The case centered on allegations that Estée Lauder—the global leader in luxury cosmetics and skincare—and its top executives misled investors by touting strong revenue growth while concealing the Company’s heavy reliance on grey-market sales channels. At the heart of the scheme was a practice known as “daigou,” in which resellers purchase luxury goods at reduced, duty-free prices and resell them to end-consumers below retail price. When regulators cracked down on these resellers, Estée Lauder’s sales took a significant hit, inventories piled up, and the Company was forced into steep discounting that crushed its revenues and profit margins.
Under the leadership of Partners Michael P. Canty and James T. Christie, the Firm overcame several hurdles in the prosecution of this matter. Notably, in March 2026, Labaton overcame Defendants’ motion to dismiss. After engaging in extensive fact discover, the Firm filed a motion for class certification, appointment of class representatives, and appointment of class counsel in February 2026. The Parties mediated and ultimately agreed to settle the matter for $210 million (pending final court approval) in May 2026.
“This settlement represents a significant recovery for investors who were harmed by Estée Lauder’s failure to disclose its reliance on grey-market sales,” said Michael P. Canty. “We are proud to have achieved this result on behalf of the class.”