Melissa Juried Kriebel
One of the newest cases to bring companies’ sustainability-centric claims under the microscope is a proposed class action lawsuit waged against Sephora over a collection of “clean” cosmetics products. According to the complaint that she filed in a New York federal court in November, Plaintiff Lindsey Finster claims that by “manufactur[ing], label[ing], market[ing], certify[ing] and/or sell[ing] cosmetics advertised as ‘Clean’ under its ‘Clean At Sephora’ program” – when no shortage of the products contain ingredients that are “inconsistent with how consumers understand” the term “clean,” the beauty retailer is engaging in false advertising and breaching warranties that it has made to consumers in connection with those products.
In the complaint, Finster asserts that in furtherance of its “Clean At Sephora” initiative, Sephora advertises “select products” that it has “evaluated to provide ‘The beauty you want, minus the ingredients you might not. This seal means formulated without parabens, sulfates SLS and SLES, phthalates, mineral oils, formaldehyde, and more.’” According to Sephora, when products meet this criteria, they are promoted with the green “Clean At Sephora” seal (complete with a green checkmark and leaf symbol) in Sephora stores and online, which means that “consumers … can be assured that the product is formulated without specific ingredients that are known or suspected to be potentially harmful to human health and/or the environment.”
Against this background, Finster claims in the lawsuit that she “saw and relied on the ‘Clean at Sephora’ seal,” which led her to believe that the cosmetics products’ ingredients “were not synthetic nor connected to causing physical harm and irritation.”
The problem, Finster alleges, is that “a significant percentage of products with the ‘Clean At Sephora’ [label] contain ingredients inconsistent with how consumers understand this term.” For instance, Finster points to the Sephora-stocked Saie Mascara 101 that she says, “contains numerous synthetic ingredients” – such as polyglyceryl-6 distearate, polyglyceryl-10 myristate, cetyl alcohol, phenethyl alcohol, and sodium benzoate – “several of which have been reported to cause possible harms.”
Sephora “makes other representations and omissions” with respect to the “Clean at Sephora” products, per Finster, and as a result, is able to offer up these goods at prices that are “higher than similar products [that are] represented in a non-misleading way, and higher than they would be sold for absent the misleading representations and omissions.” Finster, for one, says that she has been damaged (and has standing to sue), as she would not have paid more for the products or purchased them at all “had she known the ‘clean’ representations were false and misleading.”
With the foregoing in mind, she claims that Sephora is running afoul of New York General Business Law sections 349 and 350, which prohibit deceptive acts or practices in the conduct of any business, trade or commerce, and false advertising, in particular; violating state consumer fraud acts; and engaging in beaches of express warranty, implied warranty of merchantability/fitness for a particular purpose and the Magnuson Moss Warranty Act.
In terms of the warranties made by LVMH-owned Sephora here, Finster alleges that Sephora warranted that the ingredients in the “Clean At Sephora” products are “not synthetic nor connected to causing physical harm and irritation.” Did Sephora actually make such express claims? It does not seem so.
According to the complaint, Sephora defines its “Clean” seal as referring to products that are “formulated without parabens, sulfates SLS and SLES, phthalates, mineral oils, formaldehyde, and more.” Nonetheless – and in what might be the most interesting part of the complaint – Finster argues that regardless of how Sephora defines its “Clean” seal, “Consumers understand ‘clean’ [as being] consistent with its dictionary definitions, which define it as describing something free from impurities, or unnecessary and harmful components, and pure.” In the particular context of “cosmetics,” she asserts that “this means products made without synthetic chemicals and ingredients that could harm the body, skin or environment.”
Finster holds Sephora to that definition, arguing that it “expressly and impliedly warranted to that its ingredients were not synthetic nor connected to causing physical harm and irritation” by way of its “Clean” marketing. She further notes that this is an example of how in the “regulatory vacuum” that is the cosmetics industry, “companies have developed their own standards and terms purporting to inform consumers about the attributes of their products.”
It is unclear how the court will treat Finster’s claims. However given that Sephora lists the chemicals/compounds that are specifically excluded from the products that fall under the umbrella of the “Clean At Sephora” initiative, it seems somewhat safe to assume that as long as the products do not include those things, it has not engaged in false and/or otherwise deceptive advertising.
THE BIGGER PICTURE: While the number of sustainability-centric advertising lawsuits has been on the rise, including in the cosmetics space, these cases are not necessarily proving to be easy wins for the plaintiffs. In fact, courts have been shutting down suits over sustainability marketing claims with some frequency. As recently as November, for instance, a Superior Court in Washington, D.C. determined that Coca-Cola’s marketing of itself as “a sustainable and environmentally friendly company” (despite being “one of the largest contributors of plastic pollution in the world,” according to the plaintiff) was not actionable, as its claims were aspirational in nature. This highlights the fact that “environmental aspirational claims – even those tied to specific measurement attributes – are not necessarily sufficient to state a claim.”
Allbirds similarly escaped a false advertising lawsuit last year, with a judge for the U.S. District Court for the Southern District of New York finding that the plaintiff’s issue was actually with the HIGG standard, which Allbirds used to measuring environmental impact of its products and not how the footwear company advertised its products in accordance with that data.
Reflecting on the rise of sustainability and broader ESG-centric marketing efforts by brands and the lawsuits that have followed, Clifford Chance’s Karina Bashir and M.E. Bultemeier set out the following steps in a note this summer to help companies to mitigate greenwashing/false advertising risks in connection with product packaging and marketing … (1) Examine factual claims on packaging and in advertising to ensure that they have a basis, and that certifications or standards relied upon are vetted; (2) Examine broad or “aspirational” claims regarding commitment to ethics or sustainability in their context and against evolving standards, to consider whether they may be actionable, (3) Examine statements that consumers may view and claim to rely upon in contexts apart from packaging and advertising, such as social media, securities filings, mission statements, and published reports, and (4) Closely monitor trends in consumer litigation, along with federal and state regulatory and enforcement developments.
The case is Finster v. Sephora USA Inc., 6:22-cv-01187 (N.D.N.Y.)