2023 Regulatory Roundup: MoCRA

Updated deadlines, the announcement of a newly developed draft submission portal, and the release of several different draft guidance documents are just some of the developments that have occurred this year regarding MoCRA’s implementation of cosmetic safety regulations. As 2023 draws to a close, CosmeticsDesign spoke to attorney Kelly Bonner to review what’s happened so far with the Modernization of Cosmetics Regulation Act (MoCRA) and to understand what’s ahead.

To read the full text of this article, please  visit the CosmeticsDesign website.

Retailers’ Clean Beauty Claims Fuel Consumer Doubts and Lawsuits

In the beauty world, a “clean” product brings to mind one or more of the following features: sustainable, nontoxic, ethically made, cruelty-free, or even vegan.

Such broad associations speak to the appeal of “clean beauty” products: They can make consumers—especially climate-conscious Gen Z and millennials—feel like they’re making the better choice for themselves and the planet. The “clean beauty” market, which is forecast to expand to $15.3 billion by 2028, has grown from its roots in luxury and independent brands to take over shelves of products at mass-market retailers like Target.

But companies’ self-imposed definitions of what they consider to be “clean” has led to doubts about industry claims, fueling consumer-led class actions and raising the legal risk for companies trying to capitalize on product demand. While regulators are eyeing potentially misleading environmental advertising—and some beauty brands are even hoping they’ll clarify what’s “clean”—it’s the courts that will likely be the first to decide when use of the trendy term crosses into a type of greenwashing. […]

Still, the risk of regulatory enforcement for “clean” claims is fairly low, and it’s unlikely that the FTC will home in on the term for now, said Kelly Bonner, an attorney at Duane Morris who advises companies on consumer litigation and enforcement risks, including those in the beauty industry.

“I don’t think the FTC is going to focus so much on ideas of ‘clean’ or ‘natural’ given that it hasn’t defined these terms and it’s still unclear as to what these mean,” she said. “It’s more likely that it will get worked out in consumer protection suits and the courts.”

To read the full text of this article, please visit the Bloomberg Law website.

 

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.

 

 

 

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).

 

Introducing Cosmetics Direct – FDA’s New Electronic Portal for Facility Registration and Product Listing of Cosmetic Product Facilities and Products Under MoCRA

Fashion Retail Blog

Continuing its implementation of the Modernization of Cosmetics Regulation Act’s (MoCRA), and following on the heels of FDA’s Draft Guidance on Facility Registration and Product Listing (previously discussed here), on September 15, 2023, FDA announced its newly developed draft electronic submission portal, Cosmetics Direct, to assist persons submitting cosmetic product facility registrations and product listings under newly added Section 607 of the federal Food, Drug and Cosmetic Act (FD&C Act).

Draft screenshots of the electronic system, including example submissions, are available for review and comments, along with an interim Federal Register Notice, announcing the new system.

What’s New

Cosmetics Direct includes the required registration and listing submission information in a standard electronic format to help users organize their registration and listing submissions to include the information needed for FDA. Cosmetics Direct also is intended to give users access to prior Cosmetic Direct registrations and listing submissions.

Cosmetics Direct can be accessed through the Welcome to FDA Direct webpage, which will provide short background information about Cosmetics Direct. New users will need to create an account.

Users who intend to submit information about cosmetics and drugs may create a functional joint account with Cosmetics Direct and CDER Direct, FDA’s portal for drug submissions, which is intended to streamline the submission process.

Notable system features include:

  • Users will be able to create initial submissions using blank forms, or importing an FDA-accepted SPL stored in a valid XML zip file. SPL (Structured Product Labeling) is a document markup standard approved by Health Level Seven (HL7) and adopted by FDA as a mechanism for exchanging product and facility information. Importing an existing Facility Registration or Cosmetic Product Listing SPL will be beneficial for bulk submission.
  • By selecting a country outside the U.S. as a facility location, users will be prompted to identify U.S. Agent contact information.
  • Users will be prompted to sign a confirmation statement, attesting to the veracity of the information submitted, as well as additional contact information for any authorized agents submitting the information.
  • Users will be promoted to save and validate any new submissions, be able to view the status of registrations and listings, and be notified if system detects any errors through a Validation Failure message. The system will provide a list of errors that require fixing before resubmitting.
  • Users may also upload and submit existing Facility Registration or Cosmetic Product Listing SPL, and have the option to clone successfully submitted SPLs as starting points.
  • Users will be able to view the status and details of all submissions on the Cosmetics Direct homepage.

FDA strongly encourages electronic submissions to facilitate efficiency and timeliness of data submission and management for the agency; however, those who wish to submit paper forms still have the option to do so via FDA Forms 5066 and 5067.

As of March 2023, FDA discontinued use of Forms FDA 2511, 2512, and 2512a, previously used for voluntary registration activities, and stopped accepting new submissions to the Voluntary Cosmetic Registration Program (VCRP).

Takeaways

FDA’s announcement of Cosmetics Direct comes on the heels of its recent draft guidance for facility registration and product listing, clarifying, among other things, who must register and list, when, and what must be submitted.

FDA has stated that it expects its new portal to begin accepting submissions sometime in October 2023, in advance of the December 29, 2023 statutory deadline for facility registration and product listing.

 

Post-MoCRA Regulatory Compliance Checklist for Beauty and Personal Care Products

MoCRA, Pub. L. No. 117-328, represents the first major statutory change to the authority of the Food and Drug Administration (FDA) to regulate cosmetics since the Food, Drug, and Cosmetics Act (FDCA), 21 U.S.C. § 361 et seq.,
in 1938 and the Fair Packaging and Labeling Act (FPLA), 21 C.F.R. § 701.3, in 1966.

This checklist outlines key regulatory compliance considerations that are specific to personal care products marketed in the United States following the enactment of the federal Modernization of Cosmetics Regulation Act (MoCRA) on December 23, 2022.

To read the full text of this Lexis Nexis Practical Guidance Checklist by Duane Morris attorneys Driscoll UgarteRick BallAlyson LotmanKelly Bonner and Coleen Hill, please visit the firm website.

Sephora Disputes “Misleading” Allegations in Clean Beauty Class Action Lawsuit

Introduction

On March 2, 2023, Sephora filed its reply in support of its motion to dismiss proposed class action claims that its “Clean at Sephora” program was false and misleading, disputing allegations that a significant portion of relevant, reasonable consumers were or could be misled about what ‘Clean at Sephora’ means, and that the ingredients permitted by Sephora’s program were potentially harmful to humans.

Sephora’s reply (presumably) concludes preliminary briefing in what has become a closely-watched lawsuit in the beauty and wellness industry over the meaning of the term “clean beauty.”[1] Absent clear regulatory guidance from the FDA and the FTC, companies’ claims involving the terms “clean,” “natural,” “nontoxic,” or “organic” have been scrutinized in social media, and by an increasingly active and organized plaintiffs’ bar.

While it remains to be seen how the court will decide the “Clean at Sephora” case, companies should continue expect more litigation in this area, as what it means for beauty products to be clean, natural, nontoxic, or safe, remains the subject of intense debate. 

Case Background

As explained in our previous publications (here, here, and here), the market for clean beauty is expected to reach an estimated $11.6 billion by 2027.[2] But absent clear regulatory guidance about what it means for beauty products to be “clean,” “natural,” “nontoxic,” or “safe, promoting products as “clean” can carry significant regulatory risks, and leaves the industry ripe for class action litigation.

Sephora launched its “Clean at Sephora” program in 2018.[3] To qualify for inclusion in the program, which spans across various product categories, products must be formulated without certain common cosmetic ingredients—such as parabens, sulfates SLS and SLES, phthalates, formaldehyde and more—that are linked to possible human health concerns.[4]

On November 22, 2023, Plaintiff Lindsay Finster filed a proposed class action lawsuit in the U.S. District Court for the Northern District of New York, alleging that products advertised as part of the “Clean at Sephora” program contain ingredients that are “inconsistent with how consumers understand” the term “clean.”[5]

According to plaintiff, consumers understand the definition of “clean” beauty to mean the dictionary’s definition of “clean”: “free from impurities, or unnecessary and harmful components, and pure.”[6] Thus, to be considered “clean” in the context of beauty, plaintiff alleged that products should be “made without synthetic chemicals and ingredients that could harm the body, skin or environment.”[7] But, as plaintiff contended, “a significant percentage of products with the ‘Clean at Sephora’ [seal] contain ingredients inconsistent with how consumers understand the term.”[8] Consequently, plaintiff alleged that the “Clean at Sephora” program “misleads consumers into believing that the products being sold are “natural,” and “not synthetic” and to paying a price premium based on this understanding.”[9]

Plaintiffs alleged potential class action violations of §§ 349 and 350 of New York’s General Business Law (“NY GBL”), as well as multi-state consumer protection statutes, and breach of express and implied warranty, the Magnuson Moss Warranty Act, fraud, and unjust enrichment claims.[10]

Sephora’s Motion to Dismiss

On February 2, 2023, Sephora moved to dismiss plaintiff’s complaint, arguing that “[i]t is not plausible that reasonable consumers are or could be confused by the ‘Clean at Sephora’ program” for several reasons.[11]

First, Sephora argued that plaintiff relied on unsupported and conclusory allegations about consumers understanding of the word “clean.”[12] While plaintiff argued that consumers understood the definition of “clean” beauty to mean the products made without synthetic chemicals and or potentially harmful ingredients, Sephora countered that plaintiff failed to plead any facts showing that a significant portion of relevant reasonable consumers could be misled by Sephora’s claims into believing that the “Clean at Sephora” program consisted of only natural products and ingredients.[13] As Sephora noted, words like “natural,” “organic,” and the like never appeared on the label or elsewhere.[14] Instead, plaintiff relied upon “on selectively quoted blog posts and webpages from small businesses, which not only lack reliability and authority but are presented without evidence that any significant number of consumers have even read them, let alone agreed with them.”[15]

Second, Sephora argued that plaintiff mischaracterized Sephora’s representations as being about the kinds of ingredients included in the program, rather than excluded.[16] Thus, plaintiff was attempting to turn “Clean at Sephora” into “Natural at Sephora”—claims that Sephora did not make.[17] On the contrary, Sephora’s marketing for the program focused on the exclusion of certain ingredients linked to potential human health outcomes.[18] Because Sephora made no representations about the products or ingredients included, it argued that it could not mislead consumers about the safety of included products or ingredients in the program.[19] Moreover, plaintiff failed to plausibly allege that any of the ingredients included in the program were potentially harmful, relying instead on a series of unattributed and unsubstantiated blog posts.”[20]

Finally, Sephora rejected plaintiff’s contention that it forced consumers to scrutinize product lists in contradiction of the Second Circuit’s 2018 decision in Mantikas v. Kellogg, which prohibits the use of ingredient lists on the side of packaging to clarify otherwise misleading presentations where plaintiff failed to identify any misleading conduct by Sephora.[21]

Sephora also rejected plaintiff’s efforts to seek relief under other unspecified consumer protection statutes, arguing that plaintiff failed to plead how the unspecified consumer protection statutes were similar to the NY GBL,[22] and disputed plaintiff’s breach of warranty, consumer fraud, and unjust enrichment claims as duplicative of plaintiff’s NY GBL claims, or otherwise contingent on the same erroneous premise—that the ‘Clean at Sephora’ label is misleading—and thus, equally deficient.[23]

In opposition to Sephora’s motion to dismiss, plaintiff reiterated that it was sufficiently plausible that reasonable consumers would perceive the “Clean at Sephora” as excluding synthetic ingredients, and that “Clean at Sephora” meant free from potentially harmful ingredients.[24] Plaintiff further contended that resolution of her multi-state claims was not ripe until the class certification stage,[25] and that Sephora’s advertising campaign created an express warranty that “Clean at Sephora” products were formulated without potentially harmful ingredients.[26]

In its reply, Sephora argued that reasonable consumers could not interpret the phrase “Clean at Sephora” as limited to only “natural” ingredients when Sephora “prominently explains, in plain terms, exactly what it means by the phrase: ‘formulated without parabens, sulfates sodium lauryl sulfate (SLS) and sodium laureth sulfate (SLES), phthalates, mineral oils, formaldehyde, and more.’”[27] Sephora also refuted plaintiff’s efforts to characterize the program’s inclusion of the phrase “and more” into an impression that synthetic ingredients were excluded along with the listed ingredients, noting that plaintiff alleged no facts to support her contention that reasonable consumers shared that impression. [28]

Finally, Sephora rejected what it described as plaintiff’s efforts to conflate the meaning of the word “clean” with “non-synthetic” or “natural,” or otherwise assert that because products are not “natural,” they were not safe, noting that not all synthetic ingredients were unsafe, while not all natural ingredients were safe. [29]

Takeaways

Although the recent Modernization of Cosmetics Regulation Act (MoCRA), which was passed by Congress on December 23, 2022, significantly expands FDA’s authority over cosmetics, it provides comparatively little guidance on the kinds of marketing or promotional claims brands can make about the safety or purity of their products. Consequently, these issues are expected to remain the subject of intense scrutiny and costly litigation.

It remains to be seen how the court will rule in the “Clean at Sephora” case. Nevertheless, this case remains closely-watched within the beauty and wellness industry, and we will continue to update you as the case develops.

[1] See Sephora’s Reply in Support of Motion to Dismiss (“Reply”) at 1, Finster, et al, v. Sephora USA, Inc., No. 6:22-cv-1187 (GLS/ML) (N.D.N.Y.), Mar. 3, 2023 (Dkt. No. 18).

[2]Cosmetics Companies Invite Legal Risks With ‘Clean’ Marketing,” Law360, September 1, 2022

[3] https://www.gcimagazine.com/brands-products/news/news/21853297/sephora-launches-clean-at-sephora

[4] Sephora Clean Beauty Guide, https://www.sephora.com/beauty/clean-beauty-products

[5] Complaint (“Compl.”) at ¶ 15, Finster, et al, v. Sephora USA, Inc., No. 6:22-cv-1187 (GLS/ML) (N.D.N.Y.), Nov. 11, 2022 (Dkt. No. 1).

[6] Id. at ¶ 2.

[7] Id. at ¶ 2-4.

[8] Id. at ¶ 15.

[9] Id. at ¶ 35.

[10] Id. at 6-10.

[11] Motion to Dismiss at 1, Finster, et al, v. Sephora USA, Inc., No. 6:22-cv-1187 (GLS/ML) (N.D.N.Y.), Feb. 2, 2022 (Dkt. No. 6-1).

[12] Id. at 7-8.

[13] Id.

[14] Id.

[15] Id. at 9.

[16] Id. at 1.

[17] Id. at 7-8.

[18] Id.

[19] Id. at 10-11.

[20] Id. at 11-12.

[21] See 910 F.3d 633, 636–37 (2d Cir. 2018).

[22] Id. at 14.

[23] Id. at 15-19. Sephora also advanced several pleading deficiency arguments, including plaintiff’s failure to allege the product was advertised as “free from defects” as required by the Magnuson Moss Warranty Act.

[24] See Opposition to Sephora’s Motion to Dismiss (“Opp.”) at 4 (Feb. 23, 2023) (Dkt. No. 15).

[25] Id. at 7.

[26] Id. at 8.

[27] See Reply at 3.

[28] Id.

[29] Id. at 4.

Duane Morris Attorney Kelly Bonner Talks Cosmetics Regulations and More on This Week’s Episode of “Fat Mascara” Beauty Podcast

Join Duane Morris attorney Kelly Bonner as she discusses America’s complex system of cosmetics regulation on the award-winning beauty podcast, Fat Mascara, hosted by Jennifer Sullivan (beauty columnist, The Cut) and Jessica Matlin (beauty director, Moda Operandi).

Links to Episode 474: How Cosmetics Are Regulated, with Kelly Bonner, below

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Congress Overhauls FDA Cosmetics Authority in Year-End Appropriations Bill

On December 23, 2022, Congress significantly expanded the FDA’s regulatory authority over cosmetics as part of its year-end Consolidated Appropriations Act of 2023, the first major statutory change to the Food, Drug and Cosmetics Act regarding the regulation of cosmetics since 1938. Passed with bipartisan support and garnering industry approval, the Modernization of Cosmetics Regulation Act contains a number of key provisions, requirements and dates for compliance.

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

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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