Finster v. Sephora: Is “Clean at Sephora” Really All That Clean?
The global clean beauty market has exploded in recent years and is only expected to keep growing to reach $22 billion total value by 2024, according to Statistica Research.[1] In a recent report by The NPD Group, 68% of consumers say they want to buy skincare products made with clean ingredients.[2] It is estimated that one-third of the United States beauty market labels itself labeled as “clean”––but what does “clean” even mean?[3] Until December 2022, the United States had not updated the way it regulates cosmetics in over eighty years. On December 29, 2022, Congress passed The Modernization of Cosmetics Regulation Act of 2022 (“MoCRA”) which was the most significant expansion of the U.S. Food and Drug Administration’s (“FDA”) authority to regulate beauty and personal care products since the passage of the Federal Food, Drug, and Cosmetic Act in 1983.[4] With the passage of MoCRA the FDA can now issue mandatory recalls of products deemed unsafe, whereas previously it could only request that a company issue a voluntary recall.[5] MoCRA also requires companies to disclose to the FDA, but not to consumers, fragrance ingredients that are common allergens, and the companies must ensure and maintain records that adequately substantiate the safety of such cosmetic products.[6] Unfortunately, however, MoCRA did not address the issue of marketing or promotional claims brands can make about the safety of their products and the FDA does not have a list of accepted claims for cosmetics. As of now, the regulation of labeling claims is governed by the Fair Packaging and Labeling Act (“FPLA”) and the Federal Trade Commission (“FTC”). Under the FPLA, cosmetic labeling must be truthful and not misleading and disclose all ingredients.[7] The FTC, which regulates the advertising of cosmetics, can take action to enjoin brands for what it perceives as unfair or deceptive advertisements that are likely to mislead a reasonable consumer and would be material to their purchasing decisions.[8]
A noteworthy, pending case against a brand’s “clean” marketing claims is a class action lawsuit filed in November 2022 against Sephora in the Northern District of New York. The plaintiff, Lindsey Finster, on behalf of a class, alleged that Sephora’s “Clean at Sephora” program was false and misleading.[9] The Clean at Sephora products have a recognizable green seal with a checkmark that indicates to consumers that they are formulated without forty-one listed ingredients including parabens, sulfates, SLS and SLES, phthalates, mineral oils, formaldehyde.[10]. According to Sephora, when a customer sees the Clean seal they “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.”[11] Finster alleged that a significant percentage of products with the “Clean at Sephora” seal contain ingredients inconsistent with how consumers understand this term.[12] In Finster’s complaint, she argues that consumers understand the term clean “consistent with its dictionary definitions, which define it as describing something free from impurities, or unnecessary and harmful components, and pure.”[13] Finster alleged that Sephora violated New York General Business Law (“GBL”) sections 349 and 350.[14] Sections 349 and 350 make it illegal to engage in deceptive acts or practices or false advertising in the conduct of any business, trade, or commerce, or in the furnishing of any service.[15] Finster said that she relied on the Clean at Sephora seal to believe the ingredients were not synthetic nor connected to causing physical harm and irritation.[16] Her reliance on these “false, misleading, and deceptive representations and omissions” are material because she would not have purchased the “clean” product or paid its premium price if the true facts had been known.[17] Therefore, Finster alleges she was harmed and is owed damages based on her reliance on Sephora’s misrepresentations.[18] Finster also alleged that Sephora breached express warranties, the implied warranty of merchantability/fitness for a particular purpose, and the Magnuson Moss Warranty Act when Sephora expressly and impliedly warranted to Finster that its “clean” products’ ingredients were not synthetic nor connected to causing physical harm and irritation.[19] Sephora’s representations regarding the products’ ingredients were “conveyed in writing and promised it would be defect-free, and [Finster] understood this meant its ingredients were not synthetic nor connected to causing physical harm and irritation.”[20] However, Finster alleges, the “Clean at Sephora” products “did not conform to the promises or affirmations of fact made on the packaging, container, or label.”[21]
On February 2, 2023, Sephora moved to dismiss Finster’s complaint arguing that “it is not plausible that reasonable consumers are or could be confused by the “Clean at Sephora” program.”[22] Sephora argued that Finster relied on unsupported and conclusory allegations about consumers’ understanding of the word “clean” and failed to plead any facts showing that a significant portion of relevant, reasonable consumers could be misled to think “Clean at Sephora” meant the products consisted only of natural ingredients.[23] Sephora noted that nowhere on the “Clean at Sephora” label did the words “natural” or “organic” appear.[24] Rather, “the plain meaning of the phrase, the context, and Sephora’s other acknowledged conduct all show that “Clean at Sephora” means and connotes only what it says, a program of products that excludes designated ingredients that might be harmful.”[25] Sephora noted that its “Clean at Sephora” program’s marketing specifies which ingredients are excluded, not which ingredients are included, and because Sephora made no representations about the products or ingredients included, it could not have misled consumers about the safety of products or ingredients included in the program.[26]
Absent any clear guidance from the FDA or FTC, cosmetic labeling will remain in a regulatory vacuum with consumers left guessing what “clean” beauty even really means. As consumers become more educated in the beauty space and the market grows, consumers will likely grow skeptical of these “clean” claims and demand substantiation––as Finster did to Sephora. Until official guidance is issued, it appears the way brands make marketing claims will remain a sort of “wild wild west” as brands craft their own definitions of “clean” to align with their respective business agendas and appeal to a growingly eco-conscious consumer base. For now, it appears that a court of law will be the forum in which brands learn just how far they can push these marketing claims before running into legal trouble. While the Finster case is still pending, its outcome could potentially lay some ground rules for clean beauty marketing moving forward.
Footnotes
