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L'Oreal Case Highlights Legal Risks Of Anti-Aging Claims

By Kelly Bonner
December 6, 2022
Law360

L'Oreal Case Highlights Legal Risks Of Anti-Aging Claims

By Kelly Bonner
December 6, 2022
Law360

Read below

It is a truth universally acknowledged that a woman over 30 must be in want of an eye cream. Or a serum. Or anything, really, so long as it recreates the appearance of youth, vitality or an actual night's sleep.

The global market for anti-aging cosmetics is expected to reach $93.1 billion by 2027. But as illustrated by a recent decision from the U.S. District Court for the Southern District of New York, Lopez v. L'Oréal USA Inc., promises that a product can turn back time by "restoring skin" or "promot[ing] cell regeneration" can prove costly for brands looking to capitalize on this growing market.

Brands should be mindful of litigation and regulatory risk when making certain anti-aging claims.

Lopez v. L'Oréal

On Sept. 2, 2021, cosmetics giant L'Oréal was sued in New York federal court for making allegedly false claims regarding moisturizing creams that contained collagen — a protein molecule produced by the human body that is critical to maintaining the skin's structural integrity, and that, when diminished, results in wrinkles and sagging skin.[1]

While L'Oréal advertised the products as "daily moisturizers" whose continued use would lead to the advertised benefits of "restor[ing] the skin's cushion and smooth[ing] wrinkles," the plaintiffs fixated on the word "collagen."[2]

Because the products' collagen molecules were too big to be absorbed by the skin, the plaintiffs alleged that they paid a price premium for collagen products that could not work as advertised.[3]

State Consumer Protection Statutes

The plaintiffs brought their claims under two broad state consumer protection regimes: Sections 349 and 350 of the New York General Business Law, and California's Consumers Legal Remedies Act, False Advertising Law and Unfair Competition Law.

New York

NYGBL Section 349(a) prohibits "[d]eceptive acts or practices in the conduct of any business, trade or commerce in the furnishing of any service in the state," while Section 350 prohibits "false advertising in the conduct of any business, trade or commerce."[4] These statutes were intended to provide authority to deal with a wide variety of constantly changing deceptive business practices, and, like the Federal Trade Commission Act, are intentionally broad.[5]

Although claims under the NYGBL were initially reserved to the New York Attorney General's Office, the New York Legislature created a private right of action for any person injured by a violation, and permitted recovery of injunctive relief, damages and attorney fees.[6]

To state a claim under NYGBL Sections 349 and 350, a plaintiff must allege that: (1) the defendant has engaged in consumer-oriented conduct (2) that was materially misleading, and (3) the plaintiff was injured as a result of the allegedly deceptive act or practice.[7] Notably, the deceptive act or practice complained of does not have to rise to the level of common-law fraud for it to be the subject of action under Section 349.[8]

California

California's Consumers Legal Remedies Act makes it unlawful to use "'unfair methods of competition and unfair or deceptive acts or practices' in the sale of goods or services to a consumer,"[9] while the state's Unfair Competition Law prohibits "any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising."[10]

As the U.S. Court of Appeals for the Ninth Circuit said in its 2007 decision in Lozano v. AT&T Wireless Services Inc., the Unfair Competition Law "is violated where a defendant's act or practice is (1) unlawful, (2) unfair, (3) fraudulent, or (4) in violation of [the California False Advertising Law]."[11]

Similarly, the California False Advertising Law "prohibits the dissemination in any advertising medium of any 'statement' concerning 'real or personal property' offered for sale, 'which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading.'"[12]

To assert a claim for false advertising, "a plaintiff must allege that (1) the statements in the advertising are untrue or misleading, and (2) the defendants knew, or by the exercise of reasonable care should have known, that the statements were untrue or misleading."[13]

The Misleading Requirement and the Reasonable Consumer Test

To prevail on consumer fraud claims under either New York and California laws, a plaintiff must establish that a defendant's allegedly deceptive advertisements were likely to mislead a reasonable consumer acting reasonably under the circumstances.[14]

The Court's Decision

On Sept. 27, U.S. District Judge Andrew L. Carter Jr. denied L'Oréal's motion to dismiss claims that it misled consumers about the skin-smoothing effects of its products, on the grounds that reasonable consumers could believe that collagen was the active anti-aging ingredient and not, as L'Oréal intended, a moisturizing ingredient.[15]

Judge Carter agreed with L'Oréal that the collagen's inability to penetrate the skin did not preclude the products' anti-aging effects. However, he agreed that the plaintiffs adequately stated that they paid a price premium for the products based on the mere presence of the word "collagen" in the labeling.[16]

Although L'Oréal argued that a reasonable consumer could believe that "collagen" on the label referred to its use as a moisturizer, Judge Carter wrote that this alternative explanation was not obvious enough that the plaintiffs' interpretation was unreasonable as a matter of law:[17]

The products contain no qualifying language regarding the inability for the collagen or collagen-related ingredients to penetrate the skin … Instead, the language on the products[serves]to further link the products with the benefits of collagen.[18]

Consequently, the court found, it was "entirely plausible" that a reasonable consumer would associate L'Oréal's products, which promised to "smooth wrinkles," with the commonly known benefits of collagen, rather than L'Oréal's intended purpose.[19]

Litigation and Regulatory Risks

This is not the first time that anti-aging claims have proved tricky for cosmetics companies.

  • In February 2020, Peter Thomas Roth LLC settled claims under Florida, New York and Washington's consumer protection laws that consumers allegedly overpaid for products that were misrepresented as capable of repairing human skin, or having the same regenerative properties as other well-known ingredients such as human stem cells.[20]
  • In December 2016, Sunday Riley Modern Skincare also settled class action claims under New York and California law that its anti-aging serum "combatted every anti-aging concern and cause of aging," "regenerate[d] skin," and "help[ed] prevent [and] reverse the effects of aging."[21]
  • In March 2015, the U.S. District Court for the Eastern District of New York allowed the plaintiffs in Tomasino v. Estée Lauder Cos. to proceed with amended class action claims under NYGBL Sections 349 and 350, claiming that certain anti-aging products were falsely advertised as able to "repair past visible DNA damage" as a means of making the skin look younger.[22] While the plaintiff's prior complaint was dismissed with prejudice due to lack of standing or any actual harm or specifics as to the alleged falsehoods of the company's claims,[23] the court concluded that the plaintiff's amended claims, which contained additional information about the products' ingredients and referenced various scientific studies, satisfied the federal pleading standards under Federal Rule of Civil Procedure 8. The case subsequently settled in September 2015.[24]

In addition to the risks posed by private litigants, anti-aging claims may incur regulatory scrutiny by blurring the distinctions between cosmetics.

  • In 2016, the U.S. Food and Drug Administration cautioned Peter Thomas Roth Labs LLC that its marketing materials for certain anti-aging products blurred the distinction between beautifying cosmetics and drugs that are intended to affect the structure or function of the human body, and, unless changed, would subject the products to premarket FDA approval.[25]
  • In 2012, Lancôme received similar warnings from the FDA in connection with its marketing for its Génifique, Absolue and Rénergie anti-aging lines, which purported to "boost ... the activity of genes and [stimulate] the production of youth proteins," and cause "significant deep wrinkle reduction in UV damaged skin, clinically proven."[26] Lancôme's claims also resulted in charges by the FTC of deceptive advertising, which Lancôme settled in June 2014.[27]

Safeguards for Manufacturers 

Brands should be aware of the potential for liability when making anti-aging claims that can be misconstrued by consumers as overbroad, unsubstantiated or quite simply promising to turn back time.

This particularly applies to product claims that emphasize the inclusion of trendy ingredients where those ingredients can be used in different ways or are open to instinctive associations. How certain words are perceived — or in this case, misperceived — can be almost as costly as what brands intend them to mean.

Brands should also exercise caution when making claims that promise to fundamentally alter or affect skin function, or reverse the aging process itself. Absent scientific substantiation, these claims can subject brands to enhanced regulatory scrutiny, as well as expensive litigation and reputational damage.

Whenever possible, brands should emphasize a product's ability to improve the skin's appearance or minimize the visual effects of aging.

References

[1] See Compl. at ¶¶ 20-26, Lopez et al. v. L'Oréal USA Inc. , No. 21-cv-7300 (ALC) (S.D.N.Y. Aug. 31, 2021).
[2] Id.
[3] Id. at ¶¶ 11, 19, 31.
[4] See NYGBL §§ 349-50.
[5] See Goshen v. Mut. Life Ins. Co. of N.Y. , 98 N.Y.2d 314, 324 (2002); Karlin v. IVF Am. Inc. , 93 N.Y.2d 282, 291 (1999).
[6] NYGBL § 349(h) and GBL § 350-e(3); see also Plavin v. Group Health Inc. , 35 N.Y.3d 9 (2020).
[7] Nick's Garage Inc. v. Progressive Cas. Ins. Co. , 875 F.3d 107, 124 (2d Cir. 2017); see also Cosgrove v Oregon Chai Inc. , 520 F. Supp. 3d 562, 575 (S.D.N.Y. 2021) (noting that the standard for recovery under NYGBL § 350, while specific to false advertising, is otherwise identical to § 349).
[8] Boule v. Hutton , 328 F.3d 84, 94 (2d Cir. 2003) (citing Gaidon v. Guardian Life Ins. Co. , 94 N.Y.2d 330, 343 (1999)).
[9] Lozano v. AT&T Wireless Services Inc. , 504 F.3d 718, 730 (9th Cir. 2007) (quoting Cal. Civ. Code § 1770).
[10] Cal. Bus. & Prof. Code § 17200.
[11] Lozano, 504 F.3d at 731 (citing Cel-Tech Communications Inc. v. Los Angeles Cellular Telephone Co. , 20 Cal. 4th 163, 83 Cal. Rptr. 2d 548, 561, 973 P.2d 527 (1999)). 
[12] Hughes v. Ester C Co. , 930 F. Supp. 2d 439, 457, 466 (E.D.N.Y. 2013) (quoting Cal. Bus. & Prof. Code § 17500).
[13] Miller v. Ghirardelli Chocolate Co. , 912 F. Supp. 2d 861, 873 (N.D. Cal. 2012).
[14] Fink v. Time Warner Cable , 714 F.3d 739, 741 (2d Cir. 2013); Williams v. Gerber Prod. Co. , 552 F.3d 934, 938 (9th Cir. 2008) ("Under the reasonable consumer standard, [the plaintiff] must 'show that members of the public are likely to be deceived'") (quoting Freeman v. Time Inc. , 68 F.3d 285, 289 (9th Cir. 1995)).
[15] See Opinion & Order, Lopez et al. v. L'Oréal USA Inc., No. 21-cv-7300 (ALC) (S.D.N.Y. Sept. 27, 2022).
[16] See id. at 7.
[17] See id. at 8.
[18] Id. at 10.
[19] See id.
[20] See Compl. at ¶¶ 3, 31-32, 57-62, Angela Clair et al. v. Peter Thomas Roth LLC et al., No. 1:20-cv-01220 (S.D.N.Y. Feb. 12, 2020).
[21] See Compl. at ¶ 4, Armstrong v. Sunday Riley, No.1:16-cv-09329 (S.D.N.Y. Dec. 2, 2016).
[22] See Tomasino v. Estée Lauder Cos. , No. 13-CV-4692, 2015 WL 1470177 (E.D.N.Y. Mar. 31, 2015) ("Tomasino II") (citing Second Am. Compl. ¶¶ 8, 27).
[23] See Tomasino v. Estée Lauder Cos. , 44 F. Supp. 3d 251 (E.D.N.Y. 2014) ("Tomasino I").
[24] Notably, the case settled after Senior U.S. District Judge Edward R. Korman dismissed the plaintiff's breach of contract claim with prejudice under Fed. R. Civ. P. 12(c) on the grounds that she failed to provide the company with timely notice about her problem under N.Y. U.C.C. § 2-607(3)(a), leaving only the NYGBL claims and depriving plaintiff of the minimal diversity needed to maintain a federal court class action. See Memorandum & Order at 12, Tomasino v. Estée Lauder Cos. , 13-CV-4692 (ERK) (RML) (E.D.N.Y. Aug. 7, 2015) ("Tomasino III").
[25] See FDA Warning Letter NYK-2016-40 dated July 22, 2016, available at https://web.archive.org/web/20190908143729/https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/warning-letters/peter-thomas-roth-labs-llc-495984-07222016.
[26] See FDA Warning Letter No. 273596 dated Sept. 12, 2012, available at https://wayback.archive-it.org/7993/20171115075937/https:/www.fda.gov/ICECI/EnforcementActions/WarningLetters/2012/ucm318809.htm; see also FDA, Warning Letters Address Drug Claims Made for Products Marketed as Cosmetics, https://www.fda.gov/cosmetics/warning-letters-related-cosmetics/warning-letters-address-drug-claims-made-products-marketed-cosmetics (last accessed Nov. 7, 2022).
[27] FTC, Press Release, L'Oréal Settles FTC Charges Alleging Deceptive Advertising for Anti-Aging Cosmetics (June 30, 2014), https://www.ftc.gov/news-events/news/press-releases/2014/06/loreal-settles-ftc-charges-alleging-deceptive-advertising-anti-aging-cosmetics.

Reprinted with permission of Law360.