FTC enforces on “all natural” claims in personal care products.

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Today, the Federal Trade Commission (FTC) announced proposed settlement agreements and consent orders with four companies for falsely marketing shampoos, sunscreen, and skincare products as “all natural” or “100% natural.” A fifth company was issued an administrative complaint for marketing “all natural sunscreen” that contains “a synthetic ingredient,” dimethicone. Other ingredients cited as “synthetic” by the FTC in the proposed consent orders include ethylhexyl glycol, phenoxyethanol, polyethylene, polyquaternium-37, polyquaternium-7, and caprylyl glycol. The complaints against all five companies allege that using such “synthetic” ingredients renders “all natural” claims false or misleading.

In these cases, the FTC’s proposed orders bar the companies from making misrepresentations in marketing a product about the following:

  • Whether the product is all natural or 100% natural;
  • The extent to which the product contains any natural or synthetic ingredient or component;
  • The ingredients or composition of the product; or
  • The environmental or health benefits of the product.

However, representations about these subjects are allowed under the proposed consent orders if the company “possesses and relies upon competent and reliable evidence” or “competent and reliable scientific evidence” that is “sufficient in quality and quantity based on standards generally accepted in the relevant fields when considered in light of the entire body of relevant and reliable evidence, to substantiate that the representation is true.”

Notably, today’s actions are not accompanied by an Enforcement Policy Statement or other guidance for companies not subject to the consent orders. FTC has raised questions in these enforcement actions such as: Which other commonly used ingredients in personal care products are “synthetic”? How does FTC determine whether a substance is “synthetic” or “natural”? Do plant-based versions of caprylyl glycol, for example, count as “synthetic”? Are processes and production considered as part of the “synthetic” vs. “natural” distinction, or just the sources or raw materials of the ingredients?

“All natural” claims are particularly difficult to substantiate because such claims are interpreted by consumers in a variety of different ways, and the various federal agencies that have jurisdiction over such claims in the United States have not provided much clarity. When issuing the revised Green Guides in 2012, for example, the FTC declined to provide guidance on “all natural” claims, citing the lack of data on how consumers interpret such claims. A December 2015 survey [PDF] by Consumer Reports found that misunderstanding about the meaning of “natural” in the food world was widespread; more than 80% of shoppers thought that in the context of processed foods, “natural” meant no pesticides were applied in production, no chemicals were used in processing, and that the food contained no Genetically Modified Organisms (GMOs) or artificial ingredients or colors. Meanwhile, the Food and Drug Administration (FDA) is still collecting public comments, through May 10, 2016, on using the term “natural” in food labeling.

EPA grants partial exemption from Chemical Data Reporting rule for six biodiesel chemicals.

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Today, EPA announced that six biodiesel chemicals will be partially exempt from certain reporting requirements of the Chemical Data Reporting (CDR) rule, under section 8(a) of the Toxic Substances Control Act (TSCA). The Final Rule amends the list of chemical substances exempt from submitting processing and use information by adding the six chemicals, all of which are involved in the production of biodiesel. These chemicals will still be subject to other CDR reporting requirements, on facility and manufacturing and import volume information.

The affected chemicals and their Chemical Abstract Services Registry Numbers (CASRNs) are:

  • Fatty acids, C14-18 and C16-18 unsaturated, methyl esters (CASRN 67762-26-9);
  • Fatty acids, C16-18 and C-18 unsaturated, methyl esters (CASRN 67762-38-3);
  • Fatty acids, canola oil, methyl esters (CASRN 129828-16-6);
  • Fatty acids, corn oil, methyl esters (CASRN 515152-40-6);
  • Fatty acids, tallow, methyl esters (CASRN 61788-61-2); and
  • Soybean oil, methyl esters (CASRN 67784-80-9).

This partial exemption was granted as part of the petition process for “Low Current Interest” chemicals developed in 2003. Under this process, EPA considers the “totality of information” available for a particular substance and certain considerations, defined in the regulations, including the availability of other risk screening information and whether potential risks of the substance are adequately managed, in determining the agency’s “current assessment of the need for collecting CDR processing and use information.” The agency stresses that this process is not necessarily based on potential risks, and interest may increase in the future, in which case the agency would reconsider the applicability of the partial exemption.

In this case, EPA determined that it had low current interest in processing and use information for the six substances. The analyses (“Review Reports”) for the individual chemicals are available at docket number EPA-HQ-OPPT-2014-0809.

These chemicals were requested to be added to the partial exemption list in a petition submitted by a biofuels industry group in October 2014. EPA initially granted the petition in a Direct Final Rule published in January 2015, but withdrew the rule in March 2015 after receiving an adverse comment to the Direct Final Rule. The agency proposed to make the same additions to the partial exemption list in a Proposed Rule published July 22, 2015; the Final Rule announced today makes no changes from that Proposed Rule. However, the Final Rule does discuss comments submitted by the petitioner arguing that these biodiesel chemicals should be treated similarly to comparable “petroleum process” chemicals, which the EPA has designated partially exempt because the agency “believes worker exposure is diminished.” The agency made “no determination” on the petitioner’s argument that the biodiesel chemicals should be partially exempt because they share similar manufacturing conditions, properties, and uses as petroleum process chemicals, since the issue is “moot” as the agency is now granting equivalent partial exemption under the “Low Current Interest” process.

The EPA signed the Final Rule on March 22, 2016. The partial exemption goes into effect when the rule is published in the Federal Register, which should be well before the June 1 start of the 2016 CDR reporting cycle.

EPA and others weigh in on TSCA reform, but no reconciliation in sight.

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Although both chambers of Congress approved legislation in 2015 to modernize the Toxic Substances Control Act (TSCA), there has been little proof of progress towards reconciling the two bills, while stakeholders, including the United States Environmental Protection Agency (EPA), have been active in providing feedback and recommendations to legislators. However, Senator James Inhofe (R-OK), Chairman of the Senate Environment and Public Works Committee, recently told Bloomberg BNA that an agreement on merging the bills could happen before the next Congressional recess.

Overall, the EPA prefers the Senate version of legislation to update TSCA, according to a letter [PDF] sent earlier this year to Congressional leaders. EPA Administrator Gina McCarthy provided the Agency’s most comprehensive comments to date on the TSCA modernization bills passed by both houses of Congress in a letter dated January 20, 2016 but not made public until the beginning of March. The letter stops short of expressly recommending that the Senate bill be adopted as the framework for final legislation, but voices the EPA’s preference for various aspects of the Senate version while also approving certain provisions found in both bills. The EPA’s comments are based on the Administration’s previously discussed principles for TSCA reform, and were submitted to help negotiators reconcile the two bills, emphasizing that “[t]he lack of a workable safety standard, deadlines to review and act on existing chemicals, and a consistent source of funding are all fundamental flaws in TSCA that should be addressed.”

In particular, the EPA expressed support for the following aspects of the Senate bill:

  • Deadlines for chemical assessments and a requirement to repopulate the high-priority list until all chemicals on the TSCA Inventory have been evaluated;
  • Considerations EPA must assess in choosing a risk management measure, including costs and benefits of alternative ways to achieve the safety standard, based on reasonably available information;
  • Prioritizing chemicals for review based on manufacturer requests, subject to a cap on the number of manufacturer-initiated evaluations and funding from requestors;
  • Authorizing fee collection for the cost of reviewing confidential business information (CBI) claims, section 5 notices, prioritization decisions, safety assessments, and rulemakings;
  • Regulatory flexibility under a new section 6(d), providing “catch-all” regulatory authorities;
  • Affirmative safety determinations for new chemicals;
  • Strengthened civil and criminal enforcement authorities; and
  • Clarifying the types of state laws that are intended to be protected from federal preemption.

However, the EPA also wrote that it “strongly prefers the House bill” on the matter of implementation, because the Senate version’s deadlines and procedural requirements “may unnecessarily slow progress on more substantive issues, limit the EPA’s flexibility to allocate resources appropriately, and lead to burdensome litigation.” The letter also identifies some areas where both bills need improvement, or where the Senate version was not singled out as preferable, such as new use notification requirements for chemicals in articles.

The Hill reported that, after receiving the letter and incorporating suggestions from it, leaders of the House Energy and Commerce Committee Fred Upton (R-MI) and Frank Pallone Jr. (D-NJ) “sent an offer to the Senate …as the first formal step in negotiating toward a bill.” This offer addressed EPA’s main concerns by, for example, capping the number of industry-initiated risk evaluations, increasing funding for the program, and providing for safety determinations for new chemicals. The offer was reportedly made at the end of February but there have not been any public reports on whether the Senate responded or whether any other progress has been made since early March.

Plans to merge the competing bills might have been thrown off track earlier this month following reporting from the New York Times on a provision in the House legislation that “could help shield [Monsanto] from legal liability” related to its manufacture of polychlorinated biphenyls (PCBs). The article has drawn criticism of the House bill from some NGOs and even Presidential candidate Hillary Clinton.

Meanwhile, even more stakeholders have weighed in with their concerns and priorities. Environmental regulators from eight states, including California and New York, submitted a letter in early February focusing on the bills’ approaches to preemption issues. In late February, the American Alliance for Innovation, an umbrella group of dozens of trade associations, outlined its priorities for consideration in conference discussions.

Although Congress is perhaps closer than ever to passing a TSCA modernization bill, there has been little indication that legislators are making progress in getting legislation to the President’s desk. These most recent stakeholder comments may be just what Congress needs to speed up the process.

Help Wanted: Part-Time Environmental of Counsel Position

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Verdant Law, PLLC seeks an exceptional environmental lawyer for its Washington, DC office.  The firm needs support for its enforcement defense and compliance counseling practice.  Most matters involve internal investigations, audits, defense of agency enforcement actions, or regulatory compliance counseling.  The practice concentrates on product-based environmental, health, and safety requirements under federal laws, including the Toxic Substances Control Act (TSCA), the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), the Federal Trade Commission Act (FTC Act), the Federal Hazardous Substance Act (FHSA), and the Occupational Safety and Health Act (OSHA).  (A description of the firm’s practice is available at www.verdantlaw.com.)

The position requires, on average, 25 hours per week and occasional travel.  The hourly rate will be dependent on experience and credentials.

Requirements:

The ideal candidate will have 5 years of experience in environmental law in an administrative or litigation capacity.  Experience in product-oriented fields, such as advertising, toxic tort, product liability, and consumer product regulation will also be considered.

Candidates must possess creative problem-solving skills, good writing skills, strong interpersonal skills, detail orientation, the ability to work independently, and good judgment.  A technical engineering or scientific background is also desirable.

Submittals:

Candidates should submit a resume, two pieces of original written work product that demonstrate the ability to discuss complex issues clearly and concisely in five pages or less, and three references.  To apply, please send application materials to Philip A. Moffat, Managing Principal, at pmoffat@verdantlaw.com.  No calls, please.

Congressional leaders at work on reconciling TSCA reform bills.

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Quickly reconciling the recently passed House and Senate bills overhauling the Toxic Substances Control Act (TSCA) is reportedly a top priority for congressional leaders this year. Earlier this month, Bloomberg BNA reported that House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Rep. John Shimkus (R-IL), chairman of the energy committee’s Environment and the Economy Subcommittee, would be meeting privately to set the subcommittee’s agenda, including how to reconcile the Frank R. Lautenberg Chemical Safety for the 21st Century Act (S. 697) and the TSCA Modernization Act (H.R. 2576). Senator James Inhofe (R-OK), chairman of the Senate Environment and Public Works Committee, also told reporters that he was meeting with Rep. Upton to discuss the same topic.

Asked when final legislation might come before Congress, Sen. Inhofe suggested as early as this month or next month. He also noted that priorities for reconciliation include “making sure the EPA does what they’re supposed to be doing in pre-classifying chemicals.” Rep. Upton told Bloomberg BNA that reconciling the two bills is “high on both of our agendas,” and Rep. Shimkus said he was “pretty optimistic.”

It remains unclear, however, if both chambers will hold a formal conference committee or find a compromise in private that would then be approved by the House and Senate.

The bills are supported by a broad range of industry stakeholders, including the 3M, American Apparel & Footwear Association, American Chemistry Council, BASF, Dow Chemical, DuPont, and the National Retail Federation.

However, state and territorial environmental regulators have taken a more critical position. Last week, the Environmental Council of States released an analysis of the two bills highlighting provisions and sections that should be added or retained during reconciliation. Although not an official position of the organization, ECOS said the analysis is meant to be “a guide to selected issues of interest” to state environmental agencies. The analysis focuses mainly on preemption issues, including timing, grandfathering, and waivers, as well as the requirement that EPA share Confidential Business Information (CBI) data with states, and largely favors the Senate bill. However, the analysis also strongly advocates eliminating several provisions from the Senate version, including those authorizing a “regulatory pause” on state action and industry requests for safety determinations.

Yesterday, Chemical Watch reported that the Society of Chemical Manufacturers and Affiliates (SOCMA) sent a letter to key members of Congress expressing its preference for certain features of the House bill. SOCMA, the trade group for specialty chemical manufacturers, cited the House version’s stronger protections for the confidentiality of chemical identity. The trade group argued that the Senate version would have the perverse effect of discouraging submitters of Premanufacture Notices (PMNs) from conducting health and safety studies, which would trigger the disclosure of chemical identity information. SOCMA also wrote in support of the House bill’s provisions on fees, which are linked to recovering costs for the TSCA Section 5 program and do not apply to businesses that are exempt from submitting data, whereas the Senate bill authorizes fees for exemption requests. In addition, the letter urged Congress “to resist calls to adopt an approach that would prevent a [PMN] submitter from commencing manufacture until EPA issued its determination, even if EPA missed its 90/180-day deadline.”

U.S. Senate passes TSCA reform bill.

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Today, the U.S. Senate broke its months-long deadlock on chemical safety reform and approved by voice vote the “Frank R. Lautenberg Chemical Safety for the 21st Century Act” (S. 697). The bill, sponsored by Senators David Vitter (R-LA) and Tom Udall (D-NM), overhauls the decades-old Toxic Substances Control Act (TSCA) for the first time. We previously discussed aspects of S. 697 upon its March introduction and approval, a month later, by the Senate Environment and Public Works Committee.

After two years of negotiations, the legislation earned the support of 60 Senators of both parties as well as industry and many environmental groups. However, the bill was held up in October by Senators Richard Burr (R-NC) and Kelly Ayotte (R-NH), who were seeking to renew the Land and Water Conservation Fund. After that hold was lifted earlier this week, Sen. Barbara Boxer (D-CA), who has long criticized the proposal as too weak, placed another hold on the bill. Sen. Boxer reportedly lifted her hold after being promised that the legislation would be changed in reconciliation to more closely match the bill passed by the House (H.R. 2567) in June, which Sen. Boxer considers more protective.

The main issue legislators will face in reconciliation will likely be whether states will be allowed to impose tighter restrictions than federal standards.

ECHA proposes adding 11 substances to REACH Authorization List.

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Last week, the European Chemicals Agency (ECHA) announced that it is considering adding 11 substances to the Authorization List, also known as Annex XIV of REACH. The agency is soliciting comments on its draft recommendation, including “comments on the priority of the substances, their uses, possible exemptions from the authorisation requirement and on the proposed transitional arrangements.” In addition, the European Commission is separately accepting comments on the socioeconomic impact of the inclusion of these substances on the Authorization List.

The substances and their common uses, according to ECHA, are:

  • Dihexyl phthalate and 1,2-benzenedicarboxylic acid, dihexyl ester, branched and linear (plasticiser in PVC);
  • HHPA and MHHPA (hardener for epoxy resins);
  • Trixylyl phosphate (in lubricants, hydraulic fluids and plastics production);
  • Two boron compounds: sodium perborate; perboric acid, sodium salt and sodium peroxometaborate (in detergents and bleaching products);
  • Four lead compounds: orange lead (lead tetroxide); lead monoxide (lead oxide); tetralead trioxide sulphate and pentalead tetraoxide sulphate (batteries and rubber production, in adsorbents)

Comments will be accepted through February 17, 2016.

Under REACH, substances on the Authorization List are assigned a “sunset date,” after which the substance can only be placed on the market or used if a company has applied for and received an authorization for a specific use. ECHA regularly prioritizes substances from the “Candidate List” and makes recommendations for additions to the Authorization List, including use conditions, application deadlines, and sunset dates. The 11 substances are all proposed to have application deadlines of between 18 and 24 months, with recommended sunset dates 18 months after.

Last week’s recommendations are the agency’s seventh round of recommendations, and include four lead substances that were included in ECHA’s 2014 draft recommendations, but which were not part of the final recommendation submitted to the Commission in July 2015.

After considering public comments, the Member State Committee will prepare an opinion on the agency’s draft recommendation. ECHA will then develop its final recommendation and submit it to the European Commission, which will decide whether to include the substances on the Authorization List and on the conditions applicable for each substance.

FDA seeks input on “natural” food labels.

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Last week, the U.S. Food and Drug Administration (FDA) announced that it is seeking comments and information on the use of the term “natural” in food labeling. The move is in response to three citizen petitions, from industry stakeholders, requesting that the agency define “natural” for food labeling and one citizen petition, from Consumers Union, asking for a prohibition on the term. The FDA also stated that it is working with the U.S. Department of Agriculture (USDA) to examine “natural” labeling for meat, poultry, and egg products.

The last time the FDA considered establishing a definition for “natural” in food labeling was 1991, when it published a proposed rule on labeling and sought comment on whether the agency “should establish a meaningful definition for ‘natural’ so that this term would have a common consumer understanding, and whether it should prohibit ‘natural’ claims entirely on the grounds that they are false or misleading.” FDA declined to define “natural” by rulemaking in 1993, but has continued to maintain its policy that labeling a food as “natural” means that “nothing artificial or synthetic (including all color additives regardless of source) has been included in, or has been added to, a food that would not normally be expected to be in that food.” Critically, the FDA’s policy does not address methods of food production (like genetic engineering or pesticide use) or processing and manufacturing (like pasteurization), nor whether “natural” describes any nutritional or health benefit.

The three petitions to the FDA regarding “natural” labeling all seek guidance on whether “natural” can apply to certain methods of food production, processing, and manufacturing. Two of the petitioners requested better harmonization with the USDA’s Food Safety Inspection Service standards. The Consumers Union petition, seeking a prohibition on “natural” food labeling, argues that “natural” is “vague and misleading,” citing a Consumer Reports National Research Center survey. That survey “suggests that nearly two-thirds of U.S. consumers are currently misled by use of the term ‘natural’ on certain food labels and nearly 90 percent expect it to ‘mean much more than it does.’”

The FDA has posed several specific questions to commenters on when “natural” labeling is misleading to consumers, including input on application to food production, processing, and manufacturing practices, as well as a request for consumer perception data on confusion with terms like “healthy” and “organic.” The agency is accepting comments through February 10, 2016, via docket number FDA-2014-N-1207.

TSCA reform becomes filibuster proof, but floor vote remains elusive.

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Last week, the U.S. Senate came closer to passing bipartisan legislation to reform the Toxic Substances Control Act (TSCA) than ever before – but still failed to bring S. 697 to the floor. The bill, co-authored by Senators Tom Udall (D-NM) and David Vitter (R-LA), is still not scheduled for a floor vote, which will have to wait until after Congress returns from its Columbus Day recess.

On Friday, October 2, the “Frank R. Lautenberg Chemical Safety for the 21st Century Act” reached the filibuster-proof level of 60 cosponsors with the added support of Senators Ed Markey (D-MA) and Dick Durbin (D-IL). The new cosponsors came aboard as part of a deal promising changes to the bill, including increases to the annual funding cap for industry fees from $18 million to $25 million and measures to streamline the state preemption waiver process. At the same time, Senator Barbara Boxer (D-CA), who has been a vocal critic of the bill, reportedly agreed to allow S. 697 to advance. On Thursday, a diverse alliance of advocates – including the American Chemistry Council and Environmental Defense Fund – rallied outside the Capitol to support the legislation.

However, the news and optimism was quickly overshadowed by the announcement on Monday, October 5, from Senators Richard Burr (R-NC) and Kelly Ayotte (R-NH) that they would block consideration of the TSCA reform bill unless reauthorization of the Land and Water Conservation Fund (LWCF) was added as an amendment.

The LWCF proposal was met with resistance by Senators Udall and James Inhofe (R-OK), chair of the Environment and Public Works Committee, who are trying to keep out amendments that are not “germane.” In a letter to Senate Majority Leader Mitch McConnell (R-KY), Senate Democratic leaders pushed for separate floor time to address the reauthorization of LWCF, with the hope of clearing the way for TSCA reform.

Instead, the Senate adjourned today for a week-long recess without voting on the matter, meaning the Udall-Vitter bill could not reach the floor until October 19, at the earliest. Senators Udall and McConnell are said to be working on resolving the LWCF roadblock in order to secure the passage of S. 697, which is expected to pass easily once the procedural hurdles of scheduling a floor vote are surpassed.

FTC warns users and providers of environmental certification seals.

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Earlier this month, the Federal Trade Commission (FTC) sent warning letters to five providers of environmental certification seals and 32 businesses using those seals on their websites. The FTC is concerned that the seals may be deceptive according to Section 5 of the FTC Act, and may not comply with the agency’s environmental marketing guidelines, known as the “Green Guides.” The letters request that the recipients advise on what steps they are taking to bring their marketing into compliance. The agency is not disclosing the names of the companies that received the warning letters.

According to the Green Guides, unqualified general environmental benefit claims and environmental certificates or seals are likely to convey a wide range of meanings to consumers; i.e., consumers may see a picture of a leaf or the word “green” and assume that means the product is made of recycled materials or manufactured with renewable energy, even if those claims are nowhere to be found. Thus, the Guides caution marketers against using unqualified general environmental benefit claims – like “eco-friendly” – or environmental seals that do not convey “the basis for the certification.”

According to the warning letters, the environmental certification logos at issue do not convey the basis for the certification and are not accompanied by “clear and prominent qualifying language that limits the claim to a specific benefit.” Furthermore, the FTC cites their “.com Disclosures” guidance in noting that such a logo on a company’s website is “not likely an effective hyperlink label leading to the necessary disclosures.”

In its Business Blog, the FTC has a post on “Performing seals” which discusses the matter and advises on the following “key principles” about the use of environmental certifications and seals of approval:

  • Without careful qualification, general environmental benefit claims pose a risk of deception. Under the FTC Act, deception can occur inadvertently if the marketer does not have substantiation for consumers’ interpretations of claims. For example, if a product conveys an unqualified “eco-friendly” claim, and a consumer interprets that to mean that the product is carbon neutral and non-toxic, then the product maker may be on the hook for deception unless it has evidence to prove that the product is, in fact, carbon neutral and non-toxic.
  • Certifications and seals that don’t explain the reason for the thumbs-up may convey broad claims that can’t be substantiated. BecGreen Certification Examples - Good and Badause it is unlikely that companies can substantiate the vast array of claims that consumers can potentially interpret from an unqualified environmental certification seal, the FTC urges against using “seals that do not convey the basis for the certification.” The FTC’s blog post also includes a helpful visual illustrating good and bad examples of using an environmental certification seal (at right):
  • Companies can take steps to reduce the risk of deception. As discussed in the Green Guides, visuals like certification logos should be accompanied with “clear and prominent qualifying language that clearly conveys that the certification or seal refers only to specific and limited benefits.” In the “Good Example” of an environmental certification seal, for example, the words “Biodegradable,” “Recyclable,” and “Compostable,” are clearly displayed next to the certification logo.
  • Logos themselves aren’t likely to be effective hyperlinks. Companies should not assume that readers will click on the logo image, and instead include explanatory information in large, easy-to-understand text, right next to the logo. In cases where not all attributes can be listed next to the seal, companies should display sufficient information upfront to explain why readers should click the clear and prominently placed link.
  • Both the certifier and the advertiser have responsibilities under Section 5 of the FTC Act. In its letters to certifiers, the FTC notes that the certifiers’ websites do not appear to provide instructions to marketers on using qualifying language.
  • The FTC has resources for companies that want to keep green claims clean. Here, the FTC refers to the Green Guides as well as its Statement of Basis and Purpose [PDF] for more detail. More resources are available on the FTC’s Environmental Marketing

The FTC has not determined whether the letter recipients’ claims violate the law and is not taking any law enforcement actions at this time.