Managing FDA and CPSC Risk in Beauty Products

Claudia Lewis: 00:11

You're building a beauty or wellness brand in a fast moving, highly competitive market.

Kristen Ruisi: 00:16

Standing out isn't just about developing quality products and creative campaigns. It's about navigating regulations, protecting your brand, and managing risk.

Claudia Lewis: 00:25

From FDA oversight and product claims to data privacy and consumer expectations, the legal and regulatory landscape is becoming more complex.

Kristen Ruisi: 00:34

Social media, influencer marketing and global expansion are only accelerating that complexity.

Claudia Lewis: 00:40

I'm Claudia Lewis.

Kristen Ruisi: 00:41

And I'm Kristen Ruisi. We're partners in Venable's Beauty and Wellness team.

Claudia Lewis: 00:46

On this podcast, we talk with our Venable colleagues and industry insiders about the legal and regulatory issues shaping the beauty and personal care market.

Kristen Ruisi: 00:55

And focus on practical guidance brands can use to stay compliant and competitive.

Claudia Lewis: 01:00

Welcome to the Beauty Law Glow-Up.

Claudia Lewis: 01:05

This week, we're talking about how beauty brands can think proactively about risk.

Claudia Lewis: 01:12

Hi, I'm Claudia Lewis, co chair of Venable's FDA Group. As beauty and wellness products become more innovative, the legal risks surrounding safety, compliance and recall preparedness are becoming more complex as well. From FDA oversight and broker developments to CPSC jurisdiction over emerging health and wellness devices, companies are facing a broader and faster moving regulatory landscape than ever before.

Claudia Lewis: 01:40

In this episode, we explore how beauty brands can think proactively about product safety, regulatory overlap, and crisis readiness before a problem becomes a full blown event. To help us do that, we're talking to Allison Levy, chief legal officer at Mary Kay, and Erin Maus, a Venable partner focusing on international and domestic product liability and mass tort litigation. Erin, I'm going start with you.

Claudia Lewis: 02:06

Erin, you are relatively new at Venable and are based in Chicago, one of my favorite cities. Your practice spans, regulatory work, CPSC matters, and litigation. Can you tell us more about your practice and how you got into this interesting intersect of disciplines?

Erin Maus: 02:25

Chicago is my favorite city too, so I'm glad we share that, Claudia. I do co-chair Venable's consumer products team, which aims to organize our disputes and regulatory expertise so there we are effectively and holistically advising consumer product companies on the key issues that are affecting them. I am a litigator, and spent most of my career litigating product liability disputes. That led to a very robust product regulatory practice. As a litigator, you see when things go wrong. You learn a great deal about how to anticipate and then correct proactively problems to reduce risk, particularly regulatory and product safety risk.

Erin Maus: 03:16

So that's really where my practice shifted from a litigation focused practice to both litigation and a regulatory focused practice. And you're right. I do a lot with the Consumer Product Safety Commission. Obviously, we've had the benefit of working on a number of FDA matters. And my work on the regulatory side is both helping companies, put products on the market, manage, and assess regulatory obligations. But also handling regulatory investigations that may come up or product recalls or market actions that are necessary if there's a noncompliance issue or if there's a product safety issue.

Erin Maus: 04:00

So, I get to work with all kinds of exciting companies in a a wide variety of industries, including in the beauty industry. And I work a lot with the engineers and toxicologists and food safety experts. And I love the practice because I am always dealing with the science and the engineering behind the products that our our clients are putting onto the market. And it's just in a very exciting, intersection to be in.

Claudia Lewis: 04:28

So no day is the same, I would imagine.

Erin Maus: 04:31

That's correct.

Claudia Lewis: 04:32

Allison, we've known each other for such a long time. I won't say how long so we don't age each other, myself more than you. You bring a unique in house perspective having worked closely with companies across cosmetics, dietary supplements, and broader consumer products. And now you're with a major beauty company. Can you share more about your current role, and how has your in house experience shaped the way you approach product risk and compliance?

Allison Levy: 05:00

Well, hi, Claudia. Hi, Erin. That's a great question. And what I have found in my career, I've been in house now for over twenty years in a variety of companies. It's a good fit for me.

Allison Levy: 05:12

What I love about my work, and it's similar to what Erin said, I love helping our business make things happen. As Mary Kay herself said, nothing happens until somebody sells something. So what are we selling? And is it a product that consumers want and that our beauty consultants want to sell? How do we make that happen from a legal and regulatory standpoint?

Allison Levy: 05:35

It's an ever changing environment. So I see a part of my role now, and, really, it's always been a part of my role in house is how do I help our business see around the corner as best we can on what's changing with the landscape? Because as we know, things change daily, if not more often, and make good business decisions, evaluate the risk, evaluate the landscape, and make a reasonably well informed, hopefully, business decision because that's what we're here to do. We're not here to completely do away with risk or to say that we have to evaluate everything through that zero risk lens. Otherwise, we don't have a business to run, but we want to have great products and offerings that consumers want, and that makes good sense for our company.

Allison Levy: 06:28

So it's a great role to be in to help advise and inform the business so that they can make the right decisions.

Claudia Lewis: 06:36

Thank you, Allison. You both mentioned risks. Obviously, as attorneys, a part of our job is to manage risk. Erin, on the CPSC side, what are the biggest instigators you're seeing now that lead to regulatory scrutiny or product related risk in the beauty space?

Erin Maus: 06:57

Cosmetics in particular are governed by the FDA, and there's a lot of regulatory activity on the MoCRA side. Obviously, Claudia, you wrote just recently about the recall guidelines that FDA issued under MoCRA for cosmetics. And we obviously are following those kinds of developments closely. I do think we may see the proposed rule on fragrance allergen labeling coming up soon.

Erin Maus: 07:32

So obviously, for cosmetics, there are a lot of regulatory developments on the forefront. On the CPSC side, and maybe I'll just take one minute to make it clear that the Consumer Product Safety Commission has jurisdiction over, broadly speaking, consumer products that aren't regulated by another agency. And so in the beauty space, what we're seeing the CPSC focusing on are really those health and wellness products that they're hitting the market. They're at the forefront of health and wellness development, whether they're wearable products, whether they are particular applications for different, health and wellness and beauty products, the physical sort of hardware type products that are coming out of the beauty space that are often technology driven and raise some of the types of issues that the CPSC is concerned with.

Erin Maus: 08:31

The risks tend to be the sort of traditional risks that the CPSC focuses on, fire risks, the type of physical risks that a product can present if it contains a a product defect. But the CPSC is also responsible for the Poison Prevention Packaging Act, which can apply to cosmetics companies as well. And so ensuring that products have proper packaging and that they are labeled if they contain any hazardous ingredients. All that also falls under the CPSC's jurisdiction. So as products in the health and wellness space are new, are really developing, into products that didn't exist two years ago, five years ago, ten years ago, the CPSC is stepping into the space even more than they ever have.

Erin Maus: 09:31

And we've seen a number of recalls over packaging. We've seen a number of recalls over electrical issues, for health and wellness products that are electrified or that have battery issues. And so companies that may traditionally fall under FDA jurisdiction as they are developing really new and creative products need to think through whether those products could fall under CPSC jurisdiction. One other thing of note, I do think as marketing changes, as we look more and more at influencers being used to market beauty products, there's a larger question as to whether those products are being marketed towards a younger group to to children. And if so, whether that may increase the CPSC's focus on the products and potentially its jurisdiction, because there are specific children's product standards that may be implicated and may may fall under CPSC jurisdiction.

Claudia Lewis: 10:42

Well, that was very helpful, Erin, because I think that companies sometimes overlook that overlap between the FDA and CPSC.

Narrator: 10:51

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Claudia Lewis: 11:23

One thing you mentioned, Erin, and I'm going tip it to you, Allison, is about innovation. And I know Mary Kay is all about innovation. I was just recently in your beautiful facilities, where everyone was overly beautiful and everything was so interesting to touch and feel. I really appreciate the tour you gave me. When we're talking about innovation, and you talked about helping the businesses internally and making sure you're not looking through a a zero risk lens, Allison, how do you balance speed to market, marketing pressures, and internal alignment in terms of we have these regulatory pieces that we need to think about, but we want be part of that innovative, space.

Allison Levy: 12:07

I really like what Erin said about there are things that exist today that two years ago weren't even in the mix. That's how fast things are evolving and changing, and you have to keep up if you want to compete. To me, the best way to do that, to really allow the the creative energy through our scientists and innovators to do their best work, is to bring in a legal analysis as early as possible. If we are viewed as the legal counsel, in house, outside counsel, if we're advising early in the process, to me, that's the best way to help with speed to market, get out of the way, provide advice early and often, and really trying to partner with the business through the process because it is an ever evolving world. And I do think that you have to just be open and flexible to how are we marketing these products.

Allison Levy: 13:05

It's influencers today. What is it tomorrow? I do think there's concern about the blurring of age lines and how people are receiving information, but that's the world we live in. We can't necessarily change all of those things, but how do we help advise and counsel our businesses to be prepared for it? To me, sometimes this is at a human level because those of us that have been in the business a while aren't as nimble and open to change as perhaps younger people that come into this space.

Allison Levy: 13:39

So we have to adapt and support the business in that way. And I do think that some companies, if you're newer, smaller, a little more embracing of risk, it's easier to do that. It may come with some unintended consequences, or you may have to learn the hard way. But at the same time, I think for companies like the one that I work for or really a lot of beauty companies that have been in this space a long time, you've got to keep up with the times. And the best way to advise your client, my client, is to do it as early and as often as you can.

Claudia Lewis: 14:15

Yes. If people came early, we would have a lot less issues. But let's talk about and, Erin, I'm gonna tip it to you. When they don't come early or Allison, you talked about peeking around the corner when the innovation is moving so quickly that the peeking around the corner, we didn't go to the second corner. We just looked at the first corner.

Claudia Lewis: 14:36

So, Erin, I do want talk a little about escalation. When something starts to go wrong, whether it's consumer complaints, potential defect, or safety concern, how quickly can that escalate into a recall or into litigation? And talking about hitting the ground running and doing things early, what kinds of things can go wrong in the early moments that you would articulate? Like, think about these five things or think about these three things.

Erin Maus: 15:03

Yeah. Safety issues, sometimes they're not readily apparent. And for innovative products, products that are new to the market where you don't have comparative products, sometimes it can take a while for those products to be used and to be potentially misused.

Erin Maus: 15:26

So to understand the full scope of how people interact with the products and foreseeably misuse those products, which is part of what companies are supposed to be assessing when designing products. So it's not always a quick thing. And so companies really should be looking at trends in the information that is collected by the companies about the products. And that those trends can come from lots of different sources.

Erin Maus: 15:57

They obviously can come from consumer complaints, but they can come from internal assessments or internal testing. They can come from retail, your retailers who may be sharing information about what they're seeing in the market, in terms of how people are interacting with the products. So it sometimes can take a while. That's not always the case. Sometimes safety issues can arise very quickly if you have a bacterial, contamination issue. It can happen very, very quickly and escalate into a crisis within hours, a day, two days. And so all of that really speaks to having a program in place, a compliance program that really thinks, in the calm days, of allows companies to plan for how they're going to address these issues, in a systematic and effective way. I always describe these plans as ensuring that the right people get the right amount of information at the right time so that they can make informed decisions. And sometimes, those informed decisions require outside experts.

Erin Maus: 17:10

You know, somebody that is brought in very quickly to test the product or to analyze the situation, to give information to a company so they can make those kinds of quick decisions. The CPSC requires notification within 24 hours of being in possession of information that you have reasonable information that you have a reporting obligation. Doesn't mean you're conducting a recall, but it does mean that you're telling the CPSC about it. So in short it can happen in a lot of different ways. And so my recommendation is one, to have a plan, and to really think through what that plan could look like under a variety of different circumstances.

Erin Maus: 17:58

So that you're not just reactive. That you're acting within a protocol, within some policies that allow you to get attorney client privilege, to utilize the work product doctrine, and to really think holistically about the situation, not just the immediate thing in front of you. But, what what does this look like as it starts to expand further down the line? Because litigation is always a concern when you have a potential product safety issue. So it's really about planning and preparing.

Erin Maus: 18:32

The one other piece of advice that I find companies are often concerned about asking too many questions of consumers. They don't want to create what they think are bad facts. They may not want to get the product back and test it. Sometimes I think that's shortsighted. It is a complicated question, but I do think it is better to have products that people say, there's something wrong with this, so that you can test it and look at it and see if there's been a unique issue for that particular product or something that is explainable as opposed to not getting the products back because you don't you don't want to create any bad facts. You need information, and your experts need to be able to to help you, analyze that information.

Claudia Lewis: 19:27

I think that's right. I think that in my world, we call it the standard operating procedures, SOPs. We would do mock recalls or mock adverse event reporting so that when the event took place, we weren't in a panic. Allison and I have joined forces on several occasions to get the team prepared, and up to speed. So you don't feel naked.

Claudia Lewis: 19:55

One thing that you mentioned, Erin, that surprises me, 24 hours is a very short window. So I don't know that, outside of being uber prepared, you would have information to share. So, Allison, as in house counsel, when do you start to think I might want call my outside counsel for something?

Allison Levy: 20:16

I would say two different times. One, when you're in the innovation/creation phase. The landscape is changing so rapidly that I do think it's impossible as in house counsel to understand what's happening in regulatory environments, really all over the world for the company that I'm with. So early is always good because whether you're doing a mock or you're doing, an update - hey, this is what we're seeing out there in the greater world.

Allison Levy: 20:45

It's always good to educate your business partners and your scientists about what's going on. And then as you're going through the process, the first 24 hours is an impossible turnaround time. But I do think having the ability to respond in some way, even if it's a 'we don't know what we don't know yet, but we are working on it,' -- the expectation is you have some type of communication immediately ready to go.

Allison Levy: 21:10

And you have to have outside counsel and experts at the ready that know your business, that understand at least a little bit of your process so that when you do pick up the phone, it's not a, okay, tell me who you are and what you're about. It's, okay, I understand all the work you've done to date. Claudia, just like you coming and seeing our facility, you get a little bit of a glimpse into who we are, what we're about, how we operate. It doesn't mean that we're not going to have challenges, but it does help when you're addressing those challenges to be able to do so immediately with people that that you can rely on that have that expertise.

Claudia Lewis: 21:47

Absolutely. And, again, I'm always looking for reasons to come to Dallas, so I hope to be able to visit you soon. I'm being told that we're running out of time, and I think that we could talk forever. But I do want to close, and this is something I'm going to ask both of you to answer. What is the one takeaway from today's conversation that you want brand owners or business executives, in house and outside counsel to leave with after listening to this episode. Allison?

Allison Levy: 22:19

The best defense is a good offense. Get yourself ready early, and it'll help you in the long run with everything.

Claudia Lewis: 22:26

Absolutely. Erin?

Erin Maus: 22:28

I totally agree with that. But I'll add, because as a litigator, we're often dealing with the sort of back end of things. I do think that your offense can and should include, obviously, the planning we've talked about, but also managing the products throughout its life cycle. I often see problems arising because something happens that the company doesn't quite know about.

Erin Maus: 22:56

There's a shift in a supplier, or there's a change in an ingredient. It's the same ingredient, but it's coming from a different source. And that introduces risk that they didn't anticipate. So they can do everything right in the beginning, but something arises during the the life cycle. The other thing I'll suggest is that regulators are using AI, particularly for ecommerce, to analyze what information is out there about your products and looking for consumer information. And I highly recommend if you're not doing that, if you're not scrubbing the internet for information about your products and bringing that into your process, I would do that, because the regulators are doing it.

Claudia Lewis: 23:41

Yes. The FDA, surprisingly, is really ahead of the curve in a lot of ways on the AI use for regulatory purposes. So I think that's a good piece of, closing advice. And a good defense is a good offense. I love it, Allison. Spoken like a Dallas Cowboys fan.

Allison Levy: 23:58

That's right. Football.

Claudia Lewis: 24:00

Exactly. Thank you both for a really engaging episode. I really appreciate your time today, and I'm looking forward to spending more time with both of you in the near future.

Erin Maus: 24:12

Likewise. Thank you.

Claudia Lewis: 24:14

Okay. That's all the time we have for today. I want to thank Allison and Erin for helping us better understand how beauty and wellness companies can prepare for product safety issues, navigate overlapping regulatory regimes, and build the kind of proactive response plans that make all the difference when risk starts to escalate. You can read more about Venable's Beauty and Wellness team by visiting venable.com/beauty.

Claudia Lewis: 24:38

I'm Claudia Lewis. Thanks for listening to The Beauty Law Glow-Up.