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The “Reasonable Consumer’s” View of Green Labels—Lessons From Two Greenwashing Cases

By: Neal Marder and Christian E. Dodd
Posted: March 2, 2012, from the March 2012 issue of GCI Magazine.

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In assessing whether a reasonable consumer would interpret the Greenlist label as being endorsed by a third party, the Court examined the context of the symbol and the use of the trademarked term “Greenlist” by several environmental groups to describe environmentally sound products. The Court also relied on an example supplied in Federal Trade Commission (FTC) guidelines, the so-called “Green Guides,” in which the FTC indicated that a product label containing a globe icon surrounded by the words “Earth Smart” would be “likely to convey to consumers the product is environmentally superior to other products” and would be deceptive “if the manufacturer could not substantiate the broad claim.” The Court concluded that “it is plausible that a reasonable consumer would interpret the Greenlist label as being from a third party.” As a result of the Court’s ruling, the plaintiff was permitted to move forward with his claims and has moved to certify a class.

In a more recent case concerning Fiji bottled water products, a California appellate court reached a different conclusion. In Hill v. Roll Int’l Corp., No. A128698 (Cal. App. May 26, 2011), the plaintiff alleged that Fiji Water misrepresented to consumers that its water was an environmentally sound product. Specifically, she alleged that the use of a “Green Drop” on the front of the product looked similar to the seals of approval used by independent, third-party organizations. In addition, a green water drop on the back of the bottle adjacent to the address for an Internet website, “fijigreen.com,” allegedly conveyed that the product was environmentally sound and superior to other bottled waters that did not contain the drop. The plaintiff further alleged that she paid approximately 15% more for Fiji Water than for other bottled water products. According to the plaintiff, she would not have bought Fiji Water had she known that the green drop was in fact the creation of Fiji and not a neutral party or environmental group, and that Fiji Water was not environmentally friendly or superior to similar bottled water available at less expensive prices. Fiji Water demurred to the plaintiff’s UCL, FAL, CLRA and other claims. Finding that the plaintiff failed to state a cause of action, the trial court upheld the demurrer. The Court of Appeal affirmed.

The Court of Appeal found the plaintiff’s allegations did not meet the reasonable consumer standard used under the UCL and FAL, which requires a plaintiff to show potential deception of consumers acting reasonably in the circumstances. According to the Court, no reasonable consumer could believe that the “Green Drop” was a seal of approval of an independent organization. In reaching its conclusion, the Court first looked at the drop itself and found it was not deceptive because it bore no name or recognized logo of any group, much less a third party organization, no trademark symbol, and no other indication that it is anything but a symbol of Fiji Water.

Second, the Court noted the symbol was “just a green drop, being the most logical icon for its particular product, water” and was not like the globe icon in the example provided in the FTC guidelines because a symbol of the Earth is more suggestive of the seal of an environmental organization than a drop of water. Third, the Court found the context of the green drop on the back of the bottle confirmed the symbol was not supported by an independent organization because the drop was adjacent to the website name fijigreen.com. Such placement of the drop next to its own website showed it is a symbol of Fiji Water and not that of a third party organization. While the Court recognized reasonable consumers would view the green drop as referring to the environment, it noted the FTC guidelines do not prohibit “ ‘touting’ a product’s ‘green’ features.” The Court reasoned that “[b]y providing guidelines and a ‘safe harbor’ for advertisers wanting to make environmental marketing claims,” the FTC promotes the making of such claims, “provided they do not mislead reasonable consumers.”

Importantly, the Court of Appeal also distinguished the green drop in Hill from the “Greenlist” symbol used in Koh. The Court pointed out “the label [in Koh] was very different from the plain, green drop symbol” because the symbol in Koh “made express representations of environmental superiority; used the trademarked name ‘Greenlist,’ a name not immediately apt to be associated with the product or its manufacturers; and identified the name as a rating system, which further suggested an independent source that rated other manufacturers’ products as well.”

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