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.