Hain Celestial Group, Inc. has faced a number of lawsuits challenging the labeling and advertising of its various brands. In fact, since 2008, Hain has faced at least seven putative class actions as well as one action by a competitor. The suits have challenged the company’s use of “organic,” “natural,” “pure & natural,” “100% vegetarian,” and “raw” on products ranging from waffles, to juice, to cosmetics. In each case, the various plaintiffs have alleged that Hain’s labeling and advertising is misleading to consumers, misrepresents the quality or characteristics of the products, and amounts to false advertising. Hain has successfully defended four of those suits (see the article I wrote titled “Hain’s Legal Battles Offer Class Action Defense Strategies“). This past Friday, on November 14, 2014, Hain’s lost one battle (though not the war) when the court in Brown, et al., v. The Hain Celestial Group, No. 11-03082 LB, certified a class of buyers of certain products within The Hain Celestial Group’s brands Jason and Avalon Organics. In the case, the plaintiffs challenge Jason-brand tag line, “Pure, Natural, & Organic,” and the use of “organic” in the brand name, Avalon Organics.
The court’s decision is significant for a number of reasons. First, this is the first “organic” cosmetic case to have a class certified. Since 2010, we have seen a number of “organic cosmetic” cases, with most settling fairly early in the suits. This, however, is the first case to be certified to permit the plaintiffs to represent all consumers that purchased the subject products during the class period. As such, the case and its ultimate outcome, especially if it reaches a decision on the merits, will likely have an impact on future litigation in this area.
Second, the court denied Hain Celestial’s argument that the class was not ascertainable because the only way consumers, who likely do not keep receipts for such small purchases, can prove they are class members is by self-identification via an affidavit or similar means. The court reasoned that because there were only a few challenged labels with little variation through the class period (unlike the cases cited by Hain’s which involved numerous label changes and resulted in ineffective self-identification), consumers could accurately recall whether they bought an Avalon Organics product, or a Jason product that said “Pure, Natural & Organic,” during the class period.
Third, the court identified a number of “common” questions, the most central being: “(1) Did Hain’s use of the word “organic” on its Jason and Avalon Organics labels constitute selling, labeling, and representing its products as organic or made with organic ingredients?; and (2) Did the Hain products…contain at least 70% organic content?” Significant to the second question, the plaintiffs challenge Hain’s calculation methods of including the weight of water used to reconstitute a dehydrated organic ingredient, likely aloe vera. Oddly, however, the court did not cite to the NOP regulation (Part 205.302) which provides that the calculation should be made on the basis of single-strength concentrations of the liquid ingredient and finished product (which would include the weight of water necessary to reconstitute the ingredient to single strength)–and which is the manner in which California interprets the regulations for the use of reconstituted aloe vera in cosmetic products. Rather, the court relying on the plaintiffs arguments cited to comments pertaining to dehydrated spices.
Per other reports on the case (i.e., Law360), the plaintiffs’ next step in the case will be to motion the court for a determination that Hain violated COPA. That decision will likely look at the California state Court of Appeal ruling in the case Quesada v. Herb Thyme Farms, Inc., 222 Cal.App.4th 642 (2013) which held that Cal. Health & Safety Code section 111910 does not provide individuals a private right of action under the current version of the California Organic Products Act and that a UCL action based on a violation of COPA interferes with the state and federal government’s enforcement of the organic rules and regulations.
I will continue to provide updates as this case progresses. To read the decision, see Rosminah Brown and Eric Lohela v. The Hain Celestial Group, Inc., No. 11-03082 LB (N.D. Cal., Nov. 14, 2014).
Take away…If in this case the plaintiffs prove that “an objective ‘reasonable consumer’ would deem the ‘organic’ claim material,” and the plaintiff prevails on the merits on the issue pertaining to rehydrated aloe vera, don’t be surprised if a new tidal wave of lawsuits are filed in California against “organic” cosmetic companies. After all, a fair share of the “organic” cosmetics for sale in California reach the 70% threshold through the use of reconstituted aloe vera. Important to the understanding of why reconstituted aloe vera is used is that 1 kilo of 2x Aloe is equivalent to 1 drum of single strength aloe vera juice. Dehydrating the aloe vera is important to not only the safety of the ingredient (which would require preservation in its original form) but also to the transportation of the ingredient and principles of sustainability (which is an important component of organic farming).