*This post originally appeared as an article in the August 2020 edition of Happi Magazine.
Beauty companies, including those using CBD or hemp-derived components, face an uptick in alleged false-labeling class actions. Whether the actions are justified or vexatious, one thing is certain: they are expensive to defend. By keeping the following labeling-related litigation trends in mind when considering and reviewing product labels and marketing, beauty companies can, hopefully, avoid becoming a litigation target.
This most common type of false-labeling related lawsuit targets products that are labeled as containing a natural ingredient or as being all-natural. Targeted companies and claims have included:
- An entire baby care products line that had both natural ingredient and organic ingredient label claims, but also allegedly had synthetic ingredients. Mayhew v. KAS Direct, LLC, Case No. 7:16-cv-06981 (S.D.N.Y.). The company settled on a class-wide basis for more than $2.2 million.
- A “pioneer” in the area of “natural cosmetics” whose bath and body products were labeled with the claim “nourish naturally” – but allegedly contained phenoxyethanol and/or ethylhexylglycerin. Gasser v. Kiss My Face LLC, Case No. 3:17-cv-1675 (N.D. Cal.). This case settled prior to any class being certified. The apparent driver for this litigation was a letter sent by the Federal Trade Commission to other cosmetics manufacturers who had represented their products were “natural” when they contained one or both of these ingredients.
- An entire product line of baby washes, shampoos, conditioners, sprays and creams that were labeled with the claims “natural cleansers,” “safe, natural, fun” and “naturally perfect”—but allegedly contained synthetic ingredients such as decyl glucoside, lauryl glucoside, panthenol and sodium benzoate. Suarez v. Ralph, Paco & Roberto, Inc. et al, Case No. 7:17-cv-09847 (S.D.N.Y.). After nearly two years of litigation, the plaintiff voluntarily dismissed the action prior to any class being certified (possibly after obtaining an individual settlement).
The attorneys who seem to most often bring these actions also have filed lawsuits against food and beverage companies based on the same or similar label claims. The firms are leveraging their experience litigating against food and beverage to pursue the beauty industry.
Beauty companies should bear in mind that on Nov. 8, 2019, HR 5017 was introduced in the House of Representatives. This bill would amend the Federal Food, Drug and Cosmetic Act to define “natural” with a certain set of standards. As currently drafted, the bill’s definition of “natural” identifies a variety of characteristics that the product must have, for instance, it would have to contain at least 70% natural substances and cannot be made using any of seven processes, such as ionizing radiation. There is no present timeline for a vote on the bill, but companies should assume that its adoption will stoke litigation in this category.
Claims v. Labels
For a few thousand dollars or less, anyone can have a product lab-tested to learn whether it contains the ingredients or attributes claimed on the product label. The cases teach a variety of lessons for both labeling and playing class action defense.
In Forouzesh v. CVS Pharm., Inc., Case No. 2:18-CV-04090 (C.D. Cal), the plaintiff purchased a bottle of “CVS Sport SPF 100+ Sunscreen Spray,” but testing showed that the sunscreen only had an SPF of 29. CVS argued that the plaintiff’s claims were preempted (in other words, that the plaintiff sought to impose on CVS a requirement “that is different from or in addition to, or that is otherwise not identical with” a requirement contained in the FDCA).
Ultimately, the court dismissed the lawsuit, finding the consumer did not adequately show that the product he purchased was in fact the one that his counsel tested, and, the testing methodology did not appear to comply with FDA regulations. The court gave the consumer an opportunity to amend to show such compliance, but the consumer did not timely file an amended complaint.
Sunscreens claiming to be mineral-based are also a target. For instance, in Prescott v. Bayer Healthcare et al., Case No. 5:20-cv-00102 (N.D. Cal.), plaintiffs claim that, “Defendants are exposing babies and children to harmful chemical-based ingredients hidden in their sunscreens by fraudulently passing them off as safe mineral-based ingredients.”
Aloe vera has also been targeted. In Kalajian v. Rite Aid Corp., Case No. 2:17-cv-06777 (C.D. Cal.), the consumer alleged that “according to independent lab tests,” the aloe vera products had “no actual aloe vera at all.” In a parallel case filed in the Northern District of Illinois, consumers argued that there was not “enough” of aloe’s active ingredient (acemannan). In this latter case, following several years of litigation, the court found, “there is no evidence that a certain amount of acemannan must be present in the finished product for it to be aloe.”
Companies intending to infuse their products with CBD should be aware that CBD-related class action litigation has been red hot. Actions have been filed in multiple states with consumers claiming that the CBD content listed on product labels and packaging does not match the actual CBD content. Other CBD-related class actions attack label claims stating that CBD will cure, mitigate, treat or prevent disease, or is intended to affect the structure or function of the body, in violation of FDA regulations. One topical cream has already been targeted. Dasilva v. Infinite Product Co. LLC, Case No. 2:19-cv-10148 (C.D. Cal.) (“freezing point cream” alleged to “freeze away all aches and pains,” and an “afterglow healing oil” alleged to be “great for new tattoos, eczema, acne, scarring or open wounds.”).
These cases serve as a reminder that, for companies using a “marketing” amount of an ingredient which requires a higher “therapeutic” amount to be efficacious, some thought should be given about positioning that ingredient in labeling statements and marketing materials.
The idea of caveat emptor doesn’t hold up in a courtroom when it comes to personal care product performance. Consumers have asserted that a wide range of products have not performed as expected (and therefore are falsely labeled), including:
- A “repairing” line of shampoo, conditioner and hair mask products which allegedly did not contain any ingredient that could repair damaged hair. Manier v. Juice Beauty, Inc., Case No. 3:18-cv-06834 (N.D. Cal.) (this case was dismissed as not enough product units were sold during the class period);
- Product lines labeled as having “plant stem cells” that were supposed to renew or slow the aging process, but allegedly the claims were not backed by clinical trials and the plaintiffs asserted that plant stem cells could not interact with human stem cells. Mollicone v. Universal Handicraft, Inc., Case No. 2:16-cv-07322 (C.D. Cal.) (settled for approximately $840,000);
- A line of lotion containing CoQ10 that was supposed to improve skin firmness within two weeks but did not work as promised. Franz v. Beiersdorf, Inc., Case No. 3:14-cv-02241 (S.D. Cal.) (pending).
Cases in this category are unique to their facts, making it hard to state a uniform defense to them. Legal departments should coordinate with their product managers and marketers to understand why certain label claims are made to ensure they are defensible.
Undisclosed Side Effects
This trend encompasses products that have caused actual alleged harm and those which are alleged to be dangerous but which may not have caused identifiable physical harm.
In the former category is a case against Rodan & Fields for its Lash Boost product. Lewis v. Rodan & Fields, Case No. 18-cv-02248 (N.D. Cal.). Consumers alleged that the Lash Boost eye serum had harmful side effects linked to the ingredient isopropyl closprostenate (ICP). ICP is a type of synthetic prostaglandin analog, a class of drugs used to manage glaucoma. The consumers alleged a variety of harms which were known side effects of this class of drugs, including changes in eye color, lashes falling out and not growing back, and one plaintiff had her vision damaged. While printed warnings appeared on the outside of the product container and inside on an insert, none referred to the side effects associated with ICP. The complaint referred the court to a warning letter that FDA sent to another maker of cosmetic lash enhancement products that used ICP without including warnings about the possible adverse effects associated with ICP. Based on these allegations, the court found the consumers plausibly alleged violations of five states’ false advertising laws.
Other cases are based on “bare” allegations that product ingredients are harmful without parallel allegations of personal injury (only economic damages are asserted). For instance, in Clark v. Kendo Holdings Inc., Case No. CGC-17-562492 (S.F. Super. Ct.), the consumer alleged that certain Ole Henriksen cosmetic products that contained alpha hydroxy acid (“AHA”) were falsely labeled. AHA in cosmetic products is said to remove the outermost layer of dead skin cells, which produces a short-term cosmetic benefit, but can also increase the damage sun-exposed skin suffers from ultraviolet radiation. The consumer alleged that this causes permanent damage and increases the risk of cancer. He also alleged that the FDA recommends that manufacturers using AHA label their products with a specific sunburn alert, and the products in question did not contain the recommended warning. The parties reached a settlement prior to class certification.
These cases are similar in that the plaintiffs’ attorneys expressly pointed the courts to FDA enforcement actions or advice (not taken) to bolster the complaints. As described in this article, the same has been done with FTC warnings. The attorneys are plainly using FDA and FTC guidance to guide their litigation strategy. Beauty companies’ legal departments should stay abreast of FDA and FTC enforcement actions and advice, as these could be harbingers of litigation trends.
If you’ve ever used a cosmetic product down to the last drop, then you’ve experienced the tipping and tapping involved in trying to get that last bit of product out of the container. This common consumer experience has proven useful in defeating this final false-labeling class action trend.
In Ebner v. Fresh, Inc., 838 F.3d 958, 965-66 (9th Cir. 2016), the plaintiff complained that only a portion of Fresh’s “Sugar” lip product was accessible. Allegedly, “the tube’s screw mechanism permits only 75% of the total lip product to advance past the top of the tube. A plastic stop device prevents the remaining 25% of the product” from advancing, preventing direct application from the tube to the lips. The Ninth Circuit affirmed dismissal of this lawsuit, finding that, “[d]ispenser tubes that use a screw mechanism to push up a solid bullet of lip product are commonplace in the market. The reasonable consumer understands the general mechanics of these dispenser tubes and further understands that some product may be left in the tube to anchor the bullet in place.” Critically, the label disclosed the correct weight of included lip product.
Despite the favorable defense outcome, plaintiffs have not abandoned this litigation theory. Subsequent lawsuits have targeted a medicated lip balm dispensed through a flexible tube, and a purveyor of cosmetics whose products are sold in sealed bottles, often made of glass, dispensed with a pump.
These cases teach two important defense lessons:
- One, it is critical for the product’s label to correctly state the product weight (or amount) included in the container; and
- Two, if not all of the product is easily accessible, this must result from a feature of the container that consumers are reasonably familiar with.
“Slack fill” lawsuits are a related litigation concept. Slack fill is the difference between the actual capacity of a container and the volume of product contained therein. Some slack fill has a legitimate purpose in product packaging, but nonfunctional slack fill is impermissible. If a cosmetic’s (opaque) packaging suggests that there is more product inside than there actually is, a beauty company may find itself facing a slack fill class action.
To conclude, by watching trends in related spaces such as food and beverage, noting FTC and FDA enforcement actions against industry peers, and revisiting product labeling with product managers and the marketing team, beauty companies can help to set themselves up to minimize the risk of litigation.