Insights

In 2023 and 2024, several U.S. states enacted extensive “Right to Repair” laws, reflecting a growing legislative focus on ensuring consumers have access to the parts and resources needed to repair their own products without relying on the product’s original manufacturer. Most recently, California, Colorado, Minnesota, New York, Massachusetts, and Oregon implemented comprehensive regulations aimed at providing consumers direct access to tools, parts, and information for the repair of various electronic devices and equipment, including digital products and agricultural machinery. As the “Right to Repair” movement continues to gain significant traction across the United States, it is critical that manufacturers understand these laws and how these laws will impact their individual businesses.

For years, consumers have initiated legal actions against cosmetic companies alleging a causal relationship between the use of certain cosmetic products containing talc (such as baby powder) and the development of various cancers, commonly mesothelioma and ovarian cancer, with varied results. Below, we discuss a recent proposed rule from FDA proposing asbestos testing for cosmetics containing talc and potential impacts on ongoing and new consumer litigation.

On December 11, 2024, the Food and Drug Administration (FDA) released a final guidance concerning the Modernization of Cosmetics Regulation Act (“MoCRA”)’s facility registration and product listing submission requirements, which FDA began enforcing on July 1, 2024. This guidance includes key FDA recommendations and instructions, including the following:

On October 25, 2024, FDA issued final guidance to the tattoo industry on the preparation, packing and holding of tattoo inks aimed at preventing the risk of microbial contamination. FDA is getting involved because tattoo ink is considered a cosmetic product regulated by the Modernization of Cosmetics Regulation Act of 2022 (MoCRA).

The Federal Circuit recently held that a claim that a product is protected by patents when it is not may constitute false advertising. Defendants in this case, Dawgs Inc., accused the makers of Crocs of using the terms “patented,” ‘proprietary,” and “exclusive” in its advertising in a manner that misled consumers about the nature, characteristics, or qualities of its own products and the products of its competitors. Specifically, Dawgs alleged that Crocs made promotional statements that a patent covers its Croslite shoe material, that Croslite has numerous tangible benefits found in all of Crocs’ shoe products and that, because Croslite is “patented,” others’ products lack these same benefits. Crocs, Inc. v. Effervescent, Inc., No. 2022-2160, 2024 U.S. App. LEXIS 25001 (Fed. Cir. Oct. 3, 2024).

A warning letter posted by the Food and Drug Administration (FDA) on June 18, 2024 offers a first glimpse into how FDA may enforce its new regulatory scheme for products that fall within the Modernization of Cosmetics Regulation Act of 2022 (MoCRA)’s purview. While MoCRA was enacted in December 2022 and many of its provisions became enforceable on December 29, 2023, until now, many have wondered how FDA will exercise its new enforcement powers.

Talc is a mineral ingredient used in many cosmetic and personal care products, including baby powder, root touch-up products, and blush. Because both talc and asbestos are naturally occurring minerals that may be found in close proximity in underground deposits, there is risk for contamination of asbestos in talc-based products.

As we have previously discussed, in recent years, consumers have increasingly demanded “cleaner” beauty products and more transparency in product labeling. In addition to the FDA’s increased authority to regulate cosmetics under MoCRA, a number of states have now taken steps to regulate ingredients in cosmetics by limiting, and in some instances even banning, the use of certain ingredients that may be potentially harmful or toxic.

On January 8, 2024, the U.S. Food and Drug Administration (FDA) announced that SPL Xforms, a Structured Product Labeling authoring tool, is now available as an additional option for completing facility registration and product listings mandated by the Modernization of Cosmetics Regulation Act of 2022 (MoCRA). As a result, companies may submit their facility registration(s) and product listing(s) in one of four ways:

On December 18, 2023, the U.S. Food and Drug Administration (FDA) launched Cosmetics Direct, the electronic submission portal for facility registration and product listing required under the Modernization of Cosmetics Regulation Act of 2022 (MoCRA) and published a User Guide for the portal.[1] Cosmetics Direct contains user friendly data entry forms, performs initial validations, creates and saves the structured product labeling (SPL) submission, and submits the SPL to FDA.

On December 14, 2023, the FDA issued an update with further instructions on  serious adverse event reporting under the Modernization of Cosmetics Regulation Act of 2022 (“MoCRA”), which is enforceable starting December 29, 2023.

On October 13, 2023 he FDA announced that two of the requirements set forth in the Modernization of Cosmetics Regulation Act of 2022 (MoCRA)— facility registration and product listing—will be included as part of the Structured Product Labeling (SPL) framework. SPL is a document formatting standard adopted by FDA for exchanging product-related information. 

On October 11, the Federal Trade Commission announced a proposed rule designed to increase transparency in pricing practices. The proposed Rule on Unfair or Deceptive Fees would prohibit businesses from misrepresenting the total costs of goods and services by omitting mandatory fees from advertised prices and mispresenting the nature and purpose of fees. If the rule goes into effect, which we anticipate will happen following the comment period, businesses will be required to disclose all mandatory fees and do so at the start of the purchasing process, rather than waiting to disclose such fees after consumers have invested time in navigating purchase flows (or failing to disclose them altogether). Once the rule publishes in the Federal Register, there will be a sixty-day comment period, after which the FTC will consider a final rule.

The Modernization of Cosmetics Regulation Act of 2022 (MoCRA) establishes a number of new requirements for the cosmetics industry. Among other things, facilities that manufacture and process cosmetics in the U.S. will need to be registered with the FDA, and companies that manufacture cosmetics will need to submit a list of all cosmetics (and their ingredients) to the FDA.

In December 2022, the Modernization of Cosmetics Regulation Act (“MoCRA”)—the most significant expansion of the U.S. Food and Drug Administration's authority to regulate cosmetics in nearly 85 years—was signed into law. Among other things, MoCRA gives the FDA authority to require facility registration and reporting of serious adverse events, impose certain record-keeping obligations, recall cosmetic products, and establish good manufacturing practices. With many of MoCRA's provisions going into effect at the end of this year, cosmetics companies need to prepare to address these requirements and regulations, which may also have a considerable impact on the litigation landscape.

In March 2023, the White House published its National Strategy to Advance Privacy-Preserving Data Sharing and Analytics.  Buried in the report was a quiet, but notable, concern related to the possibility of deanonymizing a consumer due to “insufficient disassociability”.  See Report, pg. 6.  A new wave of class action lawsuits in California—already over three dozen at the time of writing—now seeks to turn a spotlight on these practices, claiming that companies are using “grey market” data to match user patterns with personal identifiable information (PII).

New considerations have emerged for advertisers who publish reviews or endorsements. On June 29, 2023, the FTC finalized its updated Endorsement Guides, which provide insights to businesses on how the use of reviews and endorsements might be considered unfair or deceptive in violation of Section 5 of the FTC Act. Over the past several months, the FTC sought public comments on proposed updates to the Endorsement Guides to accurately reflect the modern landscape of advertising, which includes reliance on social media and content creators.

Is there a legal, cognizable claim for a consumer who was misled by a movie trailer? Perhaps. In June 2022, two Plaintiffs filed a lawsuit against Universal concerning a movie they streamed titled Yesterday which is owned by Universal.  Woulfe et al v. Universal City Studios LLC et al., 22-cv-00459, ECF No. 83 (C.D. Cal. Dec. 20, 2022).  Prior to streaming, the Plaintiffs watched the movie trailer, which featured actress Ana De Armas.  In the complaint, Plaintiffs alleged they were persuaded by the trailer, and De Armas’ role in particular to stream the movie.  However, De Armas’ character was cut from the final version of Yesterday, so she was not featured in the film whatsoever.  The Plaintiffs alleged they would not have rented the movie had they known De Armas would not appear in the movie. The Plaintiffs then sued Universal under a host of consumer protection violations, including a violation of the California Unfair Competition Law, California Consumer Legal Remedies Act, and California False Advertising Law. 

The Federal Trade Commission (“FTC” or “Commission”) recently announced that it has adjusted the maximum civil penalty dollar amounts for violations of 16 provisions that the Commission enforces. The increase is required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, and is intended to account for inflation. The act directs agencies to implement annual inflation adjustments based on a prescribed formula. Given the uptick in FTC enforcement actions, companies are likely to begin feeling the impact of the increased penalties in the coming year.

On May 20, 2022 the Federal Trade Commission’s (“FTC”) Commissioners unanimously approved a request for public comment on proposed updates to its Guides Concerning the Use of Endorsements and Testimonials in Advertising (“Endorsement Guides” or “Guides”). In the draft revisions, released last week, the FTC seeks to update the Endorsement Guides and provide new examples that reflect advertisers’ growing reliance on social media advertising. The Endorsement Guides were last revised in 2009. See 16 CFR pt 255.