Coping with COPA: CA's Strict Standards for Labeling Cosmetics "Organic"

by Angela Diesch

For the eighth consecutive year, California has earned the dubious honor of being ranked the worst state to do business. Most CEOs quoted by Chief Executive Magazine referenced the difficulty of maneuvering through California government, laws and regulations. It is not surprising CEOs would find California government too big and its regulations and laws too convoluted. Indeed, California is known for taking a lead in regulating that which has not been regulated before, and cosmetics are no exception.

The Federal government enacted the Organic Foods Production Act of 1990 (OFPA) “to establish national standards governing the marketing of certain agricultural products as organically produced products, to assure consumers that organically produced products meet a consistent standard, and so that consumers are sure to get what they pay for."

Consistent with one CEO’s statement—“California is the most difficult state to deal with on all fronts"—California took the idea of regulating the term organic one step further by enacting the California Organic Products Act of 2003 (COPA). COPA, unlike the OFPA, mandates that cosmetic products offered for sale in California meet certain standards before being “sold as organic" in California. Until last year, as to cosmetics, COPA remained a fairly unknown statute, ignored by the plaintiff’s bar in California; but that changed with the filing of one class action and two single plaintiff lawsuits in 2011, and so far, nearly 30 cosmetic companies have been forced to defend against claims of violating a statute that many of them had never heard of.

So far the Superior Courts where the current lawsuits are pending have ruled that a cosmetic company is not protected from liability under COPA by its use of the term "organic" in a federally registered trademark or by its use of creative variations of the word "organic."  In other words, if the word "organic" appears anywhere on a cosmetic product’s label, COPA is implicated. These rulings, however, do not end the debate of the enforceability of COPA or the ability of consumers to bring individual and class claims for alleged violations of COPA.

In 2011, a California Superior Court ruled claims under California’s Unfair Competition Law and Legal Remedies Act for alleged violations of the OFPA and COPA, as to agricultural products, are preempted by the OFPA.

In addition, a similar argument is currently pending in a federal district court on a motion to dismiss. The defendant argues that COPA's provisions relating to cosmetics are preempted by the National Organic Program (NOP) because the State Organic Program did not seek approval from the NOP regarding those sections of COPA. The defendants argue that Congress expressly preempted all state organic standards and designated a single federal agency with standard setting authority for organic products and their labels. For a State Organic Program to be valid, the state must submit the program to the NOP for approval.  The Defendant argues that California did not seek approval of the provisions in COPA relating to cosmetics and, as such, COPA's compositional requirement is an unapproved state organic standard preempted by the OFPA.

As a result of California's litigiousness and the uncertainty and inconsistency between federal law and COPA, a number of cosmetic companies have already ceased offering cosmetics with organic ingredients, others have withdrawn such products from California, and others still have ceased the production of entire lines. The District Court’s ruling on the motion to dismiss may be a turning point for cosmetic companies wanting to identify the organic nature of some of their ingredients. Hopefully the ruling will not represent one more reason California is the worst place to conduct business. Either way, I will provide an update when available.

Angela Diesch is an attorney at Greenberg Traurig, LLP.