A federal court in the District of Columbia has given preliminary approval to class certification and a settlement in litigation alleging that L’Oréal USA falsely labeled several products as available exclusively in salons. Richardson v. L’Oréal USA, Inc., No. 13-508 (U.S. Dist. Ct., D.D.C., order entered June 27, 2013).
If finally approved following an October 11, 2013, fairness hearing, the settlement will resolve the claims of a nationwide class of purchasers and require the company to remove the claims from the advertising and labeling of products intended for U.S. markets for at least five years. Thereafter, “it may resume using the claims in markets with a 60% reduction from 2012 levels of non-salon sales.” The company is not required to destroy products or packaging in inventory.
According to the complaint, while the company’s Matrix Biolage®, Redken®, Kératase®, and Pureology® products carried labels indicating that they were available in salons only—thus implying they were of superior quality—the products could be purchased in non-salon retail stores, such as Target, Kmart and Walgreens. The plaintiffs apparently acknowledged that the company had a campaign to address the diversion of its products to stores without salons, but the labeling was allegedly misleading because the products are available in non-salon establishments despite those efforts.
The court outlined the counsel’s efforts to reach a settlement, as well as the risks of proceeding with the litigation, and concluded that a proposed settlement providing injunctive relief only “lies within the range of possible approval.” The court also deemed, “not outside the range of possible approval,” incentive payments of $1,000 for the lead plaintiffs and a maximum award of $950,000 for attorney’s fees, costs and expenses