In Part I of our two-part series on the legal risks in green marketing, we treated two of the principal federal laws that require attention in devising a green marketing plan – the Federal Trade Commission Act and the Lanham Act. In Part II of this series, we discuss a few state laws that impact manufacturers, producers, suppliers and advertisers of green goods and services. There are a host of consumer protection laws and specific green marketing requirements at the state level that green marketers need to be aware of when advertising products or services having environmental attributes.
State Law – New Jersey
In New Jersey, for example, false or deceptive advertising is broadly regulated through the Consumer Fraud Act (“CFA”). Under the CFA, any [d]eception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely [thereupon] in connection with the sale or advertisement of any merchandise . . . whether or not any person has in fact been misled, deceived or damaged thereby, is declared to be an unlawful practice.” The CFA grants to “any person” a private cause of action to redress violations of this act provided that such person has suffered an “ascertainable loss” and there is a causal relationship between such ascertainable loss and any unlawful practice prohibited by the CFA. The State Attorney General is also authorized to enforce this statute.
State Law – California
In California, the State Legislature has seen fit to regulate directly green product marketing. Specifically, the California Business and Professions Code makes it unlawful for any person to make any untruthful, deceptive, or misleading environmental marketing claim, whether explicit or implied[,]” and requires “any person” who utilizes certain terms in advertising, such as “ecologically friendly” or “environmentally sound” to maintain and to make available to the public upon request records and information relating to such representations. Violations of these statutory requirements constitute a misdemeanor and are punishable by imprisonment for a term not to exceed six months or a fine not to exceed $2,500 or both.
The California Legislature has even gone so far as to prohibit describing plastic bags on their label as being “biodegradable,” “degradable” or “decomposable” or as being “compostable or “marine degradable,” except when “at the time of sale, the plastic bag meets the applicable . . . standard specification[.]” Manufacturers and suppliers of plastic bags must produce evidence of compliance with these statutory requirements, which are set forth under the waste management provisions of the California Public Resources Code, within 90 days of a request for same. Offenders of California’s plastic bag labeling law are subject to civil penalties. It should be noted, as well, that during the last full week of August 2010, both houses of the California Legislature passed a bill (SB 1454), which essentially extends the said plastic bag labeling law to all plastic products. It remains to be seen whether California’s Governor, Arnold Schwarzenegger, will sign Senate Bill 1454 into law. If he does, advertising the green attributes of any plastic product in California will undoubtedly become more challenging.
The sampling of laws and guidelines that we have briefly summarized in Part I of our two-part series on the legal risks in green marketing, and here, shows the importance of planning out promotional strategies for green products. This cannot be emphasized enough! How one describes the environmental benefits of a good or service – deciding what data goes into an advertisement and what data gets left out – is often essential to the truth and veracity of a marketing claim and has the capacity to “make or break” a consumer’s purchasing decision. Clearly, the way in which one goes about performing this task will become evermore important and will likely be subjected to tougher scrutiny by government, consumers and competitors. Therefore, to avoid legal liability, businesses who produce or advertise a green product should seek counsel from a knowledgeable attorney before disseminating any advertising materials into the market.