Archive for the ‘Greenwashing’ category

Stating its Case: California Asserts New Law Against Alleged Plastic Bottle Greenwashers

November 25th, 2011

 

Most public enforcement against alleged greenwashing has been at the federal level by agencies such as the Federal Trade Commission in the U.S., the Advertising Standards Authority in Great Britain, and the Australian Competition and Consumer Commission.

Now American states are getting into the act, with a recent lawsuit filed by California’s Attorney General Kamala D. Harris involving claims of recyclable, compostable and biodegradable plastic bottles.

The complaint (Cal-ENSO_Complaint), brought on behalf of the people of California, accuses ENSO Plastics (ENSO), Balance Water Company (Balance) , and Aquamantra of making false, deceptive, and misleading claims that plastic bottles which include a particular resin made by ENSO will biodegrade or decompose in a landfill or other environment.

Among the marketing statements by ENSO alleged to be false or misleading and/or unsubstantiated are:

ENSO plastic bottles are “truly biodegradable”

“ENSO bottles biodegrade through natural microbial digestion in both aerobic (compost) and anaerobic (landfill) environments”

“ENSO bottles are recyclable with traditional PET [plastic]”

“Our scientific data supports that ENSO bottles will not contaminate PET recycle streams as the material used does not impact the PET polymer in any way”

According to the complaint, statements on Balance’s bottles such as ”100% biodegradable recyclable” and will “break down in a typical landfill or compost environment in less than 5 years” are false or misleading and unsubstantiated.

The complaint cites similar statements by Aquamantra, including “our bottles are made of 100% biodegradable & recyclable plastic” and the bottles “can be composted and will break down in around 240 days.”

The central cause of action in the suit is a recent California state law that banned the use of the terms ”biodegradable,” “degradable,” or “decompostable” in any form in connection with plastic food or beverage containers.

Enacted in 2008, AB 1972, requires that food or beverage containers labeled with the term “compostable” or “marine degradable” must meet certain statutory standards. 

This is the first lawsuit to enforce the new law, which the California legislature said is intended to ensure that:

environmental marketing claims, including claims of biodegradation, do not lead to an increase in environmental harm associated with plastic bag and plastic container litter by providing consumers with a false belief that certain bags and containers are less harmful to the environment if littered.

Along with private consumer actions and public enforcement by federal government agencies, legal action by the states adds another level of enforcement against greenwashers.

Plastic Bag Makers Do a Reversal in Reverse Greenwash Suit

October 4th, 2011

 

In previous posts here and here I wrote about a lawsuit in which plastic bag manufacturers Hilex Poly Company (Hilex), Superbag, and API Enterprises took issue with certain statements made by ChicoBag, the popular reusable bag maker.

The accusations could be called reverse greenwashing, as they involved allegedly false or misleading statements not about environmental benefits, but about the negative environmental impact of certain products. 

Specifically, the plastic bag makers alleged that ChicoBag made false or deceptive claims about the consumption, recycling, and negative environmental impact of plastic bags and has falsely indicated that the claims are substantiated.

ChicoBag countered that the statements at issue were made by third party sources such as the Environmental Protection Agency, National Geographic, and the Los Angeles Times, and simply repeated by ChicoBag, with attribution, on its web site.

In what ChicoBag and some in the eco-blogosphere are calling victory, Superbag and API agreed to dismiss the case (Superbag-API-Dismissal), and the remaining plaintiff, Hilex, settled with ChicoBag (HilexPoly-Dismissal).

According to ChicoBag’s press release, Hilex has agreed to properly cite recycling statistics and undertake certain measures to reduce windblown litter, and both parties will be more careful and even-handed in their marketing statements. 

Some of the settlement terms are:

Both parties will provide citations and dates for all facts and statistics on any web page or advertising;

Hilex will include a statement on its products “Tie Bag in Knot Before Disposal” and statements on its web site about ways to prevent windblown litter;

ChicoBag will keep updates about some of the statements at issue in the suit up on its web site;

ChicoBag will not cite any archived EPA web sites; and

ChicoBag will inform visitors to its Learn the Facts web page that plastic retail carryout bags are only a subset of plastic bags in ocean debris reports.

ChicoBag’s President Andy Keller said the settlement marks two wins for the environment:  “First, Hilex Poly can no longer inflate plastic bag recycling numbers by including non-bag wrap and plastic film.  And they have also agreed to acknowledge that plastic bags can become windblown litter despite proper disposal and to better educate the public.”

Building Immunity: Are Green Skills Certifiers Untouchable After LEED Win?

September 20th, 2011

 

Last year several individuals, including a green building consultant, an architect, and an engineer, sued the U.S. Green Building Council (USGBC) in federal court in New York, alleging that the organization made false or misleading statements in connection with its Leadership in Energy and Environmental Design (LEED) certification system for green buildings.

Specifically, Henry Gifford and the other plaintiffs accused the USGBC of making false statements regarding the energy and money-saving aspects of LEED certification in a 2008 press release, which says the results of a 2008 study:

indicate that new buildings certified under the [USGBC's] LEED certification system are, on average, performing 25-30% better than non-LEED certified buildings in terms of energy use

The plaintiffs brought a federal false advertising claim under the Lanham Act and state claims under the New York Deceptive Trade Practices Act. 

Both the federal and state claims were based on the premise that the plaintiffs were harmed by the allegedly misleading statement because it diverted customers from the plaintiffs’ business to LEED-accredited professionals.

The court disagreed and last month dismissed the suit. 

In a 9-page Order (Gifford-USGBC_Order), Judge Leonard B. Sand held that the plaintiffs lacked standing to sue the USGBC for the alleged false advertising because they could not demonstrate that their businesses were damaged by the statements at issue.

To show standing for a claim of false advertising under the Lanham Act in the Second Circuit (which includes New York federal courts), a plaintiff must (1) be a competitor of the defendant, or (2) show a reasonable interest to be protected against the alleged false advertising and that the interest is likely to be damaged by the alleged false advertising.

The court held that the plaintiffs are not competitors of the USGBC because plaintiffs provide advice on the design and construction of energy efficient buildings while the USGBC reviews and rates designs created by others.

As to the reasonable interest prong, the court held the plaintiffs had failed to establish a causal nexus between the USGBC’s alleged false statement and clients of the plaintiffs supposedly lost to LEED-accredited professionals:

With the exception of Gifford, each Plaintiff designs and consults on specific elements of individual buildings, including heating and cooling systems, moisture and mold remediation, and architectural design.  Plaintiffs do not allege that LEED certified buildings do not require such services or that those services must be provided by a LEED-accredited professional in order to attain certification.  Because there is no requirement that a builder hire LEED-accredited professionals at any level, let alone every level, to attain LEED certification, it is not plausible that each customer who opts for LEED certification is a customer lost to Plaintiffs.

While the plaintiffs here took on a certifiying organization directly, most greenwashing cases are brought against manufacturers and sellers of products for alleged false or misleading acts or statements made in connection with their own products.

This decision should keep it that way, at least for organizations that certify green skills and services, because it makes establishing the requisite standing to get into court very difficult for putative challengers.  

For green skills certifiers the universe of direct competitors is rather small, and non-competing plaintiffs are likely to have a hard time showing causal links between false or misleading statements and damage to their businesses.

ChicoBag Responds to Plastic Bag Makers in Reverse Greenwash Suit

September 6th, 2011

 

A previous post discussed a recently-filed lawsuit in which plastic bag manufacturers Hilex Poly Company, Superbag, and API Enterprises took issue with certain statements made by ChicoBag, the popular reusable bag maker.

The accusations could be called reverse greenwashing, as they involve allegedly false or misleading statements not about environmental benefits, but about the negative environmental impact of plastic products.

ChicoBag recently responded, at least in the court of public opinion. 

In a press release entitled “Bag Wars:  Plastic Bag Giants Sue Reusable Bag Entrepreneur for Loss of Sales (Environmental Community Outraged),” ChicoBag addresses the plastic bag makers’ accusations head on and suggests the suit should be viewed as part of the plastics industry’s strategy of silencing the competition.

The crux of the plastic bag makers’ complaint (Hilex_Complaint) is that ChicoBag has made a number of false or deceptive claims about the consumption, recycling, and negative environmental impact of plastic bags and has falsely indicated that the claims are substantiated.

However, according to the press release, the statements at issue were made by third party sources such as the Environmental Protection Agency, National Geographic, and the Los Angeles Times, and simply repeated by ChicoBag, with attribution, on its web site.

Moreover, Andy Keller, the inventor of ChicoBag and the company’s president, told me that the plastic bag makers’ complaint actually altered the wording of some of the statements.

In particular, while some of the statements actually relate to the environmental impact of plastic products generally, the plastic bag makers inserted the word “bags” into the statements with the result that the complaint falsely presents them as claims about plastic bags.

The press release also notes that litigation is a favored tactic by plastic bag manufacturers and their coalitions and associations such as the Save the Plastic Bag Coalition, which has filed suits against the communities of Marin County, Palo Alto, Manhattan Beach, and Los Angeles County.

According to Keller, “Plastic bag manufacturers and their ‘non-profit’ associations, along with their trade association, the American Chemistry Council, have spent millions of dollars trying to persuade voters and elected officials to vote against single-use bag legislation.”

With respect to the current lawsuit, Keller doesn’t think it is really about the facts.  Instead, he said, “I believe it is simply a way for the industry to squash the competition and scare all of us into silence.”

Plastic Bag Makers Accuse ChicoBag of Reverse Greenwashing

July 18th, 2011

 

Greenwashing has come to mean making false or deceptive representations about environmentally friendly aspects of products, services or practices. 

The vast majority of greenwashing legal actions target product or service providers touting their wares in such a way that misleads consumers about the environmental benefits of those goods or services by, for example, making unsubstantiated claims about better energy efficiency or lower environmental impact.

However, in a twist that might be called reverse greenwashing, a new lawsuit focuses on alleged false or deceptive claims about the negative environmental impact of competitors’ products.

Specifically, plastic bag makers Hilex Poly Company, Superbag, and API Enterprises accuse ChicoBag, which markets its reusable bags as eco-friendly alternatives to single use plastic bags, of making false, misleading and unsubstantiated claims about the consumption, recycling, and environmental impact of plastic bags.

According to the second amended complaint (Hilex_Complaint), filed in federal court in Columbia, South Carolina, ChicoBag has made several false or deceptive claims in its advertising and promotion, and has falsely indicated that the claims are substantiated.  The disputed claims include:

the statement that only one percent of plastic bags are recycled;

the statement that “somewhere between 500 billion and a trillion plastic bags are consumed worldwide each year”

the statements that “the world’s largest landfill can be found floating between Hawaii and San Francisco” and “this ‘landfill’ is estimated to be twice the size of Texas” and the “landfill” is comprised of “mostly plastic bags”;

the statements that “[e]ach year hundreds of thousands of sea birds and marine life die from ingestable [sic] plastics mistaken for food” and that such plastics are comprised mostly of plastic bags.

The plaintiffs also allege that some of ChicoBag’s assertions about its own reusable bags are false or misleading, such as the statement that its products are superior to plastic bags and that a reusable bag needs to be used only eleven times to have a lower environmental impact than using eleven disposable bags.

The complaint asserts one federal cause of action for false advertising under the Lanham Act and another for violations of the South Carolina Unfair Trade Practices Act.

It seems likely that some of the disputed statements will be deemed permissible advertising puffery. 

However, green consumers deserve accurate and substantiated information not only in connection with the environmental benefits of products they may want to purchase, but also the reverse – with respect to the environmental detriment of products they may wish to avoid.

Freezer Greenwashing Suit Invokes Federal Appliance Law

July 5th, 2011

 

In a recently-filed suit, Plaintiff Christopher Collins seeks to add another weapon to the greenwashing legal arsenal. 

The proposed class action, filed in federal court in Oakland, California, invokes the National Appliance Energy Conservation Act (NAECA) in allegations that Haier America Trading (Haier) made false representations about the energy efficiency of certain freezers.

The NAECA is a federal law that created mandatory standards for energy efficiency of certain household appliances to ensure that products continue to operate at the maximum technically and economically feasible energy efficiency levels. 

The statute prohibits manufacturers from making any representations about an appliance’s efficiency unless the product has been tested by the federal procedures and the manufacturer discloses the test results.

The NAECA applies to a variety of household appliances including refrigerators, freezers, room air conditioners, dishwashers, clothes washers and dryers, and kitchen ranges and ovens.

According to the complaint (Collins-Complaint), Haier and GE (which sells certain Haier freezers under its own brand name) affixed ENERGYGUIDE labels (shown above) to certain Haier freezers that substantially understated their actual energy consumption and showed levels that complied with the NAECA.  

Independent testing conducted by Consumer Reports, the complaint says, demonstrated that the labels were false, and the mislabeled freezers consume substantially more energy than what was represented on the labels.

In particular, the actual energy consumption of the freezers exceeds the maximum permitted under NAECA by between 163 and 202 kWh/yr: 

Collins alleges that, had the true energy efficiency data been disclosed, he would not have purchased a GE Model FCM7SU freezer and neither Haier nor GE would have been permitted to sell the freezer.

Collins works the NAECA argument into Count 5 of the complaint, which alleges violations of California’s Unfair Competition Law (UCL).  Specifically, Count 5 asserts that by selling the mislabeled freezers in violation of the NAECA energy efficiency standards Defendants have engaged in “unlawful” business practices under the UCL.

In addition to the NAECA ground, the complaint sets forth state and common law bases typical of greenwashing complaints such as false advertising, consumer protection violations, and unjust enrichment.  Common law fraudulent concealment and nondisclosure are also raised in connection with the alleged false energy efficiency data.

Interestingly, this post from the Class Action Blog presages Collins’ complaint, though the Meiselman Denlea firm that authors the blog is not the firm handling this case.

Fiji Defeats “Unreasonable” Consumer in Green Drop Bottle Battle

June 5th, 2011

 

In a previous post I wrote about a consumer class action against SC Johnson, accusing the producer of Windex of misleading consumers by using a GREENLIST label that allegedly implies objective third party certification of environmentally friendly ingredients in its cleaning products.

Ayana Hill recently filed a similar proposed class action suit against the Fiji Water Company (Fiji) in which she alleged that the “Green Drop” design (shown below) on Fiji’s water bottles misrepresents the product as environmentally superior to other bottled water and connotes approval by independent, third-party organizations.

Hill also cited Fiji’s “Every Drop is Green” marketing slogan and its fijigreen.com web site as evidence of deception.

Hill supported her allegations by referencing the U.S. Federal Trade Commission’s (FTC) ”Green Guides,” which provide general principles for advertising environmentally friendly aspects of products and services and lay out specific examples of impermissible advertising claims.

The trial court dismissed Hill’s complaint, and last month the First District Court of Appeals of California affirmed the decision of the lower court.

The key to the appellate court decision was the “reasonable consumer” standard.  The FTC Act and California state consumer protection laws require a plaintiff to show potential deception of “a consumer acting reasonably in the circumstances” and “the ordinary consumer within the larger population,” respectively.

What are the characteristics of a “reasonable” or “ordinary” consumer?  Well, the appeals court explained what they are not: 

…the standard is not a least sophisticated consumer, unless the advertising is specifically targeted to such a consumer 

Nor do we test the impact on the unwary consumer…

…in these days of inevitable and readily available Internet criticism and suspicion of virtually any corporate enterprise, a reasonable consumer also does not include one who is overly suspicious.

The appeals court framed the central question in the case (and answered it) this way:

Does the green drop on Fiji water bottles convey to a reasonable consumer in the circumstances that the product is endorsed for environmental superiority by a third party organization?  No.

According to the court, nothing about the green drop symbol implies any association with or endorsement by a third party organization:

[The green drop symbol] bears no name or recognized logo of any group, much less a third party organization, no trademark symbol, and no other indication that it is anything but a symbol of Fiji water.

The appellate court found the green drop design to be much less suggestive of a seal of an environmental organization than a globe icon used in an FTC Green Guides example and a logical symbol for branding water. 

The appeals court also contrasted the green drop with SC Johnson’s GREENLIST label, which the court noted made express representations of environmental superiority and suggested an independent source by identifying the name as a rating system (SC Johnson’s motion to dismiss was denied last year).

Finally, the overall context mitigates against implication of third party endorsement, the court reasoned, because the green drop appears next to the web site name fijigreen.com, which associates the symbol with Fiji, not a third party organization.

For these reasons, the court held the green drop symbol would not mislead a reasonable consumer about third party endorsement or environmental benefits of Fiji’s botted water:

we hold – and it is all we hold – that no reasonable consumer would be misled to think that the green drop represents a third part organization’s endorsement or that Fiji water is environmentally superior to that of the competition.

This is an interesting decision for a number of reasons.  What immediately struck me was the exclusion of the “overly suspicious” from the definition of the ordinary consumer. 

Isn’t the large and growing segment of green-minded consumers that Fiji is targeting with the green advertising claims naturally very discerning and more suspicious of claims of environmental benefits than other consumers?  There’s even a name for this market segment – LOHAS consumers.

The appeals court implied that a particular type of consumer could be used as the standard when it said “the standard is not a least sophisticated consumer, unless the advertising is specifically targeted to such a consumer.”  Much green branding, Fiji’s included, arguably is targeted to the LOHAS consumer. 

Perhaps when analyzing claims of greenwashing in advertising directed at LOHAS, or green-minded, consumers the courts should use an “ordinary green consumer” standard that takes into account both the green sophistication and green skepticism of this consumer group.

After all, advertisers promoting green brands and communicating green marketing messages are trying to appeal to the environmental sophistication of these consumers.  

Shouldn’t the truth of that advertising be measured against the same sophisticated standard of the consumers most inclined to evaluate it as part of their purchasing decisions?

Green Leaf Greenwash?: Letter to FTC Targets CBS EcoAds Program

May 1st, 2011

 

EcoMedia, a division of CBS, owns six pending trademark applications for the marks ECOAD and ECOAD (and Design) (shown above), for various services including fundraising for environmental protection and media and advertising services (see, e.g., ECOADS_85089838_App, ECOADS_85184033_App, and ECOADS_85184040_App). 

Through its EcoAds program, EcoMedia allows advertisers to direct a portion of their ad dollars to local environmental projects such as energy efficient retrofits and renewable energy installations.  When they do so, their advertisements display the ECOAD design mark.

Recently several environmental groups sent a letter to the Federal Trade Commission (FTC) requesting that the agency investigate the EcoAds program, issue a warning to EcoMedia, and suggest revisions to the program (ecoad_letter). 

The groups include the Center for Environmental Health, Rainforest Action Network, Friends of the Earth, and Ecopreneurist.

The groups’ main concern is that the ads do not make clear to consumers that the environmental benefit signaled by the ECOAD design mark relates only to the funding of community environmental programs and is not necessarily connected to the advertising company or advertised product:

the EcoAd green leaf symbol appears by itself, without explaining that it simply means that money from the advertisement is funding community environmental programs.  From the consumer’s perspective, the message is that either the product being advertised or the company who purchased the advertisement has some positive environmental attribute.

According to the letter, the EcoAds program in its current form violates the FTC Act and the FTC’s Green Guides by making “general environmental benefit claims” without clarifying when environmental attributes refer to a product, its packaging, or a service, as well as failing to include qualifying language about the nature of the environmental benefits associated with the ad.

The environmental groups have requested that the FTC suggest revisions to the EcoAd program such as adding text to each use of the ECOAD design mark to alert viewers that the logo does not specify environmental attributes of products or companies. 

The groups also want CBS EcoMedia to develop criteria for evaluating advertisers and products for participation in the EcoAds program.

In my view the latter is not necessary because both the issue and the fix here are straightforward. 

The key question is whether it is clear to consumers that the ECOAD design mark signals only that some of the advertiser’s dollars have gone to a local environmental project and says nothing about the advertiser’s products or business practices. 

If there is some ambiguity which causes consumers to believe the advertiser itself or the product being advertised has environmentally friendly attributes, then the EcoAd logo may constitute greenwashing.

The solution is equally straightforward and requires no information about or evaluation of the advertising companies or advertised products:  simply make EcoMedia prominently include with each advertisement a clear statement about what the ECOAD design mark signifies and what it does not.

Greenwashing in Context and other Green IP at AIPLA Orlando

January 19th, 2011

I will be speaking at the American Intellectual Property Law Association’s (AIPLA) Mid-Winter Institute next month in Orlando as part of a panel on green IP.

The other speakers on the panel - called “IP Rights in a Green World:  Opportunities, Challenges and Hazards” - are Douglas Pearson of Jones Day in Washington, DC and Maureen Gorman of Davis McGrath in Chicago. 

Mr. Pearson will speak on potential threats to patent rights in green technologies, Ms. Gorman will cover green branding issues in a presentation entitled “The Future’s so Green, I Gotta Wear Shades:  ‘Greening” Your Brand Without ‘Greenwashing’ It,” and I will provide an overview of greenwashing and anti-greenwashing legal activity (see the Institute program here).

Entitled “Greenwashing in Context:  Commercial Consumers, Cleantech Counterfeiters and Eco-Mark Enforcement,” my presentation observes that most discussions of greenwashing are unduly restricted to cases in which an individual consumer, a class of consumers, or a consumer watchdog such as the FTC challenges a company making false or misleading green claims about its products or services.

To put greenwashing in its proper context we have to consider a wider range of cases, some of which are not immediately recognizable as instances of greenwashing.

To do so requires looking beyond individual consumers to commercial consumers and beyond green brand owners to counterfeiters of clean tech products and eco-mark infringers. 

From this broader vantage point, and keeping in mind the definition of greenwashing – making false or misleading claims about purportedly environmentally friendly products, services, or practices – we are able to recognize, observe and understand greenwashing in its proper context.

For example, the eco-mark infringers hawking counterfeit Suntech solar modules are not typically viewed as greenwashers, nor is Suntech’s eco-mark enforcement campaign against them seen as anti-greenwashing activity.

Similarly, the commercial litigation between Cogen and Hess over misrepresentations about the energy efficiency of cogeneration equipment is not immediately recognized as a greenwashing case.

But they are instances of greenwashing and anti-greenwashing legal actions and are at least equally, if not more, important than the false or misleading claims directed at individual consumers.

Commercial “consumers” of green products and services such as renewable energy project developers, plant operators, utilities, retailers, distributors, and installers have a huge impact on implementation of clean technologies.  As such, it is crucial that they receive genuine products and accurate service information.

Thus, my presentation argues that studies of greenwashing should embrace the proper, broad context that includes green commercial consumers.

Registration information for the AIPLA Mid-Winter Institute is available here.

U.S. Federal Trade Commission Targets LED Lamp Maker for Alleged Greenwashing

October 15th, 2010

ftc_logo.JPG 

Legal responses to greenwashing – making false or misleading claims about purportedly environmentally friendly products, services or practices – come in two common varieties.

The first is a private lawsuit brought by a consumer or group of consumers as a class action against a company accused of making such claims.  Notable examples include the false advertising suit involving the Honda Civic Hybrid and the class action against SC Johnson regarding use of the Greenlist label on its Windex cleaning product.

The second is a public enforcement action brought by a government agency and/or consumer watchdog on behalf of consumers.  One recent example is the Australian Competition and Consumer Commission action against two solar panel retailers.

In a new example of the latter variety, last month the U.S. Federal Trade Commission (FTC) brought an action against Lights of America (LOA), accusing the California LED lamp maker of violating the FTC Act by making false or unsubstantiated advertising claims about its products.

The complaint (ftc-lights_of_america_complaint.pdf), filed in federal court in Los Angeles, states three counts of such claims, relating to comparisons with incandescent lights, LED brightness claims and product life claims. 

First, the FTC alleges that LOA’s LED lamps produce significantly less light output than a typical incandescent light bulb at the wattage represented in the company’s promotional materials.

Specifically, LOA’s label for a particular LED lamp states that the product replaces a 40-watt incandescent light bulb.  But according to the complaint, the LED lamp produces only 74 lumens of light while a typical 40-watt incandescent bulb produces 405 lumens.

The FTC also alleges that LOA overstated the light output of one its LED lamps by representing that the lamp produces 90 lumens of light when the company’s tests demonstrated that it produces only 43 lumens.

The third count of the complaint states that LOA misrepresented the number of hours its LED lamps would last.  In particular, while LOA claimed that one of its LED recessed lamps will last 30,000 hours independent testing showed that the lamp lost 80% of its light output after only 1,000 hours.

The complaint requests that the court enter a permanent injunction to prevent future violations by LOA and award other equitable remedies on behalf of consumers.

This case comes as the FTC has announced proposed revisions to its “Green Guides,” which provide guidance on how to make environmental marketing claims that are above board, true and substantiated (see the Sustainable Marks blog post on the proposed revisions).