Cosmetics and PFAS: Industry Lawsuits a Lesson For ESG
Cosmetics and PFAS is a topic that saw increased scrutiny from the scientific community, legislature, and the media in 2021. As we predicted in early 2021, the increased attention on the industry presented significant risks to the cosmetics industry, and our prediction was that the developments made the cosmetics industry the number two target for future PFAS lawsuits. Shortly before the New Year, two industry giants – Shiseido and CoverGirl – were hit with separate lawsuits related to their cosmetics and PFAS content in some of the companies’ products. Each share similarities, and each has the potential to not only impact both companies financially, but also law the foundation for future lawsuits targeting the cosmetics industry. The industry, insurers, and investment companies interested in the consumer goods vertical with niche interest in cosmetics companies must pay careful attention to these two lawsuits.
Cosmetics and PFAS: the 2021 Foundation
On June 15, 2021, a scientific study in the Journal of Environmental Science and Technology Letters published conclusions regarding testing of a variety of cosmetics products from the United States and Canada for PFAS content, and found PFAS present in over half of the products. On the same day that the study was published, the No PFAS In Cosmetics Act 2021 was introduced in the Senate by U.S. Senators Susan Collins (R-ME), Richard Blumenthal (D-CT), Dianne Feinstein (D-CA), Maggie Hassan (D-NH), Jeanne Shaheen (D-NH), Kirsten Gillibrand (D-NY), and Angus King (I-ME). The bill sought to ban PFAS in cosmetics.
These two developments led us to conclude “with these developments, our prediction that cosmetics is the number two target for PFAS litigation issues behind water rings true.”
Why PFAS In Cosmetics Is A Concern
PFAS content in cosmetics raises concerns for human health in scientific communities due to the fact that PFAS are capable of entering the bloodstream in ways other than direct oral ingestion, and one of these ways includes dermal absorption. Concerns have also been raised regarding absorption of PFAS into the bloodstream by way of tear ducts. The absorption issue is one that is being studied fairly extensively through various pending scientific studies. At the end of 2021, the federal Agency for Toxic Substances and Disease Registry (ATSDR) went so far as to recommend that citizens in Southern New Hampshire reduce their risk of further PFAS exposure by avoiding the use of certain consumer goods, including cosmetics.
Shiseido PFAS Lawsuit
On December 14, 2021, a group of plaintiffs filed a class action lawsuit in New York against Shiseido alleging that its bareMinerals brand of cosmetics falsely advertised its products as “clean and conscious”, “pure” and “free of harsh chemicals” due to the presence of PFAS in the products. The plaintiffs allege that the presence of PFAS is not noted anywhere in Shiseido’s packaging or marketing (website, advertisements, etc.). Plaintiffs go so far as to allege that the very brand name bareMinerals has created in consumers’ minds for over 25 years the impression that the products are “bare” of any additives or harmful ingredients whatsoever. Plaintiffs allege that they tested barMinerals products and discovered that they contained PFAS, which is supported by the June 15, 2021 scientific study in the Journal of Environmental Science and Technology Letters, which disclosed results of testing of bareMinerals products.
The lawsuit seeks a class certification of “all persons residing in the United States who purchased [Shiseido’s PFAS-containing makeup].” The case similarly seeks separate class action certification in the states of California, Mississippi, Ohio, New Jersey, and North Carolina. The lawsuit seeks to have Shiseido “undertake an immediate public information campaign to inform consumers [of] the truth about the PFAS….; adequately disclose the PFAS to consumers at the time of sale….and remove the PFAS.” Plaintiffs also seek monetary damages under claims of breach of implied warranty, breach of express warranty, negligent misrepresentation fraud, and various state statutes centering on false advertising and consumer protection in the above-referenced states.
CoverGirl PFAS Lawsuit
On December 29, 2021, Toxin Free USA (a non-profit) filed a lawsuit in the District of Columbia against CoverGirl and Coty, Inc. in which the organization alleged that the companies falsely advertised some of its cosmetics products as safe and environmentally friendly. Yet, the lawsuit alleges, the products at issue were neither since they contained PFAS. Unlike the Shiseido lawsuit, the CoverGirl lawsuit is not a class action lawsuit and is narrowly focused on the consumer protection elements centering on false advertising. The stark difference between the Shiseido lawsuit and the CoverGirl lawsuit is that the plaintiff in the CoverGirl lawsuit explicitly states “this action does not seek damages. Instead, Toxin Free USA seeks to end the unlawful conduct directed at D.C. consumers….”
Of critical importance to companies undertaking ESG-type of reporting is the lawsuit’s direct aim at Coty’s (the parent company of CoverGirl) sustainability report that touts its environmental initiatives and safety strategies. Language from the report is quoted throughout the Complaint, including statements concerning a dedication to ascertaining whether products are safe for consumers and minimizing environmental impacts.
Just the Beginning For Cosmetics Industry
With studies underway, legislation pending that targets cosmetics, and increasing media reporting on cosmetics concerns to human health, the cosmetics industry has a target on its back with respect to PFAS that will have impacts on the industry’s involvement in litigation. Six months ago, we made this prediction: “Personal injury / products liability cases, false advertising, and failure to disclose theories of liability are some of the more prominent allegations that cosmetics companies are likely to face. Further, the cosmetics industry is concerned about federal and state level regulatory enforcement action for environmental pollution remediation costs stemming from placing PFAS waste into the environment as a by-product of the manufacturing process.”
The first part of our prediction is becoming reality, as two significant cosmetics industry players find themselves embroiled in litigation focused on false advertising, consumer protection violations, and deceptive statements made in marketing and ESG reports. The Shiseido lawsuit in particular may well serve as a test case for plaintiffs’ bar to determine whether similar lawsuits will be successful in any (or all) of the fifty states in this country. Each cosmetics company faces the stark possibility of needing to defend lawsuits involving plaintiffs in all fifty states for products that contain PFAS.
It should be noted that these lawsuits would only touch on the marketing, advertising, ESG reporting, and consumer protection type of issues. Separate products lawsuits could follow that take direct aim at obtaining damages for personal injury for plaintiffs from cosmetics products. In addition, environmental pollution lawsuits could seek damage for diminution of property value, cleanup costs, and PFAS filtration systems if drinking water cleanup is required.
It is of the utmost importance that businesses along the whole supply chain in the cosmetics industry evaluate their PFAS risk. Public health and environmental groups urge legislators to regulate PFAS at an ever-increasing pace. Similarly, state level EPA enforcement action is increasing at a several-fold rate every year. Now, the first wave of lawsuits take direct aim at the cosmetics industry. Companies that did not manufacture PFAS, but merely utilized PFAS in their manufacturing processes, are therefore becoming targets of costly enforcement actions at rates that continue to multiply year over year. Lawsuits are also filed monthly by citizens or municipalities against companies that are increasingly not PFAS chemical manufacturers.