Demand for so-called “natural” products is increasing. According to one published report, the natural products industry is experiencing “an average of about 8 percent growth.” Dietary concerns are at least one driving factor for the growth as consumers reach for “natural,” presumably healthier foods. One CEO in the natural products industry attributes the growth to generational change. He says millennials “have really embraced the natural products industry” which has “contributed to a lot of growth.”
As this industry grows, so does the volume of litigation over the term “natural.” Lawsuits over “natural” products are typically in the posture of a consumer class action. The plaintiff typically alleges that the so-called “natural” product actually contain artificial, synthetic ingredients. The common causes of action pled include, among others, violation of state unfair and deceptive trade practices acts on false labeling and/or advertising theories. In some circumstances, competitors might also bring lawsuits under the federal Lanham Act and applicable state law.
Last year, The Washington Post reported on a “raging legal battle” consuming the food industry, noting “an uptick in lawsuits against food companies regarding ‘all natural’ and ‘natural’ claims.” The Post article also reported that “[i]n 2015, after more than 100 lawsuits and several requests from judges, the FDA agreed to take up the question.” As of this writing, FDA has yet to provide definitive guidance on the issue, though at least one commentator, citing March 2018 public comments by FDA Commissioner Scott Gottlieb in March 2018, expects FDA to weigh in soon.
In the meantime, “natural” foods continue to be a target for class action plaintiffs. This website reports on litigation involving lemonade, sour gummies, and salsa. Other industries outside food have been targets too. A recent class action lawsuit targets a manufacturer of “all-natural” laundry soap. Another lawsuit is against a company that markets “natural” cosmetics.
Here are a couple of suggestions for how your business can avoid finding itself in the crosshairs of a “natural” products lawsuit. First, you should be careful when making “natural”/“all natural” claims. The “natural” term should be applied to products over which you have visibility into each component of the supply chain. Second, if you obtain raw materials for your product from another party, make sure there is a representation and warranty in the agreement with your supplier that says the substance you are purchasing is “natural.” There should be corresponding language requiring your supplier to indemnify and defend you against third party lawsuits (like the ones identified above) in the event the substance is actually not “natural.”