Richardson v. L'Oreal USA, Inc.
951 F. Supp. 2d 104
| D.D.C. | 2013Background
- Plaintiffs sued L’Oréal USA alleging that certain Matrix Biolage, Redken, Kérastase, and Pureology products were deceptively labeled as "salon-only" even though they were sold in non-salon retailers (e.g., Target, Walgreens).
- Plaintiffs contend the "salon-only" labeling implies superior quality and supports premium pricing; L’Oréal had an anti-diversion campaign but plaintiffs allege diversion persisted.
- The parties negotiated a nationwide class settlement covering consumers who purchased the products for personal use on or after August 30, 2008, excluding resellers, salon professionals, L’Oréal employees, plaintiffs’ counsel, and court staff.
- Settlement terms: injunctive relief only — L’Oréal will remove contested "salon-only" claims from U.S. product labels, advertising, and websites for at least five years (with limited post-five-year conditions); no destruction of existing inventory.
- Additional terms: class representatives may seek up to $1,000 each; plaintiffs’ counsel may apply for up to $950,000 in fees (defendant will not oppose); notice will be via a short-form USA Today publication directing class members to a settlement website; class members retain the right to pursue individual monetary claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether proposed settlement should receive preliminary approval | Settlement resolves deceptive-label claims through meaningful injunctive relief and avoids litigation risks | Settlement is fair and negotiated at arm’s-length after document exchange and mediation | Court preliminarily approved the settlement as within range of possible approval |
| Whether pre-certification settlement was negotiated non-collusively and with adequate information | Plaintiffs say negotiations were informed by L’Oréal production of documents and mediation | L’Oréal contends parties engaged in serious, informed negotiations including mediation | Court found process was non-collusive and informed; adequate for preliminary approval |
| Whether equitable-relief-only settlement is adequate given damages uncertainty | Plaintiffs argue class-wide damages would be hard to prove due to price variation; equitable relief is reasonable and class members may sue individually for money | L’Oréal emphasizes risks and complexity of damages proof and supports injunctive remedy | Court held equitable-only relief permissible given valuation difficulties and retained individual claims for money |
| Whether incentive awards and attorney fees are reasonable | Plaintiffs seek modest incentives (≤$1,000) and up to $950,000 in fees; counsel’s judgment deserves deference | L’Oréal agreed not to oppose fee request up to $950,000; settlement is not conditioned on full fee award | Court found incentive payments reasonable and fee request not an obvious defect; preliminary approval allowed (court may later adjust fees) |
Key Cases Cited
- Trombley v. Nat’l City Bank, 759 F. Supp. 2d 20 (D.D.C. 2011) (standard for preliminary approval and weighing fairness indicators)
- In re Vitamins Antitrust Litig., 305 F. Supp. 2d 100 (D.D.C. 2004) (factors for preliminary settlement review)
- D’Amato v. Deutsche Bank, 236 F.3d 78 (2d Cir. 2001) (heightened scrutiny for pre-certification settlements)
- Radosti v. Envision EMI, LLC, 760 F. Supp. 2d 73 (D.D.C. 2011) (discussion of incentive awards for class representatives)