For $900,000, Revlon has settled a false advertising suit challenging the name of its "Age Defying with DNA Advantage" product line.
Anne Elkind and Sharon Rosen filed suit in 2014 accusing the cosmetics giant of using the product line's name to mislead consumers into believing the foundation, powder, and concealer would alter the genetic code of their skin cells. In reality, the products just had sunscreen, the plaintiffs said, and contained no ingredients that could interact with or otherwise affect the DNA in human skin cells.
After a federal court judge trimmed the suit last year, the parties began to negotiate a settlement and reached a deal last month. They filed a joint motion in support of preliminary approval of the deal in New York federal court.
The terms of the agreement require Revlon to provide $900,000 for a settlement fund that will pay for notice and administrative costs, two class representative awards of $5,000, and a class counsel award of up to $590,000. The remainder will be used to refund class members $3 per purchase, with up to three claims possible without a receipt. Class members with receipts shall receive $3 per claim with no cap on the number of the claims.
No less than $250,000 but no more than $400,000 shall be paid to the estimated tens of thousands of nationwide claimants, so in the event that claims exceed $400,000, payments will be reduced on a pro rata basis.
The motion noted that discovery revealed a Revlon document assigning a premium price to the DNA Advantage products of about 7 percent per package, or approximately $1 for a $15 purchase. "Here, the Settlement provides $3 per package to class members, or triple the expected trial result," the parties wrote. "Since the premium price attributable to the allegedly false advertising is the most the class could have received at trial, and the Settlement trebles that amount, the result is favorable to the class."
Revlon also agreed to "discontinue and not recommence manufacturing, advertising, promotion, distribution, offer for sale, and sale" of the three products in the DNA Advantage line by the end of December 2017. The company noted it has already stopped the manufacturing and sale of the concealer and powder.
To read the joint motion in support of preliminary approval of settlement in Elkind v. Revlon Consumer Products Corp., click here.
Why it matters: The motion in support of the agreement emphasized the "complex issues" presented by the plaintiffs' claims, arguing that the value of the settlement far outweighed the costs and risks of continuing to litigate the efficacy of the DNA Advantage claims, particularly as Revlon agreed to pay about three times the price premium for the products.