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Archive for the ‘Greenwashing’ category

Consumer Watchdog Quashes Solar Greenwash Down Under

August 27th, 2010

In a case of successful public enforcement against greenwashing, two solar panel retailers have amended their ads after the Australian Competition and Consumer Commission (ACCC) found their marketing statements potentially misleading and deceptive (see the Smart Company article here and the Ecogeneration piece here).

According to the ACCC, Queensland Solar Systems and State Solar Services admitted their ads had likely violated the Australian Trade Practices Act.

The advertising statements at issue included a claim that a 1.5 kilowatt system would “wipe out” a household electricity bill when a system of that output would actually generate only about a third of the energy needs for most homes.

Other claims related to pricing and misled consumers about discounted rates and the periods when discounts were available.

In particular, the companies did not make clear that certain discounts were available only to customers who were eligible for renewable energy certificates offered by the Australian government.

Both companies will be required to publish corrective notices in regional newspapers, an industry magazine and on the companies’ web sites. They will also have to contact past customers to inform them of the companies’ conduct and set up a compliance program.

The ACCC has had other notable successes in policing greenwashing.

In 2008, a probe by the consumer watchdog agency forced Goodyear to admit that it could not substantiate advertising claims that its Eagle LS2000 tire has “minimal environmental impact,” improves fuel economy and is produced by a process that results in reduced carbon dioxide emissions.

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Posted in Greenwashing, Solar Power

To Puff is not Enough: Appliance Recycling Centers’ False Advertising Claims Nixed by 9th Circuit

May 30th, 2010

Appliance Recycling Centers of America, Inc. (ARCA) is a Minnesota appliance recycling company. Earlier this month, the U.S. Court of Appeals for the Ninth Circuit affirmed a district court decision to dismiss false advertising claims ARCA had brought against its west coast competitor, refrigerator and freezer recycler Jaco Environmental, Inc. (Jaco).

Jaco’s alleged offenses included:

calling its recycling method a “unique” system with “unprecedented” results

saying that “JACO’s system for handling contaminated polyurethane is an entirely different approach”

claiming that “no other company could handle polyurethane contaminated with CFC-11″

The district court granted summary judgment for Jaco and the Court of Appeals affirmed, finding insufficient evidence that the statements had misled or deceived consumers.

The Court of Appeals held that the first statement is non-actionable puffery because it is a “general, subjective claim,” not a statement about “specific or absolute characteristics.”

In the greenwashing context, another way to think of the distinction is that the accused statements here did not claim specific environmental or energy efficiency benefits or certification of such benefits.

In most of the other recent greenwashing suits (e.g., the Honda Civic case, the Intel battery life case and the Windex case), the advertising claims at issue related to actual energy efficiency performance, environmental benefits and the appearance of independent third party environmental certification.

In this case, the purpose of the accused statements seemed to be to differentiate Jaco from its competitors. As such, Jaco was cleared of greenwashing. For false advertising claims to stick, to puff is not enough.

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Posted in Greenwashing

Pro Se Prius Owner Can’t Drive 55; Court Bounces Toyota Greenwashing Case

August 24th, 2009

I guess it was just a matter of time before this clean tech icon became the subject of greenwashing claims. In a complaint filed last month in federal court in Oakland, California, pro se plaintiff and disgruntled Prius owner Kenneth Bernstein accuses Toyota of greenwashing by misrepresenting the car’s fuel economy.

Bernstein states that he bought a Prius in 2006 because the salesman told him that the car got between 55 and 60 miles per gallon. After driving 95,000 miles, Bernstein alleges that his Prius has averaged only about 32 mpg.

According to the complaint (bernstein_complaint.pdf), Toyota advertised fuel efficiency figures of 55 mpg for the Prius when it knew or should have known that the actual fuel efficiency achieved “under normal driving conditions” was substantially lower:

Toyota advertised [the Prius] with false statements of its fuel efficiency and the cost saving realizable from its purchase, specifically, advertising the remarkable overall fuel efficiency of 55 Miles Per Gallon of gasoline . . . when Toyota knew, or by the exercise of reasonable care should have know (sic), but omitted to state, that such statements were untrue, deceptive, or materially misleading, and that the actual performance for [the Prius] is and was up to 42% below the miles per gallon of fuel efficiency or cost savings that Toyota advertised.

Bernstein alleges that Toyota continues to market the model years 2004-07 Prius using old and inaccurate fuel economy numbers despite subsequent changes in the EPA’s testing guidelines that resulted in lower fuel economy for the 2008 model year.

Bernstein also contends that Toyota impermissibly and deceptively altered federally mandated disclaimer language regarding fuel efficiency numbers and sometimes omitted the disclaimer altogether.

Unfortunately for Bernstein, in an August 7, 2009 Order (bernstein_order.pdf) Judge Marilyn Hall Patel dismissed the complaint because it failed to properly allege any basis for federal jurisdiction.

Specifically, the complaint alleged diversity jurisdiction but failed to allege that the plaintiff and defendants are citizens of different states, and the complaint contained no grounds for federal question jurisdiction because it did not make any claims under a federal statute.

I talked to Bernstein briefly, and he may try to cure the deficiencies of his complaint and re-file in federal court. Another option would be to file in California state court, where a very similar greenwashing suit involving the Honda Civic hybrid is currently pending.

Some of the allegations here are very similar to those at issue in the Honda case, in which the plaintiff accused Honda of false advertising for stating that consumers can drive the Civic hybrid like they would a “conventional car” and achieve “terrific gas mileage.”

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Posted in Greenwashing, Hybrid and Electric Vehicles

Class Action Accuses Intel of Deceptive Battery Life Measurement Scheme

July 24th, 2009

Though perhaps not squarely in the greenwashing category, a recent lawsuit accusing Intel of using deceptive practices to inflate figures for laptop battery life echoes some common themes of greenwashing claims.

Last month Intel was sued in federal court in San Jose in a proposed class action accusing the chip maker of designing a program called MobileMark 2007, which allegedly inflates battery life measurements, and misrepresenting the program as being objective and independently run.

According to the complaint (mendez_complaint.pdf), the MobileMark 2007 program tests a laptop computer’s battery life under contrived conditions that differ from how consumers actually use their computers, yielding artificially high battery life measurements.

Specifically, the complaint alleges that MobileMark 2007 measures battery life with the processor running at about 7.5% capacity, the screen dimmed to about 30% capacity and the the wireless network card turned off.

Esmeralda Mendez, the named plaintiff, alleges that MobileMark 2007 measured her laptop’s battery life at approximately 2 hours and 45 minutes, but her actual life under “reasonable, real-world conditions” is less than an hour.

Ms. Mendez also accuses Intel of using an entity called Business Application Performance Corporation (BAPCo.) as a “front” for Intel-developed benchmark programs. The complaint alleges that Intel concealed the fact that it developed MobileMark 2007 and presented it as an objective independent program by “donating” it to BAPCo. for public release.

BAPCo. is the owner of record of U.S. Trademark Registration No. 2,733,482 for the MOBILEMARK trademark for “[c]omputer programs that measure the speed, performance and/or battery life of portable computers” in Class 9 (482_registration.pdf).

Mendez’s claim that Intel’s presentation of the MobileMark 2007 program falsely implies neutral third party evaluation of battery life echoes allegations in a greenwashing class action involving the household cleaner Windex. In that case, the plaintiffs allege that SC Johnson’s GREENLIST mark and internal rating system deceives consumers by suggesting independent verification of its products’ environmental impact.

Another common thread running through greenwashing cases is the accusation that the performance levels or environmental benefits advertised cannot be achieved under normal operating conditions.

Similar to Mendez’s accusation that her battery life falls short of the MobileMark 2007 measurements during normal use, a recent false advertising suit targeting the Honda Civic Hybrid alleges that the car does not achieve the advertised fuel efficiency when driven in an ordinary manner.

Rather, the named plaintiff was told that he can’t drive in a “normal manner” and get high fuel efficiency despite Honda’s claims that drivers don’t have to do “anything special” to get ”terrific gas mileage.”

These are themes we’re likely to see more of as greenwashing cases continue to increase in frequency.

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Posted in Eco-Marks, Greenwashing

Class Action Accuses Classic Cleaner of Greenwashing

April 1st, 2009

I’m starting to see a slight uptick in lawsuits alleging greenwashing, i.e., making false or deceptive environmental claims (see previous greenwash suit post here). The latest target is that classic household cleaner, Windex.

Last month Wayne Koh filed a class action suit in federal court in San Jose, California against SC Johnson & Son, Inc. (“SC Johnson”), accusing the maker of Windex of misleading consumers about the “environmental safety and soundness” of the cleaning product (koh_complaint.pdf).

At issue is SC Johnson’s use of its GREENLIST trademark (below), and in particular, its placement of the mark on the Windex product labels.

According to the complaint, the reverse side of the product label states:

Greenlist is a rating system that promotes the use of environmentally responsible ingredients.

The complaint alleges that the GREENLIST mark and accompanying statement falsely imply that the Greenlist designation is administered by a neutral third party when, in fact, it is owned by SC Johnson.

Moreover, SC Johnson is representing that Windex is made with natural and environmentally safe ingredients, the complaint states. but the company has not changed the ingredients of the cleaning product. According to the complaint, these ingredients include ethylene glycol n-hexyl ether, which is “not naturally derived and poses serious danger, including death, if ingested by wildlife and small children.”

The complaint further alleges that products bearing the GREENLIST mark contain some of the same “non-natural toxic chemicals harmful to the environment and animals” as SC Johnson products without the label.

The complaint states several California state law claims relating to unfair competition, false advertising, unlawful business practices and consumer protection violations.

SC Johnson owns two U.S. trademark registrations and two pending applications, one each for the word mark GREENLIST and the GREENLIST design mark for various cleaning products. They are Registration Nos. 3,518,048 and 3,522,370 and Application Serial Nos. 77/039,858 and 77/142,889. None of the registrations or applications is for a certification mark.

Whether SC Johnson is truly greening its cleaning products I can’t say, but I don’t see any outright falsehoods here. The brief explanation of Greenlist on the product label seems to be literally true.

Also SC Johnson’s Greenlist webpages (see here and here) state that SC Johnson developed the ratings system and that the company itself is screening its ingredients because “we plan to measure ourselves against a much higher internal standard.”

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Posted in Eco-Marks, Greenwashing

California Appeals Court Lets Honda Hybrid Greenwashing Case Go Forward

January 21st, 2009

An interesting case right here in San Diego is highlighting the disparities between the EPA’s estimated automobile mileage data and the actual road figures and whether car owners can adjust their driving habits to bridge the gap (see the Law.com article here).

The case involves allegations of false advertising and deceptive claims by Honda about its Civic Hybrid. The plaintiff, Gaetano Paduano, sued Honda in San Diego County Superior Court in 2005 after he became disappointed with the gas mileage of his 2004 Civic Hybrid (he was getting 23-30 mpg while the EPA number was 48). In response to his inquiries, a Honda employee told him he would have to drastically change his driving habits to boost the mpg.

Paduano brought state and federal warranty claims and California state false advertising and deceptive practices claims relating to statements in Honda’s Civic Hybrid brochures about driving habits and fuel efficiency. The brochure tells drivers that they do not have to do “anything special” to get “terrific gas mileage” and instructs them to:

Just drive the Hybrid like you would a conventional car and save on fuel bills.

In 2006, the trial court ruled that Honda was entitled to summary judgment and dismissed all of Paduano’s claims. The court held that the representations in Honda’s brochure complied with the federal regulations on fuel economy advertising disclosures and that the state deceptive advertising claims were preempted by the Energy Policy and Conservation Act, the federal law that regulates disclosure of fuel estimates.

Last month, California’s 4th District Court of Appeal affirmed the portion of the summary judgment ruling regarding Paduano’s breach of warranty claims, but reversed as to the deceptive practices and misleading advertising claims, ruling that Paduano could go forward on the latter.

In a 2-1 opinion (paduano_opinion.pdf), the appeals court held that Paduano had put forth enough evidence (and Honda had presented no evidence to the contrary) that a jury could find that the statements in the Honda brochure could mislead a reasonable consumer.

Specifically, a Honda representative told Paduano that “you cannot drive in a normal manner in order to get the mileage” – the “normal manner” being accelerating and stopping with the flow of traffic and “accelerating as by law you’re supposed to [do] to get on the highway.” The record showed that one Honda employee had concluded that “you can’t do any of those [usual] things” if you want to “obtain better gas mileage.”

The court found this evidence contradicted the statements in the brochure that a driver need not do “anything special” to achieve superior gas mileage and called into question Honda’s claim that a consumer just has to drive the Hybrid like he would a conventional car:

There is thus evidence that “getting terrific gas mileage” might not be accomplished as easily as Honda suggests to consumers in its brochure.

So Paduano’s case can go to trial in what could further damage Honda’s green cred. Another dissatisified Civic Hybrid owner brought a class action suit in 2007, alleging that the car maker misled consumers by inflating mpg claims.