Sean Scott, Plaintiff, v. Walmart Inc., Defendant. (2026)

The following papers filed electronically were read and considered on the motion by Defendant, Walmart Inc. for an Order pursuant to CPLR §§ 3211(a)(1), (2),(7) and (8) dismissing the Complaint with prejudice:

Notice of Motion, Memoranda of Law,

Affirmations in Support, Exhibit 1 Doc. 7-9,12-13

Memorandum of Law in Opposition Doc. 15

Reply Memorandum of Law, Reply Affirmation Doc. 34-35

Procedural History and Background

In this putative class action, Plaintiff alleges violations of General Business Law §§ 349 and 350 against Walmart for consumer deception. The Complaint alleges Walmart sells Equate branded Maximum Strength Sleep-Aid products (the "Product") that promise to help the user fall asleep fast, sleep soundly, wake up refreshed, and that it is non-habit forming. Plaintiff asserts this labeling is misleading since the "non-habit forming" representation led to his expectation the Product was designed and/or formulated such that it could be taken regularly, without development of a desire to consume more of it to achieve the same effects. The Complaint alleges that as a result of misleading representations, Plaintiff paid more for the Product than he would have. Plaintiff seeks monetary damages and interest, as well as an award of costs and expenses, including reasonable attorney and expert fees.

As alleged in the Complaint and depicted in photographs contained within the Complaint, the label on the Product includes the following statements: "Fall asleep fast," "Sleep soundly," "Wake up refreshed," and "Non-habit forming." The Complaint alleges the Product labeling is "misbranded" because, despite its representation as being non-habit forming, the Product's active ingredient, diphenhydramine hydrochloride (HCL), acts as an inverse agonist on the H1 receptor and may or are believed to inhibit reuptake of serotonin, responsible for elevated moods, which causes or can cause persons to take a greater quantity of them.

Further, the Complaint alleges as a result of the false and misleading representations and omissions, the Product is sold at a premium price, approximately $8.14, which is allegedly higher than the Product would be sold for if it were represented in a non-misleading way.

The Complaint alleges Plaintiff is a consumer who purchased the Product between January 2023 and September 2025 and that he paid more for the Product than he would have had he known it was not designed and/or formulated such that it could be taken regularly, without development of a desire to consume more of it, and/or greater amounts and/or quantities, to achieve the same effects, in other words, that it was habit-forming.

The Complaint asserts a single cause of action for violations of New York General Business Law ("GBL") §§ 349-350 for consumer deception based upon allegedly deceptive representations and/or omissions with respect to the Product's contents, attributes and/or quality, which Plaintiff claims are material in that they are likely to influence consumer purchasing decisions. Plaintiff seeks to recover for economic injury and/or loss he sustained, based on the misleading labeling and packaging of the Product, which he alleges is a deceptive practice under the GBL.

In lieu of an Answer, Walmart moves to dismiss the Complaint pursuant to CPLR §§ 3211 (a) (1), (2), (7) and (8), on the grounds that (1) the money-back guarantee bars the action because it eliminates the injury in fact, (2) the cause of action under GBL §§ 349 and 350 is preempted by the U.S. Food and Drug Administration (FDA) authorization of the Product's labeling, and (2) Plaintiff failed to state a cause of action under GBL§§ 349 and 350 because the label does not mislead consumers.

In support of its argument for dismissal based on the Product's money-back guarantee, Walmart argues a recent court of coordinate jurisdiction dismissed a complaint alleging deceptive acts and practices under the General Business Law, ruling that the plaintiff had no cognizable injury where the product complained of was offered with an unrestricted money-back guarantee. Walmart urges this Court to follow that holding and notes that Plaintiff's counsel, who represented the plaintiff in the other matter, is pursuing this action despite intimate familiarity with the other court's holding concerning a product's money-back guarantee. Walmart contends that, as was held in the other matter, Plaintiff lacks standing to sue because he cannot allege injury in fact and does not allege that he attempted, or was unable, to take advantage of the Product's money-back guarantee.

In addition to Plaintiff's lack of standing, Walmart also contends the Federal Food, Drug, and Cosmetic Act ("FDCA") expressly preempts Plaintiff's claims, which he would use to impose different, or otherwise not identical, labeling requirements on over the counter (OTC) drugs. Walmart argues the FDA issued detailed regulations, called "Monographs," on Nighttime Sleep Aid Drug Products, concluding that antihistamines—including diphenhydramine—have "no ability to create dependency." Walmart argues courts have consistently held under similar circumstances that the plaintiff's claims are preempted because a finding of liability would establish a state requirement that is "different from," or "otherwise not identical with," FDA Monographs.

Lastly, Walmart argues Plaintiff's GBL claim must be dismissed because it fails on the merits. Walmart asserts the gravamen of the Complaint is that the OTC drug label misled Plaintiff into thinking he could consume the sleep-aids "regularly," which he cannot do because they allegedly will cause him to become dependent on them. Walmart contends Plaintiff's claims fail because the Product label, including the Drug Facts Panel, makes no such representations or omissions, and none of the research studies tested the Product such that he can rely on them to claim these products cause consumer dependence.

In opposition, Plaintiff argues consumer deception is plausible since diphenhydramine can cause habituation, its allegations need not be proved on pleadings, studies support the conclusion the Product is addictive, and Walmart's "back label" disclaimer is insufficient. Plaintiff also argues his allegations are not subject to federal preemption because the Product's designation as "non habit forming" goes beyond any FDA-approved designations. Plaintiff also challenges Walmart's contention there would be the possibility of conflicting factual determinations about whether diphenhydramine is habit forming when used as directed, citing to language in the FDA's 1975 Proposed Monograph.

As to the money back guarantee, Plaintiff argues Walmart's reliance on the recent holding from another trial court is not binding and does not invoke the doctrines of stare decisis or res judicata, and on these bases argues this Court should not follow that decision.

In Reply, Walmart reiterates its money-back guarantee bars Plaintiff's claims and argues Plaintiff failed to demonstrate why this Court should not follow the recent Supreme Court decision that held Walmart's money-back guarantee eliminates injury-in-fact.

Walmart further contends Plaintiff's argument against preemption fails because the FDA Tentative Final Monograph and Final Monograph on Nighttime Sleep-Aid Drug Products found diphenhydramine has no ability to create dependency and no unresolved safety or effectiveness issues relating to [its] use as an OTC nighttime sleep-aid, respectively. Walmart argues Plaintiff is ignoring that FDA regulation of a given subject matter preempts all non-identical state laws within that subject matter.

Lastly, Walmart argues Plaintiff's claims still fail because (1) reasonable consumers view OTC drug labeling in context, (2) the actual label representations say nothing about whether the sleep-aids can be consumed "regularly," and (3) none of the articles he cites tested the only product he purchased, as required to state his substantiation claim.

Walmart urges that for all of these reasons, dismissal is warranted without leave to amend the Complaint.

Discussion

General Business Law § 349 prohibits, as unlawful, "deceptive acts or practices in the conduct of any business, trade or commerce in the furnishing of any services in this state." (General Business Law § 349 [a]). General Business Law § 350 provides that "false advertising in the conduct of any business, trade or commerce in the furnishing of any service in this state is . . . unlawful." Under both sections, a plaintiff must adequately allege three elements: (1) the defendant's conduct was consumer-oriented, (2) the defendant's act or practice was misleading in a material way, and (3) the plaintiff suffered an injury as a result of the deceptive act. Stutman v. Chemical Bank, 95 NY2d 24, 29 (2000); see Himmelstein, McConnell, Gribben, Donoghue & Joseph, LLP v. Matthew Bender & Co., Inc., 37 NY3d 169, 176 (2021), rearg. den. 37 NY3d 1020 (2021); Katsorhis v. 718 West Beech St., LLC, 234 AD3d 744, 748 (2d Dept. 2025).

Plaintiff alleges Walmart's labelling of the Product is misleading because it promising it will help to "Fall asleep fast," "Sleep soundly," "Wake up refreshed," and that its usage is "Non-habit forming." Plaintiff expected that, based on the representation it could be consumed regularly, and did not pose a risk of the desire to consume more of it to achieve similar effects. He alleges he paid more for the Product than he would have had he known it was not designed and/or formulated such that it could be taken regularly, without development of a desire to consume more of it, and/or greater amounts and/or quantities, to achieve the same effects.

Walmart asserts the Product comes with an unrestricted money-back guarantee, permitting consumers to return the package for a replacement or their money back. The labeling of the Product clearly advises consumers of this policy and provides a toll-free telephone number to call. Walmart argues the existence of such a guaranteed refund means there is no injury under the General Business Law. (see, e.g., Preira v. Bancorp Bank, 885 F. Supp. 2d 672 [S.D.NY 2012] [consumer in putative class action failed to allege injury within meaning of GBL § 349 where defendant offered unrestricted option of sending in product - pre-paid gift card - to claim any unused balance]).

Citing Mountz v. Global Vision Products, Inc. (3 Misc 3d 171 [Sup. Ct. NY Co. 2003]) Plaintiff argues a consumer may still suffer actual damages, even where the defendant offers a money-back guarantee. However, the money-back guarantee in Mountz contained restrictions and is therefore distinguishable from Walmart's unrestricted refund policy that would fully compensate Plaintiff at any time for his alleged injury of overpaying for the product. See Preira, supra, 885 F. Supp. 2d at 678 (distinguishing Mountz and noting the absence of any cases in which a court found a consumer sustained actual damages in the face of an unrestricted money-back guarantee).

Contrary to Plaintiff's arguments, the recent holding in Gay v. Walmart (2026 WL 267711 [Sup. Ct., Westchester Co. 2026]) is persuasive on this point. Therein, the court held that the unrestricted refund policy applicable to the product would fully compensate the plaintiff for her alleged injury, thus her allegations were insufficient to plead an injury and therefore, she had no standing to commence the action. While acknowledging that the Gay decision does not invoke the doctrines of stare decisis or res judicata for the reasons correctly argued by Plaintiff, this Court nevertheless agrees with the decision in Gay and concludes Plaintiff herein would likewise be fully compensated by virtue of Walmart's unrestricted money-back guarantee for the Product and therefore, having suffered no injury on fact, he lacks standing to bring this claim under GBL §§ 349 and 350.

Even assuming arguendo that Plaintiff had sufficiently pleaded injury, Defendant additionally argues Plaintiff's claim is preempted because the supremacy clause of the United States Constitution (U.S. Const., art. VI, cl. [2]), provides that state law may be preempted in three circumstances: first, through express statutory language; second, when it regulates conduct in a field that Congress intended the Federal Government to occupy exclusively; and third, when it actually conflicts with federal law. Feldman v. CSX Transp., Inc., 31 AD3d 698, 701 (2d Dept. 2006). Preemption is fundamentally based on Congressional intent, which can be inferred from "a 'scheme of federal regulation . . . so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it,' or where an Act of Congress 'touches a field in which the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject. Id. (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 [1947]); see also Militrano v. Lederle Labs., 26 AD3d 475, 477 (2d Dept 2006) (dismissing plaintiffs' vaccine defect claim as precluded by federal Vaccine Act).

At issue herein is an OTC drug and the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 301 et seq. (the "FDCA") grants the Food & Drug Administration ("FDA") the power to regulate the labeling and marketing of OTC drugs. Congress passed the FDCA in 1938 as part of a comprehensive federal regulatory scheme to protect consumers from fraud or misrepresentation in the sale of food, drugs, and cosmetics. Bischoff v. Albertsons Companies, Inc., 678 F. Supp. 3d 518, 523 (S.D.NY 2023)(citing Critcher v. L'Oreal USA, Inc., 2019 WL 3066394 at *2 [S.D.NY July 11, 2019], aff'd, 959 F.3d 31 [2d Cir. 2020]). In doing so, Congress intended to create a national and uniform regulatory scheme, which up until the FDCA's passage had been subject to the disparate laws of the states. Id.

The FDCA also contains an express preemption clause which bars states and political subdivisions thereto from:

Establishing or continuing in effect any requirement — (1) that relates to the regulation of a drug that is not subject to the requirements of section 353(b)(1) or 252(f)(1)(A) of this title [including OTC drugs]; and (2) is different from or in addition to, or that is otherwise not identical with, a requirement under this chapter.

21 U.S.C. § 379r(a).

Thus, a state law that applies to drugs is preempted if it imposes a requirement that is not identical to the requirements of the FDCA and the FDA's regulations. Collaza v. Johnson & Johnson Consumer, Inc., 2024 WL 3965933, at *3 (S.D.NY Aug. 27, 2024) (dismissing with prejudice; FDA Monograph for OTC drugs preempted GBL claims), aff'd, 2025 WL 2233746 (2d Cir. Aug. 6, 2025); Bischoff v. Albertsons Cos., Inc., 678 F. Supp. 3d 518, 527 (S.D.NY 2023); see also Morgan v. Albertsons Cos., Inc., 2023 WL 3607275, at *5 (N.D. Cal. Mar. 13, 2023) (state law claims preempted where claims would require manufacturer to include additional or different information on federally approved label.) Thus, if the FDA regulates a given subject matter, it preempts all non-identical state laws within that subject matter. Bimont v. Unilever U.S., Inc., 2015 WL 5256988, at *3 (S.D.NY Sept. 9, 2015); Colella v. Atkins Nutritionals, Inc., 348 F. Supp. 3d 120, 137 (E.D.NY 2018) (claims preempted even where the FDA may not have considered the exact language addressed but clearly addressed the substance of the claims at issue).

Citing Goldstein v. Walmart, Inc. (637 F. Supp. 3d 95, 104 [S.D.NY 2022]), Walmart argues the FDA ensures that the labeling of nonprescription drugs provides adequate directions for use, and adequate warnings against unsafe use through FDA Monographs and other measures, thus preempting state law claims that would require labeling that is different than or in addition to the labeling requirements in an FDA Monograph.

Plaintiff relies on a decision from the Northern District of California, Sneed v. Proctor & Gamble (2024 WL 5384684 [N.D. Cal. 2024]) in support of his argument his claim is not preempted because the Final Monograph did not explicitly address whether the "non-habit-forming" statement is misleading. However, this Court declines to follow the Sneed holding in light of the contrary holdings by the Southern District of New York in 2023 in Bischoff, supra, and in 2024 in Collaza, supra. The Court agrees that if the FDA regulates a given subject matter, it preempts all non-identical state laws within that subject matter and thus, because the FDA regulates the subject matter of Plaintiff's claims—dependency on diphenhydramine—his claims requiring different labeling disclosures are preempted. Plaintiff's claim is preempted and accordingly, the Complaint must be dismissed.

As an additional matter, the Court notes Plaintiff's counsel's apparent attempt to denigrate opposing counsel's professional integrity by emphasizing what appears to be a single digit typographical error in a citation to a federal regulation and contending defense counsel improperly utilized artificial intelligence in the preparation of its motion. This Court independently recognized the typographical error in the citation and is disheartened by counsel's specious attempt to cast aspersions on his adversary and to detract from the issues raised in the motion, especially in light of the disjointed and excessively punctuated submissions by Plaintiff's counsel. The Court accepts the affirmation of Peter K. Bae, Esq. (NYSCEF Doc. 35) that artificial intelligence was not used in the drafting of Walmart's motion papers.

In light of the foregoing determination, the remainder of the parties' arguments concerning the adequacy of pleading Plaintiff's cause of action under GBL §§ 349 and 350 are rendered moot and will not be addressed in order to avoid issuance of a purely advisory opinion.

Accordingly, it is hereby

ORDERED that the motion by Defendant Walmart Inc. (Mot Seq. #1) is GRANTED; and the Complaint is dismissed.

The foregoing constitutes the Decision and Order of this Court.

Dated: July 28, 2026

E N T E R

HON. KYLE C. McGOVERN, J.S.C.

Kyle C. McGovern, J.