Antitrust Law Daily Wrap Up, TOP STORY—CDCal: Consumers State Claims Against L’Oreal for Lack of “Flammable” Warning Label on Hair Care Product, (Feb 7, 2013)

By Jody Coultas, J.D.

Beauty products manufacturer L’Oreal, USA, Inc. may be liable for its failure to warn consumers that its hair serum product could ignite when exposed to a heat source, according to the federal district court in Los Angeles (Guido v. L’Oreal, USA, Inc., February 6, 2013, Snyder, C.). However, the court dismissed claims based on alleged affirmative misrepresentations.

L’Oreal’s hairstyling serum was marketed as a leave-in product used to fight frizzy, dry, and unmanageable hair. Consumers in California and New York alleged that the serum ignited when exposed to high heat or ignition sources. Although L’Oreal packaged the serum with a warning to avoid fire, flame, smoke, and heat, it removed the warning a few years later. The consumers alleged that L’Oreal failed to warn consumers about the risk of ignition and affirmatively misrepresented the possibility that the serum would ignite.

The California consumers’ California Unfair Competition Law (UCL) claim was not dismissed based on the primary jurisdiction doctrine, according to the court. Claims under the UCL borrow violations of other laws and treat them as unlawful business practices. The consumers argued that Food and Drug Administration regulations provided that labels of cosmetic products must bear a warning statement whenever necessary to prevent a health hazard. A warning label would be an appropriate step towards preventing the hazard of a consumer’s hair igniting, and the failure to warn amounted to a violation of the Food and Drug Administration (FDA) regulations.

The primary jurisdiction doctrine, which is invoked when a claim is one of first impression or a complicated issue that should be dealt with by a regulatory agency, did not apply in this case. Whether a flammable cosmetic product should be labeled was not uniquely within the FDA’s competence and was not one of first impression. The FDA’s informal policy addressed the issue at hand directly and suggested that all flammable products must be labeled.

The New York and California consumers stated consumer protection claims against L’Oreal for fraudulently omitting a flammable warning, according to the court. The consumers alleged that the failure to disclose the fact that the serum was flammable was a deceptive or fraudulent omission. Both the New York and California laws required the consumers to show that the omission was material and that L’Oreal had a duty to disclose the omitted fact. The omission was material, according to the court, because a reasonable consumer would behave differently if warned that the product was flammable. Nondisclosures of safety considerations of consumer products are generally found to be material. L’Oreal had a duty to disclose the fact because consumers had no other way of discovering the product was flammable. The prior label warning was evidence that L’Oreal knew the product was flammable.

Because the consumers could not show that L’Oreal made false or misleading statements, the court dismissed the California and New York consumer protection claims that were based on allegedly affirmative misrepresentations. A statement is false or misleading if it would deceive a reasonable consumer. The consumers alleged that the statement that the serum could be used with a blowdryer was false because it could not be used with a defective blowdryer that emits sparks, and that advertising that it was a “leave-in” product would mislead consumers into believing that it was safe to be used around sources of ignition. These statements would not be interpreted by reasonable consumers as a representation that the product could be used around flames or sources of ignitions.

The cases are Nos. CV 11-1067 CAS (JCx) and CV 11-5465 CAS (JCx).

Attorneys: David Parisi (Parisi and Havens LLP) for Jill Guido. Dennis Ellis (Paul Hastings LLP) for L’Oreal, USA, Inc.

Companies: L’Oreal, USA, Inc.

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