Omission of side effects in lash “cosmetic” ads was plausibly false & misleading

Lewis v. Rodan & Fields, LLC, 2019 WL 978768, No.
18-cv-02248-PJH (N.D. Cal. Feb. 28, 2019)
Nine plaintiffs brought a putative class action alleging
that defendant Rodan failed to disclose that its Enhancement Lash Boost eye
serum, advertised as a cosmetic designed to make eye lashes longer and more
beautiful, “had harmful side effects linked to an ingredient in” the product, a
synthetic prostaglandin analog. One plaintiff’s eyes changed color, another
“developed a grey spot in her vision and had central serious retinopathy,” another’s
eye lashes fell out and not all of them have grown back, and another “developed
a rash on her eyelid[,] [ ] her eyelid became discolored and darkened, … and
lashes no longer grow where [a] bump” developed. “Many of these side effects
match those associated with all prostaglandin analogs.”
Indeed, for these reasons, the FDA previously warned another
manufacturer of “cosmetic” lash-enhancement products that used the ingredient
that the products violated the FDCA because they were unapproved new and
misbranded drugs and failed to reveal important side effects. Rodan, too,
didn’t disclose the serious side effects associated with the ingredient.  The warning states, as relevant here, “For
external use only. Avoid getting in the eye; in the event of direct contact
rinse with cold water. If you develop irritation or swelling discontinue
product usage.” Rodan’s website and marketing materials did no better and, in
some instances, affirmatively distinguished “drugs” that cause those side
effects from Lash Boost’s side effects, e.g.: “The only serious side effects we
have heard about are those associated with drug products, not cosmetics.” Rodan
claimed the product was “a cosmetic.”
Plaintiffs alleged that, had Rodan included an adequate and
“full[ ] disclos[ure about the] adverse side effects of Lash Boost, plaintiffs
would have decided not to purchase Lash Boost.” And plaintiffs alleged that “they
did not receive what they paid for when purchasing Lash Boost,” because they
paid for a product with, at most, side effects limited to irritation but
instead received a product that had serious and sometimes permanent side
effects.  They asserted claims under
various states’ common laws and false advertising laws, as well as a RICO claim
that was dismissed because it was a RICO claim.
The false advertising claims were all based on an omission
theory. For omission, Rule 9(b) “requires that the complaint adequately allege
why the omitted fact is true, as well as being material to consumer
decision-making.”  The complaint did
so.  Plaintiffs plausibly alleged that
the product could cause serious side effects, and that this is material in that
reasonable consumers would have been likely to act differently because of this
fact.  Given the materiality of the
omission and the other allegations, it was plausible that, had Rodan reasonably
and adequately disclosed the serious side effects, the plaintiffs would have
been aware of the disclosure and acted differently. And plaintiffs adequately
alleged injury: they didn’t receive the benefit of the bargain, a
minimal-side-effect product.  Finally, as
to the states that require some kind of intent, plaintiffs adequately alleged “that
defendants were aware of or had [ ] reason to know of” the allegedly omitted
information.

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