Settling a consumer class action challenging the labeling of its shampoos as “sulfate free” and “free of salt,” Sexy Hair Concepts LLC agreed to pay $2.33 million.

Molly Crane sued Sexy Hair in February 2017, alleging that the company prominently labeled its containers as “sulfate free” and “free of salt” when the ingredients list stated the shampoo products contained both sodium sulfate and sodium chloride.

Pursuant to the deal, the $2,330,000 settlement fund will cover attorneys’ fees of up to one-third of the gross settlement amount (just under $770,000), “reasonable” out-of-pocket costs and expenses for class counsel, a $2,000 incentive award for Crane, and notice and administration costs.

The remaining net settlement amount will be paid to the roughly 975,000 class members (defined as purchasers dating back to November 2002), who can submit a claim form to recover an estimated $6 per purchase. Class members can submit up to two claims without proof of purchase, with no limit on the number of claims submitted with proof of purchase.

In addition to the monetary benefits of the deal, Sexy Hair agreed to refrain from representing that its products are “sulfate free” or “free of salt” unless its products actually do not contain any sulfates or salt.

To read the memorandum in support of preliminary approval of settlement in Crane v. Sexy Hair Concepts, LLC, click here.

Why it matters: The agreement, which was submitted for preliminary approval to the Massachusetts federal court, was reached after the denial of the defendant’s motion to dismiss. In the motion, the plaintiffs touted the cash payment for class members as “substantial” given that the cost of the products typically ranged from $5 to $15, depending on the size of the shampoo bottle.