For the second time, Jessica Alba‘s Honest Company faces allegations that the consumer product brand has been dishonest with its customers. A suit filed Friday in the U.S. District Court in Manhattan accuses Honest of deceptively advertising at least 41 of its products–including laundry detergent, children’s toothpaste, and soap–as natural, plant-based, and free of harsh chemicals.
“These products in fact contain a spectacular array of synthetic and toxic ingredients” including toxins phenoxyethanol and methylisothiazolinone, plaintiffs Brad and Manon Buonosera allege in their class-action complaint. (Check out those links for Honest’s explanation of why it uses those two chemicals.)
This isn’t the first time Honest has faced such allegations. A previous class-action suit filed in California in September 2015 made similar accusations about the brand’s advertising as well as the effectiveness of its products. Honest is currently trying to get that case dismissed.
In response to the latest suit, the company released the following statement:
“The Honest Company takes its responsibility to our consumers seriously and strongly stands behind our products. These allegations are without merit and we will vigorously defend this baseless lawsuit. Our formulations are made with integrity and we remain steadfast in our commitment to transparency.”
The negative attention the suits bring–whether or not the cases have any merit–would present a challenge for any consumer brand, but the timing is especially bad for Honest, which is reportedly exploring an inital public offering. Reports surfaced recently that the company, whose most recent funding round valued the company at more than $1.7 billion, is working with Goldman Sachs and Morgan Stanley on a potential IPO.
“It creates an unknown liability to have one or more class actions [against a company],” says Chris Dore, partner at Chicago-based Edelson, a law firm that specializes in class-action suits and represents startups. “They’re attacking the core of what this company claims to be… when you’re on the IPO circuit and trying to price your stock appropriately, these things can be harmful.”
To be clear, the Buonosera case is not about whether or not Honest products have done harm to the plaintiffs; rather, the purpose of the case, which centers on the allegation of false advertising, is to prove that consumers aren’t getting what they paid a premium for.
Dore points to a similar case in California in 2004 where a class-action suit was brought against a company called Kwikset that sold locks prominently advertised as “made in the U.S.” It turned out some of the parts on the locks, which sold at a higher price than competitor brands, were made overseas. The case went all the way to the California Supreme Court and the consumers won.
What’s different about the Honest case is that the particular advertising claims at stake aren’t defined or regulated by the Food and Drug Administration. (The USDA regulates the term “organic” only when it applies to agricultural products.) So-called “natural” products that don’t contain any “harsh chemicals,” as Honest’s products are advertised, also fall into this murky, unregulated territory.
“Who defines what ‘harsh’ chemicals mean?” Dore says. Honest defines them as chemicals that cause long-term health issues.
The Buonosera suit is seeking $5 million in damages, which is the minimum requirement for a case seeking class-action status in a federal court.
To be sure, proving a case worthy of class-action status is notoriously difficult, vague advertising claims aside, Dore says. The burden is on the plaintiffs to prove that a lot of consumers have had a similar experience of seeing the company’s advertising and labels and concluding they didn’t get what they paid for.
“Is ‘all-natural’ a term that everyone saw and cared about? Maybe not. Maybe they just cared that Jessica Alba is behind the company,” Dore says.