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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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Taken together, the Koh and Hill decisions provide guidance to companies that seek to tout the environmentally friendly aspects of their products on the product packaging. To protect itself against claims of greenwashing, a company should ensure its product labeling complies with, among others, the following guidelines.

  • First, a company should select symbols and wording that reflect the product itself and its own green features and avoid those that could be associated with an independent organization, such as a third party environmental group, if the product has not in fact been endorsed or recognized by that organization or group.
  • Second, the symbol should not suggest or imply that the product has been ranked by a rating system unless an independent, third party organization has, in fact, rated the product.
  • Third, companies that market their products as green should familiarize themselves with, and adhere to, the FTC Green Guides, as plaintiffs who bring greenwashing claims, and courts assessing whether those claims have merit, often resort to the Green Guides for guidance as to what types of environmental claims are potentially misleading.

Class action filings based on claims of greenwashing are a relatively recent phenomena, still in their infancy, and it remains to be seen whether they will survive. If a class is eventually certified in the Koh litigation, there likely will be a sharp increase in the number of greenwashing suits filed, as the plaintiffs’ bar will take note of the fact that sufficiently pled greenwashing class claims have the potential to reach a jury. By adhering to the above guidelines, a company may not avoid greenwashing class action litigation altogether, but should improve its chances of obtaining a dismissal at the pleading stage, thereby avoiding costly discovery, class action briefing and perhaps, trial.

Neal Marder is a partner at Winston and Strawn’s Los Angeles office, the chair of the Litigation group in Los Angeles, and the firm-wide chair of Winston’s National Class Action practice. His practice concentrates on complex business and commercial litigation, white collar, securities, internal investigations and antitrust, with an emphasis on the defense of class actions. www.winston.com

Christian E. Dodd is a former senior litigation associate in the Los Angeles office of Winston & Strawn LLP.

Summer associate Stephanie Leonard also contributed to this article.

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