Claims about Biodegradable Plastics Breakdown Under FTC Scrutiny: Marketers Beware!

by Goulston & Storrs PC
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http://www.dreamstime.com/stock-photo-green-plastic-bag-recycle-symbol-image18698520In the recent administrative proceeding before the Federal Trade Commission (FTC) against ECM Biofilms, Inc. (ECM), the FTC’s presiding chief administrative law judge (ALJ) ruled that the plastics additive manufacturer ECM violated the FTC Act by deceptively claiming, and providing others with the means to claim, that plastics treated with ECM’s additives would completely biodegrade in a landfill within 9 months to 5 years and by claiming that tests proved this “green” or environmental marketing claim.

The order accompanying the FTC’s decision barred ECM from representing that any product or package will completely biodegrade within any time period, or that tests prove such a representation, unless: 1) the representation is true and not misleading, and 2) at the time it is made, ECM possesses and relies upon competent and reliable scientific evidence that substantiates the representation. This order also bars ECM from providing others with the means to make such deceptive marketing claims.

Despite siding with the FTC on the specific claims noted above as being false, unsubstantiated, and, therefore, violating the FTC Act, the ALJ rejected several other assertions by the FTC against ECM.  Specifically, the AJC found that the FTC failed to prove that ECM’s biodegradability claims conveyed the implied claim that ECM Plastics would “completely break down into elements found in nature in a landfill within one year” – as required under the FTC’s Green Guides.  Revised in 2012, the FTC’s Green Guides are designed to help marketers ensure that their claims about the environmental attributes of their products are truthful, non-deceptive and comply with the FTC Act.

The FTC’s lawsuit against ECM is part of the FTC’s ongoing crackdown on false and misleading environmental claims, and part of its program to ensure compliance with its Green Guides.  Other lawsuits filed by the FTC charge companies that represented plastics treated with additives are biodegradable, despite the lack of reliable scientific tests to back up those claims.  Specifically, the FTC filed a lawsuit against American Plastic Manufacturing (American Plastic), which advertised its plastic shopping bags as being biodegradable, based on additives sold by ECM, and sold them to distributors nationwide. The FTC’s lawsuit against American Plastic was settled in 2014.  The FTC’s final order prohibits American Plastic from making biodegradability claims, unless such claims are true and supported by competent and reliable scientific evidence.  Further, this final order requires that American Plastic have evidence that the entire plastic product will completely decompose into elements found in nature within one year after customary disposal (defined as disposal in a landfill, incinerator, or recycling facility) before making any unqualified biodegradable claim, as set forth in the FTC’s Green Guides.

While the ALJ’s recent 2105 decision in EMC calls into question the applicability of the FTC’s Green Guides standard for one year biodegradability after customary disposal, other legal commenters caution against crossing-off any implied one-year claim standards included in the current version of the FTC’s Green Guides or changing any substantiation practices regarding biodegradable claims.  Notably, given the importance that the FTC gives to its Green Guides regarding a reasonable time frame for biodegradability, the FTC may well review the ALJ’s 2015 decision on ECM in the Commission’s capacity as an appellate body.  And, if the Commission reaches a different result, the matter may be appealed up to the DC Circuit.  So stayed tuned and make sure to keep your green marketing practices in line with the FTC’s current version of its Green Guides.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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