Ulta Beauty customers who claim the cosmetics retailer resold used makeup as if it were new will get to have their day in court.
A federal court judge in Chicago ruled Tuesday that a lawsuit seeking class-action status on behalf of consumers in 18 states, including Illinois, can proceed, according to court filings.
Allegations that Bolingbrook-based Ulta put returned cosmetics back on shelves to be sold at full price arose in January 2018, when a person claiming to be a former employee described repackaging products in a Twitter post that quickly went viral.
A California woman filed the lawsuit, which seeks unspecified damages, later that month, and 21 more Ulta customers have since joined, including two from Illinois.
Judge Jorge Alonso dismissed Ulta’s argument that the consumers’ claims were too vague and based on allegations from a just a handful of employees and social media posts, saying consumers can’t be expected to know the details of the company’s practices.
Ulta said it was pleased with the ruling because it narrowed the plaintiffs’ claims.
“We remain confident in the company’s position on the remaining claims, which we continue to believe are without merit,” Ulta spokeswoman Karen Twigg May said in an emailed statement.
Alonso agreed with Ulta that consumers can’t claim harm if they purchased products that were new and unused, since “there was no defect or risk of harm in the products they purchased, and therefore no overpayment or injury,” according to the Tuesday court filing.
The judge also limited the case to consumers from the 18 states represented by plaintiffs named in the lawsuit.
In March, Ulta CEO Mary Dillon denied allegations the company sold used, damaged or expired products during a call discussing the company’s financial results.
Dillon said Ulta was reinforcing appropriate procedures for handling returns and had seen no indication that the publicity around the claims had hurt the company’s brand. That remains the case, Twigg May said.
Sales at stores open at least 14 months rose 7.8 percent during the three months ending Nov. 3, down from a 10.3 percent increase during the same period the year before, Ulta said in December.
But growth in the U.S. beauty industry overall has slowed after several years of rising spending, Stephanie Wissink, managing director and consumer products analyst at Jefferies, said in an email. That has “far more impact” on Ulta’s results than factors like the lawsuit, she wrote.
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