Duane Morris attorney Kelly Bonner analyzes the recent ‘Clean at Sephora’ case ruling and offers her perspective on the judgment’s potential impact on the clean beauty industry. Read more on the Cosmetics Design website.
Clean Beauty False Advertising Complaint Dismissed by NY Federal Court
As expected (and blogged about previously here), a NY federal court dismissed the “Clean at Sephora” class action complaint, concluding that plaintiff Lindsay Finster “failed to plausibly allege that Sephora misled reasonable consumers when it marketed and sold its ‘Clean at Sephora’ cosmetics,” or that Sephora “made any explicit or implied promises that its ‘Clean at Sephora’ cosmetics were all-natural and free of any potentially harmful ingredients.”
In his fourteen-page opinion, issued today, Judge David Hurd of the U.S. District Court for the Northern District of New York dismissed Finster’s NY GBL §§ 349 and 350 false advertising claims:
Finster’s allegations fall short of the objective standard imposed on GBL §§ 349 and 350 claims. Plaintiff’s complaint leaves the Court guessing as to how a reasonable consumer could mistake the “Clean at Sephora” labeling and/or marketing to reasonably believe that the cosmetics contain no synthetic or harmful ingredients whatsoever. Plaintiff cites to advertising from defendant which states: “consumers who see the Clean seal can be assured that the product is formulated without specific ingredients that are known or suspected to be potentially harmful to human health and/or the environment.” …. Yet, nowhere on the label or in the marketing materials plaintiff cites does defendant make any claim that the products are free of all synthetic or harmful ingredients.
The court also rejected Finster’s breach of warranty claims under the New York Uniform Commercial Code (“UCC”) and Magnuson Moss Warranty Act (“MMWA”) where Finster “cannot point to an express or implicit fact or promise by Sephora that its ‘Clean at Sephora’ cosmetics were free of all synthetic or harmful ingredients.”
The court dismissed Finster’s remaining claims for fraud as insufficiently pleaded because Finster failed to identify an intentionally false material statement, and claim for unjust enrichment .
The court will allow Finster to file an amended complaint on or before March 2029, 2024.
Takeaways
Given Finster’s emphasis on the delta between what the retailer expressly communicated versus what the consumer perceived, it remains to be seen what, if any impact, today’s decision will have on the bigger debate over the meaning of clean beauty. Nevertheless, the decision serves as a reminder that there are competing understandings of clean beauty in today’s cosmetics industry, and that it is important for brands to be transparent about how they are applying the term.
How Beauty Companies Can Mitigate Risks Associated with AI Technology Use
From L’Oreal and Olay to Procter & Gamble and Shiseido, companies across the beauty industry are embracing AI technology with open arms. But what are the risks of incorporating AI technology into business practices, and how can beauty companies protect themselves? […]
For answers to these questions and a closer look at this rapidly growing segment of the beauty industry, CosmeticsDesign spoke to attorneys Kelly Bonner and Agatha Liu of Duane Morris LLP, for their insights and experience. Kelly Bonner’s practice focuses on litigation risk and regulatory issues affecting businesses in the cosmetics and personal care industries, as well as cross-jurisdictional and complex commercial disputes involving FDA-regulated and consumer-branded products, and Agatha Liu has assisted clients with AI-related legal needs.
Continue reading “How Beauty Companies Can Mitigate Risks Associated with AI Technology Use”
Balancing Innovation and AI Regulations in the Beauty Market
Duane Morris’ Agatha Liu and Kelly Bonner were interviewed by Personal Care Insights about the challenges and opportunities beauty companies face while using AI to appeal to younger consumer demographics. Below is an excerpt of the article.
How does the competitive landscape of the beauty industry impact businesses’ use of AI technologies, especially when it comes to targeting younger consumer segments?
Bonner: The highly competitive nature of the beauty industry, with its desire to appeal to younger consumers, is certainly a key driver in beauty brands embracing AI tools to offer enhanced customer shopping experiences.
Can you provide some context about US AI regulations that the beauty industry should know? What do you expect is coming, especially considering the AI Act in the EU?
Liu: The EU AI Act imposes specific obligations on the providers and deployers of so-called high-risk AI systems, including testing, documentation, transparency and notification duties.
To read the full interview, please visit the Personal Care Insights page.
Beauty Is in the AI of the Beholder
Duane Morris partner Agatha Liu spoke with Personal Care Insights on potential risks, including personalization, appearance bias and regulatory compliance, as beauty companies integrate AI technologies.
What steps do you advise beauty companies to take to reduce the legal risks that could arise from implementing AI?
Liu: Very generally, companies should understand the technology they’re adopting and implementing and balance the benefits of the technology against potential legal pitfalls. That means liaising with outside counsel and privacy teams to obtain clarity and mitigate risks. […]
Read the full interview on the Personal Care Insights website.
U.S. House Reps Reintroduce Federal Bill Banning Intentionally Added PFAS in Cosmetics
On November 30, 23, U.S. Representatives Debbie Dingell (D-MI), Brian Fitzpatrick (R-PA) and Annie Kuster (D-NH) reintroduced H.R. 6519–the “No PFAS in Cosmetics Act“–which would require the Food and Drug Administration (FDA) to ban use of “intentionally added per- and polyfluoroalkyl substances” (PFAS) in cosmetics.
According to the Environmental Protection Agency, PFAS are a group of long lasting manufactured chemicals that have been widely used in industry and consumer products since the 1940s because of their useful properties. There are thousands of different PFAS, some of which have been more widely used and studied than others.
The “No PFAS in Cosmetics Act,” which was previously introduced in Congress in June 2021, and referred to the House Committee on Energy and Commerce on November 30, 2023, would amend the Food, Drug, and Cosmetic Act (FDCA) to require FDA to prohibit intentionally added PFAS in cosmetics within 270 days of the bill’s enactment.
Notably, the bill does not define PFAS beyond “intentionally added” perfluoroalkyl and polyfluoroalkyl substances. Nor does the bill differentiate which chemicals in the PFAS group–for example, Perfluorooctanoic Acid (PFOA) and Perfluorooctane Sulfonate (PFOS), two of the most widely used and studied chemicals in the PFAS group–should be banned.
Last year’s Modernization of Cosmetics Regulation Act (MOCRA) requires FDA to publish a report within three years (i.e., by end of year 2025) assessing the use of PFAS in cosmetics and their safety, signaling the possibility of further legislation or regulation, if warranted. Senate appropriators also have directed FDA “to develop a plan outlining research needed to inform regulatory decision-making, including potential development of a proposed rule to ban intentionally added PFAS substances in cosmetics.”
The proposed bill reflects the growing number of state legislatures that have enacted or are considering legislation banning the intentional use of PFAS in cosmetics, as well as other consumer products such as children’s products, menstrual products, cleaning ingredients, dental floss, and textiles. For example:
- In 2021, Maine became the first state to require manufacturers of products with intentionally added PFAS to report to the Maine Department of Environmental Protection (DEP) documenting the purpose and amount of each PFAS compound used. The law aims to phase out the use of PFAS in cosmetics, among other new consumer products, by 2030.
- Starting on January 1, 2025, California and Maryland will prohibit the manufacturing, sale, or delivery of cosmetic products containing certain intentionally added PFAS in cosmetics, including PFOA and PFOS, unless they contain technically unavoidable trace quantities of the substances stemming from impurities of natural or synthetic ingredients.
- Starting January 1, 2025, Minnesota and Colorado will prohibit the sale or distribution of cosmetics (among other consumer products) that contain intentionally added PFAS.
- Beginning January 1, 2025, Washington State will prohibit the manufacturing, knowing sale, or distribution of cosmetic products containing PFAS, defined as “a class of fluorinated organic chemicals containing at least one fully fluorinated carbon atom.”
- Oregon’s Toxic Free Cosmetics Act, which bans the sale or distribution of cosmetics that contain intentionally added PFAS (among other chemicals) is scheduled to take effect on January 1, 2027.
New York, which last year banned the use of intentionally added PFAS in apparel, effective January 1, 2025, is considering several bills that would prohibit the sale or distribution of cosmetics (among other consumer products) that contain intentionally added PFAS.
FDA Updates Instructions for Serious Adverse Event Reporting for Cosmetic Products under MoCRA
On December 14, 2023, FDA published updated instructions for reporting serious adverse events for cosmetic products, as mandated by the Modernization of Cosmetics Regulation Act of 2022 (MoCRA), enforceable starting December 29, 2023.
FDA recommends that industry “responsible persons” as defined by MoCRA report serious adverse event reports for cosmetic products by using the current MedWatch Form 3500A , which is downloadable and fillable at MedWatch: The FDA Safety Information and Adverse Event Reporting Program – Mandatory (PDF).
FDA has updated the form’s instructions to make it easier for the responsible person to complete the form , and requests that the completed form (along with any information to support the report) be submitted to FDA via email at: CosmeticAERS@fda.hhs.gov or by mail to:
FDA CDER Mail Center
Attn: Cosmetics MedWatch reports
White Oak Campus, Building 22, G0207
10903 New Hampshire Ave.
Silver Spring, MD 20993
FDA strongly encourages electronic submission of serious adverse event reports to facilitate efficiency and timeliness of data submission and management for the agency.
FDA is developing a process for submitting electronic mandatory adverse event reports for cosmetics, and will provide more information on the launch date for this process in the coming months.
As a reminder, MoCRA requires that a “responsible person” must report serious adverse events associated with the use of cosmetic products in the United States to FDA within 15 business days, and include a copy of the label on or within the retail packaging of such cosmetic product.
If the responsible person receives medical or other information about the adverse event within 1 year of the initial report to FDA, the responsible person must submit this new information to FDA within 15 business days.
MoCRA defines the “responsible person” as the manufacturer, packer, or distributor of a cosmetic product whose name appears on the label of such cosmetic product in accordance with section 609(a) of the Food, Drug, and Cosmetic Act or section 4(a) of the Fair Packaging and Labeling Act.
Additionally, MoCRA expands the definition of “serious adverse event” ” to include infections or “significant disfigurement (including serious and persistent rashes, second- or third-degree burns, significant hair loss, or persistent or significant alteration of appearance), other
than as intended, under conditions of use that are customary or usual.”
Products will not be considered “injurious” if they cause minor or transient reactions to certain users.
This expanded definition still includes previously identified adverse events such as death; a life-threatening experience; in-patient hospitalization; a persistent or significant disability or incapacity; a congenital anomaly or birth defect; or medical or surgical intervention to prevent any of these outcomes.
New GAO Report Recommends FDA “Strengthen Efforts” to Implement MoCRA
On December 11, 2023, the United States Government Accountability Office (GAO) issued a report calling for FDA to strengthen its efforts to implement the Modernization of Cosmetics Regulation Act (MoCRA), and institute reforms necessary to exercise its new authorities under MoCRA.
The GAO’s report, entitled
“COSMETIC SAFETY: Better
Planning Would Enhance FDA Efforts to Implement New Law,” issues seven recommendations to the Office of the Chief Scientist to implement FDA’s new cosmetic oversight responsibilities:
- Develop an implementation plan for MoCRA — including a timeline with interim steps and interim deadlines — for completing all MoCRA requirements within the statutorily prescribed deadlines.
- Report on key milestones for all MoCRA requirements.
- Develop processes to collect needed data and evidence to measure FDA’s MoCRA implementation efforts against requirements identified in MoCRA.
- Assess the effects of implementing all MoCRA provisions on the current and future workforce.
- Develop a multiyear strategic workforce plan that identifies the needed personnel and capacity, including skills and competencies, to implement all MoCRA requirements.
- Develop a plan to strengthen diversity, equity, inclusion (DEI) and accessibility when recruiting and hiring additional staff to implement MoCRA.
- Adopt effective recruitment and hiring practices for MoCRA implementation, such as customized strategies to recruit highly specialized and hard-to-fill positions.
As previously reported on this blog and elsewhere, MoCRA represents the most significant statutory change to FDA’s ability to regulate cosmetics since the passage of the Federal Food, Drug, and Cosmetic Act (FDCA) in 1938. MoCRA significantly expands FDA’s rulemaking and enforcement authority over cosmetics and creates substantial new compliance obligations for manufacturers, packers, and distributors of cosmetics intended for sale in the United States.
The GAO’s report acknowledges that although FDA has taken important steps in implementing MoCRA, “FDA has not fully addressed leading practices that help ensure the success of agency reforms–in this case, the organizational changes necessary to implement the law.”
The GAO report acknowledges that FDA has undertaken significant organizational changes. In February 2023, FDA proposed moving the Office of Cosmetics and Colors out of its Center for Food Safety and Applied Nutrition (CFSAN) and into the Office of the Chief Scientist to better align the expertise of the agency’s cosmetics subject matter experts with those of the Chief Scientist, who is focused on research, science, and innovation.
However, the GAO noted that FDA has not developed an implementation plan for MoCRA, including interim steps or deadlines; not implemented processes for measuring the results of its efforts against MoCRA’s requirements; and has not developed a strategic workforce to ensure that FDA has the necessary personnel with the requisite skills and competences to exercise its new authorities,
FDA was provided an opportunity to review and comment on the GAO’s report, and generally agreed with its findings and recommendations.
According to FDA’s Chief Scientist, FDA had not developed an implementation plan because FDA had been focused on meeting near-term MoCRA deadlines, such as additional requirements for adequate safety substantiation and adverse event reporting, which take effect December 29, 2023.
Additionally, FDA acknowledged that timely progress in implementing MoCRA and addressing GAO’s recommendations “hinges upon a significant increase in funding.”
Although MoCRA authorized FDA funding levels to increase sharply between 2023 to 2027, with authorized funding levels growing from $14.2 million in FY 2023 to $41.9 million in FY 2025 through 2027, no funding has been specifically set aside for MoCRA implementation. Accordingly, the FY 2024 President’s Budget request includes $5 million for MoCRA implementation, and in particular, hiring new staff. FDA also anticipates requesting funding for additional staff in subsequent fiscal years in order to fully implement MoCRA.
The GAO’s report comes shortly after FDA announced last month that it intended to delay enforcement of MoCRA’s requirements for cosmetic product facility registration and product listing for an additional six months after the December 29, 2023, statutory deadline, or until July 1, 2024.
This delay is intended to provide the personal care products industry additional time to comply with these requirements, and comes in response to industry concerns about the need for additional time to gather information required for facility registration and product listing.
FDA has advised that it will be ready to accept registration and listing information by the statutory deadline of December 29, 2023, and encourages companies to meet that deadline if they are able to do so.
FDA Publishes Updated SPL Implementation Guide with Validation Procedures
Yesterday FDA published an updated Structured Product Labeling (SPL) Implementation Guide with Validation Procedures, including updates to cosmetics product facility registrations and product listings that are now included within the SPL framework.
Yesterday’s release updates the SPL Implementation Guide published by FDA on October 13, 2023, which included facility registrations and product listings within the SPL framework, and described the soon-to-be-released Cosmetics Direct electronic submission portal function as an SPL authoring tool intended to feature user friendly data entry forms, perform initial validations, create and save SPL submissions, and submit the SPL forms to FDA for internal processing.
Noteworthy changes to the required technical conformance criteria include:
-
- Clarification of initial versus updated cosmetic product coding;
- Clarification of coding requirements for human OTC drugs that are also cosmetic products;
- Clarification between “leave-on” versus “rinse-off” product coding, unless the document type is a Cosmetic Facility Registration;
- Clarification of cosmetic product category and cosmetic product facility codes;
- Reclassification of “feminine deodorants” as “other personal cleanliness products”;
- Clarification of market status coding as to discontinued or soon-to-be discontinued cosmetic products; and
- Replacement of “Registrant” information with “Authorized Agent” information.
FDA has not yet announced when it expects the Cosmetics Direct portal to go live, but anticipates it being available for companies to register facilities and list products sometime before year end.
FDA Issues Update On Ongoing Cosmetic Product Facility Registration and Product Listing Under MoCRA
Today, FDA announced that it is effectively pushing back its anticipated October launch date for electronically submitting cosmetic product facility registration and product listing information required by the Modernization of Cosmetics Regulation Act (MoCRA).
MoCRA requires any facility that manufactures or processes cosmetic products intended for sale in the United States—irrespective of whether the facility is located in the United States—to register with FDA, and further requires manufacturers, packers, and distributors of cosmetics intended for sale in the United States to submit to FDA lists of products and ingredient information. The statutory deadline for facility registration and product listing is December 29, 2023.
FDA has previously stated that it expected its newly developed draft electronic submission portal–Cosmetics Direct–to begin accepting submissions in October 2023, in advance of the year-end deadline.
Today, however, FDA advised that it will provide more information on the launch date for electronic submission and paper submission forms “in the coming weeks.”
FDA advised that “[i]ndustry can continue to prepare for registration and listing by reviewing the documents FDA has provided and being proactive in collecting the information required to complete their facility registrations and product listings.”
FDA’s announcement comes after its issuance of draft guidance in August 2023, which, when finalized, will provide recommendations and instructions to assist persons submitting cosmetic product facility registrations and product listings to FDA.
FDA also solicited comments on Cosmetics Direct in its draft form, as well as the proposed paper forms (Forms FDA 5066 and 5067). The comment period is now closed, and FDA is in the process of obtaining approval from the Office of Management and Budget (OMB) in the Executive Office of the President, under the Paperwork Reduction Act for the proposed collection of registration and listing information, as well as concluding beta-testing of Cosmetics Direct.
In October 2023, FDA also announced publication of the Structured Product Labeling (SPL) Implementation Guide with Validation Procedures, which can be used to develop SPL authoring tools and generating SPL-formatted submissions for cosmetic product facility registrations and product listings.
FDA will continue to provide updates on its MoCRA rollout, and until then, stay tuned for additional MoCRA updates.