Cosmetics Industry Violations of the False Claims Act

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The U.S. Food & Drug Administration (FDA) had not typically targeted cosmetics manufacturers, except in cases that presented serious and significant health risks to consumers. In the past year, however, the federal regulator has been taking a closer look at the cosmetics industry. In fact, last year, the agency sent four warning letters in a matter of two months to Avon Products as part of its crackdown on the marketing of cosmetics products. The cosmetics giant maintains international operations and is based in Manhattan.

For example, one of the warning letters sent to Avon alleged that Avon’s products, “appear to be intended for uses that cause these products to be drugs under the Federal Food, Drug and Cosmetic Act (FD&C Act).” Under the Act, a product cannot be marketed as having effects on the human body’s structures or functioning unless FDA approval was received deeming the product a new drug product, or unless the product meets the standards in place for an over-the-counter (OTC) monograph. The FDA letter claimed that a number of products marketed by Avon violated the Act’s regulations and “appeared to be intended for uses that cause these products to be drugs” under the Act. The FDA went on to say that Avon’s “products are not generally recognized among qualified experts as safe and effective for” the cited uses and, because of this, “are new drugs” under the Act.

At issue is that a number of cosmetics firms have made marketing assertions that involve claims only permitted for approved pharmaceutical products. And, Avon isn’t the only such example. Prior warning letters—notices of intended regulatory action—were previously sent to Lancôme USA, which is a subsidiary of L’Oreal subsidiary; Andes Natural Skin Care, which is based in Nevada; and Janson Beckett, which is located in New Jersey. All of the FDA letters alleged the firms marketed their products using improper claims.

It is believed that these situations do not represent isolated instances and other cosmetics manufacturers and marketers might be making similar, unsubstantiated, and illegal claims.

Cosmetics Industry Whistleblowers

The whistleblower lawyers at Parker Waichman LLP are investigating potential whistleblower lawsuits against cosmetics manufacturers involving violations of the False Claims Act. Current and former cosmetics industry employers and others who qualify as whistleblowers may be entitled to a reward of 15-to-25 percent of any amount the government recovers should a cosmetics industry whistleblower lawsuit be successfully pursued under the federal False Claims Act.

The whistleblower provisions of the False Claims Act contain protections that grant whistleblowers confidentially and bar cosmetics firms from taking any type of retaliatory action against whistleblowers.

If you are aware of a cosmetics manufacturer or marketer that engaged in illegal activities to its marketing practices, the Cosmetics Industry Whistleblower Lawyers at Parker Waichman LLP want to hear from you today. Parker Waichman is offering free legal evaluations to any potential cosmetics industry whistleblower.

False Claims Act Whistleblower Provisions

The False Claims Act allows for private persons to file lawsuits to provide the government information about wrongdoing. Under the statute, if it is established that a person has knowingly submitted or caused others to submit false or fraudulent claims to the United States, the government can recover treble damages and $5,500-to-$11,000 for each statute violation. If the government is successful in resolving or litigating its claims, the whistle blower who initiated the action can receive a share of 15-to-25 percent of the amount recovered. Should the government decline to join the whistleblower case, the lawsuit may proceed privately, and the whistleblower will be entitled to a reward of 25-to-30 percent of the recovery.

The False Claims Act prevents companies from retaliating against a whistleblower. Any employee who is discharged, demoted, suspended, threatened, or harassed for filing a whistleblower lawsuit can bring an action for re-instatement with the same seniority restored. That employee is also entitled to recover double back pay with interest, as well as other compensatory damages.

The False Claims Act also allows whistleblowers to initially report fraud anonymously by filing a claim through an attorney. The whistleblower’s identity remains under seal while the Justice Department investigates the case. Should the government chooses not to pursue the case, the firm will never know the identity of the whistleblower, unless the claim is privately pursued.

Legal Help For Whistleblowers

If you have knowledge that a cosmetics firm illegally marketed cosmetics you may have valuable legal rights as a cosmetics industry whistleblower. For a confidential, no obligation evaluation of your potential cosmetics industry whistleblower lawsuit, please fill out our online form, or call 1 800 LAW INFO (1-800-529-4626) today.