A complaint filed against LilyAna Naturals earlier this month over the use of the word “natural” in the brand’s labeling is one of the latest in a line of consumer complaints alleging that aspects of a company’s environmental and social marketing are misleading.
The Federal Trade Commission is currently revising its Green Guides—which explain how consumers are likely to interpret environmental marketing claims and how marketers can substantiate and qualify these claims to avoid deceiving consumers—for the first time in over a decade. The revisions could provide companies (and potential litigants) with additional clarity on environmental marketing.
The current false advertising lawsuits highlight consumers’ concerns—and may even indicate what topics the FTC will revise in the Green Guides.
Green Guides Chart Path for Consumers
Forty-seven complaints relating to false advertising in environmental and social ads were filed against companies in federal court from the start of Q1 2022 to the end of Q1 2023, according to Bloomberg Law’s latest report in the 2023 Litigation Statistics Series, ESG Litigation. Across those 47 complaints there were 68 environmental and social marketing claims.
The Green Guides provide guidance on some of the environmental marketing claims showing up on dockets, including:
- general environmental impact (general environmental benefit);
- climate impact (carbon offsets, ozone-safe, and ozone-friendly);
- third party certification (certifications and seals of approval); and
- responsible disposal (compostable, degradable, recyclable, and recycled content).
Consumers filing false, misleading, or deceptive advertising lawsuits in federal court often leverage the Green Guides’ provisions to bolster their allegations of companies violating state law.
Several plaintiffs filed a proposed class-action lawsuit in June against Berkshire Blanket Inc. in the District of Massachusetts. The consumer-plaintiffs alleged that the marketing and packaging of the company’s “EcoSoft” blankets mislead consumers as to the environmental impacts of the 100% polyester products. This complaint mirrors many others where consumers allege that sustainability claims around polyester are misleading, false, or deceptive, such as in cases against Nike and H&M.
But the current Green Guides don’t address specific materials in much detail, aside from provisions for renewable materials and recycled material claims. However, with consumer attention directed at the composition of products, it’s possible that the FTC’s revisions to the Guides will include details like fabric makeup to match what we are currently seeing on the federal dockets.
Environmental & Marketing Claims Evolve
Consumer-plaintiffs are also getting creative in their lawsuits against companies for supply-chain related representations and the use of the word “natural”—areas not currently included in the Guides.
Supply Chain Claims
McDonald’s Corp. was sued last year in a potential class action in the Southern District of Illinois for making false supply chain assurances about sustainable production and deceptive statements about the fitness of its products for human consumption. The lawsuit alleges that McDonald’s products contain substances that are harmful to the environment and humans.
The case is pending in the Northern District of Illinois after being transferred there earlier this year.
This case and similar environmental supply chain cases may push the FTC to consider the role of suppliers and supply chains in environmental marketing.
‘Natural’ Claims
The lawsuit filed against LilyAna Naturals in the Northern District of California targets the company’s use of the word “natural.” The FTC said in its 2012 Green Guides (the most recent version) that the agency “lacks sufficient evidence on which to base general guidance” regarding the use of this word for marketing purposes.
The plaintiffs in this potential class action allege that use of the word “natural” on LilyAna’s eye cream violates California’s Consumers Legal Remedies Act, Unfair Competition Law, and False Advertising Law because it contains lab-made ingredients.
The case remains pending, but if this case survives, the court will likely examine the question of what is natural enough for marketing purposes.
Despite their omission from the Green Guides, the presence of supply chain and false-natural claim cases on the federal dockets shows that consumers are (perhaps even unknowingly) charting a course for revisions they would like to see from the FTC.
Bloomberg Law’s free “2023 Litigation Statistics Series: ESG Litigation” report is available here for subscribers and here for non-subscribers. For a complimentary CLE webinar on this topic entitled “ESG Lawsuits: Exploring Emerging Areas of Risk” is accessible here.
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