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When does lawful product differentiation become actionable deception? Manufacturers are increasingly confronting that question in consumer class actions challenging products marketed to different consumer groups despite sharing similar or identical formulations.
One of the latest examples is Raymundo v. L'Oreal USA S/D Inc., a putative class action in the U.S. District Court for the Southern District of California in which the plaintiff alleges certain CeraVe baby ointments and creams share the same formulations as less expensive CeraVe products marketed for general use.[1]
According to the plaintiff, the infant-focused labeling and imagery implicitly represent that the products are specially formulated for babies, causing consumers to pay a price premium based on a material difference that does not exist.
The plaintiff seeks to certify a class of all California consumers who purchased the subject CeraVe baby ointments at any time during the last four years. Although the case is at an early stage, its theory represents a significant litigation risk to companies that maintain audience-specific product lines or employ market segmentation.
California's Consumers Legal Remedies Act, False Advertising Law and Unfair Competition Law govern these claims and are generally evaluated under the reasonable consumer standard.[2]
Although this theory has been litigated most extensively in California, federal courts outside the state have also addressed similar claims and adopted California precedent or, in cases involving products regulated by U.S. Food and Drug Administration, found the claims preempted by federal law.[3]
At the pleading stage, a plaintiff must plausibly allege that a significant portion of the general public, or of targeted consumers, acting reasonably in the circumstances, could be misled by the labeling.[4]
Because determining whether an advertisement is misleading is ordinarily a question of fact, a complaint can be dismissed by court for failing to state a claim only where the court can conclude, as a matter of law, that the public is not likely to be deceived by the advertisement.[5]
Applying that standard, several federal district courts in California have concluded that infant-focused packaging may plausibly mislead a reasonable consumer to believe that a product is specially formulated for babies.[6]
In other cases, they have dismissed similar claims where the front or back label clearly identified the same active ingredient and concentration, or where the overall context defeated the inference.[7] Importantly, these decisions clarify that the product's labeling, not its higher price, is the source of the alleged deception.[8]
Read together, these decisions may create an affirmative disclosure duty: Manufacturers risk litigation unless infant-focused packaging affirmatively clarifies that a comparable general-use product shares the same formulation.
Substantial discovery, expert and class certification costs may follow once such claims survive a pleading challenge.
The current interpretation raises the central question of what message infant-focused marketing sends to reasonable consumers. According to the cases referenced above, it plausibly communicates to a significant portion of consumers that the product is specially formulated.
In Boris v. Wal-Mart Stores Inc., the U.S. District Court for the Central District of California took a more restrained approach, holding in 2014 that neither a price premium nor the red background of a product's packaging amounted to a representation that the product was stronger than the standard medicine.[9]
But more recent decisions have moved away from that reasoning by allowing audience-specific packaging and imagery to support an inference of special formulation, even without an express comparative statement.
The courts' "specially formulated" assumption may also have consequences beyond infant products. Similar questions may arise whenever a manufacturer maintains multiple products with overlapping formulations, but differentiates them based on intended use, application, lifestyle or other consumer characteristics.
A product marketed for athletes, for example, may share ingredients with a general-use counterpart, while differing in packaging, dispensing method, instructions or testing. Likewise, a "sensitive skin" product may overlap substantially with another product in the same portfolio without being identical in every respect.
These variations illustrate why formulation alone may not tell the entire story. If targeted marketing alone can imply that a product has a different formulation, manufacturers could face similar claims whenever two products share the same or similar ingredients but are packaged and priced differently.
In other words, the distinction between a product's suitability for a particular audience and whether it was uniquely or specially formulated for that audience may become increasingly important.
A product marketed for infants, for example, may be entirely suitable for infant use even if its formulation is identical or substantially similar to a product marketed for general use. The legal question is whether the audience-specific branding communicates only the former proposition or implicitly communicates the latter, as well.
That distinction matters because, absent an express representation concerning formulation, plaintiffs' claims necessarily depend on the overall impression created by product names, imagery, placement and other contextual cues.
These decisions make it increasingly important for companies to review related product lines together, rather than evaluating each label in isolation. This review should extend beyond express claims to the product name, imagery, packaging, website copy and other contextual cues that may contribute to the overall message received by a reasonable consumer.
Where an audience-specific product commands a price premium, manufacturers should identify and document the actual basis for the differentiation, including differences in formulation, testing, directions, packaging, dispensing mechanisms or intended use.
They should also carefully review phrases such as "specially formulated," "extra gentle," "developed for babies" or similar language that could imply a material distinction from a lower-priced general-use product. Where no such distinction exists, marketing should focus on accurate statements about suitability and intended use, rather than suggesting a unique formulation.
Manufacturers should also consider whether disclosures elsewhere on the package adequately clarify potentially ambiguous messaging, recognizing that a technically accurate ingredient list may not necessarily cure a misleading overall impression.
Finally, in today's legal environment synergy within different departments is paramount. Marketing, legal, regulatory and other product development teams should work in tandem and communicate early in the product-positioning process.
A marketing distinction that appears innocuous when viewed in isolation can take on a different significance when compared with another product in the company's portfolio. Periodic portfolio-level reviews can therefore help companies identify inconsistencies before they become the basis for consumer confusion, or worse, litigation.
Once a claim arises, companies should promptly identify the materials underlying the challenged product differentiation. That inquiry may extend beyond the final label to product development records, substantiation materials, consumer research, testing, marketing, briefs and documents explaining pricing or positioning decisions.
Companies should also identify related products within the portfolio and understand the similarities and differences among them before taking a litigation position concerning the challenged product.
Because these cases often turn on the message allegedly conveyed to a reasonable consumer, the factual record surrounding why a product was developed, how it was marketed, and what distinctions the company intended to communicate may become important well before class certification and merits discovery.
These steps will not eliminate litigation risk, but they may reduce the likelihood that ordinary product segmentation is characterized as consumer deception.
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This article first appeared in Law360 on September 18, 2026, and is republished here with permission from the publication.
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[1] Complaint, Raymundo v. L'Oreal USA S/D Inc. 
, No. 3:26-CV-3951-RBM-DEB (S.D. Cal. July 9, 2026).
[2] Schippell v. Johnson and Johnson Consumer Inc. , No. EDCV23410JGBSHKX, 2023 WL 6178485, at *9 (C.D. Cal. Aug. 7, 2023).
[3] Robinson v. Walgreen Co. , No. 20 C 50288, 2022 WL 204360, at *7 (N.D. Ill. Jan. 24, 2022) (adopting the holding from Eidmann v. Walgreen Co. , 522 F. Supp. 3d 634, 645 (N.D. Cal. 2021)); Ostermeier-McLucas v. Rite Aid Hdqtrs. Corp. , 549 F. Supp. 3d 276, 284 (E.D.N.Y. 2021) (same); Harris v. Topco Associates LLC , 538 F. Supp. 3d 826, 832 (N.D. Ill. 2021) (finding that the Food, Drug, and Cosmetic Act's labeling standards preempted the plaintiff's state law claims).
[4] Schippell v. Johnson and Johnson Consumer Inc. , 2023 WL 6178485, at *9.
[5] Id. at 10.
[6] Schippell, 2023 WL 6178485, at *9-13 (suit based on Aveeno's sale of "baby" sunscreen and moisturizing cream); DiGiacinto v. RB Health (US) LLC , 668 F. Supp. 3d 950, 965 (N.D. Cal. 2023) ("The court concludes that the FAC plausibly alleges that the packaging of the children's product, which contains the word 'children' and a cartoon of a child but no express disclosure that the medicine in the bottle contains the same concentration of the active ingredient as the adult's product, could mislead a reasonable consumer into believing that the children's product is specially formulated for children. Accordingly, the motion to dismiss the UCL, FAL, and CLRA claims is denied"); Burchfield v. Prestige Consumer Healthcare Inc. , 534 F. Supp. 3d 1192, 1203 (C.D. Cal. 2021); Youngblood v. CVS Pharmacy , No. 220CV06251MCSMRW, 2020 WL 8991698, at *3 (C.D. Cal. Oct. 15, 2020).
[7] Lokey v. CVS Pharmacy Inc. , No. 20-CV-04782-LB, 2021 WL 633808, at *5 (N.D. Cal. Feb. 18, 2021) (no deception where the "front label here expressly discloses the medicine's composition"); Eidmann v. Walgreen Co. , 522 F. Supp. 3d 634, 645 (N.D. Cal. 2021) (no misrepresentation where the "Product displays overlapping age ranges and identical acetaminophen concentration information in large print on the front of the box").
[8] Burchfield, 534 F. Supp. 3d at 1203 (citing Youngblood, 2020 WL 8991698, at *3); DiGiacinto, 668 F. Supp. 3d at 964 (same); Lokey, 2021 WL 633808, at *6 (price is a nonjusticiable issue and cannot, on its own, be the basis of a consumer deception claim).
[9] Boris v. Wal-Mart Stores Inc. , 35 F. Supp. 3d 1163, 1169-170 (C.D. Cal. 2014).