Honest Co., a Santa Monica start-up co-founded by actress Jessica Alba that sells more than 100 consumer products touted as healthy and nontoxic, has been hit with another lawsuit challenging its product claims.
This time the product is Honest's organic infant formula, which the Organic Consumers Assn. alleged is falsely labeled because it "contains 11 substances prohibited by federal law from organics."
But Honest said Thursday that the formula was cleared by the Food and Drug Administration and meets all safety and nutritional standards. The company said it was "confident this lawsuit will be dismissed."
The formula is "also certified USDA Organic by an independent third party, in strict accordance with the National Organic Program," the company said.
The suit, filed in Superior Court in Los Angeles, nonetheless is another blow to the outlook for the privately held company founded in 2012.
The fresh litigation also comes on top of media reports that Honest might be looking for a buyer rather than pursuing an initial public stock offering to expand its growth.
Honest sells a variety of baby-care, personal-care and home-care products, including diapers, shampoos and detergents, along with vitamins and supplements. The company's products are carried on its website and at thousands of retail outlets.
It has amassed more than $220 million in private funding that has given the company an overall valuation of $1.7 billion.
But Honest's contentions increasingly are being called into question, raising the risk that the principles who have allowed Honest to grow are being undermined.
"They better be in crisis-management mode right now," said Bernhard Schroeder, a marketing expert who heads the Lavin Entrepreneurship Center Programs at San Diego State's business school.
"They will have one good opportunity to handle" the string of allegations, he said, otherwise "it will be a major hit to the brand."
The company already is facing class-action lawsuits in California and New York that accuse Honest of falsely advertising a number of its products as natural, plant-based and free of harsh chemicals.
Honest has dismissed the merits of those lawsuits.
In addition, a report last month in the Wall Street Journal said its tests showed the company's liquid laundry detergent contained a chemical — sodium lauryl sulfate, or SLS, which can cause skin irritation — that Honest pledged never to use.