Duane Morris Class Action Review - 2023 - Report - Page 114
CHAPTER 7
Consumer Fraud Class Actions
I.
Executive Summary
Class action litigation in the consumer fraud space remains an area of key focus of
skilled class action litigators in the plaintiffs’ bar. In 2022, consumer fraud class actions
were alleged across a variety of industries including household appliances, credit
reporting, children’s car seats, and insurance. For one, the beauty and cosmetic
industry experienced a boom in consumer fraud class actions during the last few
months of 2022 as consumers demanded increased transparency about the ingredients
in their cosmetic products and the products’ effects. L’Oreal USA Inc., is currently
defending a consumer fraud class that avers the beauty brand misled its customers
about the nature of the collagen ingredients used in its anti-aging products. See Lopez,
et al. v. L’Oreal USA, Inc., Case No. 21-CV-7300 (S.D.N.Y.). Similarly, Sephora USA
Inc. faces a serial lead plaintiff who claims Sephora’s “Clean at Sephora” stamp on
cosmetic products is misleading because Sephora’s “Clean” beauty products actually
contain a multitude of synthetic ingredients that consumers would not understand meet
a laymen’s definition of “clean” as something free from impurities. See Finster, et al. v.
Sephora USA Inc., Case No. 22-CV-1187 (N.D.N.Y.).
The ability of putative consumer classes to succeed in court has been modified by the
U.S. Supreme Court, particularly by decisions issued within the last decade. For
example, in AT&T Mobility v. Concepcion, et al., 563 U.S. 333 (2011), the Supreme
Court held a class action waiver contained in a consumer form contract was
enforceable; this decision gave businesses the “green-light” to insert class action
waivers into their consumer contracts and subsequently mount their class defenses
around them to force putative class members into individual arbitrations.
The Supreme Court’s decision in Spokeo, Inc. v. Robins, et al., 136 S.Ct. 1540 (2016),
held a consumer alleging a claim under the Fair Credit Reporting Act could not survive
Article III standing analysis through a mere citation to an allegedly violated provision of
the statute. Instead, putative plaintiffs must show they suffered an injury-in-fact that was
“concrete and particularized,” “concrete” meaning de facto, or that it actually existed,
and “particularized” meaning it must have affected putative plaintiffs in a “personal and
individualized way.” Id. at 1548. When a putative consumer class alleged claims under
the Fair Credit Reporting Act in 2021, the Supreme Court in TransUnion LLC, et al. v.
Ramirez, et al., 414 S.Ct. 2190 (2021), clarified that consumer plaintiffs must
demonstrate a concrete, ascertainable harm from a defendant’s statutory violation to
have Article III standing to sue for monetary damages.
The plaintiffs’ class action bar continues to push the legal envelope with new variations
of consumer fraud putative classes implicating a variety of issues for courts to decide.
Whether their putative classes hail from new industries, whether they style their claims
in a procedurally unique way, or whether they attempt to skirt Article III’s evolving
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Duane Morris Class Action Review – 2023
