The Federal Trade Commission released its much anticipated “Green Guides” earlier this month. As discussed here, on Foley Hoag’s Law & the Environment blog, the guides seek to rein in the use of specious environmental marketing claims by ensuring that marketers have competent and reliable scientific evidence to back up express and implied environmental claims. As with other FTC guides (e.g., its 2009 Endorsement and Testimonial Guides), the Green Guides are quite specific, providing detailed guidance on a number of topics, including among others (1) claims concerning carbon offsets, (2) degradable claims, (3) non-toxic claims, (4) recycled content claims, (5) renewable energy claims, and (6) compostable claims.
Although the Green Guides do not hit every hot environmental marketing claim—discussion of “natural,” “organic,” and “sustainable” claims are noticeably absent—they certainly provide a very clear picture of how the FTC is likely to view environmental claims in the future. This clarity is surely a good thing for marketers.
Or is it?
Over the past several years, consumer class actions alleging unfair and deceptive advertising practices have risen sharply, often as a result of class action lawyers simply paying attention to competitor disputes concerning claim substantiation. Given the prevalence of environmental marketing claims, there is a risk that the class action attorneys will attempt to use the Green Guides as a roadmap for proving unfair or deceptive conduct in future cases.
Imagine, for instance, that at the time the FTC released its Green Guides, a trash bag manufacturer included the word “biodegradable” (in big, bolded letters, of course) on its packaging. When the manufacturer first began touting its trash bags as biodegradable, it had competent and reliable scientific evidence showing that its trash bags degraded within 18 months. Then the FTC published the Green Guides, which provide that “biodegradable” claims are deceptive if the items advertised as such do not completely decompose within one year. Skeptical that the manufacturer’s claims pass the one-year test, a class action lawyer files a suit alleging on information and belief that the manufacturer’s bags do not decompose within one year. Assuming the complaint survives a motion to dismiss and the evidence shows that the bags do not decompose within a year, should the manufacturer be held liable? Plaintiffs’ counsel may argue that it should be and will likely point to the Green Guides as Exhibit A.
To be sure, there are serious problems with such a strategy. For starters, the Green Guides are just that: guides. Some courts have been wary to ascribe great precedential weight to FTC guidelines in the civil context, where the standards for liability are different and the plaintiff bears the burden of proof. See, e.g., In re Pharm. Indus. Average Wholesale Price Litig., 491 F. Supp. 2d 20, 84 n.56 (D. Mass. 2007). Second, plaintiffs must have a good faith basis for asserting that a defendant has engaged in false advertising. Unless the details of a marketer’s substantiation are publicly available, plaintiffs’ counsel will often lack the necessary good faith basis to file a complaint. Finally, the plaintiffs must be able to show that the defendant’s conduct has caused compensable harm.
While it is too early to tell whether the FTC’s Green Guides will result in an uptick in false advertising claims, this issue bears watching. Accordingly, if environmental claims are a part of your advertising strategy, you should take a careful look at the Green Guides, along with the scientific evidence that you contend substantiates those claims. The best approach for heading off potential lawsuits of all types is to ensure that your claims comport with FTC guidance, and that means ensuring that all of the claims a consumer could reasonably take from your ads--whether express or implied--are adequately substantiated.