ACI's Legal, Regulatory and Compliance Forum on Cosmetics
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ACI’s Legal, Regulatory and Compliance Forum on Cosmetics February 20-21, 2014 Mitigating the Risk of and Defending Cosmetics Products Liability and False Advertising Class Actions February 20, 2014 4:00 p.m. Daniel R. Dwyer Anca Cornis-Pop Dennis S. Ellis Partner Senior Counsel, Global Partner, Litigation Kleinfeld, Kaplan and Marketing Department Becker, LLP Avon Products, Inc. Paul Hastings, LLP Tweeting about this conference? #ACICosmetics 10 Suggestions for Aggressive but Defensible Cosmetic Claims Daniel R. Dwyer KLEINFELD, KAPLAN & #ACICosmetics KKB BECKER LLP 1. Use “appearance” claims • To reduce the risk that your claim will be interpreted as a drug claim, wording such as – –“Helps minimize the appearance of lines and wrinkles” is better than –“Helps minimize lines and wrinkles” Daniel R. Dwyer KLEINFELD, KAPLAN & #ACICosmetics KKB BECKER LLP 2. Avoid high-risk claims • Genetic claims • Collagen claims • Comparisons to the effects of Botox or face-lift surgery • Names of diseases Daniel R. Dwyer KLEINFELD, KAPLAN & #ACICosmetics KKB BECKER LLP 3. Define your terms • For example – – “Repairs” • “Repairs better than the leading conditioner” means smoothes, reduces damage at the tips, strengthens and shines when that’s what the ad says or shows » Unilever, NAD Case 5057 (7/09) – “Natural” • “Natural shampoo” means that specific natural ingredients are added and certain ingredients are excluded when that’s what the label says – Note: No reasonable consumer would think that a shampoo is “existing in or produced by nature” » Balser et al. v. Hain Celestial Group, cv-13-05604-R (C.D. Cal., Dec. 18, 2013) (appealed, Jan. 13, 2014) – “Organic” – “Organic” means certified as organic under USDA’s National Organic Program, if that’s what the label says Daniel R. Dwyer KLEINFELD, KAPLAN & #ACICosmetics KKB BECKER LLP 4. If you make a claim about a specific level of performance, make sure your data support that level • For “up to 45%” reduction in appearance of dark circles, testing on an ingredient could not be extrapolated to the marketed cosmetic – IQ Cosmetics, NAD Case 4666 (5/07) • “[Q]uantified claims of product performance require a level of substantiation that is very specific to the advertised product’s precise formulation, application and measurable performance.” – P&G, NAD Case 4266 (1/05). Daniel R. Dwyer KLEINFELD, KAPLAN & #ACICosmetics KKB BECKER LLP 5. For claims that are “puffery,” avoid specific details • “No more dark circles and crow’s feet” is not puffery in a context of claims about dramatic skin changes, where “the implied message of eradication was a reasonable consumer takeaway.” – IQ Cosmetics, NAD Case 4666 (5/07). • But “Erase fine lines! Erase crow’s feet! Erase age spots!” was puffery in an ad where only 14% of consumers took away total elimination of imperfections. – Maybelline, NAD Case 5241 (11/10). Daniel R. Dwyer KLEINFELD, KAPLAN & #ACICosmetics KKB BECKER LLP 6. If you only have substantiation for ingredients, limit claims to ingredients • “… [A]n advertiser … may not extrapolate testing results on a particular ingredient contained in its product to substantiate performance claims for its product when … it contains other ingredients that could impact upon product performance.” • However, the evidence might support more limited claims that “an ingredient in the product and not the product … itself [may] … potentially reduce under eye puffiness.” – Skin Doctors, NAD Case 4627 (2/07). Daniel R. Dwyer KLEINFELD, KAPLAN & #ACICosmetics KKB BECKER LLP 7. Make sure your substantiation is scientifically defensible • The test product and subjects are representative of the actual product and consumers • The protocol is consumer-relevant • The test is blinded and well-controlled • Results are statistically significant • Comparative tests are head-to-head or otherwise reflect an accurate comparison Daniel R. Dwyer KLEINFELD, KAPLAN & #ACICosmetics KKB BECKER LLP 8. Match your claims to your substantiation • Objective scientific claims require a clinical study, not an in-home consumer use study • BreathAsure, NAD Case 3151 (11/94) • Subjective claims (e.g., “soothing”) require consumer perception testing, not a clinical study • Kimberly Clark, NAD Case 3574 (8/99) • “Clinically proven” claims require clinical proof Daniel R. Dwyer KLEINFELD, KAPLAN & #ACICosmetics KKB BECKER LLP 9. Use disclosures to clarify the limitations of claims • A disclosure may qualify or limit a claim (so as to avoid giving a misleading impression) • But a disclosure may not directly contradict a claim – For example, where the claim conveys that an antiperspirant leaves no perceptible residue on clothes, a demonstration that shows perceptible residue “contradicts instead of qualifies the main message,” and so cannot be relied upon to modify the claim • Unilever, NAD Case 4560 (9/06) Daniel R. Dwyer KLEINFELD, KAPLAN & #ACICosmetics KKB BECKER LLP 10. Keep the overall context “cosmetic” • Focus on a temporary, superficial change in appearance – A consumer should not “expect[] anything other than a possibility that she may look better.” United States v. An Article of Drug … Magic Secret, 331 F. Supp. 912 (D. Md. 1971). • Avoid claims that, to an “ignorant, unthinking or credulous” consumer,” may imply a “medical- or drug-type” effect. – United States v. An Article … Sudden Change, 409 F.2d 734, 741-742 (2d. Cir. 1969). • However, claims “so associated with the familiar exaggerations of cosmetics advertising that virtually everyone can be presumed to be capable of discounting them as puffery” do not cause a product to be intended for use as a drug. – Id. Daniel R. Dwyer KLEINFELD, KAPLAN & #ACICosmetics KKB BECKER LLP Class Action Origins • FTC • FDA • NAD • Advocacy groups • PETA Anca Cornis-Pop #ACICosmetics FTC/Scheuerman v. Nestlé Healthcare Nutrition, Inc. Anca Cornis-Pop #ACICosmetics FDA/In Re: L’Oreal Wrinkle Cream Marketing and Sales Practices Litigation “The claims on your web site indicate that these products are intended to affect the structure or any function of the human body, rendering them drugs under the Act.” Anca Cornis-Pop #ACICosmetics FDA/In Re: Avon Anti-Aging Skincare Creams and Products Marketing and Sales Practices Litigation • Anew Clinical Advanced Wrinkle Corrector: • “The at-home answer to wrinkle-filling injections. Start rebuilding collagen in just 48 hours.” • “4D WRINKLE-REVERSE TECHNOLOGY IS DESIGNED TO: • Rebuild collagen to help plump out lines and wrinkles. • Stimulate elastin to help improve elasticity and resilience. • Regenerate hydroproteins to help visibly minimize creasing.” • “Formulated to boost shock-absorbing proteins to help strengthen skin's support layers.” • “Improve fine & deep wrinkles up to 50%. Immediately plumps out wrinkles and fine lines. Within 48 hours begins boosting collagen production.” • Anew Reversalist Night Renewal Cream & Anew Reversalist Renewal Serum • “[W]rinkles are a result of micro-injuries to the skin, so AVON studied how skin heals. As part of the repair process, the body produces Activin . [E]xhaustive research, testing & review have resulted in an unprecedented discovery by AVON scientists: how to activate this key repair molecule. Designed to boost Activin, ANEW’s Activinol Technology helps reactivate skin’s repair process to recreate fresh skin & help dramatically reverse visible wrinkles.” • Anew Clinical Thermafirm Face Lifting Cream • “Our effective lifting treatment is formulated to fortify damaged tissue with new collagen. In just 3 days, see tighter, firmer, more lifted skin.” • “[H]elp tighten the connections between skin's layers.” Anca Cornis-Pop #ACICosmetics NAD/Alexander, et al. v. L’Oreal USA, Inc. Anca Cornis-Pop #ACICosmetics NAD/Chow v. Neutrogena Corp. Anca Cornis-Pop #ACICosmetics Public Advocacy Groups Anca Cornis-Pop #ACICosmetics Public Advocacy Groups/Beltran, et al. v. Estee Lauder, et al. Anca Cornis-Pop #ACICosmetics Recent Cases and Trends in Cosmetics Actions The Unilever Class Actions . Several consumer class actions were filed in 2012-2013, in various federal courts, against Unilever U.S., Inc. and related distributors, including: – Naiser v. Unilever U.S., Inc., No. 3:13-CV-00395-JHM (W.D. Ky 2013) – Wells v. Unilever U.S., Inc., No. 3:13-cv-04749-EDL (N.D. Cal. 2013) – Reid v. Unilever U.S., Inc., No. 12 C 06058 (N.D. Ill. 2012), available on Westlaw at 2013 WL 4050194. These class actions related to Suave® Professionals Keratin Infusion 30 Day Smoothing Kit, a hair product which allegedly caused hair loss and scalp burning . Consumers sought damages under breach of warranty theories, violations of state consumer protection acts, the Magnuson-Moss Warranty Act, and under common law tort law claims (e.g., negligence, unjust enrichment, etc.) Dennis S. Ellis #ACICosmetics Recent Cases and Trends in Cosmetics Actions Algarin v. Coty, Inc., No. 3:120cv-02868-JAH-JMA (S.D. Cal. 2012) . Consumer class action filed against manufacturer, seller and distributor of Rimmel London Lash Accelerator Mascara with Grow-Lash Complex . Plaintiff alleged the Product does not grow and multiply eyelashes within 30- days as promised, and that advertisements that the product was “advanced, ultra-lengthening” and “clinically tested,” as well as representations regarding its “Grow-Lash Complex” were misleading . Plaintiff sought relief under California consumer protection statutes (UCL and CLRA) and also alleged that Coty breached an express warranty . On February 20, 2013, Coty moved to strike the nationwide class allegations and to dismiss