Recently, local California news channels reported a quarter million dollar settlement involving a store branded line of cosmetic products. I do not generally name companies involved in such settlements (and will not do so here), but the claims settled in the suit are a good topic of discussion to help your company avoid or at least minimize its legal risks. In the action, four California District Attorneys (DAs) (from the counties of Fresno, Yolo, Sacramento, and Shasta) alleged the retailer violated state regulations by misrepresenting product sizes or quantity of its store branded cosmetic products with the “use of oversized and non-functional slack-fill and/or false sidewalls and/or false bottoms.” The settlement is only one of many in recent years in actions brought by these same District Attorneys and others.
Slack Fill – What is it? How much empty space is too much?
What is slack fill? Slack fill is the difference between the actual capacity of a container and the volume of product contained therein. (CA Bus. & Prof. Code 12606(b).) Simply put, the space in packaging not occupied by the product. While some slack fill is permissible, non-functional slack fill is not. The problem for companies arises in the subjective manner in which enforcement and evaluation of non-functional slack fill occurs. For example, I have seen District Attorneys claim that the space taken up by the thick walls of a glass container or the space occupied up by the components of an airless pump constitutes impermissible nonfunctional slack fill. In other words, the space in the bottle or packaging not actually occupied by the cream.
California’s slack fill statutes have undergone a number of amendments over the years. In 1997, in an effort to put to rest a number of nuisance lawsuits against companies in several industries, including cosmetics, after significant negotiations among the California District Attorneys Association, the Consumer Attorneys of California, environmental groups, consumer groups and the business community, A.B. 1394 was passed. In that amendment, the current exemptions or safe harbors for permitting slack fill were adopted. Of particular relevance to cosmetic packaging are the following:
- Protection of the contents of the package (for example, thicker walls for glass bottles to prevent breakages)
- Adequate space for mandatory and necessary labeling information (warnings, directions, ingredients, net contents, etc.)
- Decorative or representational container that is part of the presentation of the product
- Prevention of pilfering
- Dimensions of the product or immediate container are visible through the exterior packaging or the “actual size” image is clearly and conspicuously depicted
- Product delivery or dosing device (for example, airless pumps and bottles)
- Holiday or gift packages
With the above exemptions in place, lawsuits and challenges against cosmetic packaging went quiet for a number of years until around 2012 when California District Attorneys once again began challenging cosmetic companies’ packaging. Subsequently, in September, 2013, California Governor Jerry Brown signed into law SB 465 which amended the “slack fill” statute to its current form. That amendment, which aligned the definition of nonfunctional slack-fill more closely with the federal rule, appeared to provide manufacturers some relief from the onslaught of subjective interpretation and enforcement by California DAs. Specifically, SB465 revised the definition of nonfunctional slack fill as the “empty space in a package that is filled to substantially less than its capacity for reasons other than” (emphasis added) one or more of the enunciated exemptions (B&P Code 12606(c)(1)-(15).). The statute now also provides that the slack fill in a package shall not be used as grounds to allege a violation based solely on its presence “unless it is nonfunctional slack fill.” Notably, SB 465 was opposed by the California District Attorneys’ Association.
Some, including me, thought SB 465 was a step in the right direction, and that the number of challenges by DAs would likely decrease. However, the announced settlement is an indication that perhaps that is not the case. As such, it appears that slack fill cases in California may continue to be a real challenge as the DAs are continuing to prosecute them, the standards are subjective (after all, what does “substantially less” really mean), companies thus far have opted to settle claims rather than litigate, compliance with Federal rules does not bar state action, and there is little case law available use a guide.
What can companies do? Audit. Is the outer package larger than it needs to be? Is there substantiation for the oversized package resulting from retailer requests to minimize pilfering? Is the “actual size” image really the actual size? Can a consumer, at the point of purchase, see the product through the outer packaging sufficiently without having to manipulate the packaging to know what portion of the container consists of product? Is the outer package reasonably related to the primary container? Does the primary container have an inner wall unseen by the consumer? These are only a few questions to consider. Taking the time to evaluate the slack fill of your company’s packaging can save unnecessary challenges down the road and can help your company minimize its risks of being the next revenue source for county prosecutors.