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23 California DAs Obtain $1.5 Million Settlement for Deceptive Biodegradable Claims

By Sheila Millar & JC Walker
August 9, 2018
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Environmentally conscious consumers often look for products advertised as “green.” But labeling plastic products as “biodegradable” may land you on the legal compost heap if you can’t meet federal and state regulations governing green marketing. Amazon was just the latest company to find itself in the crosshairs when 23 California district attorneys charged that it violated state law when it marketed and sold products labeled “biodegradable” or “compostable.” Amazon settled the lawsuit for $1.5 million.

Most advertisers interested in degradability and similar claims should be familiar with the requirements in the FTC’s Guides for the Use of Environmental Marketing Claims. Advertisers also need to be aware of 2011 amendments to the California Public Resources Code restricting green claims for plastic products. The California law prohibits businesses from selling plastic goods that are labeled “compostable,” “biodegradable,” “degradable,” or other wording that implies the product will break down in a landfill or other environment, unless the product meets specific standards set forth in the law. There are differences, however, in how the FTC and the state of California view available standards from a substantiation standpoint.

Under the settlement, Amazon is prohibited from selling plastic products labeled as “biodegradable” or “compostable” if the product has not been certified as such in accordance with California’s requirements. In addition, the company will pay CalRecycle, the state agency responsible for recycling, $50,000 to test plastic products that are advertised as compostable or degradable.

California has shown itself to be an aggressive enforcer against misleading green marketing claims. In the last few years, the state has pursed legal action against several companies for alleged deceptive green labeling, settling claims against ENSO Plastics in 2013 with an $18,000 fine, and obtaining agreed-to penalties of $27,000 and $940,000 against Overstock.com and Walmart, respectively, in 2017. It is worth noting that any penalties received under the California law go directly to the jurisdiction that brings suit, providing DAs with an incentive to pursue degradable and compostable claims.

Any advertiser interested in developing and marketing products that are degradable or compostable should pay special attention to the requirements of both federal and state laws since they do not always align. In particular, it is essential for businesses to fully understand the nuances of FTC guidance and California law in assessing how they substantiate their claims.

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Photo of Sheila Millar Sheila Millar

Sheila A. Millar is a partner at Keller and Heckman LLP, where she represents businesses and trade associations on a variety of public policy and regulatory issues, including privacy, data security, cybersecurity and advertising matters, as well as product safety issues. She has…

Sheila A. Millar is a partner at Keller and Heckman LLP, where she represents businesses and trade associations on a variety of public policy and regulatory issues, including privacy, data security, cybersecurity and advertising matters, as well as product safety issues. She has been involved in a variety of audit and compliance projects, including, among other issues, privacy and data security audits, and is experienced in providing crisis management legal support to a variety of national and international companies and associations.

Ms. Millar is a frequent speaker on regulatory and public policy matters, and has authored many articles. Ms. Millar is one of the vice chairs of the International Chamber of Commerce (ICC) Marketing and Advertising Commission, and chair of its Working Group on Sustainability, where she spearheaded the development of the ICC Framework Guides on Environmental Marketing Claims.

Ms. Millar is AV® PreeminentTM Rated by Martindale-Hubbell and for the eigth consecutive year was selected by her peers for inclusion in The Best Lawyers in America® 2018 for her work in practicing Advertising Law. She has also received the distinguished honor of Advertising Law “Lawyer of the Year” 2014 in Washington, DC by Best Lawyers®, and was awarded Advertising and Marketing Lawyer of the Year USA by Finance Monthly for their Finance Monthly Global Awards 2017.

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  • Posted in:
    Class Action & Mass Torts, Corporate & Commercial, Featured Posts
  • Blog:
    Consumer Protection Connection
  • Organization:
    Keller Heckman
  • Article: View Original Source

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