Guthy-Renker LLC and WEN by Chaz Dean, Inc. will establish a $26.25m fund largely to compensate WEN Cleansing Conditioner users for documented hair loss and other injuries under a proposed settlement headed for preliminary approval in California’s Central District Court.

The arrangement will resolve one of two suits filed in the court against the WEN product marketers by consumers claiming to have suffered adverse effects after using the “five-in-one formula,” said to cleanse without lather and condition hair, making it a drop-in substitute for a regimen of commonly used hair products.

Neither suit pinpoints a precise cause for injuries allegedly linked to the WEN line, something that FDA also has been investigating following its receipt of 118 associated adverse-event reports from consumers ([A#02160711001]).

Amy Friedman et al. v. Guthy-Renker LLC was the first complaint filed, in July 2014, seeking economic and other damages for plaintiffs and a proposed class of consumers – i.e., those affected by the marketers’ alleged misrepresentation of WEN conditioners and injuries attributed to “an inherent design and/or manufacturing defect.”

According to related court documents filed June 28, parties in the dispute came to an agreement on tentative settlement terms in late April following four mediation sessions held earlier in the year.

While the defendants admit no wrongdoing, denying allegations of liability, causation and damages, they have accepted proposed settlement terms expected to be set forth in a motion by plaintiffs Aug. 1. Both parties foresee complications and costs that make continued litigation inadvisable, the records indicate.

A Guthy-Renker spokesperson underscored in a July 6 email that while the firm stands by the safety of WEN products and their full compliance with regulations, “litigating a case is a time-consuming and costly endeavor. We therefore made a business decision to pursue a settlement and put this behind us so that we can continue to focus on delivering quality products,” he said.

If approved, the deal will require Chaz Dean and Guthy-Renker to pay settlement class members out of a $26.25m fund according to a two-tiered system for “class-wide flat rate claims” and “documented adverse reaction claims.”

Tier 1 covers any US purchaser or user of WEN hair-care products between Nov. 1, 2007 and Aug. 1, 2016 who submits a claim to receive compensation for misrepresentation regarding the “qualities and attributes” of the products and/or undocumented injuries, including hair loss, hair damage or scalp irritation.

Such individuals will be entitled to a one-time flat payment of $25, with $5m of the fund designated for these purposes.

Tier 2 pertains to WEN hair-care users who incurred injuries of the nature specified, and/or out-of-pocket expenses as a result of injuries, and can provide supporting documentation, such as dated before-and-after photographs, video testimony or medical records.

Injury awards of up to $20,000 per class member will be dispensed to those determined to qualify by a court-appointed administrator.

According to the Guthy-Renker rep, all remaining funds after satisfying outstanding claims will be donated to charity.

Settlement members who do not opt-out by a set date will be barred from pursuing relief for related claims against the WEN marketers under a release provision in the proposed settlement.

As part of the deal, the companies also will label WEN Cleansing Conditioners going forward with a “common sense caution” along the lines of: “If you experience any adverse reaction after using this product, immediately cease use and consult a physician.”

It appears that Dean and Guthy-Renker still would face uncertainties in a second suit pending in the California district court. Filed in March 2015 by plaintiff Caryn Collazo, et al., the litigation involves 850 plaintiffs with claims similar to those in the Friedman case.

In December, the parties agreed on a framework for exchanging evaluation-critical information and mediating plaintiff claims in groups of 50, for one week each month, through October 2017.

According to the latest joint status report filed by the parties in May, Dean and Guthy-Renker intended to enter a motion to stay the mediation process, in order that at least 750 of the plaintiffs – who had yet to submit required documentation – could consider participating in the prospective Friedman settlement.

Plaintiffs’ counsel urged the court to proceed with the scheduled mediation protocol.

WEN Class Action Headed For Potential $26M Settlement In California

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