From Hamilton Hackney of GT Boston: As noted in a previous post, as well as in August 2009 and October 2010 GT Alerts, it is no secret that the Federal Trade Commission (FTC) has stepped up its regulatory efforts to address deceptive environmental marketing claims, including initiating enforcement cases and proposing revisions to its “Guides for the Use of Environmental Marketing Claims” (the so-called Green Guides). However, manufacturers of consumer products should not forget that state regulators often possess independent authority to take action against alleged greenwashing. A recent example is a settlement announced by the Massachusetts Attorney General’s Office in a case brought against EarthTronics, Inc., a manufacturer of compact fluorescent light bulbs.  See Massachusetts v. EarthTronics, Inc., No. 11-1448E, (Mass. Super. Ct.). CFLs contain mercury, which in Massachusetts triggers an obligation to comply with the state’s Mercury Management Act (MMA). Passed in 2006, this statute bans the use of mercury in certain consumer products and imposes various notification, labeling, end-of-life, and consumer education requirements for products that are not subject to the ban. In 2009, the Massachusetts Department of Environmental Protection (MassDEP) issued a notice of enforcement to EarthTronics for failing to comply with the MMA, and EarthTronics paid a $6,000 penalty.

The AG’s office alleged that, during and after this enforcement case, EarthTronics made marketing claims regarding its environmental stewardship that were false in light of its failure to comply with the MMA. These claims included statements such as:

• that the company’s mission is to “look after our people [and] to be good stewards of the planet . . . ;”
• that “[q]uality of life begins with proper care of our environment . . .;” and
• that “At EarthTronics, we’re not bound to specific products or technologies. We ARE committed to reducing the amount of energy our customers use. It’s good for their bottom lines and it’s good for our planet.”

 The AG Office contended that these statements constituted false advertising claims in violation of Massachusetts’ consumer protection statute. EarthTronics subsequently agreed to address its remaining MMA compliance issues, refrain from making unsupported environmental claims in the future, and pay $7,500 in investigation costs and penalties to resolve the matter, at which time the AG’s Office filed an assurance of discontinuance.

The sums paid in this instance were relatively minor, but this case still serves as an important reminder of who may be scrutinizing environmental marketing claims. While consumers continue to respond favorably to products marketed as having environmental benefits, manufacturers need to anticipate that those claims may be subject to review by both state and federal regulators. And, in states like Massachusetts that statutorily authorize consumers to recover damages from manufacturers for unfair and deceptive trade practices (plus exemplary damages and attorneys fees), those claims may be scrutinized by plaintiffs’ class-action attorneys as well.

As a result, environmental marketing claims need to be carefully and regularly reviewed to ensure they can be substantiated and otherwise conform with federal and state greenwashing standards.