On February 12, 2016, two consumers brought a proposed New York state class action lawsuit against The Honest Company, Inc., a personal care products company co-founded by actress Jessica Alba. The lawsuit alleges that The Honest Company falsely, misleadingly, and deceptively labeled its products as “natural,” “all natural,” “naturally derived,” and/or “plant-based,” and as containing “no harsh chemicals, ever!” The claims are based on New York state laws prohibiting deceptive and unfair practices, and follow similar claims filed against The Honest Company last year in connection with its sunscreen products. Consumers assert that The Honest Company is able to charge a premium for its products because the “all natural” designation falsely leads consumers to believe the products do not contain certain substances.
It is anticipated that consumer lawsuits like this new one against The Honest Company will continue to be brought against companies that market "natural" and "organic" products, in part because there is limited guidance on how consumers understand those terms and the meaning they convey in any particular context. This leaves the door open for consumers' attorneys to argue widespread consumer confusion and misplaced reliance on products touted as "natural".
The Federal Trade Commission ("FTC") has issued Guides to help marketers avoid deceptive advertising claims under Section 5 of the FTC Act, 15 U.S.C. 45. Although the Guides specifically address certain types of environmental advertising claims, such as "compostable," "degradable," "free of," "non-toxic," and "recyclable" claims,1 the FTC has declined to issue guidance on natural2 or organic3 advertising claims. Even so, the Guides’ general principles still apply to natural and organic claims. Notably, marketers must have substantiation for any environmental benefit claims they make, including implied claims about natural and organic products. To the extent that reasonable consumers perceive organic or natural claims as general environmental benefit claims, marketers must be able to substantiate those claims and all other reasonably implied claims.
Section 260.4 of the Guides provides, in connection with general environmental benefit claims:
- It is deceptive to misrepresent, directly or by implication, that a product, package, or service offers a general environmental benefit.
- Marketers should not make unqualified general environmental benefit claims. This is because they are difficult to interpret and likely convey a wide range of meanings. As a result, it is difficult for marketers to substantiate all reasonable interpretations of these claims.
- Marketers should appropriately qualify general environmental benefit claims to prevent deception about the nature of the environmental benefit being asserted.
- Even if a marketer has substantiation for specific environmental claims, marketers should ensure that an advertisement's context does not otherwise imply deceptive environmental claims.
For example, if reasonable consumers would interpret a natural claim as conveying that a product contains no artificial ingredients, then the marketer must be able to substantiate that impression.4 Similarly, if reasonable consumers would perceive a natural claim as a general environmental benefit or comparative claim (e.g., that the product is superior to a product with synthetic ingredients), then the marketer must be able to substantiate that claim and all attendant reasonably implied claims as well.5
Marketers need to make sure that all reasonable interpretations of their claims are supported by a reasonable basis.6 In the context of environmental marketing claims, this often requires competent and reliable scientific evidence consisting of tests, analyses, research, or studies that have been conducted and evaluated in an objective manner by qualified persons and that are generally accepted in the profession to yield accurate and reliable results.7 Such evidence should be sufficient in quality and quantity based on standards generally accepted in the relevant scientific fields, when considered in light of the entire body of relevant and reliable scientific evidence, to substantiate that each of the marketing claims is true.8
Although it is clear that the FTC has authority to require a company to provide a reasonable basis for advertising claims, an increasing number of courts are placing the burden on consumers to plead affirmative evidence that claims are false or misleading in private deceptive advertising lawsuits. Consumers cannot simply allege that the advertising claims are unsubstantiated in every case, but will instead have to come forward with evidence to substantiate that a particular "natural" or "organic" claim is false or misleading.