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

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.

© 2018 Keller and Heckman LLP

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About this Author

Sheila Millar, Keller Heckman, advertising lawyer, privacy attorney
Partner

Sheila A. Millar counsels corporate and association clients on advertising, privacy, product safety, and other public policy and regulatory compliance issues.

Ms. Millar advises clients on an array of advertising and marketing issues.  She represents clients in legislative, rulemaking and self-regulatory actions, advises on claims, and assists in developing and evaluating substantiation for claims. She also has extensive experience in privacy, data security and cybersecurity matters.  She helps clients develop website and app privacy policies,...

202-434-4646
Jean-Cyril Walker, Keller Heckman, Environmental Compliance Lawyer, Renewable Fuel Standards Attorney
Partner

Jean-Cyril Walker joined Keller and Heckman in 2000. He advises clients on a wide range of environmental matters, including compliance with U.S. requirements governing the safe management and disposal of chemical and hazardous substances. Mr. Walker counsels fuel industry clients on federal and state requirements governing the development and distribution of fuels and fuel additives, including the renewable fuel standards (RFS and RFS2), and matters involving renewable fuel identification number (RIN) transactions. Mr. Walker regularly advises industry and trade association clients on matters concerning the regulation of hazardous air pollutants under the federal Clean Air Act (CAA) and state and local air pollution statutes. In this regard, Mr. Walker has advised clients on compliance with numerous MACT standards, including those governing pharmaceutical production, chemical manufacturing, can and other surface coatings, and other industrial operations. Mr. Walker has extensive experience with CARB regulations, and in particular, on complying with regulations governing emission of volatile organic compounds (VOCs) in adhesives, paints, and other industrial and consumer products. 

202-434-4181