Spike in false advertising legal challenges to the cosmetics industry
L’Oréal, Estee Lauder, and Maybelline are just some of the companies that have been targeted. Recent suits have challenged lash-enhancing claims for mascara, anti-aging claims for lotions, “lasting” statements about lipstick and foundation, and “natural” claims for hair care products.
These challenges resemble those the food industry has faced in recent years. For example, class action complaints in California have challenged the word “natural” to describe both food products such as yogurt and health and beauty products such as shampoo. The cosmetics and food industries can learn a great deal from each other about how to stay afloat during these waves of consumer class actions.
Continuously reassess risk.
For both foods and cosmetics, false advertising claims can quickly go viral. In 2013, California saw several cases alleging that the phrase “evaporated cane juice” is a misleading term for sugar. No two cases were identical but all involved similar legal theories.
Likewise, anti-aging claims ran rampant after a class action was lodged against L’Oréal’s Genefique products in September 2012. Before long, Avon and Estee Lauder were facing a similar challenge, and suits involving anti-aging claims continue to be filed.
Notably, for both evaporated cane juice and anti-aging claims, FDA action alerted plaintiffs’ lawyers to the potential for class action. In 2009, FDA issued guidance on the use of “evaporated cane juice.” In 2012, FDA issued warning letters to L’Oreal and Avon about anti-aging claims.
These examples are a reminder that companies must continuously reevaluate their advertising in light of issues coming before judges and regulators, and stay apprised of litigation trends to anticipate the evolution of consumer class actions.
Prepare for the possibility of nationwide litigation.
Cosmetics companies should maintain a fifty-state perspective on their advertising. Beyond standard consumer protection statutes, claims about cosmetics may implicate distinct state laws such as the California Organic Products Act (“COPA”). Although COPA usually applies to food, plaintiffs successfully invoked COPA in a challenge to Jason and Avalon Organic cosmetics, marketed by the Hain Celestial Group.
Investing the time and resources to develop an overarching strategy for multi-district litigation may pay a hefty dividend. On the whole, courts seem more eager to consolidate cosmetics cases than food cases. The cases against L’Oréal and Avon over anti-aging claims were each combined into multi-district litigation.
Attack the complaint in federal court.
Federal court is often the best option for corporate defendants because federal standards and requirements for class certification are generally tougher than those in state court. Under the Class Action Fairness Act, many consumer class actions can be removed to federal court.
Federal pleading standards require plaintiffs to allege facts sufficient to state every element of their claims. In consumer fraud cases, these allegations must be detailed enough to show the “who, what, where, when, and how” of the alleged fraud. Recently, the Second Circuit upheld dismissal of consumer fraud claims involving the Clinique Repairware line because the plaintiff failed to allege those details.
Gear up to defeat the class.
To sustain a class action, plaintiffs have to show that it would be better to proceed as a class rather than as individuals, and that the named plaintiff adequately represents the class. These have proven to be significant hurdles for plaintiffs in cosmetics cases. Estee Lauder, Maybelline, and Neutrogena are among the companies that have defeated class certification. Strong expert reports that undermine plaintiffs’ claims are often key.
No company can predict whether or when a wave of consumer class actions will reach its shores, but being alert to the rising tide of false advertising class actions may buffer the impact for cosmetics companies.
Amy Lally is a partner in Sidley Austin LLP’s Los Angeles office, Robin Wechkin is counsel in Sidley’s Seattle office and Naomi A. Igra is an associate in the firm’s San Francisco office. The views expressed in this article are exclusively those of the authors and do not necessarily reflect those of Sidley Austin LLP and its partners.
