Wednesday, August 08, 2018

tell me no lyes: hair relaxer claims continue

In re Amla Litigation, --- F.Supp.3d ----, 2018 WL 3629226, No. 16-cv-6593 (S.D.N.Y. Jul. 31, 2018)

Plaintiffs brought fifteen claims, including false advertising, against L’Oreal based on alleged defects in the Amla Legend Rejuvenating Ritual Relaxer, which is used to chemically straighten naturally curly hair. The court previously certified a NY class and a Florida class, but now decertified the unjust enrichment classes and classes seeking injunctive and declaratory relief, granting summary judgment to L’Oreal on those claims, and also granted summary judgment on all dangerousness-related claims based on the relaxer component of the product and on the California plaintiffs’ omission-based fraud and negligent misrepresentation claims. Summary judgment was denied as to the NYGBL claims and all remaining claims based on dangerousness or representations or warranties regarding Amla’s ability to protect scalps or implicit misrepresentations that the product is safer than relaxers that contain lye.

Hair relaxers generally use an alkaline agent “to penetrate the hair’s outer layer and permanently break the disulfide bonds in the hair’s keratin proteins, forming new, substantially weaker bonds.” The hair becomes straighter but more fragile—that is, damaged. This can cause hair breakage and scalp burning, as relaxer users know. L’Oreal’s expert survey determined that, after adjusting for the control, 80.2% of respondents believed that no-lye hair relaxers such as Amla can irritate the scalp and 63.5% knew that it could cause hair to fall out. “Users’ baseline expectation, then, is that the product here at issue, like all hair relaxers, poses risks. The alleged difference must be one of degree.”

Amla’s relaxer component contains proprietary “pro-solvent ingredients,” allowing the alkaline agent to penetrate the hair faster than they otherwise would. Plaintiffs alleged that these ingredients, together with the design of the emulsifier in the relaxer cream, caused the product to finish relaxing hair in less time than users could reasonably apply and remove it. But the alkaline agent continues breaking disulfide bonds until it is removed or neutralized; thus, the relaxer would necessarily break more bonds than necessary to relax the hair, thus allegedly making the product unreasonably dangerous. The court found plaintiffs’ expert report on the dangerousness of the relaxer component unreliable and inadmissible, and their other evidence of dangerousness insufficient.

Plaintiffs also argued that Amla was unreasonably dangerous and representations to the contrary were false and misleading because the scalp protector in the Amla kit does not “protect[ ] scalp & skin,” as represented on the product’s packaging. Their expert report tested the scalp protector versus petroleum jelly five times and each time found that the relaxer penetrated the scalp protector after a few minutes, while petroleum jelly lasted 30 minutes. This was admissible evidence, and the court noted that users might not complain about an unreasonably dangerous flaw in the scalp protector, given that users already know that the relaxer can burn if it touches the scalp (and thus presumably might blame themselves for user error in applying the scalp protector, without understanding that it had failed them). Thus, there was a genuine dispute over scalp protection, including whether representations and warranties about scalp protection were misleading or were breached.

Other alleged misrepresentations were based on the statements/warranties that Amla was a “no-lye,” “anti-breakage” and “intense conditioning” “rejuvenating ritual” that is “infused with” a “powerful antioxidant rich in vitamins in minerals” and which “delivers unified results,” has “superior respect of hair fiber integrity,” “reveal[s] visibly fuller, silkier hair”, “protects scalp & skin” and “infuses hydration & conditioning.” The court found that, the scalp protector aside, these were literally true claims as applied to the individual kit components to which they were directed.

However, plaintiffs also argued that these representations, and other package elements, misleadingly communicated greater safety than other relaxers, and though the product wasn’t unreasonably more dangerous than other relaxers, “the evidence strongly suggests that the product is not safer,” creating a genuine dispute on that issue. But was there a dispute over whether such a claim was made? The issue is how a normal consumer understands “no-lye,” a technically accurate description of L’Oreal’s lithium hydroxide product (lye is sodium hydroxide).

Separate from the litigation, L’Oreal conducted a study among 406 African American women, from 18 to 49 years old, who had used hair relaxers in the past six months. In that study, 57% of respondents said that the phrase “no-lye” communicated to them “that the product contained no/fewer chemicals” than other relaxers, and 39% said it communicated that the product “will not be harmful to the hair.” 27% of respondents pointed to the lack of lye as the principal reason they would like to use the relaxer. Another L’Oreal study found that “women are drawn to trying Amla relaxer anticipating that an oil-based/no lye relaxer ... will be more soothing and protective of a sensitive scalp than relaxers they’ve used previously.”

Plaintiffs offered their own survey of a similar population, which L’Oreal moved to exclude. That survey found that 80% of respondents answered that they would expect a relaxer whose package makes the “No-Lye” representation to be “less harsh on your hair,” 77.5% would expect that it is “more safe to use,” and 77.9% that it is “less likely to be harmful to your scalp and hair.” L’Oreal argued that the questions were leading in that they forced respondents to specifically consider safety, which they might not just seeing the package. There was no control group. “Comparable flaws have rightfully served as the basis for exclusion of similar surveys in other areas.” However, there was significant external evidence that relaxer consumers already associate lye with dangerousness and no-lye relaxers with comparative safety, as discussed above. “The risk that respondents only considered this possibility because of the listed responses is therefore relatively low, making the survey results more reliable.” Thus, the survey was admissible, and there was a genuine dispute over whether the package “meaningfully communicates to users that it is safer or gentler than relaxers that do contain lye.”

Unjust enrichment: plaintiffs’ only damages theory was that the product was so dangerous as to be worthless, justifying a full refund. They didn’t have evidence of damages based on the value of the scalp protector, and that didn’t render the entire kit so dangerous as to be worthless; the other parts performed their intended functions. [Query whether any reasonable consumer would buy a kit with a worthless but really important component.] Thus those claims, and their class, went away.

By contrast, NYGBL § 349 provides for the greater of actual damages or $50 statutory damages for anyone injured by a violation of its terms. “Because the statutory damages apply on a classwide basis, there is no need to determine the exact amount of [any] price premium.” A reasonable juror could find that adding the scalp protector increased the price of the product. The package advertised the scalp protector as one of its five steps and recommended its use in the section of the packaging labeled “READ BEFORE PURCHASING.” Also, 85.4% of respondents in plaintiffs’ survey, all of whom had used relaxers, indicated that a scalp protector should always be applied before using no-lye hair relaxers.

L’Oreal argued that some class members likely would have purchased the product even in the absence of those allegedly misleading representations. “This argument, however, is an attempt to impose a reliance requirement where none exists. As the New York Court of Appeals has recognized in this context, ‘[r]eliance and causation are twin concepts, but they are not identical.’… If there is a price premium, then every purchaser of the kit paid more than they otherwise would have, so every purchaser was injured. A purchaser’s individual experience after purchasing the product or idiosyncratic ex ante valuation does not matter.”

Since plaintiffs didn’t show a likelihood of repurchasing the product, their declaratory/injunctive relief claims were dismissed.

Fraud/negligent misrepresentation by omission: New York, Florida, Illinois, and Missouri define a manufacturer’s duty in varying ways, but the upshot is that “a manufacturer that knows its product presents an unexpected safety risk when put to its normal use has a duty to disclose that fact to consumers who do not have access to that information.” In California, a duty to disclose only arises if there is a direct “transaction” between a manufacturer and end-consumer and negligent omission claims are otherwise barred, so the California claims were kicked out.

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