At last year’s Kennedy Center Honors, Aretha Franklin brought down the house and brought President Obama to tears with her rendition of Natural Woman. Marketers relying on “all natural” claims also may feel like crying these days. We’ve blogged frequently about natural claims; see this recent post. Much of the misery in this area results from confusion over the use of the term “natural” in food. The Food and Drug Administration (FDA) has requested public comments on the use of the term, issued rather circular non-binding guidance, but thus far not issued regulations. The Federal Trade Commission (FTC) also has refused to issue guidance regarding natural claims. All of this confusion, however, will not stop the FTC from going after marketers making “all natural” claims that the FTC deems deceptive. In April, we discussed the FTC suing several marketers of sun screen and beauty products for deceptive all natural claims based on the presence of synthetic ingredients in the products. Four of those companies choose to settle, one choose to fight the FTC on the FTC’s home court — administrative litigation. Anyone want to guess how that turned out?

On December 12th, the FTC announced that it had granted summary decision in staff’s favor against California Naturel, Inc. The personal care products sold by California Naturel include an “all natural” sunscreen with SPF 30, which California Naturel described on its website as containing “only the purest, most luxurious and effective ingredients found in nature.” California Naturel conceded that its “all natural” sunscreen actually contained the synthetic ingredient dimethicone—making up 8% of the sunscreen formula. The FTC found that was sufficient to find the “all natural” claim deceptive in violation of Sections 5 and 12 of the FTC Act.

California Naturel resisted summary adjudication and defended the case generally by claiming that its sales were de minimis, that dimethicone is listed as an ingredient on the label, and that it added a disclaimer to its website in 2016 alerting consumers that the product contained 8% dimethicone. The FTC didn’t find any of this persuasive.

In assessing what “all natural” means the FTC pointed to Williams v. Gerber, 552 F. 3d 934, 939-40 (9th Cir. 2008) and Bohac v. Gen. Mills, 2014 WL 126648 (N.D. Cal. Mar. 26, 2014) and found that all natural means a product contains only ingredients found in nature. Whether the FTC will seek to enforce this definition in situations where only de minimis amounts of synthetic ingredients are present remains to be seen—especially in a Trump administration.

The FTC simply ignored the company’s pleas about its meager sales, reinforcing that there is no de minimis exemption to the FTC Act. The rejected the notion that listing dimethicone as one in a long list of ingredients was sufficient to inform consumers that a synthetic ingredient was in the “all natural” product. The FTC also was unconvinced by California Naturel’s position that their website disclaimer adequately discloses the synthetic ingredient of the sunscreen because the disclaimer is located at the bottom of the webpage, below the website’s “add to cart” button. The company pointed to a Wall Street Journal article regarding the lawsuit, wherein the reporter noticed both the ingredient listing and the disclaimer, to argue that consumers were not deceived. The FTC found that the reporter was not a fair proxy for the typical/reasonable consumer.

Commissioner Ohlhausen dissented only as to the necessity of reaching a decision of the adequacy of the disclaimer. Chairwoman Ramirez, who authored the opinion, and Commissioner McSweeny disagreed and felt it imperative to reach the decision because California Naturel’s primary defense against the Complaint Counsel’s allegations was that its newly added disclaimer cured the deceptive labeling.

The FTC issued a final order, prohibiting California Naturel from misrepresenting: (1) whether a product is all natural or 100% natural; (2) the extent to which a product contains any natural or synthetic ingredient; (3) the ingredients and composition of the product; and (4) the environmental or health benefits of the product. Additionally, California Naturel must possess competent and reliable evidence to support each of the four claims.

As evidenced by the FTC and FDA’s recent workshop on organic claims for non-agricultural products, regulators understand that natural and organic claims can be powerful tools in marketing. For that reason, the regulators scrutinize those claims. If natural claims are part of your advertising, you might want to put on some legal sunscreen otherwise you might get burned.