Association of Corporate Counsel
Annual Compliance Seminar
September 30, 2010
Hot Topics in Advertising & Marketing Law 2010
Update on Green Marketing
Jeffrey A. Greenbaum
Frankfurt Kurnit Klein & Selz, PC
488 Madison Avenue
New York, New York 10022
(212) 826-5525
jgreenbaum@fkks.com
“We tell consumers that they should deal with trusted national brands . . . . In the future,
the Commission will certainly be more attentive to national advertisers.”
-- FTC Chairman Jon Leibowitz
Introduction

In recent years, we have seen an explosion of green marketing claims in
the United States and around the world. Reacting to consumers’
environmental concerns, advertisers are developing new “greener”
products and are also looking for ways to tout the “green” attributes of
their existing products.

In this evolving marketplace, it is often a challenge to determine how to
accurately describe the environmental benefits of a product. Technology
is changing. New terminology is emerging. There are often no generally
accepted standards for measuring an environmental benefit or even for
determining whether there is in fact any benefit at all. Consumers may
also interpret marketing claims in different ways. And different companies
make widely different judgments about the types of claims that are
appropriate. Regulators, consumer advocates, and others have taken
notice, and significant attention is now being paid again to green
marketing.

As the FTC nears the end of its review of its Green Guides, it is a critical
time for advertisers to revisit their environmental marketing practices and
make necessary changes. Additional enforcement, as well as competitor
and consumer litigation, is widely expected. This outline provides a
general introduction to the laws governing environmental marketing in the
United States, as well as an update on select recent developments.
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
Warning. The FTC’s revisions to the Green Guides are expected shortly.
By the time you read this outline, it may be very out-of-date. If you would
like a copy of my updated outline, I’m happy to send it to you. Please just
send me an e-mail at jgreenbaum@fkks.com.
FTC Guides

Guides. The FTC “Guides for the Use of Environmental Marketing
Claims” set forth general standards for promoting the environmental
benefits of products in advertising. See 16 C.F.R. Part 260.

General principles. The Green Guides set forth several general principles
that apply to all environmental marketing claims:
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
Disclosures should be sufficiently clear, prominent, and
understandable to prevent deception. See 16 C.F.R. § 260.6(a).

Claims should be presented in a way that makes clear
whether the attribute or benefit refers to the product, the product’s
packaging, or a portion or component. See 16 C.F.R. § 260.6(b).

Claims should not overstate the attribute or benefit, and should
avoid implications of significant benefits if the benefit is negligible.
See 16 C.F.R. § 260.6(c).
*
The FTC recently warned seventy-eight companies that
they may be selling clothing and other textile products that
are falsely labeled and advertised as made from bamboo
(but are actually made from rayon). See Press Release,
FTC (February 3, 2010).
*
The FTC recently settled charges with several clothing and
textile manufacturers that they deceptively advertised
products that were originally made from bamboo. Although
the allegations in each of the cases varied, one or more of
the cases involved allegations that they made false and
unsubstantiated claims about their products such as that
their clothing and textiles products are made from bamboo
fiber (when they are really made of rayon), that they were
manufactured using an environmentally friendly process,
that they retain the natural antimicrobial properties of the
bamboo plant, and that they are biodegradable. See, e.g.,
FTC v. Sami Designs, LLC (2009); FTC v. CSE, Inc.
(2009); FTC v. Pure Bamboo, LLC (2009).
*
The New York City Department of Consumer Affairs
recently charged that Bosch overstated the water-saving
benefits of using its dishwashers. See NYC v. Bosch
(2008).
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*


The basis for comparative claims should be sufficiently
clear to avoid deception. See 16 C.F.R. § 260.6(d).
General benefit claims. It is deceptive to misrepresent that a
product offers a general environmental benefit. As a general matter,
unqualified general claims of environmental benefit are difficult to interpret
and may convey many claims requiring substantiation. See 16 C.F.R. §
260.7(a).

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The NAD has also recently decided a number of cases
addressing whether environmental claims have been
properly substantiated. See, e.g., Seventh Generation,
Inc., NAD Case No. 5206 (08/24/10) (recommending that
Seventh Generation discontinue or modify various safety
and “natural” claims); The Clorox Company, NAD Case
No. 5089 (09/25/09) (recommending that Clorox
discontinue the claim “cleans with the power of Clorox” to
avoid conveying the message that Green Works, a natural
product that does not disinfect, has disinfectant capability);
Southern Diversified Products, NAD Case No. 5009
(04/29/09) (finding that claim that Mythic Paints have no
toxins is substantiated, but also recommending that the
advertiser discontinue claims that suggest that competitive
products are dangerous); Scotts Miracle-Gro Co., NAD
Case No. 5002 & 5003 (04/21/09) (recommending that
Scotts discontinue the use of “Water Smart Formula” to
avoid conveying the message that the formula is new); The
Clorox Company, NAD Case No. 4882 (7/17/08) (finding
that claim that Green Works works as well as traditional
cleaners could not be substantiated, because it does not
kill germs as many others do); Church & Dwight Co., NAD
Case No. 4848 (5/13/08) (finding that claim that Essentials
Liquid Laundry Detergent was made from “100% percent
plant based soaps” could not be properly substantiated).
FTC. In the 1990s, the FTC brought a number of cases
challenging advertisers’ alleged general environmental benefit
claims. See, e.g., F.T.C. v. Dura Lube Corp., 2000 WL 561696
(F.T.C.) (challenging claims that motor oil reduces toxic
emissions); F.T.C.. v. Blue Coral, Inc., 1997 WL 409304 (F.T.C.)
(challenging claims that engine treatment product reduces toxic
emissions); F.T.C. v. Safe Brands Corp., 121 F.T.C. 379 (1996)
(challenging claims that antifreeze was environmentally safe and
safer for the environment than conventional antifreeze); F.T.C. v.
Amoco Oil Co., 121 F.T.C. 561 (1996) (challenging claims that
gasoline is superior to all other brands of gasoline in providing
engine performance and environmental benefits); F.T.C. v.
Benckiser Consumer Products, Inc., 121 F.T.C. 644 (1996)
(challenging claim that a portion of the proceeds from the sale of
cleaning products would be donated to non-profit environmental
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groups); F.T.C. v. RBR Productions, Inc., 122 F.T.C. 444 (1996)
(challenging claims that disinfectant is safe for the environment);
F.T.C. v. Orkin Exterminating Company, Inc., 117 F.T.C. 747
(1994) (challenging claims that lawn pesticides are practically
non-toxic and do not pose any significant risk to the
environment); F.T.C. v. Chemopharm Laboratory Inc., 118
F.T.C. 1195 (1994) (challenging environmentally safe claims for
de-icer product); F.T.C. v. DeMert & Dougherty, Inc., 116 F.T.C.
841 (1993) (challenging claims that hairspray, which contained
chemicals, is environmentally safe); F.T.C. v. First Brand, Corp.,
115 F.T.C. 1 (1992) (challenging claims that Glad plastic trash
bags are safe for the environment and environmentally friendly).

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NAD. The NAD has also heard many challenges involving
alleged general environmental benefit claims, including many
recent cases. See, e.g., Masternet Ltd., NAD Case No. 5092
(10/02/09) (finding the claim “more environmentally friendly” was
adequately substantiated but recommending that Masternet
discontinue its claim that using its plastic products “saved
countless trees from destruction”); Solo Cup Co., NAD Case No.
5036 (06/19/09) (Solo voluntarily discontinued advertising that
its paper plates were made from bamboo and therefore, more
environmental); Apple Inc., NAD Case No. 5013 (06/03/09)
(recommending that Apple discontinue “world’s greenest” claim);
GP Plastics Corporation, NAD Case No. 4944 (12/04/08)
(recommending that GP Plastics Corp. discontinue the “ecofriendly,” “environmentally friendly,” “green tomorrow” and
“saving the planet” claims); North American Green, NAD Case
No. 4854 (05/23/08) (recommending that North American Green
discontinue claims that HydraCX2 is environmentally friendly
and cotton is totally green); Church & Dwight Co., NAD Case
No. 4848 (05/13/08) (recommending that Church & Dwight
discontinue advertising that laundry detergent is “more sensible
for the environment”); Nestle Purina Pet Care Company, NAD
Case No. 4837 (05/16/08) (finding that Nestle had substantiated
the claim that it is “committed to ecofriendly practices”);
Panasonic Corporation of North America, NAD Case No. 4697
(07/16/07) (recommending that Panasonic discontinue
advertising that televisions are “environmentally friendly”);
Seventh Generation, NAD Case No. 4488 (05/08/06) (finding
that statement that Seventh Generation products are “as gentle
on the planet as they are on people” is puffery); Nuclear Energy
Institute, NAD Case No. 3508 (11/01/98) (recommending the
Nuclear Energy Institute abandon claims that nuclear power
plants “do not pollute the environment” and that nuclear energy
is “environmentally clean”); Proctor & Gamble, NAD Case No.
3499 (10/01/98) (recommending that Proctor & Gamble modify
claims that imply Olean is “natural”); Tom’s of Maine, NAD Case
No. 3470 (06/01/98) (recommending that Tom’s of Maine avoid
claiming that its Natural Mouthwash is 100% or completely
natural and include in advertising that the product contains an
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ingredient that is not inherently “natural” or sourced from nature);
Norcold, Inc., NAD Case No. 3416 (10/01/97) (Norcold
voluntarily modified its advertising to clarify its “environmentally
friendly” and “environmentally responsible” claims by disclosing
the presence of HCFCs in the product’s system); Sekisui TA
Industries, Inc., NAD Case No. 3057 (10/01/93) (the advertiser
voluntarily discontinued its claims that Sekisui TA Supreme
brand tapes are “environmentally friendly, clean, clear and nontoxic”); AV Olsson Trading Co., Inc., NAD Case No. 2957
(06/01/92) (finding that the claim “environmentally friendly,”
followed by a reference to the fact that the If You Care Coffee
Filters are 100% unbleached, was truthful and not misleading,
but recommending that claims that the product has a positive
effect on the environment be discontinued); Sunshine Makers,
Inc., NAD Case No. 2940 (03/01/92) (recommending that
Sunshine Makers discontinue claims that its product Simple
Green is “environmentally safe” and “it won’t hurt the
environment”); Sebastian International, Inc., NAD Case No.
2931 (01/01/92) (recommending Sebastion modify or
discontinue claims that its hair cosmetics are “environmentally
friendly”); Mr. Coffee, Inc., NAD Case No. 2925 (12/01/91)
(recommending the claim “environmentally friendly” be
modified); Rockline, Inc., NAD Case No. 2918 (11/01/91)
(recommended that Rockline modify claims that its Natural Brew
Coffee Filters are “environmentally friendly” to state the
environmental benefit in specific terms).

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Degradable. A claim that a product or package is degradable,
biodegradable, or photodegradable should be substantiated by competent
and reliable scientific evidence that the entire product or package will
completely break down and return to nature within a reasonably short
period of time after customary disposal. See 16 C.F.R. § 260.7(b).

FTC. The FTC has recently brought cases involving degradability
claims. See, e.g., Dyna-E International, Inc. (2009); In re: Kmart
Corp. (2009); see also, e.g., F.T.C. v. Mobil Oil Corp., 116 F.T.C.
113 (1993); F.T.C. v. First Brands, Corp., 115 F.T.C. 1 (1992);
F.T.C. v. American Enviro Products, Inc., 115 F.T.C. 399 (1992);
F.T.C. v. RMED International, Inc., 115 F.T.C. 572 (1992); F.T.C.
v. Mobil Oil Corp., 116 F.T.C. 113 (1993); F.T.V. v. Archer Daniels
Midland Co., 117 F.T.C. 403 (1994); F.T.C. v. LePage’s, Inc., 118
F.T.C. 31 (1994); F.T.C. v. AJM Packaging Corp., 118 F.T.C. 56
(1994); F.T.C. v. Keyes Fibre Co., 118 F.T.C. 150 (1994); F.T.C.
v. North American Plastics Corp., 118 F.T.C. 632 (1994); F.T.C. v.
BPI Environmental, Inc., 118 F.T.C. 930 (1994); F.T.C. v. RBR
Productions, Inc., 122 F.T.C. 444 (1996).

NAD. The NAD has also recently considered a number of
challenges involving degradability claims. See, e.g., Masternet
Ltd., NAD Case No. 5092 (10/02/09); The Clorox Company, NAD
Case No. 5089 (09/25/09); Dispoz-O Products, NAD Case No.
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4990 (03/27/09); GP Plastics Corporation, NAD Case No. 4944
(12/04/08); Andex Corporation, NAD Case No. 2974 (8/1/92); 3M,
NAD Case No. 2955 (5/1/92); Sunshine Makers, Inc., NAD Case
No. 2940 (3/1/92); Stone Container Corporation, NAD Case No.
2932 (2/1/92); Sebastian International, Inc., NAD Case No. 2931
(1/1/92); Creative Technologies Group, Inc., NAD Case No. 2862
(4/1/91); Lever Brothers Company, NAD Case No. 2909 (11/1/91).

Compostable. A claim that a product is compostable should be
substantiated by competent and reliable scientific evidence that the
product will break down into, or otherwise become part of, usable
compost in a safe and timely manner in an appropriate composting
program or at home. See 16 C.F.R. § 260.7(c).



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FTC. Over the years, the FTC has brought a number of cases
involving composting claims. See, e.g., F.T.C. v. Keyes Fibre Co.,
118 F.T.C. 150 (1994); F.T.C. v. American Enviro Products, Inc.,
115 F.T.C. 399 (1992); F.T.C. v. RMED International, Inc., 115
F.T.C. 572 (1992); F.T.C. v. Mobil Oil Corp., 116 F.T.C. 113
(1993); F.T.C. v. Keyes Fibre Co., 118 F.T.C. 150 (1994).
Recyclable. A product or package should not be marketed as recyclable
unless it can be collected, separated, or otherwise recovered from the
solid waste stream for reuse, or in the manufacture of another package or
product, through an established recycling program. See 16 C.F.R. §
260.7(d).

FTC. The FTC has brought, over the years, several cases
involving recyclability claims. See, e.g., F.T.C. v. White Castle
System, 117 F.T.C. 1 (1994); F.T.C. v. Mr. Coffee, Inc., 117 F.T.C.
156 (1994); F.T.C. v. America’s Favorite Chicken Co., 118 F.T.C.
1 (1994); F.T.C. v. Oak Hill Industries Corp., 118 F.T.C. 44 (1994);
F.T.C. v. LePage’s, Inc., 118 F.T.C. 31 (1994); F.T.C. v. AJM
Packaging Corp., 118 F.T.C. 56 (1994); F.T.C. v. Keyes Fibre Co.,
118 F.T.C. 150 (1994); F.T.C. v. Amoco Foam Products Co., 118
F.T.C. 194 (1994); F.T.C. v. Safe Brands Corp., 121 F.T.C. 379
(1996); F.T.C. v. RBR Productions, Inc., 122 F.T.C. 444 (1996).

NAD. The NAD has also considered challenges involving
recyclability claims. See, e.g., Masternet Ltd., NAD Case No.
5092 (10/02/09); GP Plastics Corporation, NAD Case No. 4944
(12/04/08); Confab, Inc., NAD Case No. 2952 (5/1/92); Fort
Howard Corporation, NAD Case No. 2948 (4/1/92); Sebastian
International, Inc., NAD Case No. 2931 (1/1/92); Creative
Technologies Group, Inc., NAD Case No. 2862 (4/1/91).
Recycled content. A recycled content claim should be made only from
materials that have been recovered or otherwise diverted from the solid
waste stream, either during or after the manufacturing process. See 16
C.F.R. § 260.7(e).
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
FTC. See, e.g., F.T.C. v. Mr. Coffee, Inc., 117 F.T.C. 156 (1994).

NAD. See also, e.g., Andex Corporation, NAD Case No. 2974
(8/1/92); 3M, NAD Case No. 2955 (5/1/92); Fort Howard
Corporation, NAD Case No. 2948 (4/1/92); Statler Industries, Inc.,
NAD Case No. 2945 (4/1/92); Mr. Coffee, Inc., NAD Case No.
2925 (12/1/91); Colgate-Palmolive Company, NAD Case No. 2912
(11/1/91); Lever Brothers Company, NAD Case No. 2909
(11/1/91).

Refillable. An unqualified refillable claim should not be made unless there
is a system in place for the collection and return of the package for refill
(or the later refill of the package by consumers with product sold in
another package). See 16 C.F.R. § 260.7(g).

Ozone safe. It is deceptive to misrepresent that a substance is “ozone
safe” or “ozone friendly,” for example, if a substance has an ozone
depleting substance. See 16 C.F.R. § 260.7(h).

FTC. See, e.g., F.T.C. v. Zipatone, 114 F.T.C. 376 (1991); F.T.C.
v. Jerome Russell Cosmetics, U.S.A., Inc., 114 F.T.C. 514 (1991);
F.T.C. v. Tech Spray, Inc., 115 F.T.C. 433 (1992); F.T.C. v.
PerfectData Corp., 116 F.T.C. 769 (1993); F.T.C. v. Nationwide
Industries, 116 F.T.C. 853 (1993); F.T.C. v. Texwipe Co., 116
F.T.C. 1169 (1993); F.T.C. v. G.C. Thoresen, Inc., 116 F.T.C.
1179 (1993); F.T.C. v. Creative Aerosol Corp., 119 F.T.C. 13
(1995); F.T.C. v. Mattel, Inc., 119 F.T.C. 969 (1995); F.T.C. v.
RBR Productions, Inc., 122 F.T.C. 444 (1996).
FTC Review

Regulatory review. In November 2007, the FTC announced that it was
beginning a review of its Green Guides. The review is being conducted
earlier than originally scheduled “because of the current increase in green
advertising claims.” See Press Release, FTC (November 26, 2007).
Revised Green Guides are currently expected to be issued during 2010,
but the specific timing is uncertain.

Workshops. As part of its review of the FTC Green Guides, the FTC held
various public workshops.

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Carbon offsets/renewable energy. The FTC held a workshop on
carbon offsets and renewable energy certificates on January 8,
2008. See www.ftc.gov/bcp/workshops/
carbonoffsets/index.shtml.
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
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
Packaging. The FTC held a workshop on green packaging claims
on April 30, 2008. See www.ftc.gov/bcp/
workshops/packaging/index.shtml.

Buildings and textiles. The FTC held a workshop on
environmental claims for buildings and textiles on July 15, 2008.
See www.ftc.gov/bcp/workshops/ buildingandtextiles/index.shtml.
Consumer perception study.

In October 2008, the FTC announced that it planned to conduct a
study to examine consumer perception of environmental
marketing claims. See 73 F.R. 60704 (October 14, 2008).

In May 2009, the FTC released further information about the
study, which is to “aid the Commission in determining what
revisions, if any, it should make to the Guides to ensure that the
Guides are appropriately responsive to any changes in consumer
perception of environmental claims.” See 74 F.R. 22396 (May 12,
2009).

The study will examine the following claims:
*
General environmental benefit claims (e.g., eco-friendly
and green).
*
Sustainable.
*
Renewable (e.g., made with renewable energy and made
with renewable materials).
*
Carbon neutral and carbon offset claims.

The primary focus of the study is to “compare participant
responses regarding the meaning of different environmental
marketing claims, including unqualified general environmental
claims, such as ‘Green’ and ‘Eco-friendly,’ and general
environmental benefit claims combined with a specific
representation – e.g., ‘Green – Made with Renewable Materials’ (a
‘qualified-general claim’).”

The study will also examine how consumers perceive specific
environmental attributes, such as “Made with Recycled Materials”
and “Made with Renewable Materials.”

The study will also examine whether consumers believe that
environmental claims suggest anything about the environmental
impact of a product through stages of its life cycle.
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
The study will collect information about how consumers perceive
claims about the purchase of renewable energy and how they
understand claims about carbon neutrality and carbon offsets.

AGs. In late January 2008, ten attorneys general wrote to the FTC to ask
that the FTC develop guidelines for businesses that sell carbon emission
offset credits. See Press Release, Vermont Attorney General, January
28, 2008.

A number of states have also enacted laws that specifically govern the
use of environmental claims.

FTC standards. Some states use the same definitions as those in FTC
Green Guides, at least in part. See, e.g., Cal. Bus. & Prof. Code §
17580.5; Ind. Code § 24-5-17-2; 38 Me. Rev. Stat. Ann. § 2142; 220
Mass Code Regs. § 11.06 (electric industry); Mich. Comp. Laws Ann. §
445.903; Minn. Stat. Ann. § 325E.41; 52 Pa. Code § 54.6 (electric
industry); R.I. Gen. Laws § 6-13.3-1; see also ANA v. Lungren, 44 F.3d
726 (9th Cir. 1994).

State standards. Some states have adopted specific definitions (or
prohibitions) for terms used in environmental marketing. See, e.g., Cal.
Pub. Res. Code § 42355 through § 42358; Ind. Code § 24.5-17-3 through
§ 24.5-17-10; Mich. Comp. Laws Ann. § 445.903; N.M. Admin. Code §
12.2.5.

Record-keeping. Some states have adopted specific requirements for
record-keeping and public or other disclosure of the substantiation for
environmental claims. See, e.g., Cal. Bus. & Prof. Code § 17580; Fla.
Stat. § 403.7193; Ind. Code § 24-5-17-12 and § 24-5-17-13; N.M. Admin.
Code § 12.2.5.
States

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California, for example, requires any person who makes various
environmental benefit claims, to maintain the following
information: (1) the reasons why the person believes the
information to be true: (2) any significant adverse environmental
impacts associated with the product; (3) any measure taken to
reduce the environmental impact associated with the product; (4)
violations of any permits associated with the product; and (5)
whether the product conforms with the FTC’s Green Guides. See
Cal. Bus. & Prof. Code § 17580(a).
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
Green Report II. In 1991, a multi-state task force of attorneys general
issued “The Green Report II: Recommendations for Responsible
Environmental Advertising.”
*
*
*
This outline does not provide an exhaustive treatment of the subject matter. This outline is also not intended
to be legal advice and may not be applicable in all situations. Consult your attorney for legal advice.
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