Litigation Minute: Companies Selling Products in California Must Substantiate Environmental Marketing Claims | K&L Gates LLP

WHAT YOU NEED TO KNOW IN A MINUTE OR LESS

When companies make claims in advertising (including websites, social media, print, and product labels) that a product is beneficial or not harmful to the natural environment, California law requires those companies to maintain written documentation supporting the validity of the claims. This requirement extends to manufacturers and distributors.1 As marketing trends continue to address consumers’ environmental concerns regarding the sourcing and production of food and beverages, food and beverage businesses should be aware of their dress code obligations. records in California. They should also consider how product-specific marketing claims may trigger these obligations (or create the risk of litigation) when they refer to a product’s impact on the natural environment.

What claims does this law cover?

The law specifically covers the following claims: “environmental choice”, “eco-friendly”, “earth-friendly”, “eco-friendly”, “eco-friendly”, “eco-friendly”. ‘, ‘environmentally safe’, ‘environmentally safe’, ‘lite’, ‘green product’, the use of the arrows symbol to indicate recyclability and any other instructions to the consumer to recycle the product . The law, however, also includes the catch-all phrase, “or any other similar term”, which means that the law covers all similar expressions.

What documents should companies keep?

If a product contains the above phrase(s), or any other similar term, a manufacturer or distributor should retain all records that support the validity of the claim as follows:

  • The reason(s) the company believes the claim is true;
  • Any significant adverse environmental impact directly associated with the product or its production;
  • Any measure taken to reduce the environmental impact of the product or its manufacture;
  • Violations of any federal, state, or local permits directly associated with the product or its production;
  • Whether the product meets Federal Trade Commission (FTC) guidelines for the use of the terms “recycled,” “recyclable,” “biodegradable,” “photodegradable,” or “ozone-friendly”; and
  • Whether the use of the term “recyclable” or the arrows symbol is in accordance with national regulations.
How do courts analyze “other similar terms” not listed in the law?

Under the term “other similar terms”, companies must always keep records if they make claims about products that would lead a reasonable consumer to believe that the product is either beneficial or not harmful to the natural environment. Additionally, businesses may still be liable under other consumer laws, including California Legal Remedies Act, False Advertising Act, or Unfair Competition Act. For example, a company was sued in California for placing a green drop on its bottled water label and marketing the product with the phrase “every drop is green.” The applicant claimed that the droplet and phrase represented that the water was ecologically superior to other waters and approved by an environmental organization. Applying the reasonable consumer standard, however, the court held that a simple green droplet and a generic reference to “green” were not enough to mislead a reasonable consumer into believing that the product was environmentally superior or approved by an environmental group.2

Food and beverage companies should remain vigilant, however, as trends point to more lawsuits against environmental marketing claims aimed at attracting environmentally conscious consumers. For example, plaintiffs in California recently filed a class action lawsuit against Red Lobster for marketing certain seafood products as “sustainable” when they allegedly came from suppliers who use environmentally harmful practices.3 Red Lobster has decided to dismiss this case, in part in reference to its satisfaction of Cal’s record keeping requirements. Bus. & Code Prof. § 17580.

Does the law provide a safe harbor for certain claims?

Yes. California law prohibits making false or misleading “environmental marketing claims,” as defined in FTC guidelines.4 If a company makes environmental marketing claims that don’t comply with FTC guidelines, then that’s a regulatory issue, and the law provides protection from consumer lawsuits. These claims, however, must be claims about the natural environment, such as “eco-friendly” or “environmentally safe.” These laws do not provide a haven for claims about a product’s impact on the health of individual consumers (eg, “non-toxic” or “formaldehyde-free”) or claims related to durability (eg, ” sustainable origin”), so plaintiffs can target these claims as misleading in class action lawsuits.5

Take away

Manufacturers should carefully consider their environmental impact claims and how consumers might claim that the product has failed to meet their expectations.

1 California Business and Professions Code § 17580

2 Hill vs. Roll Int’l Corp., 195 Cal. App. 4th 1295 (2011).

3 Marshall v. Red Lobster Mgmt., LLC, et al. (CD Cal. 2021, no. 2:21-cv-04786-JAK-MAR).

4 Cal. Bus. & Code Prof. § 17580.5

5 Dodson v. Tempur–Sealy Int’l, Inc.no. 13-cv-04984-JST, 2014 WL1493676 at *1 (ND Cal. 16 April 2014); Walker vs. Nestle USA, Inc.No. 3:19-CV-723-L-BGS, 2021 WL 1195983 (SD Cal. Mar. 30, 2021).