To settle a false advertising suit filed in the U.S. District Court in the Northern District of California, Organix recently agreed to pay a class of consumers $6.5 million and to stop using the word “organic” unless a product contains at least 70 percent organically produced ingredients.
Per the settlement, class members – purchasers of the company’s hair and skin care products dating back to October 2008 – are eligible to recover $4 per product up to a maximum of $28. Todd Christopher International (doing business as Vogue International), the maker of Organix, had previously moved to dismiss the complaint, but the parties reached a deal before the court decided the motion.
In addition to the misleading name of the product line itself, the complaint alleges that front and back product labels used the term “organic” when the products were actually composed “almost entirely” of nonorganic ingredients (none of the products contained more than 10 percent organic ingredients). Plaintiffs allege that consumers paid a premium for the products because they believed they were organic.
In their motion for preliminary court approval of the settlement, plaintiffs claim that class members will receive two benefits from the settlement. First, the deal “will prevent future alleged violations of state consumer protection and false advertising laws” as the word “organic” will be prohibited unless the 70 percent threshold is met. Second, purchasers will receive a financial benefit. Calling the deal “fair and reasonable,” the plaintiffs said it “provides substantial benefits to the class by requiring changes in Vogue’s labeling and marketing practices, and by securing just compensation for past purchases of the products.”
Defendant has agreed not to oppose class counsel’s request for attorneys’ fees and costs of $1.625 million, or 25 percent of the total claim fund.
To read the settlement agreement in Golloher v. Todd Christopher International, Inc., click here.
Why it matters: If approved, the settlement would be Vogue’s second involving allegations of false advertising in connection with the Organix line. In June 2011, the Center for Environmental Health sued the company – and 25 others – in California state court in a private attorney general action alleging violations of the California Organic Products Act. Vogue settled with CEH, a California nonprofit, in September 2012. The settlement included injunctive relief restricting Vogue’s use of the Organix brand name and the word “organic” on product labeling, advertising, and marketing materials in California. The Golloher suit was filed two months later.