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©2013. All rights reserved.
GREENBERG TRAURIG, LLP ATTORNEYS AT LAW WWW.GTLAW.COM
Current Status of “Natural” and
“Organic” Cosmetic Claims
• EXISTING LEGISLATION
• LEGAL DEVELOPMENTS
• PREVENTION
Speaker: Angela Diesch Attorney [email protected] 916.442.1111
©2013 Greenberg Traurig, LLP. Attorneys at Law. All rights reserved. Greenberg Traurig is a trademark and trade name of Greenberg Traurig, LLP and Greenberg Traurig, P.A. This presentation is intended for general information purposes only and should not be construed as legal advice or legal opinions on any specific facts or circumstances.
Agenda
Existing Legislation
State of Private Standards
Recent Litigation
Preventing Wrinkles
Offense From The Defense
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©2013. All rights reserved.
GREENBERG TRAURIG, LLP ATTORNEYS AT LAW WWW.GTLAW.COM
ORGANIC–
EXISTING LEGISLATION
ORGANIC FOODS PRODUCTION ACT OF 2001 (7 U.S.C. §§ 6501 – 6522)
NATIONAL ORGANIC PROGRAM (7 CFR Part 205)
CALIFORNIA ORGANIC PRODUCTS ACT OF 2003 (Cal. Health & Safety
Code §§ 110810 – 110959)
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OFPA & NOP’s Cosmetic History
□ The USDA concluded, “[t]he ultimate labeling of
cosmetics, body care products, and dietary
supplements ... is outside the scope of these
regulations.” (Final Rule at 80,557.)
□ May 2002, USDA issued a “Policy Statement on
National Organic Program Scope” indicating that
because cosmetics and body care products may
“contain agricultural products the producers and
handlers of such products, classes of products and
production systems are eligible to seek certification
under the NOP.”
□ April 2004, Guidance Statement USDA changed its
position, declaring that producers of personal care and
cosmetic products could not seek even voluntary
participation in the NOP.
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OFPA & NOP’s Cosmetic History
□ Aug. 2005: USDA policy statement extended the
regulations to cover organic claims made on
personal care products which meet compositional
requirements for organic food.
□ April 2008: NOP news bulletin further explained
USDA’s position of organic certification of
cosmetics, body care products, and personal care
products
□ July 2009: NOP published “Draft for Comment Only:
Certification and Labeling of Soap Products Made
from Agricultural Ingredients”
Not developed through
the Federal Rulemaking process
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California Organic Products Act of 2003
Cal. Health & Safety Code § 110838
□ cosmetic products sold, labeled, or represented as organic or
made with organic ingredients shall contain, at least 70 percent organically produced ingredients.
§ 110839
□ Multi-ingredient cosmetic products sold as organic in California
with less than 70 percent organically produced ingredients, by weight or by fluid volume, excluding water and salt, may only
identify the organic content as follows:
(a) By identifying each organically produced ingredient in the
ingredient statement with the word "organic" or with an asterisk or other reference mark that is defined below the ingredient statement to
indicate the ingredient is organically produced.
(b) If the organically produced ingredients are identified in the ingredient statement, by displaying the product's percentage of organic
contents on the information panel.
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California Organic Products Act of 2003
□ H&S § 110815(k): “Sold as organic” []
any use of the terms "organic," "organically grown," or
grammatical variations of those terms, whether orally or in writing, in connection with any product grown, handled,
processed, sold, or offered for sale in this state, including,
but not limited to, any use of these terms in labeling or
advertising of any product and any ingredient in a multi-ingredient product.
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“Sold as organic” in California
Brown v. Hain Celestial Group, 913 F.Supp. 881, 896 (2012).
□ “COPA is unambiguous on this point and the court agrees that Plaintiffs' allegations are sufficient. Plaintiffs allege that the word "organics" in the Avalon
Organics brand name and the "pure, natural, and organic" tagline and "pro-organic pledge" on the Jason brand products are barred by section 110838(a)
and that neither of the exceptions in section 110839 apply. The court agrees.”
□ "COPA prohibits ̀ any use' of the term organic or organic [sic] in the labeling of
products that contain less than 70 percent organic content, subject only to the exception for listing organic ingredients on the ingredient statement."
In other words, section 110839 prohibit labels with
insufficient organic content from making claims like "we
support organic farmers," "supporting organic lifestyles," or
"choose organic."
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California “Organic” Registration
110875. (a) … every person engaged in the processing or handling
of animal food and cosmetics sold as organic, shall register with the director, and shall thereafter annually renew the registration
unless no longer so engaged…. shall register within 30 days of forms being made available for this purpose. Any processor or
handler of processed products required to register under this subdivision that does not pay the registration fee required by
subdivision (c) within 30 days of the date on which the fee is due and payable shall pay a penalty of 1 1/2 percent per month on
the unpaid balance.
Registration form available at
http://www.cdph.ca.gov/pubsforms/forms/CtrldForms/cdph8593.pdf
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©2013. All rights reserved.
GREENBERG TRAURIG, LLP ATTORNEYS AT LAW WWW.GTLAW.COM
PRIVATE “ORGANIC”
STANDARDS
NSF/ANSI 305
ISO WG4
Ecocert (France)
NSF/ANSI 305 Organic Standard
<70% "Contains Organic [ingredient]" claim
Source of raws must be agricultural except
for an approved non-organic list
All processing methods must comply with
"Green Chemistry" principles (see EPA site
on Green Chem/John Warner)
Plus normal "organic" principles: no
irradiation, no gmos, no petrochemicals
except for those on allowed list.
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ISO WG4
Cooperation between the Organization for
International Standardization (www.iso.org)
& the American National Standards Institute
(www.ansi.org)
TC 217: includes over 40 countries &
working groups
WG4
□ Technical Report: survey of relevant natural and
organic standards
□ Working Drafts
A) Basic definitions for “natural” and “organic”
B) More detailed criteria (e.g., how to deal with H20)
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Foreign “Organic” Standards
Ecocert France / Cosmos
– 95% of the total ingredients come from
natural origin.
– A minimum of 95% of all plant-based
ingredients in the formula and a minimum of
10% of all ingredients by weight must come
from organic farming.*
Do you see a conflict?
*http://www.ecocert.com/en/natural-and-organic-cosmetics
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Organic Certification of Cosmetics
Third Party Accredited Certifying Agents
(“ACAs”) offering NSF/ANSI 305
certification
□ Oregon Tilth (www.tilth.org)
□ Quality Assurance International (www.qai-inc.com)
□ Ecocert (www.ecocert.com)
□ Control Union
□ Ecologica ??
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©2013. All rights reserved.
GREENBERG TRAURIG, LLP ATTORNEYS AT LAW WWW.GTLAW.COM
“NATURAL”
Legislation??
Private Standards
May Cosmetics be “NATURAL”?
While "natural" has a somewhat logical
meaning with respect to food, which the FDA
identified as being "from the earth," that logic
should not be applied to cosmetics, products
in which almost all ingredients are in some
way processed and are therefore not "from
the earth.”
Defendant’s Argument from Astiana v. Hain Celestial
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What is “NATURAL”?
FDA informally defined “Natural” in the food context
□ “FDA considers use of the term ‘natural’ on a food label to be
truthful and non-misleading only when nothing artificial or
synthetic has been included in, or has been added to, a food
that would not normally be expected to be in the food”
□ Oddly, even naturally-sourced ingredients added to a product
for color, such as beet juice in pink lemonade, is considered
“artificial.” FDA Compliance Guide Sec. 587.100
□ Does “All ingredients from natural sources” work instead”?
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NOP’s “attempt” to define “Natural”
Synthetic – “A substance that is formulated or manufactured by a
chemical process or by a process that chemically changes a substance extracted from naturally occurring plant, animal, or
mineral sources, except that such term shall not apply to substances created by naturally occurring biological processes.” (7 CFR 205.2)
Nonsynthetic (natural) – “A substance that is derived from mineral,
plant, or animal matter and does not undergo a synthetic process as defined in section 6502(21) of the [OFPA] (7 U.S.C. 6502(21)).
Nonsynthetic is used as a synonym for natural as the term is used in the [OFPA].” (7 CFR 205.2)
□ Synthetic – “A substance that is formulated or manufactured by a chemical process or by a process that chemically changes a substance extracted from naturally occurring
plant, animal, or mineral sources, except that such term shall not apply to substances
created by naturally occurring biological processes.”
Processing – “Cooking, baking, curing, heating, drying, mixing,
grinding, churning, separating, extracting, slaughtering, cutting, fermenting, distilling, eviscerating, preserving, dehydrating,
freezing, chilling, or otherwise manufacturing and includes the packaging, canning, jarring, or otherwise enclosing food in a
container.” (7 CFR 205.2)
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“ALL NATURAL” CLAIMS
“All natural” claims for products
with chemical preservatives, alleged
processed ingredients, GMO
ingredients, and other synthetics
At what point does a process cause
an ingredient to be “not natural”?
□ E.g., caprylyl glycol, benzyl alcohol, citric acid
No formal FDA definition of natural makes it hard for
defendants to resolve cases quickly, which is ideal for
plaintiff lawyers; companies often don’t have stomach
for long protracted litigation so they settle claims
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Natural Certification Options
Voluntary “Natural” Seal and Standard Programs
– Natural Products Association
» Allows ingredients to come from or are
made from a renewable resource found
in nature (flora, fauna, mineral), with no
petroleum compounds.
– Ecocert:
» minimum of 95% of the total ingredients
come from natural origin.
» A minimum of 50% of all plant-based
ingredients in the formula and a
minimum of 5% of all ingredients by
weight must come from organic farming
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©2013. All rights reserved.
GREENBERG TRAURIG, LLP ATTORNEYS AT LAW WWW.GTLAW.COM
ENFORCEMENT:
GOVERNMENT / PRIVATE
ACTION
Sources of Potential Enforcement
Sources of Private Enforcement: State and Federal
Targeted Claims
Potential Enforcement
“Organic”
□ Cal. Dept. of Food and Ag
□ Cal. Dept. of Public Health (“CDPH”)
Complaint driven
Critique of organic claims on labels
“Natural”
□ FDA Warning Letters: “The term "all natural" on the …label is inappropriate because the product
contains potassium sorbate. Although FDA has not established a regulatory definition for "natural,“…
FDA’s policy regarding the use of "natural," means nothing artificial or synthetic has been included in,
or has been added to, a food that would not normally be expected to be in the food…." 100 %
NATURAL" and "ALL NATURAL” [inappropriate where label] contains citric acid.”
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GOVERNMENT ACTION
FDA warning letters and guidance documents used to
kick-start litigation
Actions filed based on FDA warning
letters (“all natural” cases),
FDA guidance documents, FTC actions,
and National Advertising Division of BBBC
(NAD) opinions
□ Neutrogena NAD Opinion issued beginning of January 2012
and lawsuit filed by end of the month (Stephenson vs.
Neutrogena Corp.)
□ Recent letters focus on structure/function claims
Often taken out of context by plaintiffs or used
incorrectly as conclusive proof of wrongdoing
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GOVERNMENT ACTION
FDA Warning Letters are not final agency action
(Holistic Candlers v. FDA, 664 F.3d 940 (D.C. Cir.
2012)) but simply FDA’s opinion that violations took
place
Similarly, FDA Draft Guidances reflect the FDA’s opinion
and interpretation of law, not the law
BBBC NAD opinions are likewise unenforceable, but
often detailed
Despite being temporary or unenforceable,
they often shine a bright light on potential
violations and misleading claims
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“STATE” OF LITIGATION
Broad statutes in CA and
other states have provided
lawyers enticing avenues to
bring class actions
Three main statutes that
cases are brought under in
California: CLRA, UCL, FAL
□ Injunctive Relief
□ Attorneys’ Fees
□ Restitution (disgorgement of
profits)
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“STATE” OF LITIGATION
CLASS ACTION STATUTES
□ California Legal Remedies Act
(CLRA) (§1750)
Provides remedies for enumerated unfair or deceptive trade practices
□ Unfair Competition Law (UCL) (§17200)
Prohibits unlawful, unfair or fraudulent business acts or practices
and unfair, deceptive, false or misleading ads
Violations of CA food regulations, which are adopted federal
regulations, are unlawful business practices under §17200; avoids federal pre-emption?
□ False Advertising Law (FAL) (§17500)
Prohibits misleading and deceptive advertising
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Federal Actions
Lanham Act
□ “Direct Competitor”
Class Action Fairness Act (“CAFA”)
□ When jurisdiction based on diversity, “district
courts shall have original jurisdiction of any civil
action in which the matter in controversy exceeds
the sum or value of $5,000,000, exclusive of
interest and costs,…”
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“TARGETED” CLAIMS
“100% Organic Active Ingredients”
“Organic”
“Pure, natural, & organic”
“100%” or “All Natural” claims v. “Natural” or “Made
with Natural Ingredients”
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“Organic” Lawsuits
All One God Faith, Inc. dba Dr. Bronner’s Magic
Soap vs. Hain Celestial Group, et al.
□ Competitor action; Dismissed in 2012
Rosminah Brown v. Hain Celestial Group
□ COPA; Plaintiffs have standing even for unpurchased products
Center for Environmental Health v. Advantage
Research Laboratories, Inc., et al.
□ Against 26 companies (majority have settled)
Golligher, et al., v. Todd Christopher International
dba Vogue International (Nov. 26, 2012)
□ Class action settlement for nearly $6.5Million
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“Natural” Lawsuits…
□ Langan v. Johnson & Johnson Consumer
Companies (3:13-cv-01470) (Conn. Oct. 7, 2013)
Allegations that “100 percent naturally sourced
sunscreen ingredients” and “natural protection” mean
the sunscreen products contain only natural
ingredients.
□ Virgil, et al., v. Johnson & Johnson Consumer
Companies (3:13-cv-00524) (N.J. Jan. 24, 2013)
“natural oat formula” on the label, but according to
the suit the baby care items contain numerous
synthetic compounds, including the chemical 1,4
dioxane
□ Stephenson v. Neutrogena (N.D.Cal. Aug. 22, 2013)
Nationwide class settlement for $1.3Million
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Natural Lawsuits cont.
Recent Orders
□ Astiana v. Hain Celestial Group (C11-6342 PJH)
"all natural," "pure natural," and "pure, natural &
organic.” Court declined to decide whether use of the
word “natural” was false or misleading.
– But see: Janney v. General Mills:
» “cosmetics are by their nature artificial
and/or synthetic.” factor weighing in
favor agency expertise.
» regulatory involvement by the FDA with
respect to “natural” labeling of cosmetic
and food products
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Lingering affects on sales & shelves
Not only the responsibility of the manufacturer or distributor!
Likely retailers will eventually get pulled into the fight.
□ Prop. 65
□ VOC regulations
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©2013. All rights reserved.
GREENBERG TRAURIG, LLP ATTORNEYS AT LAW WWW.GTLAW.COM
PREVENTING WRINKLES
Claims Check
Defenses
Reasonable Consumer Standard
CLAIMS CHECK
The best way to avoid litigation
is to stop it before it happens!
□ Be Proactive!!
□ Organic: what is your percentage? Reformulate?
□ Natural: have the science to back it?
YOU MUST INSPECT LABELS, PACKAGING, AND
MARKETING CLAIMS!
□ Certification under voluntary
programs is not bullet proof protection;
European certifications may conflict
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OFFENSE FROM THE DEFENSE
Defensive Strategies
□ Preemption
All One God Faith, Inc. v. The Hain Celestial Group, Inc., et al
(N.D. Cal. August 8, 2012)
– Organic claims: No private right of action to enforce OFPA or
NOP. Challenge to defendants’ labeling would require Court to interpret and apply federal organic standards, potentially creating conflict.
In re Aurora Dairy Corp. (8th Cir. 2010)
– Claims attempting to hold def. accountable for representing products as organic when in fact they are not are preempted
by the OFPA (Food case)
□ But…Rosminah Brown v. The Hain Celestial Group, Inc. (N.D.
Cal. August 1, 2012)
– OFPA expressly preempts state certification requirements
(COPA) but does not expressly bar state law claims that do not conflict with OFPA’s provisions.
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□ Prior Substantiation
Chavez v. Nestle USA (C.D. Cal. May 27, 2011)
– Claims must show falsity, not just allege lack of substantiation
Ries v. Arizona Beverages USA LLC (N.D. Cal. March 28, 2013)
– "All Natural," "100% Natural," and "Natural" — although they contain
high fructose corn syrup (HFCS) and citric acid
» Plaintiffs have not introduced any evidence showing that HFCS or citric acid are artificial, nor have they produced any evidence
from which damages may be assessed
□ Not False or Misleading
Werberl v. Pepsico Inc. (N.D. Cal. July 2, 2010)
– “no reasonable consumer would believe” that Cap’n Crunch contained
real fruit based on picture on front of cereal box
Mason v. Coca-Cola (D.N.J. March 31, 2011)
– Case based on 2008 FDA warning letter for Diet Coke + -- “not every
labeling violation amounts to consumer fraud”
OFFENSE FROM THE DEFENSE
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OFFENSE FROM THE DEFENSE
□ Damages: Most cases don’t make it to damages phase
but…
Mason v. Coca-Cola (D.N.J. March 31, 2011)
– Plaintiffs failed to show how they suffered any out-of-pocket
loss; at most, their expectations were disappointed
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Reasonable Consumer Standard
“[P]laintiff is required to show not simply that the
defendants' [statements] could mislead the public,
but that they were likely to mislead the public."
“Likely to deceive implies more than a mere
possibility that the [statement] might conceivably be
misunderstood by some few consumers viewing it in
an unreasonable manner. Rather the phrase
indicates that the [statement] is such that it is
probable that a significant portion of the consuming
public or of targeted consumers, acting reasonably
under the circumstances, could be misled.”
Anecdotal evidence alone is not enough.
□ Consumer Surveys
□ Expert Testimony
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Burden of Proof
At trial, burden is on plaintiffs to prove that
the “all natural” or “organic” labeling
violates the UCL, FAL, and CRLA and to
prove the damages to which they are
entitled.
□ Is the defendant willing to go the distance?
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Strategies to Avoid Government Scrutiny
and Minimize Litigation Risk
Audit Websites, Labeling, Advertising, and
Marketing Materials
Consumer testimonials: Likely interpreted as
representative of what the average consumer can expect to be
achieved; saying "results not typical" is not a sufficient disclaimer
False Claims: Photo-shopping of images (even if the
enhancement is disclosed, may be considered misleading)
Scientific Support
Certification Trail
Audit Supply Chain
Consumer Complaints
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PREVENT “WRINKLES”
Civil litigation has become big, if not the biggest,
concern due to financial costs
Review all labeling, marketing, packaging, and
advertising to ensure compliance
Weigh benefits of claims against risks of litigation
These cases have big consequences; develop early
plan of action and strategy with experienced counsel
Attack early and aggressively -- once certification
happens, it’s all about the numbers!
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LEGAL DISCLAIMER
This presentation consists of general legal
information. It is not intended to give legal advice
about a specific legal problem, nor does it create an
attorney-client relationship.
Due to the importance of individual facts of every
situation, the generalization in this presentation
may not necessarily be applicable to all situations.
Changes in the law could make parts of this
presentation obsolete in the future.
This information is provided with the understanding
that if specific legal advice is required, the services
of the presenter or another competent attorney
should be sought.
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Angela L. Diesch
Greenberg Traurig LLP
1201 K Street, Ste 1100
Sacramento, California 95814
(916) 442-1111 (office)
(530) 400-4369 (cell)
