Organic products? Really?

Posted by:

Are your personal care products really organic? There is no federal regulation of cosmetics sold as “organic,” other than a voluntary USDA certification process, but California takes use of the term “organic” seriously.

The California Organic Products Act (COPA), requires that multi-ingredient cosmetics labeled or sold as organic contain at least 70% organically produced ingredients.  The Center for Environmental Health (CEH) sued 40 cosmetics manufacturers in 2011 and 2012 in Alameda County for violating COPA. One of the defendants in CEH’s first lawsuit was Todd Christopher International, dba Vogue International, (Vogue) the manufacturer of Organix brand products.  While the Organix products contained less than 10% organic ingredients, Vogue contended that the “active” ingredients in its products were organic.  Vogue argued that COPA did not apply to its Organix hair care products because hair care products are not “cosmetics” and that “Organix” is not a grammatical variation of the term “organic.”  The court rejected Vogue’s arguments.  In September 2012, Vogue agreed to either change its packaging and stop using “Organix,” or change the ingredients of its products to comply with COPA.

CEH then brought another lawsuit against Vogue.   This time, it was a class action aimed at stopping Vogue’s use of “Organix” nationwide – not just in California.  CEH claimed that Vogue’s labeling is unfair and deceptive under each state’s consumer protection laws because Vogue’s Organix products are not composed of predominately organic ingredients.  In October 2013, the federal court for the Northern District of California preliminarily approved a settlement of the class action in which Vogue would pay $6.5 million and stop using “Organix” for cosmetics that did not contain at least 70% organic ingredients.  The final approval hearing is set for April 3, 2014.  Vogue has already begun to transition its packaging and advertising to the more defensible “Ogx”.

Conkle, Kremer & Engel stays current on federal and state regulatory issues and helps its clients avoid the kind of labeling problem that befell Vogue.

Print Friendly, PDF & Email

Naked Juice Labels to be Stripped of "All Natural" and "Non-GMO" Claims in False Advertising Settlement

Posted by:

PepsiCo has agreed to pay $9 million to settle a class action battle over its use of the words “All Natural” and “Non-GMO” (non-Genetically Modified Organism) on its Naked Juice drink products.  As part of the settlement, PepsiCo agreed to change its labeling.

If approved by the district court, the settlement would resolve five separate class action lawsuits, which were consolidated with the lead case Pappas v. Naked Juice Co. of Glendora, Inc., in March 2012.

The case against PepsiCo stems from allegations that statements on the Naked Juice labels constitute false advertising.  The plaintiffs sued for violation of a number of California statutes – the Consumer Legal Remedies Act (CLRA) and False Advertising and Unfair Competition Laws.

According to the plaintiffs, independent testing revealed genetically modified soy protein in some Naked Juice products.  The plaintiffs also alleged that several ingredients in the Naked Juice products are non-natural, including ingredients like beta carotene and biotin which do occur naturally but are produced synthetically when added as supplements to foods, and a fiber ingredient that is produced by chemically rearranging corn starch molecules.  All of these ingredients are listed in the ingredient panel, but according to the plaintiffs, a reasonable consumer wouldn’t scrutinize the ingredient list for information contradicting the plain, conspicuous statements “All Natural” and “Non-GMO.”

The settlement in the PepsiCo case is likely to lead to many more class action lawsuits against businesses that advertise their products as “natural” or “all natural.”  Unlike use of the word “organic,” use of the word “natural” is not explicitly regulated by federal or state law, leaving the door open for claims of false or misleading advertising by consumers.

What’s the moral of this story?  An ounce of prevention is worth a pound of cure.  It is important to scrutinize health-related language used in advertising, especially on food products, and ensure there is documentation to back up claims.  CK&E routinely works with clients to evaluate the language on product packaging and in advertising as part of a comprehensive risk analysis so they can make informed choices for their businesses.  CK&E also has extensive experience defending clients against consumer false advertising claims.

Print Friendly, PDF & Email

Closing the Door to Class Actions for False Advertising Claims

Posted by:

Advertising claims are often the subject of lawsuits in California. Ads, slogans, packaging or even product images are claimed to be “false or misleading.” Plaintiffs make claims under a variety of consumer protection laws, such as California’s Unfair Competition Law (UCL), Business and Professions Code section 17200; False Advertising Law (FAL), Business and Professions Code section 17500; and the Consumer Legal Remedies Act (CLRA), Civil Code section 1750.

But an individual who wants to sue has a problem, because a single person who claims to have been misled into purchasing a product will usually only have purchased one product and therefore has just a few dollars (or sometimes only pennies) of “out of pocket” money damages. It’s usually not realistic for a lawsuit to be pursued for just a few dollars. As a result, plaintiffs’ lawyers sometimes try to make a “class action” claim to join together many people who can each claim a few dollars of damages, which can add up to a great deal of money. In a class action, the plaintiff can assert that similar injuries happened under similar circumstances to a large number of people, and the plaintiff should be allowed to make a claim for all of the damages to that group of people. Further, the lawyers for the class action can make claims for attorneys’ fees that are much larger than they would otherwise be permitted for representing an individual claimant.

To proceed with a class action lawsuit, the plaintiff must show the court that the proposed “class” meets the rules for “certification.” That is a big hurdle in many cases, because it requires that the plaintiff show that all of the proposed class members have similar claims and issues. A recent ruling from the United States District Court, Central District of California shows how hard it can be to prove that there are such common claims and issues. In Mara Chow v. Neutrogena Corp., Case No. CV 12-04624, the plaintiff claimed that Neutrogena had made false and misleading labels and advertising for its “anti-aging” skincare products, including that the products are “clinically proven,” can cause a person to look younger, and can prevent and repair signs of aging within one week. The plaintiff tried to show that she had a proper class action because all of the class members had similar claims. But District Judge Manuel L. Real refused to certify a class.

Judge Real found that too many individual questions existed as to whether the Neutrogena product had worked as advertised for each individual class member. In other words, each member would have to individually show whether the claims were false as to that member. Further, some of the claims required that each class member would have to show that she “relied” on the false advertising when she purchased the Neutrogena product, which also could only be proved individually and not on a class-wide basis. But the news wasn’t all bad for plaintiff – the individual plaintiff was allowed to continue asserting her own individual claim for a few dollars in damages. No one will be surprised when the case is dismissed, because it isn’t worth pursuing.

CK&E’s lawyers have experience handling all aspects of claims of false or misleading advertising under the UCL, FAL and CLRA. CK&E’s lawyers are particularly well-versed in developing methods to reduce the risk of such lawsuits before they are filed. If a claim does arise, it often comes first to a business in the form of a demand letter, and CK&E attorneys are skilled at responding to such demand letters in ways that eliminate or minimize the claim and can lead to a quick and cost-effective resolution.

Update:  The plaintiff filed a petition for permission to appeal the District Court’s Order denying class certification.  On April 23, 2013, the Ninth Circuit Court of Appeals denied the petition for permission to appeal.  The lawsuit was subsequently settled and dismissed with prejudice on June 10, 2013.

Print Friendly, PDF & Email