Aside from California’s general false labeling laws, there are specific laws and regulations regarding organic product labeling. The California Organic Products Act (COPA), generally requires that multi-ingredient cosmetics labeled or sold as organic contain at least 70% organically produced ingredients. But COPA is designed to work in concert with Federal regulations that direct baseline standards for production, labeling and sale of organic products. The California Supreme Court recently addressed whether the Federal regulations of organic products in some manner preempt or supersede California’s consumer protection laws, so that only the very limited Federal remedies can be pursued when there are alleged violations of organic labeling laws.
In Quesada v. Herb Thyme Farms, Inc., the California Supreme Court determined that California’s general laws prohibiting labeling misrepresentation do not conflict with the Federal laws concerning organic production, labeling and sale, but rather complement those Federal laws by allowing additional remedies to be pursued when those laws are broken by fraudulent organic product labeling. The Supreme Court observed that “permitting state consumer fraud actions would advance, not impair” the goals of providing “a level playing field” to manufacturers of organic products and “enhance consumer confidence in meaningful labels and reduce the distribution network’s reluctance to carry organic products.” From this perspective, where products are fraudulently mislabeled as organic, “the prosecution of such fraud, whether by public prosecutors where resources and state laws permit, or through civil suits by individuals or groups of consumers, can only serve to deter mislabeling and enhance consumer confidence.”
The result for manufacturers, distributors and resellers is that organic product labeling can create concerns at multiple levels, including federal and state regulatory liability, and class actions under strong state consumer protection laws. All those involved in the chain of manufacturing and distribution of products labeled as organic should consult with experienced counsel to protect themselves from potential adverse outcomes that can come from several directions. Conkle, Kremer & Engel attorneys are well versed in helping their clients proactively avoid and resolve such problems.
John and Kim will present on “Emerging Legal Issues in the Cosmetic and Personal Care Products Industry.” The topics to be discussed include recent developments involving enforcement of prohibitions on container slack fill, trends in lawsuits and agency action concerning advertising, an update on the California Air Resources Board’s ongoing Consumer and Commercial Products Survey, as well as a discussion about protecting companies from counterfeiting and cybersquatting in the digital age.
CK&E’s presentation from last year’s Emerging Issues Conference can be found here.
The annual event by the PCPC – the leading national trade association for the cosmetic and personal care products industry – is a must-attend for beauty companies across the country, with its unique focus on the many challenges that are on the horizon for the beauty industry.
This year’s agenda will also include updates from the PCPC on key issues for the industry and from the California Department of Toxic Substances Control on the California Safer Consumer Products and Workplaces regulations, as well as presentations on emerging issues in the Americas, safety standards for cosmetics, current and future challenges for Proposition 65. In addition, Deputy Attorney General Robert Sumner is slated to speak at the conference.
CK&E is pleased to once again participate in this annual event and to offer its experience and insight into legal issues affecting the industry to the PCPC and its members.
One of the more surprising of the proposed Prop 65 ingredients is Aloe Vera Whole Leaf Extract. On April 23, 2015, California’s Office of Environmental Health Hazard Assessment (“OEHHA”) issued its notice of intent to list Aloe Vera Whole Leaf Extract as a chemical known to cause cancer. Although more than 420 species of Aloe plant exist, the specific form that is the subject of the proposed listing is: “Aloe Vera whole leaf extract” which “consists of the liquid portion of the Aloe Vera leaf and is a natural constituent of the Aloe barbadensis Miller plant.” Fortunately, OEHHA specifically excludes Aloe Vera decolorized whole leaf extract, Aloe Vera gel, Aloe Vera gel extract and Aloe Vera latex, which are the more common forms used in personal care products.
When it issued the notice of intent to list Aloe Vera Whole Leaf Extract, OEHHA also issued a notice of intent to list Goldenseal Root Powder as a chemical known to cause cancer. OEHHA identified goldenseal root powder in the proposed listing as “the powdered dried roots and underground stems of goldenseal plants” and declared it to be “a natural constituent of the goldenseal plant.” OEHHA further specifies that Goldenseal is also known as Hydrastis Canadensis, orangeroot, Indian turmeric, and curcuma. Fortunately, OEHHA further specifies that the spice turmeric (Curcuma longa Linn.), frequently found in personal care products such as face and body lotions and cleansers, is not proposed for listing. The form of goldenseal root extract that is contemplated for addition to the Prop 65 list is most often used in the form of nutritional supplements.
Even when manufacturing or distributing “natural” products, beauty companies should take care to review the products’ current formulations to determine whether they contain an ingredient that is or may be on the Proposition 65 list, or whether any of their products contain an ingredient that may cause an exposure to a Prop 65 chemical. It may be vital to work closely with manufacturers or suppliers, and have strong contracts to protect against Proposition 65 liability. Companies should be pro-active and consider reformulation if a proposed or actual Prop 65 chemical is being used. And if a Proposition 65 Notice of Violation is received, affected companies should promptly contact counsel with experience in successfully resolving Prop 65 claims.
On March 27, 2015, the Office of Environmental Health Hazard Assessment (“OEHHA”) added beta-myrcene (CAS No. 123-35-3) as a chemical known to cause cancer under Proposition 65. This means that enforcement actions may commence starting March 27, 2016. Beta-myrcene is a natural constituent of food plants, such as hop, bay, verbena, lemongrass, citrus, pomegranate, and carrot, and of their juices and essential oils. Beta-myrcene is used as a fragrance in cosmetics and soaps, many of which are positioned as “natural” products. Other ingredients that are popularly used in “natural” beauty products are joining the list – check back for our additional blog posts on those in the near future.
In addition to such ingredients, businesses should be careful not to overlook diethanolamine (DEA), coconut oil diethanolamine (cocamide DEA) and benozphenone – three chemicals that became subject to enforcement action in June 2013 and which remain a favorite of Prop 65 plaintiffs. Thousands of companies, with particular focus on beauty industry manufacturers, distributors and retailers have been hit with Notices of Violation over these chemicals.
Beauty companies should review their current formulations to determine whether any of their products contain an ingredient that is or may be on the Proposition 65 list, or whether any of their products contain an ingredient that may cause an exposure to a Proposition 65 chemical. Companies should work closely with their manufacturer or supplier, and have strong contracts to insulate them from Proposition 65 liabilities. Companies should also consider being pro-active by reformulating chemicals out of their products early on, if possible. If a Notice of Violation is received, contact counsel with experience in successfully resolving Prop 65 claims.
Pulegone is among the plant extracts found on the Prop 65 list. Pulegone is a natural constituent of various plants, including mint and other herbs, and of their essential oils. Pulegone was added to the Prop 65 list on April 18, 2014 as a chemical known to the state of California to cause cancer, and it became subject to enforcement actions a year later, on April 18, 2015. Prop 65 bounty hunter Mateel Environmental Justice Foundation wasted no time in sending out a 60-Day Notice of Violation to businesses whose products involve exposure to this chemical. It only took two days for the first Notice of Violation over exposure to pulegone to be served on businesses around the country. A Notice of Violation is often a pre-cursor to a lawsuit. The Notice of Violation claims consumer and occupational exposures to pulegone through use in products of pennyroyal oil.
The requirements of Proposition 65 are deceptively simple – provide a clear and reasonable warning if the use of the product results in an exposure to one or more of the 800+ chemicals on the Prop 65 list of known carcinogens and reproductive toxins. But the penalties, fees and damage to business reputation for failing to comply can be severe: Under Proposition 65, the civil penalties for failing to provide a clear and reasonable warning prior to exposure can reach up to $2,500 per violation per day, in addition to payment of an enterprising plaintiff’s attorneys’ fees. Wherever they are located, manufacturers, distributors and retailers can be liable for Prop 65 violations, and the sale of even one product that may cause an exposure to a Prop 65 chemical is subject to zealous pursuit by Prop 65 plaintiffs. Businesses are well advised to consult with counsel who are familiar with Prop 65 concerns and can help them proactively get ahead of the Prop 65 curve or successfully resolve claims in the event a Notice of Violation is received.
For other businesses, the deadline to report 2013 data has passed. Unless they have been granted an extension from CARB, formulators were required to comply by April 1, 2015 and all other businesses, by March 1, 2015.
The 2013 Consumer and Commercial Products Survey is part of a comprehensive three-year data collection effort by CARB, which is authorized by law to collect data about chemically formulated products. The Survey collects formulation data and sales information for chemically formulated consumer and commercial products sold or supplied for use in California during the 2013 calendar year. Compliance with the Survey is mandatory.
The Survey is remarkable in its breadth, targeting virtually all consumer and commercial products. The Survey requires that each “responsible party” listed on the label of a consumer or commercial product that was sold or supplied for use in California during the calendar year, and falls into a category listed on that year’s Survey Category List, is required to report detailed product ingredient information, as well as annual sales on a per-product basis, to CARB through the online Consumer Products Reporting Tool.
The general categories of consumer products that are subject to reporting in 2013 are personal care products, adhesives, sealants and related products, household and institutional products, pesticide products, solvent and thinning-related products, vehicle and marine vessel aftermarket products, and aerosol coating products.
In addition, updated data for the 2014 and 2015 calendar years must also be reported to CARB. Businesses who are required to report should plan for timely compliance with the 2014 Survey, which opens on July 1, 2015. The deadline for reporting 2014 Survey data – including 2014 sales – is November 1, 2015. In addition, CARB expects to begin collecting 2015 data on July 1, 2016 with all 2015 data due by November 1, 2016.
Conkle, Kremer & Engel provides expert guidance to clients as they navigate compliance with California’s complex and ever-changing regulatory requirements, including the Consumer and Commercial Products Survey.
The ambitious, single-day event puts the spotlight on the personal care industry as a key industry for the California economy. According to the PCPC, the beauty and personal care products industry positively affects California in at least the following ways:
The PCPC’s annual Lobby Day includes a full day of meetings with legislators and state officials, starting with a meeting at the Governor’s Office with top administrative officials. The meetings are followed by educational briefings for legislative staff. While the briefings for staff are taken place, PCPC staff and members will visit legislative offices to speak with lawmakers about bills of interest. The day concludes with a legislative reception for California legislators, the Governor’s Office staff and Administration officials.
Among the legislation that is likely to be addressed with lawmakers at Lobby Day are
Other bills of interest to PCPC include the Proposition 65 bill AB 543 (Quirk), which would provide that a person in the course of doing business does not knowingly and intentionally expose an individual to a chemical known to the State of California to cause cancer or reproductive toxicity if there exists an exposure assessment that meets specified requirements. In addition, the PCPC will present its positions on hazardous waste bill AB 1075 (Alejo) and pharmaceutical waste bills AB 901 (Gordon) and AB 45 (Mullin) with legislative officials. Other key regulatory issues of importance to the personal care industry such as Green Chemistry, Proposition 65, Hazardous Waste, California Organic Products Act and Air Quality are also expected to be addressed at Lobby Day.
CK&E regularly participates in personal care product industry events. As an active member of the PCPC, CK&E is pleased to support the industry’s efforts to advance the legal and regulatory interests of the PCPC and its member companies and is proud to have been invited to again participate in California Lobby Day.
Industry insider publication Beauty Industry Report recently profiled the Center for International Trade Development (CITD) and its comprehensive international training and trade mission program for beauty companies seeking to expand export sales. The intensive training program is known as the Beauty Industry Market Access (BIMA) Program.
Conkle, Kremer & Engel attorneys Mark Kremer and Kim Sim were recognized in the BIR Article about CITD for their contributions to the BIMA Program. Mark Kremer teaches instructional modules about domestic and international intellectual property protection, including trademarks, and international distribution agreements and relationship management. Kim Sim provides an overview of state and federal regulatory compliance, such as California’s Proposition 65 and organic claims under the California Organic Products Act, and state and federal advertising and substantiation laws, among other laws and regulations.
CK&E attorneys are subject matter experts in the personal care products industry, and bring a wealth of experience to guide industry clients in both the U.S. and international markets.
Additional Extension Requests
The California Air Resources Board (ARB) recognized the substantial resources required to complete the 2013 Consumer and Commercial Products Survey (2013 Survey). In some cases, ARB announced, companies may need extra time to complete reporting of 2013 data beyond the 90 statutorily required days and the additional 90-days ARB staff already issued due to the 2013 Survey scope. Below is a summary of the additional extension request process announced by ARB.
1. Formulators: All formulators will receive a 30-day extension to submit formulation data to ARB. The due date for formulators is extended to April 1, 2015. Formulators automatically receive the extension and do not need to send an email to request one.
2. Small Businesses: Responsible parties who are also a small business have an additional extension until July 1, 2015 for reporting 2013 data. For purposes of the 2013 Survey, a small business is defined as a company or entity with 25 or less full-time, part-time and contract employees combined. The 25 employee count must also include seasonal workers. For example, a salon with their own product line of hair care products with a 12 part-time employees would quality for this extension. Small businesses automatically receive the extension and do not need to send an email to request one.
3. Responsible Parties (other than those who qualify as “Small Businesses”): Responsible party requests will be handled on a case-by-case basis, and must request an extension by email no later than February 27, 2015. To request an extension from the original survey due date of March 2, 2015, responsible parties must email firstname.lastname@example.org by February 27, 2015 to make a request, and the email must have the following title: “2013 Survey Additional Extension Request – Company Name (add your company name here)”. In order to receive an extension, responsible parties will need to provide the following information:
a) When did you learn about the 2013 Survey?
b) When did you start working on the 2013 Survey?
c) When did you finish your data collection effort for the 2013 Survey?
d) Approximately how many products will you report? labels?
e) How far along are you in entering data into the Consumer Products Reporting Tool (CPRT)?
f) How much time are you requesting to complete the 2013 Survey?
ARB staff will notify each company the results of their request via email.
ARB also reminded survey participants to submit complete data reports, as partial data sets will not be accepted.
Conkle, Kremer & Engel attorneys keep abreast of the latest developments in California regulatory laws to guide the firm’s clients through the shifting labyrinth that they must navigate.