Natural Products Litigation Update: The FDCA May Not Explicitly Preempt a Judicial Interpretation of the Term “Natural”

Jul 02, 2015   

July 2nd, 2015

On April, 10, 2015, the United States Court of Appeals for the Ninth Circuit found that the Food, Drug, and Cosmetic Act (“FDCA”) does not explicitly preempt California’s state law causes of action, which provide consumers with remedies for false or misleading cosmetic labels. In Astiana v. The Hain Celestial Group, Inc., a class action suit against The Hain Celestial Group, Inc. and JASON Natural Products (collectively “Hain”), Skye Astiana, Tamar Davis, and Mary Littlehale (collectively “Plaintiffs”) filed a suit alleging that Hain deceived its consumers into purchasing its cosmetics labeled “all natural,” but allegedly contained synthetic and artificial ingredients. (Read the entire Astiana opinion here)

Plaintiffs sought injunctive relief and damages, citing the federal Magnuson-Moss Warranty Act, California’s unfair competition and false advertising laws, and common law theories of fraud and quasi-contract. The district court dismissed the case per the primary jurisdiction doctrine, which allows courts to decide whether a legal claim requires technical or policy answers that should first be addressed by an agency with regulatory authority over an industry, and encourages courts to favor allowing legislatively qualified administrative tribunals to resolve controversies involving technical or policy questions. The relevant issue on appeal was whether “federal preemption or the primary jurisdiction doctrine prevents the district court from deciding when a ‘natural’ label on cosmetic products is false or misleading.” See Astiana at 3-4.

The Ninth Circuit reversed the district court’s dismissal of Plaintiffs’ claims under the primary jurisdiction doctrine. The Ninth Circuit found that the district court correctly invoked the doctrine, but instead of dismissing the case, the district court should have issued a stay to obtain expert guidance from FDA.

Ninth Circuit Decision

Hain manufactures several cosmetic products including moisturizing lotion, deodorant, shampoo, and conditioner. Hain labels these products “All Natural,” “Pure Natural,” or “Pure, Natural & Organic.” Plaintiffs claim that Hain’s cosmetics contain synthetic and artificial ingredients, which include benzyl alcohol and airplane anti-freeze. Although FDA has never regulated the use of the term “natural” on cosmetic products, the FDCA provides a broader requirement that deems cosmetics misbranded if the labeling is “false or misleading.” 21 U.S.C. § 362(a). Additionally, the FDCA states

no State or political subdivision of a State may establish or continue in effect any requirement for labeling or packaging of a cosmetic that is different from or in addition to, or that is otherwise not identical with, a requirement specifically applicable to a particular cosmetic or class of cosmetics. . . . 21 U.S.C. § 379s(a).

The Ninth Circuit in Astiana, nevertheless, found that although the FDCA bars states from creating their own labeling requirements inconsistent with the federal requirements, the FDCA does not bar states from providing remedies for violations of the federal law. The Ninth Circuit further held that FDA’s failure to issue specific regulations for the use of the term “all natural” in cosmetic product labeling does not amount to a decision by the agency to permit a manufacturer to use the term “all natural” without bounds. In fact, in FDA’s Small Business Fact Sheet, the FDA states that, although the agency has not yet established a regulatory definition for the word “natural,” manufacturers should be sure that their “labeling is truthful and not misleading.” The Ninth Circuit found that this statement and the FDCA are consistent and both statements reinforce the court’s determination that “the FDA did not intend to permit indiscriminate use of the word ‘natural’ on cosmetic labels.” See Astiana at 9.

The Ninth Circuit concluded the district court properly invoked the primary jurisdiction doctrine, but erred in dismissing the case, and ruled that the district court should have issued a stay to the proceedings while the parties sought guidance from the FDA. According to the Ninth Circuit, in Clark v. Time Warner Cable, primary jurisdiction is a doctrine that permits courts to determine “that an otherwise cognizable claim implicates technical and policy questions that should be addressed in the first instance by the agency with regulatory authority over the relevant industry rather than by the judicial branch.” (Read the entire Clark opinion hereSee Clark at 4700. The Ninth Circuit in Astiana found that the definition of “natural” for cosmetic labeling is “both an area within the FDA’s expertise and a question not yet addressed by the agency.” See Astiana at 12-13. Therefore, obtaining expert advice from FDA is necessary to ensure that a technical question is properly answered by a qualified agency. The agency is only to provide expert advice that would aid the district court in making its determination, not to adjudicate the claims itself.

After the district court dismissed Plaintiffs’ claim, but before appeal, Plaintiffs wrote to FDA, requesting that “FDA render an administrative determination on the meaning of ‘natural’ as applied to personal care products regulated under the FDCA, or advise that the agency declines to make such a determination.” Id. at 11. Plaintiffs argue that, because Hain responded by refusing to make the determination without adequate public participation, Hain declined to take primary jurisdiction over the case. However, the Ninth Circuit found that Plaintiff’s informal letter did not comply with FDA’s citizen petition requirements pursuant to 21 C.F.R. § 10.30 because the district court did not institute an administrative proceeding, but rather dismissed the case before Plaintiffs sent their informal letter to FDA.

Uncertain Future of What “All Natural” Will Mean in the Cosmetic and Food Industry

Three other district courts have invoked the primary jurisdiction doctrine in response to litigation over the use of the term “natural” in food labeling. See In re Gen. Mills, Inc. Kix Cereal Litig.See Barnes v. Campbell Soup Co.See Cox v. Gruma Corp. In a Letter from Department of Health & Human Services (HHS) responding to the district courts’ referrals to FDA, HHS outlined the complexity of regulating the term “natural” on food labels and stated that “priority food public health and safety matters are largely occupying the limited resources that FDA has to address food matters.” See Astiana at 14.  Additionally, FDA “decline[d] to make a determination” at that time with respect to regulating the term “natural” on food labels. Id. at 15. The Ninth Circuit states “[o]n remand, the district court may consider whether events during the pendency of this appeal—including [Plaintiffs’] informal letter, the FDA’s website publication of a Small Business Fact Sheet regarding cosmetics labeling, and the FDA’s response to other courts—affect the need for further proceeding at the FDA or demonstrate that another referral to the agency would be futile,” which indicates that the Court may be willing to grant relief for the misuse of the term “all natural” in cosmetic and food labeling without expert advice from FDA. Id. at 16.

As Hain argues in the case, “Astiana’s suit [can] ultimately require[ ] Hain to remove these allegedly misleading advertising statements from its product labels.” Id. at 8. Nevertheless, the Ninth Circuit found that “such a result does not run afoul the FDCA, which prohibits ‘requirements’ that are ‘different from,’ ‘in addition to,’ or ‘not identical with’ federal rules” because the Court’s determination is merely a remedy for the Plaintiff, not a regulation of Hain’s cosmetic labels. Id.

Ultimately, if Hain is required to cease using “natural” claims on its product labeling as a result of this lawsuit, other companies in the natural products industries could be susceptible to similar consumer litigation.  Due to cases like this one against Hain, and until FDA promulgates a regulatory definition of “natural,” companies in this industry will be at risk of becoming targets of these types of class action lawsuits.

Companies in the cosmetic and food industry will need to stay abreast of these judicial determinations and federal regulatory issues that may affect the way they label their products.  For more information regarding further judicial determinations and how the FDA regulates the use of the term “natural” for cosmetic and food product labels, please contact us at