Online column by veteran LeClairRyan (leclairryan.com) environmental attorney describes ongoing FTC campaign against ‘false and misleading’ environmental claims on product packages and marketing materials.
Use of the term “biodegradable” on product packaging and marketing materials spurred a host of federal enforcement actions last year—a clear signal that companies should stick to the facts and avoid making fuzzy environmental claims, writes LeClairRyan attorney James A. Kosch in a Jan. 6 column posted on CorporateComplianceInsights.com.
“It is clear that when it comes to environmental claims, more companies are following advice Mark Twain once gave to aspiring writers: ‘If you can catch an adjective, kill it,’ ” writes Kosch, a Newark-based shareholder in LeClairRyan’s Commercial Litigation Practice and a director of the New Jersey State Bar Association’s environmental law section. “Companies are giving up on the vague terminology that has heretofore been part and parcel of green marketing and, instead, are sticking to a just-the-facts approach. This is a wise move.”
In the piece (“Just the Facts, Ma’am: FTC Actions Target ‘Biodegradable’ Claims”), the veteran environmental attorney details how the Federal Trade Commission (FTC) continues to police what it sees as false and misleading environmental claims on product packages and marketing materials. In October, the agency announced six enforcement actions in response to the marketing of plastic bags, golf tees, storage containers and the like as “biodegradable,” with civil penalties running as high as $450,000, Kosch notes.
But it did so, not based on hard-and-fast regulations spelling out the dos and don’ts of environmental claims, but under its so-called Green Guides—less formal guidelines that give regulators broad latitude on enforcement, Kosch points out. “This raises the risk level for companies that make broad environmental claims,” he writes. “The risk encompasses not just the embarrassment and expense associated with federal enforcement actions, but also the damages that can accrue from lawsuits filed by any number of ideologues or opportunists.”
At the state level, in particular, the proliferation of consumer fraud and/or private right-of-action statutes means the prospect of a class action lawsuit often looms even when government action does not, Kosch warns. “Fighting frivolous litigation is sometimes necessary, but it is typically cheaper to buy peace than to fight for justice. In the end, the company shells out lots of money for legal bills and takes a hit on its reputation in the marketplace, even if it ‘wins’ the actual case.”
Moreover, the use of subjective language can amount to an invitation to criticism, regardless of a company’s good intentions, Kosch writes. “If the company has installed, say, 10 low-flow toilets at its headquarters, this is an indisputable fact,” he notes. “In the realm of the subjective, however, pleasing all sides is nearly impossible.” As an example, Kosch cites activists’ continued criticism of Apple and Dell despite these companies’ extraordinary efforts, including a race to develop the world’s “greenest” laptops.
“Let poets and dreamers use flowery language where they will,” Kosch writes in the conclusion to the piece. “When it comes to the product, consumers can draw their own conclusions based on the facts at hand.”
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