On October 1, 2012, the Federal Trade Commission (“FTC”) issued a revised version of its “Guides for the Use of Environmental Claims,” better known to many as the “Green Guides,” which describe the types of environmental claims that the FTC may find deceptive under Section 5 of the FTC Act. Recently, Jessica Rich, Director of the Federal Trade Commission’s Bureau of Consumer Protection stated that “[w]hether they’re buying diapers or dishwashers, consumers base their purchasing decisions on claims about a product’s attributes. . . . Consumers can count on the FTC to make sure claims made by marketers are meeting the standards for truthfulness, accuracy, and substantiation.” These comments, coupled with several recent settlements announced by the FTC and summarized below, make it clear that the FTC intends to continue enforcing the law regarding environment claims vigorously, pursuant to the parameters set forth in the Green Guides.
N.E.W. Plastics Corp
Recently, the FTC announced that a Wisconsin-based manufacturer of plastic lumber products agreed to stop making allegedly unsubstantiated claims about the recycled content and recyclability of two of its brands of plastic lumber. N.E.W. Plastics Corp., which also does business as Renew Plastics, makes plastic lumber products, which are used to make items such as outdoor decking and furniture. In its administrative complaint, the FTC allege that N.E.W. made false and misleading claims that products were made from 90 percent or more recycled content; that products were made from mostly post-consumer recycled content; and that products were recyclable.
The proposed consent order prohibits N.E.W. from making any statements about the recycled content, post-consumer recycled content, or environmental benefits of any product or package unless they are true, not misleading, and are substantiated by competent and reliable evidence, which for some claims must be scientific evidence. Additionally, N.E.W. is restrained from making unqualified recyclable claims about any product or package, unless it can be recycled in an established recycling program, and such facilities are available to at least 60 percent of consumers or communities where the product or package is sold. If N.E.W. can’t meet these requirements, it must qualify the claim regarding the availability of recycling centers. An entry on the FTC’s Consumer Information blog titled “Green lumber claims must stack up” can be read here.
Earth Designs, Inc.
The settlement with N.E.W. follows a settlement against Down to Earth Designs, Inc., which does business as gDiapers. The FTC alleged that gDiapers made deceptive claims that its diaper products were “100% biodegradable” and “certified” biodegradable, that the products would biodegrade when tossed in the trash, and would offer an environmental benefit because they can be flushed.
The proposed order prohibits gDiapers from making biodegradable and compostable claims, unless the claims are true, not misleading, substantiated by competent and reliable scientific evidence, and meet specific requirements outlined in the FTC’s revised Green Guides. Additionally, any claims that a disposable diaper or wipe is compostable must clearly and prominently disclose that the product cannot be composted if soiled with solid human waste. The proposed order also prohibits gDiapers from making misrepresentations about certifications, including independent third-party certifier evaluations. A blog entry entitled “Time to Change gDiapers’ Product Claims” can be read here.
These cases emphasize the importance for anyone making environmental claims to be familiar with the contents of the Green Guides, which are found in the Code of Federal Regulations at 16 CFR Part 260, [enhanced version available to lexis.com subscribers], and can be reviewed here.
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