Unilever’s $10M Hair-Loss Settlement Upheld

CHICAGO (CN) - The Seventh Circuit upheld Unilever's $10 million settlement that will compensate women who suffered hair loss and scalp burns from using Suave Professionals Keratin Infusion 30-Day Smoothing Kit.

Hundreds of women in multiple class actions claimed Unilever failed to warn consumers about its product, the Suave Professionals Keratin Infusion 30-Day Smoothing Kit, though it knew of the risk of hair loss and scalp burns before the product was introduced in late 2011.

One lead plaintiff, Catherine Reny, claimed her hair began "melting" immediately after she applied the product.

"Unilever knew, but failed to disclose to plaintiffs and the class, that the treatment contains an ingredient or combination of ingredients that causes significant hair loss upon proper application," the 2013 lawsuit states. "The active ingredient in the treatment, thioglycolic acid, including its salts and esters, is the same active ingredient that is used in hair depilatories and some hair perming solutions."

The devastating effects of the treatment were documented by hundreds of women on a public Facebook page called Suave-Keratin-Infusion-Kit-Destroyed-my-Hair, screen shots from which are included in the complaint.

Unilever also allegedly advertised that the treatment contained "no Formaldehyde," though it contains DMDM Hydantoin, a chemical that releases formaldehyde, which is a carcinogen.

Unilever recalled the product in May 2012, characterizing it as a decision to "discontinue" it, but maintaining that it was still safe to use, and without disclosing reports of scalp burns and hair loss, according to the lawsuits.

Many women report that their hair never recovered from the effects of the product, and they suffered permanent hair loss or hair thinning.

Unilever agreed to settle the cases by creating a $10,250,000 fund.

It set aside $250,000 to reimburse every class member for the $10 cost of the product.

The other $10 million will reimburse class members who suffered bodily injury as a result of using the product. Class members who have no hairdresser or medical records showing they required treatment will receive $40 each, but claimants who can prove serious injury may receive up to $25,000.

Not all class members were happy with the settlement, but the Seventh Circuit upheld the terms of the deal on Friday.

"[Plaintiff Tina] Martin's speculation that there might be many more claims filed is unsupported," Judge Diane Wood said, writing for the three-judge panel. "The hearing occurred two-thirds of the way through the claim period. By that time, the administrator had received 2,294 claims. These numbers do not suggest that there was a horde of people who were likely to swamp the monies available in the remaining six months."

The lower court anticipated up to 40 percent of the settlement fund might revert to Unilever, but the settlement still provides significant recovery for class members, and there is no evidence that the class would do better at trial, the Chicago-based appeals court found.

Wood also found it unsurprising and not particularly burdensome that class members seeking greater monetary awards must show documentation to substantiate their claimed injuries.

"In the absence of any evidence that the special master has been imposing unrealistic requirements on claimants, we see nothing wrong with this aspect of the settlement," Wood said.

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