consumer fraud – Fashion, Retail and Consumer Branded Products

March 15, 2024March 15, 2024 by Kelly A. Bonner

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.

October 24, 2023 by Kelly A. Bonner

New York Federal Court Dismisses Putative Class Action Suit Alleging Deceptive Marketing Of PFAS-Containing Mascaras

On September 30, 2023, the US District Court for the Southern District of New York dismissed a putative class action in which plaintiffs claimed they would not have purchased or paid a premium price for certain waterproof mascaras had they known of the presence of per- and polyfluoroalkyl substances (“PFAS”).

In a 22-page opinion, the court held that plaintiffs failed to sufficiently allege that the mascaras they individually purchased actually contained PFAS, or that there was a material risk that they did; thus, plaintiffs could not establish an actual injury.

The court dismissed plaintiffs’ claims under Sections 349-50 of New York’s General Business Law, as well as a host of other state consumer protection laws, and common law claims for unjust enrichment, breach of express and implied warrant, and fraudulent concealment.

Notably, the court rejected plaintiffs’ attempts to establish actual injury by relying on a 2021 study conducted by researchers at the University of Notre Dame, which screened 231 cosmetic products, including lip products, eye products, foundations, face products, mascaras, concealers, and eyebrow products, for their total fluorine levels to identify the possible presence of PFAS, as well as specially commissioned third party analysis of the waterproof mascaras purchased by plaintiffs.

The court concluded that the mascaras purchased by plaintiffs weren’t analyzed in the Notre Dame Study; moreover, the court identified “glaring shortcomings” with plaintiff’s’ third party analysis, noting that the study “does not allege, for instance, how many products were tested … whether all those tested products revealed the presence of PFAS, and if not, what percentage of the products had PFAS.”

Although plaintiffs are seeking to amend their complaint to revive their claims, the takeaway here is, following the U.S. Supreme Court’s decision in TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 2207 (2021), absent an actual injury, plaintiffs will not have standing to pursue class action claims.

It’s important to note that hovering in the background of cosmetics-related PFAS litigation is the recent Modernization of Cosmetics Regulation Act (“MoCRA”), which overhauled federal regulation of cosmetics in the United States. Among its many new rulemaking requirements, MoCRA requires FDA to publish a report no later than 2025 assessing the use of per- and polyfluoroalkyl substances (PFAS) in cosmetics and safety risks associated with such use. It remains to be seen what effect FDA’s report will have on putative PFAS class actions in the beauty and wellness space, and what, if any, defenses cosmetics companies can assert based on FDA’s analysis.

The case is Zaida Hicks, et al. v. L’Oréal USA Inc., No. 22-1989, (S.D.N.Y. Sept. 30, 2023).

November 18, 2022November 19, 2022 by John M. Simpson

Activist Greenwashing Case In D.C. Runs Aground

“Greenwashing,” a topic of frequent discussion, actually has dictionary definition. According to Merriam-Webster, greenwashing is “the act or practice of making a product, policy, activity, etc., appear to be more environmentally friendly or less environmentally damaging than it really is.” A trial court in the District of Columbia recently dismissed a greenwashing case brought by an environmental activist group against a major beverage producer, making some interesting findings in the process. Earth Island Institute v. Coca-Cola Co., No. 2021 CA 001846 B (D.C. Super. Nov. 10, 2022). Continue reading “Activist Greenwashing Case In D.C. Runs Aground”

March 22, 2022 by Duane Morris

INFORM Consumer Act Designed to Curb Counterfeits

In March 2021, the Senate reintroduced a revised version of a bill calling for online retailers to publish specific, verified information concerning high-volume third-party sellers of consumer products for their customers. The Integrity, Notification and Fairness in Online Retail Marketplaces (INFORM) for Consumers Act is directed toward putting an end to the online sale of stolen, counterfeit and unsafe consumer products.

In particular, online marketplaces that include high-volume third-party sellers would be required to authenticate vendors’ identities through essential identification and contact information in the hopes of preventing not only anonymous online sales of counterfeit goods, but also preventing organized retail crime rings from stealing from stores and reselling items online.

To read the full text of this Duane Morris Alert, please visit the firm website.

March 4, 2021 by Michelle Pardo

Vanilla is the New Flavor of Food Mislabeling Class Actions

By Ashley Barton

Consumer mislabeling class actions are no novelty in the California food industry, thanks to the state’s trio of consumer protection laws. Plaintiffs have their choice between California’s Consumer Legal Remedies Act (Cal. Civ. Code §§1750, et seq.), False Advertising Law (Cal. Bus. & Prof. Code §§17500, et seq.), and Unfair Competition Law (Cal. Bus. & Prof. Code §§17200, et seq.) when alleging that similarly situated buyers are misled by false advertising on a product’s label. The number of these suits specifically pertaining to flavoring of food and beverage products has risen dramatically in the last several years. Continue reading “Vanilla is the New Flavor of Food Mislabeling Class Actions”