Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

FTC Fines Company for Not Being Truly Organic

Author: Scarinci Hollenbeck, LLC

Date: November 19, 2019

Key Contacts

Back

The FTC Recently Announced that Truly Organic, Inc. and its Founder/CEO Maxx Harley Appelman will Pay $1.76 Million Settlement for Deceptive Advertising

Organic and eco-friendly products are increasingly popular with consumers. However, businesses that rely on environmental marketing to sell their products and services must have the science to back up their claims. If not, you could face costly allegations of deceptive advertising from regulators and consumers.

FTC Fines Company for Not Being Truly Organic

FTC Complaint Against Truly Organic

The Federal Trade Commission (FTC) recently announced that Truly Organic Inc. (Truly Organic) and its founder and CEO, Maxx Harley Appelman, will pay $1.76 million to settle a complaint alleging that their nationally marketed bath and beauty products are neither “100% organic” nor “certified organic” by the U.S. Department of Agriculture (USDA). The FTC’s complaint alleged violations of Section 5 of the Federal Trade Commission Act (FTC Act), which prohibits unfair or deceptive acts or practices in or affecting commerce.

According to the FTC complaint, Truly Organic used non-organic ingredients in its products, such as non-organic lemon juice, which can be sourced an organic version. Other products contained ingredients that the USDA doesn’t allow in organic handling, including cocamidopropyl betaine and sodium cocosurfactant. Other Truly Organic products were made by third-parties, including bath bombs and soaps, and fail to contain any organic ingredients. The FTC also alleged that certain products contain non-vegan ingredients such as honey and lactose.

On May 4, 2016, the USDA contacted Truly Organic to notify them that NOP had received complaints alleging that Truly Organic “markets its product as organic in violation of the USDA organic regulations.”  After receiving a Notice of Warning from the USDA, company president Maxx Appelman told USDA that “previous management” had erroneously used the USDA Organic seal, and that “we have removed the seal from all packaging, marketing/promotional materials, website, everything as you can see and are selling a completely redesigned group of products. We are well aware of the rules and regulations that govern the USDA Seal and have not used the seal whatsoever and do not plan to unless we gain proper certification.”

Truly Organic’s Response to USDA Warning Letter

Truly Organic offers a good lesson on what not to do if contacted by a regulator regarding allegations of false advertising. Despite its statements to the USDA, Truly Organic continued to make the false “certified organic,” “USDA organic,” and “vegan” claims. According to the FTC, Appelman subsequently stated in an email to Urban Outfitters, Inc. that all of its products were certified organic and vegan. He maintained they were “certified organic (and actually the most organic in the world)” and “everything is vegan, made in the USA, cruelty-free, fair trade, non-gmo and gluten-free,” according to the FTC. The agency also alleged that the company falsified USDA certification by taking a document issued to another company, erasing that name, and adding its own. Truly Organic then provided falsified certification to third parties as purported proof for its “certified organic” claims.

FTC Settlement

Truly Organic and Appelman have agreed to pay a monetary fine of $1.76 million to resolve the FTC complaint. The settlement also prohibits Truly Organic and Appelman from making deceptive claims, including false and/or unsubstantiated claims, that any good or service: 1) is wholly or partially organic; 2) contains or uses organic ingredients; 3) is certified organic; 4) is vegan; or 5) has been evaluated by any third party, including one affiliated with the USDA NOP, based on its environmental or health benefits or attributes.

“To know if a product is truly organic, consumers have to rely on companies to be truthful and accurate,” Andrew Smith, director of the FTC’s Bureau of Consumer Protection, said in a press statement. “That’s why we’ll hold companies accountable when they lie about their products being organic, especially when they’ve used fake certificates and ignored USDA warnings.”

FTC Commissioner Rohit Chopra also issued a statement, praising the imposition of monetary fines in such cases. “I believe it would be helpful for the Commission to codify this approach in a Policy Statement addressing unlawful conduct that is dishonest or fraudulent,” he wrote. “In cases involving such conduct, no-money settlements are inadequate, and the Commission should commit itself to exercising its full authority to protect consumers and honest businesses.”

Key Takeaway

As organic, vegan, and eco-friendly products continue to flood the market, regulators are taking a closer look at any associated advertising claims in an effort to prevent so-called “greenwashing.” The FTC’s latest action serves as an important reminder that all environmental marketing claims must not be misleading, must be true at the time they are made, and must be supported by competent and reliable scientific evidence. The FTC’s Guides for the Use of Environmental Marketing Claims, (“Green Guides”), are an excellent resource for New York and New Jersey businesses seeking to ensure that their environmental marketing claims do not violate federal truth-in-advertising standards.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
What Every Real Estate Investor Should Know Before Buying a Rental Property post image

What Every Real Estate Investor Should Know Before Buying a Rental Property

Before buying a New Jersey rental property, an investor should verify realistic operating numbers, the property’s legal and regulatory status, lead-based paint and flood compliance, the existing leases and tenant protections, and the right ownership structure. A rental property is more than a piece of real estate; it is an operating business subject to legal, […]

Author: Donald M. Pepe

Link to post with title - "What Every Real Estate Investor Should Know Before Buying a Rental Property"
Can You Change an Irrevocable Trust in New Jersey? post image

Can You Change an Irrevocable Trust in New Jersey?

In New Jersey, an irrevocable trust can sometimes be modified even though its name suggests otherwise, and one of the primary tools for doing so is a process called decanting. Whether decanting is available depends on the specific terms of the trust and the discretion given to the trustee. Key takeaways: New Jersey has no […]

Author: Marc J. Comer

Link to post with title - "Can You Change an Irrevocable Trust in New Jersey?"
How Intellectual Property Valuation Will Impact Business Transactions post image

How Intellectual Property Valuation Will Impact Business Transactions

Intellectual property valuation determines the monetary value of a business’s IP assets, and it drives outcomes in licensing deals, joint ventures, mergers and acquisitions, financing, and ownership disputes. The most valuable assets of a business are often the things that cannot be seen or touched: a proprietary process, a copyrighted work, brand recognition, or the […]

Author: Jay McDaniel

Link to post with title - "How Intellectual Property Valuation Will Impact Business Transactions"
Data Center, Dark Fiber, and Lit Services Agreements in New Jersey: Key Terms and Legal Pitfalls post image

Data Center, Dark Fiber, and Lit Services Agreements in New Jersey: Key Terms and Legal Pitfalls

For New Jersey data center owners and operators, a service agreement may look routine when it is signed. The network is functioning, the vendor is meeting its installation schedule, and the parties have agreed on pricing and performance specifications. The provisions that seem most important at that stage are often the technical ones. That changes […]

Author: George McGowan

Link to post with title - "Data Center, Dark Fiber, and Lit Services Agreements in New Jersey: Key Terms and Legal Pitfalls"
Fort Monmouth Redevelopment and the Transformation of Monmouth County Real Estate post image

Fort Monmouth Redevelopment and the Transformation of Monmouth County Real Estate

The Fort Monmouth redevelopment has entered its execution phase, and it is repositioning the broader Monmouth County real estate market. When Netflix and the Fort Monmouth Economic Revitalization Authority closed on the 292-acre Mega Parcel in December 2025, the transaction did more than hand over a deed. It marked the moment Fort Monmouth stopped being […]

Author: Donald M. Pepe

Link to post with title - "Fort Monmouth Redevelopment and the Transformation of Monmouth County Real Estate"
Local Zoning and Land Use Rules Every New Jersey Rental Property Owner Should Understand post image

Local Zoning and Land Use Rules Every New Jersey Rental Property Owner Should Understand

Owning a residential rental property in New Jersey involves more than finding tenants and collecting rent. Property owners must comply with a combination of state laws, municipal ordinances, building and housing codes, and zoning and land use regulations. These requirements can affect everything from the number of dwelling units permitted at a property to whether […]

Author: Donald M. Pepe

Link to post with title - "Local Zoning and Land Use Rules Every New Jersey Rental Property Owner Should Understand"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. By providing a telephone number and submitting this form you are consenting to be contacted by SMS text message. Message & data rates may apply. Message frequency may vary. You can reply STOP to opt-out of further messaging.
“If you would like to submit a file, please email it directly to info@sh-law.com.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!