Plaintiff does business as Dr. Bronner’s Magic Soaps,
personal care products labeled “organic.”
It sued a bunch of companies that make “organic” labeled personal care products,
alleging that those weren’t organic as the term is understood by consumers
because their products were made from conventional agricultural products, had
ingredients made from petrochemicals, and/or contained synthetics. Dr. Bronner’s also sued Ecocert, which
certifies products as “organic” using its own standards.
The Organic Food Products Act of 1990 (OFPA), authorized
USDA to create the National Organic Program (NOP), which provides national
standards for labeling agriculture and food products as “organic.” USDA was also authorized to create a National
List of approved and prohibited ingredients for the production, handling, and
processing of organic products. The National
Organic Standards Board (NOSB) has the exclusive authority to recommend
placement on the National List. Congress
“expressly declined” to create a private right of action to enforce OFPA or the
resulting regulations. Only USDA can
investigate and penalize violations.
The NOP’s labeling certification scheme is comprehensive—for
agricultural products intended for food.
It defines when food can be labeled 100% organic, organic, made with
organic, or use organic to describe an ingredient.
Initially, the USDA concluded that cosmetics, body care
products, and dietary supplements were outside its scope. Later, it held that producers of cosmetics
and body care products who used agricultural products were eligible for USDA
organic certification, but not required to get it or otherwise subject to NOP
standards. Then it changed back, so such
producers couldn’t participate voluntarily.
Then it changed back, allowing
producers to use “100 percent organic,” “organic” or “made with organic” if
they complied with the NOP regulations. A few years later, it clarified that
compliance with NOP standards was necessary to use USDA certification, whether
explicit or implied, on cosmetic/personal care products, but reiterated that
the NOP doesn’t govern such products unless the labeling itself implies USDA
certification:
USDA has no authority over the
production and labeling of cosmetics, body care products and personal care
products that are not made up of agricultural ingredients or do not make any
claims to meeting USDA organic standards. Cosmetics, body care products, and
personal care products may be certified to the other, private standards and may
be marketed to those private standards in the United States. These standards
might include foreign organic standards, eco-labels, Earth friendly, etc.
USDA's NOP does not regulate these labels at this time.
Of course, this finesses the key issue: given the
comprehensive, uniform national scheme applied to food, won’t consumers expect
that the related field of personal care/cosmetics containing agricultural
products is subject to the same comprehensive, uniform regulation, and that
“organic” therefore means the same thing on food as on avocado
conditioner? Thus, using “organic” on
conditioner will itself imply “USDA
organic,” even without more specific labeling.
Anyway, in 2009, the NOP issued a draft guidance on certification
and labeling of soap products made from organic agricultural ingredients, and
the standards board formally recommended to the Secretary of Agriculture that
the existing rules be amended to provide that NOP standards for labeling a
product as “organic” or “made with organic [ingredient]” apply to personal care
products. In 2010, the NOP basically
said it would study and consult on the issue, and there matters stand.
Dr. Bronner’s initially alleged that consumers expected
compliance with NOP standards for the use of “organic” or “made with organic,”
so that defendants engaged in false advertising by not complying. Its third
amended complaint eliminated reliance on NOP definitions, but alleged that
surveys and other evidence demonstrated that consumers believe that
organic-labeled products “do not contain any petrochemicals or petrochemical
compounds in ingredients whatsoever, and are thus entirely free of
petrochemical contaminants” and do not “contain synthetic compounds including
preservatives.” Dr. Bronner’s also filed
an administrative complaint with the USDA.
The case was stayed for well over a year pending resolution by the USDA.
Defendants moved to dismiss.
Hain argued that the case should be dismissed because of the primary
jurisdiction doctrine: resolving the Lanham Act claim would impermissibly
require the court to interpret and apply USDA standards. The court agreed, following Pom Wonderful LLC
v. Coca–Cola Co., 679 F.3d 1170 (9th Cir. 2012). Courts should defer to an agency’s primary
jurisdiction “where, in order to determine the falsity or misleading nature of
a defendant's representations about its products, the court would be required
to interpret and apply federal standards governing those products.” Dr. Bronner’s argued that it could establish
falsity based on consumer research without reference to NOP standards.
But the USDA had taken pre-rulemaking steps, even if it was
acting slowly, and the NOP has made reference to personal care products since
2005, allowing USDA organic claims that meet those requirements. If the court allowed Dr. Bronner’s to proceed
using consumer surveys, it would have to evaluate how consumer expectations
compared to federal organic standards, which permit the use of certain
synthetic ingredients, including petrochemicals, along with a certain
percentage of non-organic ingredients.
Thus, there was a potential conflict with USDA’s authority.
Dismissal without prejudice was appropriate since laches was
unlikely to bar Dr. Bronner’s claim later, given its administrative complaint
and vigorous litigation so far.
Ecocert also moved to dismiss because it was a certifying
agent, not a competitor/producer. The
court agreed that this was enough to dismiss the Lanham Act claim.
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