Sephora Disputes “Misleading” Allegations in Clean Beauty Lawsuit

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.” 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.

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. 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. 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.

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.”

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.” 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.” But, as plaintiff contended, “a significant percentage of products with the ‘Clean at Sephora’ [seal] contain ingredients inconsistent with how consumers understand the term.” 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.”

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.

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.

First, Sephora argued that plaintiff relied on unsupported and conclusory allegations about consumers understanding of the word “clean.” 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. As Sephora noted, words like “natural,” “organic,” and the like never appeared on the label or elsewhere. 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.”

Second, Sephora argued that plaintiff mischaracterized Sephora’s representations as being about the kinds of ingredients included in the program, rather than excluded. Thus, plaintiff was attempting to turn “Clean at Sephora” into “Natural at Sephora”—claims that Sephora did not make. On the contrary, Sephora’s marketing for the program focused on the exclusion of certain ingredients linked to potential human health outcomes. 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. 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.”

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.

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, 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.

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. Plaintiff further contended that resolution of her multi-state claims was not ripe until the class certification stage, and that Sephora’s advertising campaign created an express warranty that “Clean at Sephora” products were formulated without potentially harmful ingredients.

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.’” 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.

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.

MORE TO COME

Coty Changing The Definitions Of Beauty

One of the world’s largest beauty companies with a portfolio of iconic brands across fragrance, color cosmetics, skin and body care, launches a new campaign to change the dictionary definitions of beauty. The #UndefineBeauty campaign recognizes that the current English language definitions of the term ‘beauty’ are outdated and no longer reflect the values of today’s society. Specifically, the examples cited under the current entries for ‘beauty’ across the leading English dictionaries are both limiting and exclusive.

Sue Y. Nabi, Coty’s CEO, has written an open letter to the major Dictionary houses, co-signed by the Company’s Executive Committee and Senior Leadership Team, highlighting the outdated nature of their definitions, and their need for review.

Sue Y. Nabi said, “Seen through the lens of today’s society and values, the definition of beauty hasn’t aged well. Of course, not all people are impacted by, or feel excluded by these definitions. But the implicit ageism and sexism in the examples were born in a different time. We believe it’s time to bridge the gap – time to bring the definition to where society is today. By changing the definition, if more people feel included – feel beautiful – there will be a ripple effect which touches us all.”

“At Coty, we believe that no one can control or dictate what is, or is not, beautiful,” said Sue Y. Nabi. That is why the campaign to #UndefineBeauty aims to ‘undefine’ rather than simply ‘redefine’ beauty, so that no one feels excluded by the definition or examples that accompany it. Founded in Paris in 1904, Coty is one of the world’s largest beauty companies with a portfolio of iconic brands across fragrance, color cosmetics, and skin and body care. Coty serves consumers around the world, selling prestige and mass market products in more than 130 countries and territories. Coty and our brands empower people to express themselves freely, creating their own visions of beauty; and we are committed to making a positive impact on the planet.

Clean Beauty…or Dirty Business?

The “clean” beauty movement is picking up steam. Health-conscious consumers are paying more attention to ingredients applied to their bodies and are looking for products made without harmful chemicals. In response to the demand, some popular cosmetics companies are now offering so-called, “clean” beauty lines. Companies considering joining this trend should take into account the substantial legal risks.

A look at the food industry’s use of the adjectives like “natural”, “clean”, “simple,” and “wholesome” illustrates the kinds of risks the beauty industry may face. When consumers began paying more attention to ingredients, companies began marketing their products with these health driven adjectives. However, this led to a barrage of class action lawsuits for false advertising under state consumer protection laws as plaintiffs lawyers argued that the claims made on the front of the label did not match the ingredients on the back of the label.

The food industry started to use the word “clean” after the use of “natural” resulted in a barrage of consumer lawsuits. As it turned out, however, the alternative claim also resulted in consumer class action lawsuits. The theory behind these suits is that “clean” is just a synonym of “all-natural” and signifies to consumers the absence of any synthetic chemicals. Similarly, it is argued that “wholesome” and “simple” are misleading consumers as to the real nutritional value of food products. This is at best an idiosyncratic view, not backed by legitimate consumer evidence. However, merely making the allegation is sometimes sufficient to survive a motion to dismiss, where the court must consider whether “no reasonable consumer” could share the plaintiff’s alleged interpretation.

Adding to the complexity is the difficulty of placing a sufficiently prominent and clear explanation, or definition, for such adjectives in an unavoidable location where the plaintiff cannot reasonably allege she failed to notice it. Courts have sometimes held that consumers need not be expected to turn around the bottle or package to read textual information on the back label before purchase.

We have seen false advertising claims creeping into the skincare industry as well, and this, coupled with the history of the food industry, should put the beauty industry on notice of the legal risks. For example, just last month, a lawsuit was filed in California State Court against the makers of Coppertone sunscreen. Prescott, et al. v. Bayer Healthcare Pharmaceuticals Inc., et al., No. 5:20-cv-00102 (N.D. Cal. filed Jan. 3, 2020). The suit alleges that Coppertone deceived consumers by labeling certain sunscreens as “mineral-based” when in fact chemicals make up a significant portion of its active ingredients. The plaintiff’s theory is that the headline “mineral-based” claim suggests to consumers that the product protects skin from sun damage exclusively with minerals.

In the “all-or-nothing” world of the plaintiffs’ lawyers, any ingredient call-out or characterization creates legal peril by negative implication. If the label says “clean,” the product can contain no synthetic substances. If the label says “plant-based,” the product should not have any synthetic or animal components – even if trivial in amount. Plaintiffs are routinely sending products to labs for rote chromatographic analysis, and the tiniest detectable amounts of disfavored chemicals can trigger lawsuits. In California, the consumer protection laws include California’s Unfair Competition Law, False Advertising law, and the Consumer Remedies Act. Companies making sales in California also need to be mindful of Proposition 65 which requires warning labels on products that contain any enumerated chemicals identified by the State to cause cancer, birth defects, or reproductive harm.

Since there are no regulations mandating the definition of such descriptive terms on cosmetic labels, these definitions (e.g., “clean”) can vary from company to company. The beauty industry should heed caution when using “clean” beauty claims. In order to avoid consumer confusion— and ultimately litigation— companies should define “clean” in a way that they can, and do, meet, and that definition should be available at the point of sale.

Professional Salon Products- Ingredient Disclosure Victory!

On September 14th, California Governor Jerry Brown signed into law the Professional Salon Products Labeling Act (AB 2775). Previously, ingredient labels were not required on professional salon products, leaving workers and consumers in the dark about harmful ingredients. Thanks to AB 2775, companies that sell professional nail, hair, and beauty salon products in California are now required to list ingredients on product labels. As companies move to comply with this new labeling law, the impact will be felt across the country. About time everyone!