court will address the motion as appropriate after

resolution of this Motion to Stay, Transfer, or Dismiss.

Similar punitive class actions were later filed against Defendant on April 14, 2021 in the

Northern District of California, see Lichtinger v. The Procter & Gamble Co., No. 3:21-CV-

02680-MMC (N.D. Cal.), and on May 4, 2021 in the Middle District of Florida, see Keirsted

v. The Procter & Gamble Co., No. 6:21-CV-00778-RBD-GJK (M.D. Fla.). Lichtinger and

Keirsted voluntarily transferred their cases to the Southern District of New York in order

to consolidate their cases with the Nieves case.

On September 2, 2021, the consolidated plaintiffs filed a master class action

complaint in the SDNY Action (Doc. 45-2). The consolidated complaint also asserts that

Defendant's “Crest Gum & Enamel Repair” toothpaste contained false and misleading

representations (Doc. 35-1). The consolidated plaintiffs bring counts for violations of

Florida, New York, and California consumer protection statutes, in addition to breaches

of express warranty, implied warranty of merchantability, and the Magnusom Moss

Warranty Act, negligent misrepresentation, fraud, and unjust enrichment (Id.). The

consolidated plaintiffs seek to certify three subclasses: New York, Florida, and California,

with class members consisting of “all persons in New York, Florida, and California who,

from the beginning of the applicable limitations period through the date of trial,

purchased one or more of Defendant’s Products for personal use and not for resale (Id.).

The consolidated plaintiffs seek preliminary and injunctive relief, restitution,

disgorgement, monetary and statutory damages (Id.).

On October 21, 2021, the SDNY Court held a pre-motion conference on

Defendant's request to file a motion to dismiss the consolidated complaint, and a briefing

schedule was set allowing for Defendant to file a motion to dismiss on or before

November 12, 2021 (See Nieves v. The Procter & Gamble Co., No. 7:21-CV-00186 (S.D.N.Y.),

at Docket Entry dated October 21, 2021).

Defendant now asks the Court to transfer, dismiss, or stay all proceedings and

deadlines in this action pending resolution of the SDNY Action under the “first-to-file”

rule or otherwise for the convenience of the parties.

Discussion

No mechanical rule governs the handling of overlapping cases. Blair v. Equifax

Check Servs., Inc., 181 F.3d 832, 838 (7th Cir. 1999). “The first-to-file rule provides that a

district court may “for reasons of wise judicial administration” dismiss or stay “a parallel

action that is already pending in another federal court.” Serlin v. Arthur Andersen & Co.,

3 F.3d 221, 223 (7th Cir. 1993); Guill v. All. Res. Partners, L.P., No. 16-CV-0424-NJR, 2017

WL 1132613, at *2 (S.D. Ill. Mar. 27, 2017). While the Seventh Circuit Court of Appeals

“does not rigidly adhere to the first-to-file rule,” the decision to invoke the rule is part of

the district courts’ “inherent power to administer their dockets so as to conserve scarce

judicial resources” by avoiding duplicative litigation. Trippe Mfg. Co. v. Am. Power

Conversion Corp., 46 F.3d 624, 629 (7th Cir. 1995); see also Askin v. Quaker Oats Co., No. 11-

CV-111, 2012 WL 517491, at *3 (N.D. Ill. Feb. 15, 2012).

District courts are accorded “a great deal of latitude and discretion in determining

whether one action is duplicative of another, but generally, a suit is duplicative if the

‘claims, parties, and available relief do not significantly differ between the two actions.”

See Serlin, 3 F.3d at 223; see also McReynolds v. Merrill Lynch & Co., Inc., 694 F. 3d 873, 889

(7th Cir. 2012). However, second filed actions may proceed where favored by the

interests of justice. Nicholson v. Nationstar Mortgage LLC of Delaware, 2018 WL 3344408, at

*5 (N.D. IIL. July 6, 2018); see also Blair, 181 F.3d at 838; Serlin, 3 F.3d at 223.

Plaintiff's complaint is substantially similar to the consolidated complaint in

SDNY. Both suits identify the same product Crest Gum & Enamel Repair Toothpaste —

as bearing misleading labels. The suits identify the same key phrases, including, “gum

repair” and “reversing gingivitis”, as the sources of misrepresentation, and also cite the

same facts from the American Dental Association to support their claims that the product

cannot repair gums without assistance from a dentist. While the SDNY Action does not

specifically involve Illinois based consumer fraud claims, the question of whether cases

are substantially similar is a question of substance rather than form. See Jaramillo v.

DineEguity, Inc., 664 F.Supp.2d 908, 916 (N.D. Ill. 2009). “As long as the underlying facts

are the same . . . the fact that the two complaints allege violations of different state laws

is not enough to render them substantially dissimilar for purposes of the first-to-file

analysis.” Askin, 2012 WL 517491 at *3.

Nevertheless, Defendant as the moving party, has not met its burden to show that

transfer is appropriate here. See Forcillo v. LeMond Fitness, Inc., 220 F.R.D. 550, 552, 3-CV-

565-MJR (S.D. Il. 2004) (citing Heller Financial Inc. v. Midwhey Powder Co., Inc., 883 F.2d

1286 (7th Cir. 1989) (the burden is on the moving party to establish that transfer is

warranted)). The Seventh Circuit appears to authorize transfer of a case filed here to the

district of an earlier-filed case only if 28 U.S.C. § 1404(a) authorizes such a transfer of

venue. See Rsh. Automation, Inc. v. Schrader-Bridgeport Int’l., Inc., 626 F.3d 973, 980 (7th Cir.

2010); BRT Heavy Equip., LLC v. C. Norris Mfg., LLC, 14-CV-1407-MJR, 2015 WL 13158332,

at *5 (S.D. Ill. Apr. 15, 2015) (The sequence in which two federal cases are filed should be

considered but is only one factor in a transfer analysis); see also Aliano v. Quaker Oats Co.,

2017 WL 56638, at *4 (N.D. Ill. Jan. 4, 2017). 28 U.S.C. § 1404(a) provides that “[f]or the

convenience of parties and witnesses, in the interest of justice, a district court may transfer

any civil action to any other district or division where it might have been brought or to

any district or division to which all parties have consented.”

To satisfy the “where it might have been brought” requirement, transfer is

appropriate under § 1404(a) if three criteria are met: (1) venue is proper in the transferor

district; (2) venue and jurisdiction are proper in the transferee district, and (3) transfer of

the case will serve the convenience of the parties and witnesses and promote the interest

of justice. See BRT Heavy Equip., LLC., 2015 WL 13158332, at *5. The federal venue statute,

28 U.S.C. § 1391(b), provides that a civil action may be brought in:

(1) a judicial district in which any defendant resides, if all defendants are

residents of the State in which the district is located;

(2) a judicial district in which a substantial part of the events or omissions

giving rise to the claim occurred, or a substantial part of the property

that is subject of the action is situated; or

(3) if there is no district in which an action may otherwise be brought . . .

any judicial district in which any defendant is subject to the court’s

personal jurisdiction with respect to such action.

There is no question that venue is proper in this, the transferor district. The parties

have not challenged venue here, and the allegations in Plaintiff's complaint make clear

that a substantial part of the events giving rise to Plaintiff's claim - Defendants’

marketing and sale of its products, and Plaintiff's purchase of the products - occurred

within this District. Accordingly, venue is proper here under 28 U.S.C. § 1391(b)(2).

However, venue and jurisdiction in the Southern District of New York is less clear.

Apart from a blanket statement by Defendant that venue is proper in the Southern

District of New York, Defendant has not offered any factual allegations to support this.

The alleged activities giving rise to Plaintiff's claim all occurred in Illinois. Further,

Defendant is a resident of Ohio (Doc. 1, { 9), as residence is defined by § 1391(c)(2)3. As

such, Defendant has not established that venue would be appropriate under 28 U.S.C. §

1391(b)(1) or (2).

Similarly, because the alleged activities giving rise to Plaintiff's claim all occurred

in Illinois, it is unlikely that there would be a sufficient link between the “forum and the

underlying controversy” to allow the Southern District of New York to exercise specific

personal jurisdiction over Defendant in a suit brought by Plaintiff. See Goodyear Dunlop

Tires Operations, S.A. v. Brown, 564 U.S. 916, 919 (2011); see also Mussat v. IQVIA, Inc., 953

F.3d 441, 447 (7th Cir. 2020). Defendant has not argued that its contacts with New York

are so “continuous and systemic” as to render it “essentially at home” there, such that the

Southern District of New York could exercise general personal jurisdiction over

Defendant in a suit brought by Plaintiff. See Daimler AG v. Bauman, 571 U.S. 117, 139

(2014). While Defendant, who is now seeking to transfer to that district, would surely

consent to personal jurisdiction in New York, the Supreme Court has determined that a

3 See 28 U.S.C. § 1391(c)(2) (if a defendant is an entity with the capacity to sue and be sued, whether or not

incorporated, it shall be deemed to reside “in any judicial district in which such defendant is subject to the

court’s personal jurisdiction with respect to the civil action in question.”).

defendant’s subsequent consent to jurisdiction is irrelevant to the question of “where [the

case] might have been brought” initially. Hoffman v. Blaski, 363 U.S. 335, 342-43 (1960). In

sum, Defendant has not met its burden to show that the Southern District of New York is

a “district or division where [Plaintiff’s case] might have been brought” initially under §

1404(a).

The Court may still contemplate the possibility of a stay. Here, there is significant

overlap between the two cases such that there is a possibility that the SDNY Action could

dispense with certain issues and relief that may not need to be revisited here.

Nevertheless, Plaintiff's allegations of prejudice merit additional consideration. This case

and the SDNY Action are largely in their infancies. Indeed, this matter appears to be

further along than the SDNY Action with a fully briefed motion to dismiss and a set

scheduling order. The Parties have further begun discovery and negotiated agreed upon

ESI and discovery protocols here.

Plaintiff also argues that he and the putative Illinois class members will be

prejudiced by a stay because the anticipated class members will likely need to self-

identify and the delay caused by a stay of unknown - yet likely long - duration would

create a substantial risk of putative class members being unable to recall whether they

purchased the class products within the applicable statute of limitations. These fears are

not unfounded and weigh against the imposition of a stay, particularly considering the

comparative stages of litigation in both matters, and because Defendant failed to present

any arguments of a potential hardship should it be required to continue litigating both

cases.

“Tf there is even a fair possibility that the stay will work damage to someone else,

the party seeking the stay must make out a clear case of hardship or inequity in being

required to go forward.” Nicholson v. Nationstar Mortgage, LLC of Delaware, 2018 WL

334408, at *4 (N.D. Ill. Jul 6, 2018) (quoting Landis v. N. Am. Co., 299 U.S. 248, 254 (1936)

(internal markings and quotations omitted). Defendant has not made a clear case of

hardship or inequity here. Moreover, Plaintiffs counsel has represented that Plaintiff is

willing to work with the attorneys in the SDNY Action to avoid unnecessary duplication.

At this time, the development of a joint discovery plan may prove more useful in

mitigating any potential hardships on Defendant and would better serve the interests of

justice than a limitless stay. Given these facts, the Court finds that the interests of justice

would not be served by staying the case pending resolution of the SDNY Action at this

time. However, should different circumstances arise during the course of this litigation

which may warrant the imposition of a stay, the parties are granted leave to seek such

relief from this Court as may be appropriate.

Conclusion

For the foregoing reasons, Defendant’s Motion to Stay, Dismiss, or Transfer (Doc.

34) is DENIED. The Court will issue separate opinions on Defendant's Motion to Dismiss

and the parties’ Motion for Protective Order and Entry of ESI Protocol.

SO ORDERED. A L WJ

Dated: October 29, 2021 fists W J “—

DAVID W. DUGAN

United States District Judge