FTC ‘Organic’ Guidance Could Help To Curtail Litigation; Comments On 'Green Guides' Update Due 24 April

The US Federal Trade Commission is accepting comments through 24 April on potential updates to its Guides for the Use of Environmental Marketing Claims, aka “Green Guides,” including on whether it should address “organic” product advertising. Angela Diesch, a partner at law firm Amin Talati Wasserman, discusses.

US Federal Trade Commission guidance on “organic” advertising claims for non-agricultural items would help to clarify legal responsibilities around a term that continues to confuse consumers, muddle fair competition, and fuel lawsuits against cosmetics companies, stakeholders say.

The FTC broached the subject of possible guidance on organic as well as sustainable advertising claims as it considers updates to its Guides for the Use of Environmental Marketing Claims, aka “Green Guides,” which would be the first in more than 10 years.

The agency declined to issue guidance on organic claims for non-agricultural products, such as cosmetics, when the Guides were last updated in 2012. (Also see "FTC Final Revised “Green Guides” Tackle Certification Disclosures" - HBW Insight, 15 Oct, 2012.)

In December 2022, the FTC asked the public whether it should revisit the issue and, if so, why. (Also see "FTC Considers Adding ‘Organic’ and ‘Sustainable’ Guidance In Environmental Claims Update" - HBW Insight, 15 Dec, 2022.) The agency’s specific questions include:

• What evidence supports making your proposed revision(s)?

• What evidence is available concerning consumer understanding of the term ‘organic’ with respect to non-agricultural products?

• What evidence constitutes a reasonable basis to support an ‘organic’ claim in this context?

The public comment period originally was set to expire on 21 February 2023.

At the request of interested parties, the FTC in January extended the period 60 days to 24 April 2023. Information about how to submit comments can be found in the Federal Register notice announcing the extension.

Regarding organic, “it’s not like it’s a new claim,” noted Angela Diesch, a partner in the Los Angeles, CA office of law firm Amin Talati Wasserman, LLP, in an 8 February interview with HBW Insight about the possible organic guidance.

“There’s been a lot of education over the last decade regarding organic. I think if there is guidance at the federal level on this topic, that provides greater awareness for especially international and smaller companies that may or may not know about the state-specific rules like California’s,” Diesch said.

COPA Compliant?

California’s Organic Product Act of 2003 (COPA) generally requires products represented as organic to be produced and labeled in accordance with regulations promulgated by the US Department of Agriculture’s National Organic Program. 

The NOP allows cosmetic products that meet its agricultural criteria to be certified as 100% Organic, Organic (95% organic), or Made With Organic Ingredients (at least 70% organic ingredients), and to sport the USDA Organic seal in the first two instances. In addition to meeting the organic ingredient thresholds (excluding water and salt), products certified to NOP standards must only contain nonagricultural substances, or nonorganically produced agricultural products that are not commercially available in organic form, that appear on USDA’s National List of Allowed and Prohibited Substances.

However, NOP has long said that it does not define or regulate the term “organic” as it applies to cosmetic products and lacks authority over the production and labeling of such products that are not made up of agricultural ingredients or do not make claims about meeting USDA organic standards.

The US Food and Drug Administration regulates organic cosmetic product labeling, insofar as it regulates all cosmetic product labeling, but the FDA also has not defined the term “organic” for cosmetic products or set out rules for its use in labeling.

Thus, organic fraud in the cosmetics space went largely unchecked until California stepped in with its Organic Products Act, which essentially made the NOP criteria mandatory for cosmetics companies while granting the Department of Health Services authority to tighten the requirements further.    

Diesch noted that most cosmetics companies already are careful about using organic claims in observance of California’s legal standard. And there are risks for not treading carefully. In 2011, Kiss My Face, derma e, and Head Organics were among 11 firms that settled with the nonprofit Center for Environmental Health in California superior court over alleged violations of the law. (Also see "Brands Settle With CEH, Will Make “Organic” Products COPA-Compliant" - HBW Insight, 12 Dec, 2011.)

The lack of a national standard also enables plaintiffs in litigation against cosmetics brands. “You’re left with plaintiffs’ attorneys creating their own definitions and their own standards,” Diesch said.

If the FTC does issue organic guidance, Diesch expects it would be crafted to reflect California law as well as certain third-party standards, such as NSF/ANSI 305 for personal care products containing organic ingredients. Whole Foods made waves in 2011 when it began requiring personal-care products that make front-label organic claims to be third party-certified to either the USDA NOP or NSF/ANSI 305. (Also see "New Whole Foods Policy Requires USDA Certification For Organic Body Care" - HBW Insight, 14 Jun, 2010.)

The FTC has taken action against egregious instances of organic fraud, including against Truly Organic, a Miami Beach, FL-based marketer of skin-care and bath products, which now goes by Truly following its $1.76m settlement with the FTC in 2019. (Also see "Truly Organic Defines Irony With $1.76m Fraud Settlement With FTC" - HBW Insight, 26 Sep, 2019.)

In 2012, the agency explained its decision not to issue guidance on organic advertising, despite most commenters asking for it (italics added): “The NOP provides a comprehensive regulatory framework governing organic claims for agricultural products. Given this framework and the NOP’s ongoing work on these claims, the Commission is concerned about adopting duplicative or inconsistent advice. Further, no commenters provided justifications why the Commission should not defer to the NOP in this area. Therefore, the final Guides do not address organic claims covered by NOP standards.”

USDA’s Agricultural Marketing Service (AMS) in January released a Strengthening Organic Enforcement final rule to “protect organic integrity throughout the supply chain” but without any mention of organic cosmetic, personal-care or body-care products. (Also see "USDA’s New Rule To Strengthen Organic Enforcement Falls Short Of Cosmetics Solution" - HBW Insight, 31 Jan, 2023.)

What’s New In Environmental Claims, Consumer Perceptions?

The FTC also seeks comment on the Green Guides’ interaction with other environmental marketing regulations and whether it should explore rulemaking to establish independently enforceable requirements related to unfair and deceptive environmental claims.

The agency notes increased attention to environmental concerns since the Green Guides were last revised, “including climate change and issues driven by the COVID-19 public health crisis.” The FTC has seen a proliferation of environmental benefit claims on products, packaging, services, and manufacturing processes that are not addressed by the guides currently, but perhaps ought to be.

Consumer perceptions may have changed as well. “As the Commission recognized in 1992, science and technology in the environmental area change constantly, and new developments might affect consumer perception.”

The FTC specifically mentions addressing unqualified recycling claims that may deceive consumers, for example on products collected by recycling programs but not ultimately recycled. The FTC is considering whether claims should reflect where products end up.

That approach would be consistent with European standards for recycling claims as well as California SB 343, which passed in 2021 to regulate the word “recyclable,” as well as the chasing arrow symbol placed around resin identification numbers on packaging. (Also see "PCPC Working To Ensure State EPR Programs Are ‘Least Onerous As Possible’" - HBW Insight, 3 Oct, 2022.)

Entering into effect in January 2024, the law would provide that, except as specified, a product or package is considered recyclable only if (among other conditions), “it is of a material type and form collected by recycling programs for jurisdictions that collectively encompass at least 60% of the population of the state” and “is sorted into defined streams for recycling processes by large volume transfer or processing facilities.”

Other states are considering similar legislation.

For decades, many states required the chasing arrows symbol as well as a resin identification code to specify the type of plastic in a product container. There are seven such codes, and not all refer to plastics that can be recycled normally. Environmental advocacy groups have been working to change the practice, contending that the chasing arrows signal to consumers that materials are recyclable when in reality they often are not. (Also see "PCPC Working To Ensure State EPR Programs Are ‘Least Onerous As Possible’" - HBW Insight, 3 Oct, 2022.)

Diesch said the California law is “definitely presenting a challenge for suppliers,” but she expects other states to follow California’s lead, as they tend to do. “What I don’t want to see, and I don’t think any company wants to see, is the patchwork of a bunch of different states” with non-identical laws.

For now, Diesch’s clients are mostly not using the chasing arrows symbols, instead enclosing the resin ID code in a triangle.

She recommends companies that make claims about recyclability ensure that the resin provide specifics on which parts are and are not recyclable, for example if the outer box is recyclable but parts of the inner packaging are not.