Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Ill.: Consumer’s state-law consumer protection claims proceed in eyelash serum lawsuit, (Jan 31, 2025)

By Patricia K. Ruiz, J.D.

The consumer alleged the manufacturer failed to disclose the risk associated with its products’ ingredients.

The federal district court in Chicago, Illinois granted in part and denied in part a motion to dismiss by the manufacturer and seller of beauty products in a putative class action. The consumer brought claims of for consumer protection, fraud, breach of warranty, negligence, and unjust enrichment. The court found the state law claims in the complaint were rooted in the states’ historic power to protect citizens’ health and safety, as such the claims did not depend on federal law and were not preempted (Markoff v. Athena Cosmetics, Inc., No. 1:23-cv-16401 (N.D. Ill. Jan. 28, 2025)).

Athena Cosmetics, Inc., manufactures and sells beauty products, including four serums advertised as naturally enhancing the appearance of eyelashes or eyebrows. A consumer alleged she purchased and used one of Athena’s eyelash serums, RevitaLash Advanced, after which she experienced pain and eye inflammation. While Athena markets its serums as over-the-counter cosmetics without warning of any adverse side effects, the serums contain dechloro dihdroxy difluoro ethylcloprostenolamide (DDDE), an ingredient purportedly associated with adverse reactions affecting the eye. DDDE is a prostaglandin analog (PGA), a class of compounds found in prescription drugs used to aid in the growth, lengthening, and thickening of eyelashes and eyebrows. Due to the risk of side effects impacting the eye and its surrounding area, the FDA approved PGAs for use only under the supervision of a physician. However, Athena represented that the products were safe and free from any side effects, even though it knew them to contain DDDE.

The consumer filed a putative class action, asserting claims under state consumer protection law and common law claims for fraud, breach of warranty, negligence, and unjust enrichment. Athena moved to dismiss.

Implied preemption. Under the Food, Drug, and Cosmetic Act (FDCA), a cosmetic is regulated differently—more leniently—than a drug. Athena argued the consumer’s lawsuit essentially seeks to establish that the products are mislabled as cosmetics but are, in fact, drugs and should be regulated as such. Athena argued that the determination of how products should be labeled is a task assigned by the FDCA exclusively to the FDA. The FDCA contains no private right of action and makes clear that generally all proceedings for the enforcement or to restrain violations of the FDCA “shall be by and in the name of the United States.” Thus, Athena argued the consumer’s claims are preempted as an improper attempt to privately enforce the FDCA in a state law tort claim.

The court found the state law claims in the complaint are firmly rooted in the states’ historic power to protect citizens’ health and safety. While the claims might also support a violation of the FDCA, they do not depend on the existence of an FDCA violation. Instead, the claims are rooted in the allegation that Athena sells products it knows contain an ingredient associated with adverse side effects but fails to fully disclose the potential risks to consumers. There is no indication in the FDCA that Congress intended to displace previously available tort remedies for customers who have been harmed by unsafe cosmetics, the court found. That the complaint relies on FDA findings regarding the safety issues associated with PGAs does not mean that the consumer is seeking to enforce the FDCA. Given that the consumer and others are alleged to have actually experienced side effects from using the products, and the side effects they experienced are consistent with adverse effects associated with other PGAs, the allegations regarding the risks posed by the DDDE-containing products stand on their own and do not depend on any FDA determination, the court found, holding that the complaint’s claims are not impliedly preempted.

State law consumer protection claim. Athena argued that the complaint listed more than fifty consumer protection statutes in one count without addressing how the allegations in the complaint satisfy the elements of any single one of those laws. However, the court found the complaint set forth detailed allegations about how Athena misled the consumer and other customers into believing the products were all-natural and free of side effects, that the consumers relied on Athena’s deceptive actions, and that they suffered actual damages as a result. These allegations are sufficient to support a claim under the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA). The notice pleading system established by the Federal Rules of Civil Procedure does not require that a complaint plead the elements of a cause of action along with facts supporting each element. Thus, the court denied the motion to dismiss as to the state law consumer protection claim.

Fraud claim. Athena argued the consumer’s fraud claim failed to allege with particularity any safety risk associated with DDDE and therefore did not plead sufficiently that Athena fraudulently failed to warn of those risks. The court disagreed, finding that the complaint alleged DDDE is a PGA and thus falls within a class of compounds associated with adverse reactions to the eye and surrounding areas. Further, the complaint alleges the consumer and other purchasers of the products experienced similar adverse effects after they used Athena’s products. The complaint also cites a study that was unable to conclude that DDDE is safe for use in cosmetics meant to be applied around the eye. The court found the complaint alleges the potential safety risk posed by DDDE with sufficient particularity. Given its alleged awareness that the products contained DDDE, it is reasonable to infer Athena knew or should have known that the products could cause side effects similar to those caused by other PGAs. Thus, the FAC plausibly alleged Athena’s failure to disclose the products’ potential safety risks was a fraudulent omission, the court held.

Athena argued that the complaint did not sufficiently plead that Athena’s omissions were made with the intent to induce the consumers to act; however, under FRCP 9(b), intent can be alleged generally, and it is enough at this stage that the FAC alleges Athena sold products it knew contained a PGA without disclosing that PGAs can cause adverse reactions, instead emphasizing the effects of the products’ natural ingredients. These allegations make it plausible that Athena omitted pertinent information regarding the products with the intent to mislead customers into believing the products were safe and natural. Thus, the court denied the motion to dismiss the consumers’ fraud claim.

Negligence-based claims. Athena argued that, because the consumer conceded she seeks to recover only the economic damages she incurred as a result of Athena’s omissions, the economic loss doctrine precludes the consumer’s negligence claims. Because the consumer seeks to recover for solely economic losses and because no exception to Illinois’ economic loss doctrine applies, the court dismissed the consumer’s negligent misrepresentation and negligence claims.

Breach of express warranty. The court found the complaint does not plead an express affirmation of fact or promise regarding the products’ ingredients and side effects. The allegations focus, instead, on the implications created by Athena’s omissions. However, the complaint does not allege Athena directly claimed the products did not contain DDDE or were completely free from side effects. Based on the allegations, the impression that the products were free from side effects and wholly natural came more from what was omitted rather than what was said. The court granted Athena’s motion to dismiss as to the breach of express warranty claim due to the consumer’s failure to adequately plead any affirmative statement of fact or promise Athena made regarding the products.

Breach of implied warranty; unjust enrichment. The court denied Athena’s motion to dismiss the consumer’s breach of implied warranty claim, rejecting Athena’s contention that the complaint fails to plead any safety risk associated with the products. The court also allowed the consumer’s unjust enrichment claim to proceed.

The case is No. 1:23-cv-16401.

Judge: Wood, A.

Attorneys: David John Stanoch (Kanner and Whiteley, L.L.C.) for Corrine Markoff. David Mitchell Poell (Sheppard Mullin Richter & Hampton LLP) for Athena Cosmetics, Inc.

Companies: Athena Cosmetics, Inc.

Cases: Advertising StateUnfairTradePractices IllinoisNews