Phil Moffat and Irene Hantman presented on
the green marketing legal landscape at
the Product Stewardship Conference on September 10, 2019.
The presentation opened with an overview
of green marketing, noting that the number of environmental marketing claims is on the rise,
with an attendant
increase in the number of claims that are false and/or deceptive.
Ms. Hantman reviewed the “seven sins” of
greenwashing:
Ms. Hantman then reported on litigation
over green marketing claims. She noted
that green marketing claims have been litigated in federal and state courts, in
administrative proceedings before the FTC, and in private forums, and that companies
face litigation from federal agencies, state agencies, and from private parties. First Ms. Hantman discussed the 2017 case ECM
Biofilms v. FTC. That case began when
the FTC filed an administrative complaint, ECM then appealed the agency’s
findings – that ECM violated the prohibition in section 5 of the FTC Act on the
use of deceptive advertising — all the
way to the 6th Circuit Court of Appeals, where the court upheld
FTC’s finding.
Ms. Hantman also reported that Volkswagen
paid $570 million for deceptive marketing in a settlement with the Attorneys
General for 41 states, Washington, DC, and Puerto Rico. That settlement was part of the litigation
over Volkswagen’s use of defeat devises in “green” diesel cars.
Ms. Hantman then shared information on
other FTC enforcement against green marketing claims including, the 2018
settlements against Benjamin Moore, ICP Construction, YOLO Colorhouse, and
Imperial Paints for misleading claims that their products were free of
emissions and volatile organic compounds (VOCs). She also reported on FTC’s enforcement
against Engineered Plastic Systems in 2014.
That case involved business to business marketing. Under the final FTC consent order, the
company must have credible evidence including scientific proof, to support any
environmental benefit claims it makes.
Ms. Hantman also provided information
regarding recommendations made by the National Advertising Division (NAD),
Better Business Bureau in green marketing cases brought before the NAD by
competitors. She described the Olivet
case in which Van Ness Plastic Molding Company challenged Olivet’s claim that
its containers are made of recycled materials.
She also described cases involving sustainability and energy savings
claims.
Mr. Moffat then provided information on
sources of regulation of green marketing claims. He discussed the role of the NAD in
investigating competitor challenges and consumer complaints. He reported that all states and the District
of Columbia have consumer protection statutes.
Mr. Moffat also described private causes of action that consumers and competitors
might pursue.
Mr. Moffat then presented information on the
FTC Act and the FTC’s Green Guides. He
noted that, section 5 of the FTC Act, 15 U.S.C. § 45, authorizes the FTC to
take legal action against “unfair or deceptive” practices in commerce, however
the statute doesn’t give FTC the authority to set environmental standards
(e.g., testing protocols). He also
explained that the FTC published the Green Guides to help advertisers avoid
making deceptive claims under Section 5, stressing that the Green Guides are
non-binding administrative interpretations.
The presentation explained that because the Green Guides are non-binding
administrative interpretations, they don’t preempt federal, state, or local
law; compliance will not necessarily preclude FTC enforcement of Section
5; and that compliance with voluntary standards won’t guarantee Section 5
compliance.
Mr. Moffat explained that the Green Guides
apply to claims about the environmental attributes of a product, package, or service in connection with the
marketing, offering for sale, or sale of such item or service to individuals, businesses, or other
entities; and that Section 5 applies to environmental claims in any marketing medium, whether asserted directly or by implication.
He then reported on principles established by the Guides that focus on avoiding
deception: “a representation, omission, or practice is deceptive if it is likely to mislead consumers acting reasonably under the circumstances
and is material to consumers’ decisions.”
The presentation also discussed the need
to substantiate claims. Marketers must
identify all express and implied claims
that the advertisement reasonably
conveys, and ensure that all reasonable interpretations of their claims
are truthful, not misleading, and supported by a reasonable basis. For environmental marketing claims, a
“reasonable basis” often requires “competent
and reliable scientific evidence.”
Mr. Moffat provided examples of the
specific topics covered by the Green Guides including:
- General environmental benefit claims,
- Certifications and seals of approval,
- Degradable,
- Free-of,
- Non-toxic, and
- Recycled content.
The presentation then discussed general
environmental benefits claims. Mr.
Moffat noted that marketers should not make unqualified general environmental
benefit claims as it is difficult, if not impossible, to substantiate all
express and implied claims.
Mr. Moffat also reported on issues raised
by seals of approval and certifications.
He explained that third-party certifications and seals of approval are
appealing, but stressed that companies must exercise due diligence because
third-party certifications and seals are not a safe haven from enforcement or
lawsuits.
Mr. Moffat wrapped up the presentation with examples
of when free-of and non-toxic claims can be deceptive.
Click here for a copy of the presentation.
PFAS in the NDAA
/in Chemicals of Concern, News, News & EventsThe 2021 National Defense Authorization Act (NDAA) addresses PFAS in several ways. Sections 330 and 334 incentivize developers to create and promote additional alternative firefighting foam to replace the PFAS-containing aqueous film-forming foam.
Section 332 establishes an interagency body on PFAS research and development. The interagency group will have representatives from at least 19 different agencies. The Director of the Office of Science and Technology Policy will Co-Chairs the group with a representative from another member agency, which will change on a biannual rotating basis. Goals of the organization will be:
Section 333 states that the “Department of Defense may not procure any covered item that contains perfluorooctane sulfonate (PFOS) or perfluorooctanoic acid (PFOA).” ”Covered items” is limited to nonstick cookware and utensils, and fabrics that have been treated with stain-resistant coatings. This section does not take effect until April 1, 2023.
Section 335 requires providing notification to agricultural operations located in areas exposed to department of defense PFAS use. Any agricultural operation within 1 mile of a military or National Guard facility where PFAS has been detected in the ground water, drinking water, or well water must be notified. Notification must occur within 60 days of the enactment of the NDAA. Notification of any updated testing results must occur within 15 days after validated test results are received.
The NDAA was passed by Congress on December 11, 2020.
BPA and Proposition 65
/in Prop. 65On October 19, 2020, a California appeals court ruled in favor of the Office of Environmental Health Hazard Assessment (OEHHA) listing bisphenol A (BPA) as a chemical known to cause cancer or reproductive harm under Proposition 65. The American Chemistry Council (ACC) had attempted to prevent BPA from being added to the Proposition 65 list. ACC alleged OEHHA abused its discretion by refusing to consider the 2009 determination of a committee working for OEHHA, the Developmental and Reproductive Toxicant Identification Committee (DRTIC). DRTIC’s 2009 panel voted unanimously that BPA should not be added to the Prop 65 list because it “did not meet the criteria for listing pursuant to the state’s qualified experts listing mechanism.” The criteria for a chemical being listed under Proposition 65 for developmental or reproductive effects include sufficient evidence in humans, limited evidence in humans supported by sufficient animal data, sufficient evidence in animals that would extrapolate to humans, and statistical considerations with biological plausibility. However, DRTIC’s 2015 panel, comprised of different members, reversed that recommendation.
Key points from the suit are below.
The ruling raises alarms for many manufacturers. BPA is found in many different products, such as polycarbonate plastic found in bottles, tableware, and food containers. According to the California Attorney General, 80 private enforcement actions were commenced in 2020 alleging violations of Proposition 65 for products containing BPA. For example, Five Below Inc. and 1616 Holdings Inc. received notices of violation in relation to their cell phone cases and Air Pod cases. The notice of violation claims the cases can cause female reproductive toxicity due to BPA dermal exposure from handling the cases and the possibility of ingesting BPA if placed in contact with the user’s mouth. The notice also states that plaintiffs “seek[] constructive resolution of this matter without engaging in costly and protracted litigation.”
FIFRA Enforcement Against Electrolux
/in EPA, FIFRAAn October 6, 2020 Consent Agreement and Final Order (CAFO) between EPA and Electrolux Home Products, Inc. resulted in Electrolux agreeing to pay nearly $7 million. EPA settled FIFRA violations in relation to the import and distribution of Electrolux dehumidifiers and air conditioners containing a filter manufactured with nanosilver. Although the products made pesticidal claims, they were not registered with EPA – pesticide products imported into the United States for distribution or sale must be first registered with EPA, unless the product is exempt from FIFRA (e.g., under the treated articles exemption). Marketing materials for the dehumidifiers and air conditioners included the following pesticidal claims “Antimicrobial Filter Cleans air by removing harmful bacteria” and “Our removable, washable filter reduces bacteria, room odors and other airborne particles for a healthier, more comfortable environment.” The CAFO notes that “at no time relevant to the allegations herein was the nanosilver that was used to manufacture the filters that were contained in the [dehumidifiers and air conditioners] registered with the EPA”, in violation of Section 12(a)(1)(A) of FIFRA, 7 U.S.C. § 136j(a)(1)(A). 7 U.S.C. § 136l(a)(1).
Key Points of the Agreement are as follows:
EPA Petition on Chemours PFAS
/in Chemical Screening, Chemicals of Concern, EPAOn October 14, 2020, EPA received a petition to require health and environmental testing under Section 21 of the Toxic Substances Control Act (TSCA) on certain PFAS manufactured by Chemours in Fayetteville, North Carolina. The petitioners consist of the Center for Environmental Health, the Cape Fear River Watch, Clean Cape Fear, Democracy Green, Toxic Free NC, and the NC Black Alliance. The petition requests testing on 54 PFAS which Chemours produces. The petition states that the 54 PFAS meet the criteria for testing in section 4(a) of TSCA. It states that,
Based on the known hazards of these analogues, untested PFAS with potential for exposure would meet the criteria for testing in section 4(a)(1)(A) of TSCA because they “may present an unreasonable risk of injury” and have “insufficient information and experience” to determine their effects on health or the environment.
The PFAS produced by Chemours includes both commercial products and byproducts from their manufacturing process. Some of the testing differs based on whether the compound is Tier 1 (detection in human sera, food or drinking water) or Tier 2 (significant potential for human exposure based on detection in environmental media and other evidence). The petition also states that Gen X chemicals have been detected in drinking water and private wells in the vicinity of the Chemours plant. A major point of concern for the petitioners involves the North Carolina consent order, which is the result of a lawsuit against Chemours from the North Carolina Department of Environmental Quality addressing PFAS contamination in the Cape Fear River basin from the Chemours’ facility. The petition states current testing of Gen X chemicals by Chemours has been inadequate to fully evaluate the risks and additional carcinogenicity studies are needed.
The petition proposes testing with animal studies:
The petition also proposes the following human studies:
The European Commission’s Chemicals Strategy for Sustainability
/in UncategorizedOn October 14, 2020 the European Commission communicated the Chemicals Strategy for Sustainability Towards a Toxic-Free Environment to the European Parliament, the Council, the European Economic and Social Committee, and the Committee of the Regions. This ambitious Strategy is intended to “chart a new long-term vision for the EU’s chemical policy … [that] strives for a toxic-free environment, where chemicals are produced and used in a way that maximises their contribution to society including achieving the green and digital transition, while avoiding harm to the planet and to current and future generations.” If fully implemented, the Strategy would amend REACH, the CLP (the Regulation on the Classification, Labelling and Packaging of hazardous substances), and other legislation addressing the safety of toys, cosmetics, biocides, plant protection products, food, carcinogens in the workplace as well as legislation on environmental protection.
The Strategy focuses on the following topics:
The Strategy will implement a new hierarchy for chemical management with a three-level approach. The use of safe and sustainable chemicals for both humans and the environment will be highlighted and is the first level. Minimizing and controlling hazardous substances is the second level. Eliminating and remediating substances of concern is the third and final level. The Strategy will implement their new hierarchy through a series of methods mentioned below.
To facilitate Safe and Sustainable-by-Design, the Commission will:
To address non-toxic material cycles, the Commission will:
To implement Innovating Industrial Production, the Commission will support:
To extend protection against most harmful chemicals, the Commission will:
To address endocrine disruptors, the Commission will:
To address chemical pollution in the natural environment, the Commission will:
To address PFAS, the Commission will:
To coordinate and simplify actions across EU chemical legislation, the Commission will:
To effect zero tolerance for non-compliance, the Commission will:
To extend information requirements, the Commission will:
PFAS in California’s Water Supply
/in Chemicals of Concern, EPATesting of California’s public water supply wells reveals that 60 percent of them contain the “forever” chemicals, perfluoroalkyl and polyfluoroalkyl substances (PFASs). The concentrations of these substances were higher at airports than landfills and public supply wells. One million parts per trillion were detected at airports, while landfills had 10,000 parts per trillion and public wells had 100 parts per trillion. EPA has established a health advisory level at 70 parts per trillion for the combined amounts of PFOA and PFOS.
The health advisories from EPA offer guidance for states and the federal government to meet standards that will avoid adverse health effects. Studies of individuals exposed to PFASs show increases in hormonal issues, organ damage, and cancer. Nationally, the Safe Drinking Water Act (SDWA) regulates maximum contaminant levels (MCLs) allowed in drinking water for over 90 chemicals. However, PFASs currently remain on EPA’s unregulated and non-enforceable list for SDWA MCLs. EPA’s PFAS Action Plan shows that the Agency is still in the information gathering phase to determine the prevalence and full effects of the PFASs with regulation in the future.
Individual states have been putting their own regulation forward for PFASs. For example, in September 2020 California Governor Gavin Newsom signed Senate Bill No. 1044, which governs the tracking and recall of firefighting foam containing PFASs.
Recent Green Marketing Litigation
/in UncategorizedDr. Pepper recently won litigation over whether it had made deceptive marketing claims by labeling products made with “all-natural” ingredients. The Northern District Court of California dismissed the case finding that no reasonable consumers would not expect the product to be completely free of any trace pesticides.
The litigation was brought by Hawyuan Yu who claimed that he purchased Mott’s Natural Applesauce and Natural Apple Juice from a Costco on multiple occasions believing that they were insecticide free because of the “all-natural ingredients” label. However, the products contained the synthetic insecticide acetamiprid. Acetamiprid is a chloropyridinyl neonicotinoids insecticide. Note. Acetamiprid is not on the list of synthetic substances allowed for use in “organic” crop production (7 CFR §205.601).
Yu argued that Natural Applesauce and Natural Apple Juice should not contain any amount of acetamiprid in the products because the “natural” label leads reasonable consumers to believe that there would not be any levels of pesticides in the products. He sued for unfair and deceptive acts and practices under the California Legal Remedies Act, violation of California’s False Advertising Law, violation of California’s Unfair Competition Law, breach of express warranty, and unjust enrichment. The court disagreed. It applied the reasonable consumer test and held that reasonable consumers would not expect the product to be completely free of any trace pesticides, following case law including the recent 9th Circuit decision in Becerra v. Dr. Pepper/Seven Up, Inc.
It is important to note that food labeled as organic is backed by federal regulations and independently verified, while “natural” is not presently a regulated term — FDA regulatory proceedings to define the term “natural” in regard to food is still ongoing.
Executive Order on Pandemic Regulatory Relief and Revised OSHA Guidance
/in UncategorizedIn the past several days, OSHA has revised portions of the pandemic guidance issued previously, and the President has issued an Executive Order on regulatory relief to support the economic recovery. Key aspects of these recent actions are summarized below.
Executive Order on Regulatory Relief
The President’s Order includes the following primary provisions:
Revised OSHA Guidance for Identifying Work-Related Coronavirus Cases
OSHA has revised its enforcement guidance for recording cases of coronavirus as a workplace-related illness on OSHA Form 300. Under OSHA’s recordkeeping requirements, employers are responsible for recording cases of COVID-19, if:
Employers must make a reasonable inquiry to determine if a case is work related and recordable. A reasonable inquiry does not require the employer to contact medical personal or obtain medical records. An employer can rely on statements made by an employee. An employer must ask the employee how he or she believes she contracted COVID-19; inquire about any out-of-work activities while respecting employee privacy; and review employees work environment while considering any other employees that may have contracted COVID-19.
An employer must consider any reasonably available information, even if obtained at a later time, after the employee’s infection. OSHA also notes the following as indicators of work-related cases of COVID-19:
OSHA also notes that a case is not likely to be work-related where an employee’s case is the only case in the vicinity and the job duties do not include contact with the public. An employee’s close and frequent association with someone outside of work who contracts COVID-19 also indicates the employee’s case is not work related.
If after making a good-faith effort to determine if the case is work-related and the employer still cannot make a determination, the employer does not need to record the case as a work-related illness.
A work-related case should be coded as a respiratory illness on OSHA Form 300. An employees’ identity need not be provided, if the employee requests confidentiality.
Revised OSHA Enforcement Plan
In response to workplaces reopening, OSHA has revised its Interim Enforcement Response Plan for COVID-19. OSHA will increase workplace inspections and enforcement in geographic areas experiencing either sustained elevated community transmission or a resurgence in community transmission. Particular attention for on-site inspections will be given to high-risk workplaces, including workplaces with high numbers of complaints or known COVID-19 cases. The policy includes inspection, citation and rapid response procedures.
Applicability of OSHA standards varies by workplace. OSHA identifies the following as standards that may apply:
Verdant Law includes experienced attorneys who have been following these developments closely and stand ready to assist clients with regulatory or enforcement issues, whether with OSHA or other agencies.
OSHA/EPA Guidance for COVID-19 Activities
/in UncategorizedIn the past few weeks, OSHA has taken the following actions related to short-term COVID-19 risk in the workplace, advising industry with respect to evaluating exposure, use of PPE, reporting and compliance with OSHA standards and guidance, among other matters. Most of these items can be accessed at OSHA’s COVID-19 website. In addition, EPA and CDC have issued updated guidance for cleaning and disinfecting workplaces and businesses.
Verdant Law includes experienced OSHA attorneys who have been following these developments closely and stand ready to assist clients with OSHA issues, whether related to the pandemic or other matters.
Green Isn’t Just a Color: Navigating the Green Marketing Legal Landscape
/in UncategorizedPhil Moffat and Irene Hantman presented on the green marketing legal landscape at the Product Stewardship Conference on September 10, 2019.
The presentation opened with an overview of green marketing, noting that the number of environmental marketing claims is on the rise, with an attendant increase in the number of claims that are false and/or deceptive.
Ms. Hantman reviewed the “seven sins” of greenwashing:
Ms. Hantman then reported on litigation over green marketing claims. She noted that green marketing claims have been litigated in federal and state courts, in administrative proceedings before the FTC, and in private forums, and that companies face litigation from federal agencies, state agencies, and from private parties. First Ms. Hantman discussed the 2017 case ECM Biofilms v. FTC. That case began when the FTC filed an administrative complaint, ECM then appealed the agency’s findings – that ECM violated the prohibition in section 5 of the FTC Act on the use of deceptive advertising — all the way to the 6th Circuit Court of Appeals, where the court upheld FTC’s finding.
Ms. Hantman also reported that Volkswagen paid $570 million for deceptive marketing in a settlement with the Attorneys General for 41 states, Washington, DC, and Puerto Rico. That settlement was part of the litigation over Volkswagen’s use of defeat devises in “green” diesel cars.
Ms. Hantman then shared information on other FTC enforcement against green marketing claims including, the 2018 settlements against Benjamin Moore, ICP Construction, YOLO Colorhouse, and Imperial Paints for misleading claims that their products were free of emissions and volatile organic compounds (VOCs). She also reported on FTC’s enforcement against Engineered Plastic Systems in 2014. That case involved business to business marketing. Under the final FTC consent order, the company must have credible evidence including scientific proof, to support any environmental benefit claims it makes.
Ms. Hantman also provided information regarding recommendations made by the National Advertising Division (NAD), Better Business Bureau in green marketing cases brought before the NAD by competitors. She described the Olivet case in which Van Ness Plastic Molding Company challenged Olivet’s claim that its containers are made of recycled materials. She also described cases involving sustainability and energy savings claims.
Mr. Moffat then provided information on sources of regulation of green marketing claims. He discussed the role of the NAD in investigating competitor challenges and consumer complaints. He reported that all states and the District of Columbia have consumer protection statutes. Mr. Moffat also described private causes of action that consumers and competitors might pursue.
Mr. Moffat then presented information on the FTC Act and the FTC’s Green Guides. He noted that, section 5 of the FTC Act, 15 U.S.C. § 45, authorizes the FTC to take legal action against “unfair or deceptive” practices in commerce, however the statute doesn’t give FTC the authority to set environmental standards (e.g., testing protocols). He also explained that the FTC published the Green Guides to help advertisers avoid making deceptive claims under Section 5, stressing that the Green Guides are non-binding administrative interpretations. The presentation explained that because the Green Guides are non-binding administrative interpretations, they don’t preempt federal, state, or local law; compliance will not necessarily preclude FTC enforcement of Section 5; and that compliance with voluntary standards won’t guarantee Section 5 compliance.
Mr. Moffat explained that the Green Guides apply to claims about the environmental attributes of a product, package, or service in connection with the marketing, offering for sale, or sale of such item or service to individuals, businesses, or other entities; and that Section 5 applies to environmental claims in any marketing medium, whether asserted directly or by implication. He then reported on principles established by the Guides that focus on avoiding deception: “a representation, omission, or practice is deceptive if it is likely to mislead consumers acting reasonably under the circumstances and is material to consumers’ decisions.”
The presentation also discussed the need to substantiate claims. Marketers must identify all express and implied claims that the advertisement reasonably conveys, and ensure that all reasonable interpretations of their claims are truthful, not misleading, and supported by a reasonable basis. For environmental marketing claims, a “reasonable basis” often requires “competent and reliable scientific evidence.”
Mr. Moffat provided examples of the specific topics covered by the Green Guides including:
The presentation then discussed general environmental benefits claims. Mr. Moffat noted that marketers should not make unqualified general environmental benefit claims as it is difficult, if not impossible, to substantiate all express and implied claims.
Mr. Moffat also reported on issues raised by seals of approval and certifications. He explained that third-party certifications and seals of approval are appealing, but stressed that companies must exercise due diligence because third-party certifications and seals are not a safe haven from enforcement or lawsuits.
Mr. Moffat wrapped up the presentation with examples of when free-of and non-toxic claims can be deceptive.
Click here for a copy of the presentation.