Greenwashing Claims: How to Avoid Becoming an Eco-Fraud Target

Greenwashing claims: how to avoid becoming an eco-fraud target

Victoria Davis Lockard and Josh Becker ALSTON & BIRD LLP

Green is the new black in consumer product market- attention, and the plaintiffs’ bar, on eco-fraud is The “Six ing. Gone are the days when the local co-op was the only Sins of Greenwashing™” — A Study of Environmental business pushing products labelled as environmentally Claims in North American Consumer Markets, which friendly. Even large, mainstream retailers and manufac- was published by the environmental marketing firm turers have joined the green revolution and are reaping TerraChoice in November 2007.2 The study, intended to the benefits to be had from green marketing. Environ- describe and quantify the pervasiveness of greenwash- mentally friendly products are in greater demand, and ing, conducted a survey of six category-leading big box companies are repackaging their products as “clean and stores in which more than one-thousand so-called green green” in order to stay competitive. Unfortunately, the consumer products were examined. A host of consumer more aggressive a company is with its environmental products, such as shampoo, paper towels, televisions, claims, the more likely it is to become a target in an light bulbs, copy paper, laundry detergent and lumber, “eco-fraud” or “greenwashing” action brought on behalf were tested for compliance with current best practices in of consumers, competitors or the government. environmental marketing as found in sources such as the International Organisation for Standardisation (ISO), the What is “greenwashing” or “eco-fraud”? US Federal Trade Commission (FTC), the US Environ- The term “greenwashing,” a derivative of “white- mental Protection Agency (EPA), Consumers Union, wash,” has recently come into vogue to describe the and the Canadian Consumer Affairs Branch. All but one promotion of environmental benefits through consumer of the products made environmental claims that were advertising and labelling practices that are perceived to judged to be “demonstrably false” or misleading. be false, deceptive, misleading or vague. The term The study identified the following six patterns, or “greenwashing” is widely attributed to a 1986 essay “sins,” of greenwashing: (1) sin of the hidden trade-off, penned by suburban New York environmentalist Jay (2) sin of no proof, (3) sin of vagueness, (4) sin of Westerveld criticising the hotel industry’s use of plac- irrelevance, (5) sin of lesser of two evils and (6) sin of ards suggesting guests could help “save the environ- fibbing. ment” by reusing their towels.1 Westerveld maintained 1 The sin of hidden trade-offs is described as adver- that the hotels were more motivated by profit than by tising a product as “green” based on one attribute, any real environmental agenda. without considering other important environmen- Legal actions arising from alleged greenwashing can tal issues related to the product. This first sin is best be described as “eco-fraud” litigation. Such claims, demonstrated with reference to household insula- which may be brought by a purported class of consum- tion products that promote indoor air quality ers, competitors, state attorneys general or government without paying attention to other environmental agencies, seek recovery and/or injunctive relief based on aspects of the insulation, such as manufacturing allegedly deceptive trade practices and fraudulent adver- impact or recycled content. tising of environmental benefits. These actions essentially challenge labels such as “Environmentally Friendly,” 2 The sin of no proof arises when a claim cannot be “Eco-conscious,” “Carbon Neutral,” “Energy Efficient,” substantiated by easily accessible information, “Sustainable,” “Renewable,” “Organic,” “Non-toxic,” such as household lamps and lights that promote “Chemical free,” “All Natural,” “Recycled,” and “Bio- energy efficiency or facial tissues and paper towels degradable.” that claim post-consumer recycled content without Part of the recent interest in eco-fraud litigation has providing evidence. been triggered by aggressive publicity and publications 3 The sin of vagueness occurs when a claim is so by eco-activists and advocacy groups, such as Greenpeace, poorly defined or overly broad that an intended decrying the environmental practices of corporateAmerica. consumer is likely to misunderstand it. Examples One oft-cited study responsible for focusing public of such claims include insecticides promoted as

australian product liability reporter May 2009 7 “chemical-free,” “natural” hair mousse, and wax defendant either failed to disclose the product’s alleged paper that claims “recycled” content, but fails to health risks (eg, failure to disclose alleged harms from quantify that content. Teflon® coated cookware) or deceptively advertised the 4 The sin of irrelevance is committed when an product to possess some health benefit or premium environmental claim is made that may be truthful, attribute that cannot be substantiated (eg, “probiotic” but is unimportant or unhelpful to the environmen- yogurt or tools “made in the USA”). The goal in tally conscious consumer. The most common example bringing such claims is clear: attain certification and of this “sin” is the allegedly irrelevant claim that a extort a settlement. product is free of chlorofluorocarbons (CFCs), The consumer class action is an alluring avenue for a which the study notes have been banned for number of reasons. First, the bar for class certification is almost thirty years. far lower in these types of cases than in personal injury 5 The sin of lesser of two evils is made when a claim or medical monitoring actions, where individualised may be true, but it risks distracting the consumer injuries often defeat the class certification requirements from the greater adverse environmental impacts of of commonality and typicality. Second, these actions the product’s entire category, with cited examples usually dispense with the hurdle of proving scientific or including organic cigarettes and “green” insecti- medical causation and the associated expense of hiring a cides and herbicides. cadre of scientific experts. Third, these actions give rise to large classes with high monetary payoffs due to the 6 The final sin, the sin of fibbing, occurs when a many consumers who purchase the types of everyday claim is false. The study cites as examples of this products being targeted. sin several shampoos that claimed to be “certified Historically, the class model could be avoided in organic,” but for which no confirmation of that product liability actions alleging personal injury because claim could be found. in such cases the differences among individual plaintiffs The conclusions of the TerraChoice study are difficult on issues of liability, comparative fault, causation, and to verify, because the study does not mention any the nature and degree of injuries tend to overshadow the specific brands, stores or companies by name, and the commonality of the class.3 By eliminating the personal methodology has been questioned. One thing that is not injury element in consumer fraud class actions, however, questionable, however, is the interest in it by the media. plaintiffs can avoid the biggest hurdle to class certifica- The study has been covered on CNN, MSNBC, The tion. Today Show, The New York Times, and a host of other An important and current debate relevant to the national publicity outlets. Not only has the study, and defense of consumer class actions concerns the issue of publications like it, brought greenwashing into the individual reliance, the traditional causal element of a American consciousness, but it essentially provides a common law misrepresentation claim. It is believed that road map for plaintiffs’ attorneys looking for the next big the courts’ relaxation of the reliance requirement — a consumer fraud case. showing that the misrepresentation induced the consumer to purchase the product — is a significant factor Eco-fraud: today’s flavour of consumer class in the rise of these consumer product class actions.4 In litigation recent years many have described a national trend The rise of no-injury consumer product class actions dispensing with the need for plaintiffs to prove reliance has been chronicled on the legal blogs and the seminar under consumer protection claims.5 Most recently, how- circuit for the past several years. The term “consumer ever, it seems there is a reversal of this trend and more product class action” is a catch-all phrase used to courts are finding that the “as a result of” language in describe “no-injury” class actions involving a consumer most consumer protection statutes requires actual cau- product claim typically based on a hybrid collection of sation in the form of reliance.6 state and federal consumer protection statutes and tradi- In the light cigarette case of McLaughlin, the Second tional theories of recovery. The common paradigm in Circuit held that “proof of misrepresentation — even these cases involves a statewide or sometimes nation- widespread and uniform misrepresentation — only sat- wide class action targeting a single product or a discrete isfies half of the equation; the other half, reliance on the class of products by plaintiffs seeking recovery for an misrepresentation, cannot be the subject of general alleged economic injury. A familiar charge is that the proof.”7 The court stated that individualised proof of product failed to deliver the “benefit of the bargain” reliance on the misrepresentation is needed to overcome because the product was not delivered as advertised, and the possibility that a member of the purported class thus the plaintiffs seek a return of the purchase price or purchased the product for some other reason.8 Eco-fraud the premium paid. The plaintiffs typically allege the is just the latest flavour of consumer product class

8 australian product liability reporter May 2009 litigation, as such claims fit squarely within the para- consumers’ consideration and awareness of green claims, digm, and the reliance debate, described above. It would motivations, processes and choice behaviours. In most be very easy to craft a purported class action based on cases, expert testimony on these points is essential to any of the examples described within the TerraChoice defeat the commonality, typicality, superiority and pre- study cited above. For example, products with labels dominance requirements. purporting to be “chemical free” are subjecting them- Likewise, reliance is likely to be a difficult challenge selves to fraud claims on the ground that nothing is truly for plaintiffs in cases of alleged greenwashing. Follow- free of chemicals. Similarly, claims that a product is ing the logic of McLaughlin, specific proof of reliance “non-toxic” may be subject to attack since most any- on the alleged environmental marketing should be an thing, including water, oxygen or salt, will become toxic element in most of these claims.11 Consumers purchase if ingested in excess amounts. Your product may be “all products such as milk, toothpaste, televisions and lum- natural,” but so are arsenic, mercury, uranium and ber for a variety of reasons, and it cannot be assumed formaldehyde. that a class of consumers all purchased the product One such consumer eco-fraud class action was recently because of the advertised green benefits. In order to filed in San Francisco Superior Court against Fiji Water attack reliance, evidence as to the plaintiff’s environ- Company and its corporate owner alleging that Fiji mental practices and ecological behaviours will be “misrepresented... to con- relevant and persua- sumers that Fiji Water is an sive. For example, it environmentally sound prod- would be a hard sell uct.”9 Plaintiffs in the case to suggest a plaintiff challenged the company’s the climate of concern over consumer relied on a particu- “GreenDrop”sealofapproval, class action lawsuits is mounting, and lar green claim in the use of term “Fijigreen,” purchasing a house- and the company’s overall corporate defendants should be particu- hold product when green marketing campaign it can be shown that as misleading given the envi- larly wary of potential eco-fraud con- thesameplaintiffnever ronmental costs (burning of sumer class actions recycles, drinks his fossil fuels and creation of coffee from polysty- greenhouse gases) associ- rene cups, and drives ated with transporting the a gas-guzzling SUV. bottles and the impact of the containers tossed in land In such a case it is likely the consumer relied on the fills. The action seeks disgorgement of profits, restitu- price, the name brand, or other attribute of the product tion, declaratory and injunctive relief and compensatory rather than the green claim. and punitive damages under California’s consumer fraud Nonetheless, the climate of concern over consumer statutes and other state law. The company will likely class action lawsuits is mounting, and corporate defen- defend with evidence of its commitment to reduction in dants should be particularly wary of potential eco-fraud packaging, investment in rainforest renewal and reduc- consumer class actions. Despite the difficulty of plain- tion of carbon emissions to support its eco-friendly tiffs being able to prove reliance in these cases, there are campaign, but the costs of defending the suit, the impact several other factors that render these types of cases of any follow-on actions and the negative publicity will more troublesome than the average consumer fraud case. take its toll regardless of the outcome. First, there is a legitimate public policy argument in The same strategies employed for defeating class favour of protecting the environment and encouraging certification in typical consumer fraud actions apply in corporate environmental responsibility, which is absent eco-fraud cases. Defendants will want to emphasise the in the typical consumer product case. Whereas courts dissimilarity of consumer experiences and behaviour may be more willing to take a common sense approach among putative class members in order to show that the or “buyer beware” stance as to an exaggerated product of commonality, typicality, predominance, and superior- label touting more trivial claims such as “calorie- ity cannot be met.10 Members of a purported eco-fraud burning” benefits of a soft-drink or the failure to provide class likely would not have received the same informa- an obvious warning that playing an MP3 player at full tion, made purchasing decisions in the same way, used volume might damage your hearing, they may be more the product in a similar way and for the same reasons, or sympathetic to the environmental cause and the public reacted in a uniform manner. A recognised and reliable policy in favour of conservation. market research firm is invaluable to conduct the studies, Second, the plaintiffs have very strong allies when it surveys and other market research needed regarding comes to punishing corporate defendants for perceived

australian product liability reporter May 2009 9 greenwashing. The number and the strength of the claims and criteria on which consumers can base their environmental watchdog groups is unparalleled. Public complaints. As discussed below, the FTC is expected to interest and advocacy groups such as Greenpeace are issue revised Green Guides in 2009 to include more well-funded, active and very willing to take on a fight specific guidance for companies facing this dilemma. against a corporate defendant over greenwashing. The While the additional guidance is welcome clarification group sponsors a website, , for many, it is also likely to give rise to increased featuring its own slick logo, “Clean up your act, NOT litigation when companies’ labelling does not comply, your image.” Similarly, Co-op America, whose stated even though the Guides do not carry the force of law. mission is to “harness economic power — the strength of consumers, investors, businesses, and the marketplace Third-party claims — competitors, — to create a socially just and environmentally sustain- regulators and public prosecutors able society,” sponsors the website , where consumers can search literally hundreds greenwashing are the eco-fraud consumer class actions, of company profiles by name or by industry and quickly companies should also be concerned about actions compare corporate responsibility records. Groups like brought by competitors, regulatory agencies and public The Cornucopia Institute, Center for Science in the prosecutors such as state attorneys general. Companies Public Interest, Organic Consumers Association, and US have been known to initiate litigation over a competi- Public Interest Research Group have also shown that tor’s green claims in order to eliminate the competitor’s they are willing to promote consumer eco-fraud litiga- market advantage gained by a misleading environmental tion, by providing the needed funding or helping to marketing claim. identify class representatives, to further their missions. Tyson Foods, Inc, the second largest domestic chicken Advocacy groups occasionally have sought to bring producer, was reportedly sued for eco-fraud by competi- such actions solely on their own behalf, although stand- tors contending that its chicken products were fraudu- ing is a significant barrier to such direct claims. In order lently advertised as “raised without antibiotics.”14 Both to establish standing to sue, such a group must establish Tyson and its competitors added an antibiotic known as that it suffered an injury in fact, that there is a causal ionophores to its chicken feed to help prevent consumers nexus between injury and the defendant’s conduct, and from contracting disease. Tyson also injected a vaccine the likelihood that the injury will be redressed through a containing antibiotics into the chicken eggs right before favourable decision.12 Specifically, the organisation must they hatched. The “antibiotic free” label was believed to demonstrate that it has suffered a “concrete and demon- enhance Tyson’s profits because consumers were willing strable injury” to its activities, not merely “a setback to to pay more for the environmentally “green” product. the organisation’s abstract social interests.”13 The Tyson labels, at issue, were initially approved by Third, the PR costs to a company targeted in eco- the US Department of Agriculture’s (USDA) Food fraud claims can be huge. A corporate green campaign Safety and Inspection Service. However, USDA later can quickly backfire, doing more harm than good, if the claimed that the approval was a mistake based on consuming public believes the claims are untruthful or misinformation provided to it by Tyson. Thus, the label misleading. Environmental responsibility is a deeply felt was rescinded to avoid claims that it was false and conviction held by many people, from private citizens to misleading. The court ordered an injunction barring professionals, to religious devotees, politicians and extrem- Tyson from similar advertising and Tyson subsequently ists. Environmental consciousness is a hot topic for the voluntarily withdrew its label. Tyson’s antibiotic free media outlets, and they will be quick to disseminate any labels, advertising, and corresponding marketing mate- story involving an alleged “greedy corporation” taking rials have spawned a purported class action on behalf of advantage of “innocent” consumers’ efforts and desires consumers as well as a petition to the USDA by Tyson’s to “save the earth.” Meanwhile, both the plaintiffs’ competitors.15 attorneys and the public interest groups will fuel the fire In another competitor suit in 2008, Dr Bronner’s of media attention, if for no other reason than to promote Magic Soaps filed a lawsuit in California Superior Court their own profiles. against Estee Lauder and numerous other personal care Finally, unlike most other areas of consumer fraud, brands to force them to stop making alleged misleading there are published guidelines and standards by which organic labeling claims.16 Dr Bronner’s and the Organic green marketing claims can be objectively measured for Consumers Association (OCA) had threatened offending deceptiveness, including those found within the FTC brands that they would be sued unless they either Green Guides, the USDA organic standards, the ISO’s dropped their organic claims or reformulated their prod- standards, and state environmental marketing statutes. ucts. The suit maintained that organic labelling standards These standards provide a benchmark for measuring the set by the USDA’s NOP for food and beverages set the

10 australian product liability reporter May 2009 bar for consumer expectations of “organic” cosmetic ethylene and polyethylene terephthalate that are not products, even though the USDA standards do not chemically capable of being broken down by the bio- necessarily apply to cosmetics, body care or personal logical activity of living organisms.20 care products. As these examples illustrate, companies should be Government agencies such as the USDA, the FTC prepared to defend eco-fraud claims on multiple fronts and state attorneys general are also willing to get and in multiple geographic regions, as competitors, involved in challenges to perceived greenwashing by various government agencies and individual states may corporate defendants, either in connection with con- pursue independent actions. Aside from the civil penal- sumer class actions or independently. As an example, the ties involved, the expense and burden of defending a FTC and various states became involved in watchdog- product in various arenas can mount quickly, with each ging environmental marketing as early as 1988 when having its own set of discovery and investigatory obli- they pursued actions against Mobil for its Hefty® brand gations. trash bags advertised as “biodegradable.”17 To be biodegradable, the bag would have had to be capable of The FTC’s Green Guides and other sources being fully metabolised by microorganisms and assimi- Subsequent to the Mobil case, the Federal Trade lated into the natural biological cycle in soil and water. Commission (FTC), with the cooperation of the EPA, The bags were made from polyethylene and were released the “Green Guides” to provide guidance to alleged not to be fully biodegradable as they would companies in their environmental marketing.21 Origi- break down only slightly if left in the sun but not fully nally released in 1992 as “Guides for the Use of degrade. The FTC and seven states filed suit against Environmental Marketing Claims,” and last updated in Mobil, and the company eventually entered into a 1998, these provisions are the primary tool for federal consent agreement with the FTC whereby it agreed to regulation of environmental marketing. The Guides are stop making the allegedly unsubstantiated claims. Mobil intended to aid companies in their compliance with s 5 also settled with the states, paying a total of $165,000 of the FTC Act, which makes unlawful deceptive acts and agreeing to remove the term “biodegradable” from and practices in or affecting commerce. the Hefty® bags. Given the flurry of green marketing claims and The risk of eco-fraud claims extends beyond US growing concern about alleged greenwashing, the FTC borders, as government entities in several other coun- has promised the Guides will be revised for 2009 to tries also have pursued eco-fraud enforcement actions in better address these issues. To that end, the FTC has recent years. In 2008, for accepted public com- example, eight Japanese paper ments and held a series companies were reportedly of workshops in 2008 sanctioned by Japan’s Fair to discuss the Green Trade Commission for exag- companies should be prepared to Guides and needed gerating the percentage of defend eco-fraud claims on multiple areas of revision. The recyclable material in their FTCiscurrentlyinves- 18 paper products. fronts and in multiple geographic tigating a variety of In Australia, the Austra- regions, as competitors, various govern- environmental claims lian Competition and Con- and is expected to sumerCouncil(ACCC)recently ment agencies and individual states show renewed inter- brought legal proceedings may pursue independent actions. est in pursing claims against SeNevens Interna- againstcorporatedefen- tional Ltd in relation to its dants once the Guides claims that its disposable are updated. 19 Safeties Nature Nappy were “100% biodegradable.” The Green Guides apply to environmental claims The ACCC alleged that SeNevens engaged in false, included in labelling, advertising, promotional materials misleading and deceptive conduct in violation of ss 52 and all other forms of marketing, as well as claims about and 53 of the Trade Practices Act 1974 (Cth), which prohibit misleading or deceptive conduct and false the environmental attributes or “carbon footprint” of a 22 representations about a product’s composition, perfor- product, package or service. Some states, such as mance or benefits. In December 2008, the court declared California, also have their own, more stringent environ- 23 that the biodegradability claims were false and mislead- mental marketing statutes. Familiarity with these guide- ing because SeNevens Safeties Nature Nappy product lines and state statutes is essential to avoid, and defend contained plastic polymers such as polypropylene, poly- against, litigation and enforcement actions.

australian product liability reporter May 2009 11 Because the Guides are not legislative rules under non-toxic” or “practically non-toxic” may be deceptive s 18 of the FTC Act, they are not enforceable regula- if the label applies to health effects but not to the toxic tions, nor do they have force and effect of law.24 They effects on the environment. The Green Guides currently do, however, provide the basis for voluntary compliance provide around sixty such specific examples with further with such laws. The FTC notes that conduct inconsistent guidance. Additionally, companies should refer to the with the positions articulated in the Guides may result in FTC’s publication entitled “Complying with the Envi- corrective action by the FTC under s 5 if the FTC ronmental Marketing Guides,” which is available on the believes that the behaviour falls within the scope of FTC’s website. conduct declared unlawful by the statute.25 Currently the There are a number of additional sources for envi- Guides set forth general principles and specific guid- ronmental advertising standards and guidance. The Inter- ance, as well as a number of relevant examples. The four national Organisation for Standardisation (ISO) has general principles are as follows: published “Global Green Standards” for environmental 29 • Any qualifications or disclosures such as those labeling. The Consumer Union, who publishes Con- described in the Guides should be sufficiently sumer Reports, also maintains a website with an exten- clear, prominent and understandable so as to sive searchable database showing report cards for a wide prevent deception; variety of environmental labels and logos and the products on which they appear.30 Australia, France, • An environmental marketing claim should be Canada, the UK and other countries have published their presented in a way that makes clear whether the own guidance, some mandatory and some voluntary, environmental attribute or benefit being asserted regarding environmental marketing of consumer prod- refers to the product, the product’s packaging, a ucts. For example, in 2008 the Australian Competition service or to a portion or component of the and Consumer Council issued a guidance publication product, package or service; very similar to the FTC’s Green Guides entitled “Green • An environmental marketing claim should not be marketing and the Trade Practices Act,” which is avail- presented in a manner that overstates the environ- able online at . cation; and Moreover, a number of independent third-party cer- • Environmental marketing claims that include a tifiers and eco-labeling organisations, such as Green comparative statement should be presented in a Seal and members of the Global Ecolabelling Network, manner that makes the basis for the comparison are available to evaluate and certify products as envi- sufficiently clear to avoid consumer deception. ronmentally preferable. Thus, there are a number of In addition to these general principles, specific guid- resources available to help set the standard for accept- ance is offered about the use of environmental marketing able environmental marketing claims, and voluntary claims involving the following terms: degradable, bio- adherence to these will help companies avoid litigation degradable, photodegradable, compostable, recyclable, and bolster their defense in the event they are targeted. recycled content, source reduction, refillable, ozone safe, ozone friendly, and “general environmental benefit “Organic” labelling and the USDA claims,” such as eco-safe or environmentally friendly.26 The USDA’s regulations include strict requirements For example, the Guides point out that a product labelled for the labelling of organic products, and labelling as “degradable,” “biodegradable” or “photodegradable,” violations can carry severe penalties. The Organic Foods “should be substantiated by competent and reliable Production Act (OFPA) authorised the USDA’s National scientific evidence that the entire product or package Organic Program (NOP) to develop, implement, and will completely break down and return to nature, ie, administer the national production, handling, and label- decompose into elements found in nature within a ing standards for organic agricultural products.31 The reasonably short period of time after customary dis- NOP also accredits the certifying agents, foreign and posal.”27 domestic, who inspect organic production and handling Specific guidance is also provided for use of the term operations to certify that they meet USDA organic “recyclable” in marketing. Such language may be used standards.32 only when a product or package “can be collected, Agricultural commodities or products that meet the separated or otherwise recovered from the solid waste NOP standards for certification can be certified under the stream for reuse, or in the manufacture or assembly of NOP and therefore be labelled as “organic” or “made another package or product, through an established with organic” pursuant to the NOP regulations.33 To recycling program.”28 Similarly, the Green Guides advise qualify for such certification, a producer or handler must that a lawn care product advertised as “essentially comply with the applicable NOP regulations as set forth

12 australian product liability reporter May 2009 in the C.F.R. USDA has accredited certifying agents fraud litigation. Greenwashing has become a buzzword whose job is to certify that handlers and producers for consumers, advocacy groups and the media, and this representing their products is fertile ground for as organic have complied no-injury consumer with NOP regulations. class actions and regu- USDA defines three lev- latory enforcement els of organic labelling for Generally, cosmetics, body care prod- actions. Unfortu- food and beverages. A products and personal care products may be nately, the rules are uct can be labelled “100% not always clear, con- organic” if it is made entirely labelled and marketed as “natural” or sistent or static when with 100% organically pro- it comes to respon- duced ingredients, not count- “organic” or may display other green sible environmental ing added water and salt.34 labels without being subject to the marketing. As com- Generally, the label “organic” panies become more may be used if the product USDA NOP program. aggressive with their contains at least 95% organic “greenandclean”cam- ingredients with no added paigns, they must be sulfites. Both of these categories may also display the careful not to become a target for these eco-fraud and USDA organic seal.35 Products may be labelled as greenwashing claims. “made with organic ingredients” if they contain a Victoria Davis Lockard, minimum of 70% organic ingredients and no added 36 sulfites, except that wine may contain sulphur dioxide. Partner, and Recently, the advocacy group Organic Consumers Asso- ciation (OCA) has pushed for tightened restrictions on organic labelling of cosmetics and personal care articles. Currently, cosmetics and personal care products may be certified and labelled as “USDA organic” if they meet the production, handling, processing, labelling, and Josh Becker, certification standards, although such products are not required to comply. Currently the USDA has no author- Associate, Alston & Bird LLP. ity governing the production or labelling of personal care products not made of agricultural ingredients or products that do not make claims to meet USDA organic standards. Generally, cosmetics, body care products and personal care products may be labelled and marketed as “natural” or “organic” or may display other green labels without being subject to the USDA NOP program. Footnotes Failure to comply with the USDA labelling require- 1. Purple Romero, Beware of Green Marketing, Warns Greenpeace ments can subject companies to hefty fines, as well as Exec, , Sept. 17, 2008. civil suits for alleged misrepresentation. In 2007, mul- 2. See . tiple purported class actions were filed against Aurora 3. See, eg, In re Vioxx Prods Liab Litig, 239 FRD 450 (ED La Dairy Corp. alleging that it labelled and sold its milk as 2006). organic, which yields much higher prices than conven- 4. See Sheila B Scheuerman, The Consumer Fraud Class Action: tional milk, without following federal standards for Reigning in Abuse by Requiring Plaintiffs to Allege Reliance as 37 organic products. In what follows a familiar pattern, an an Essential Element, 43 Harv J on Legis 1, 33 (2006). advocacy group first made complaints to the USDA, 5. See Smoot v Physicians Life Ins Co, 87 P3d 545, 551 (NM Ct which then launched an investigation into the company’s App 2003). practices. Class action lawsuits, at least six in total, were 6. See McLaughlin v Am Tobacco Co, 522 F3d 215 (2d Cir 2008) filed on the heels of the USDA investigation alleging (holding that individualised proof of reliance is a required violations of various statutes and common law, includ- element); see also Castano v Am Tobacco Co, 84 F3d 734, 745 ing consumer fraud, unjust enrichment, breach of war- ranty, negligence and false advertising. (5th Cir 1996) (“a fraud class action cannot be certified when individual reliance will be an issue”). Conclusion 7. McLaughlin, 522 F3d at 223. Recent developments suggest companies and their 8. Above, note 7; See also Thorogood v Sears, Roebuck and Co, counsel should be prepared for the new wave of eco- 2008 WL 4709500 (7th Cir October 28, 2008) (decertifying a

australian product liability reporter May 2009 13 class of purchasers of clothes dryers advertised with “stainless 19. See Nappy biodegradability claims declared false and mislead- steel” drums after finding a presumption of reliance “implau- ing, ACCC News Release (December 3, 2008). sible”). 20. ACCC v SeNevens International Ltd, (2008) TAD34/2008. 9. See Ayana Hill, on behalf of herself and all others similarly 21. 16 CFR § 260. situated, v Roll International Corporation and Fiji Water 22. Above, note 20, at § 260.2. Company LLC, Case No CGC-09-487547, filed April 22, 2009. 23. See, eg, California’s Environmental Representations Law, Cal. 10. See Int’l Union of Operating Eng’rs Local No 68 Welfare Fund Bus. & Prof. Code §§ 17580, 17580.5. v Merck & Co, 929 A2d 1076 (NJ 2007). 24. 16 CFR at § 260.1. 11. See McLaughlin v Am Tobacco Co, 522 F3d 215 (2d Cir 2008). 25. Above, note 24. 12. See Lujan v Defenders of Wildlife, 504 US 555, 560–61 (1992). 26. Above, note 24 at § 260.7. 13. Ctr for L & Educ v US Dept of Educ, 315 F Supp 2d 15, 22 27. Above, note 24. (DDC 2004), aff’d, 396 F3d 1152 (DCCir 2005) (citing Nat’l 28. Above, note 24. Taxpayers Union v United States, 68 F3d 1428, 1433 (DC Cir 29. See Int’l Inst. for Sustainable Dev., Global Green Standards: 1995)). ISO 1400 and Sustainable Development, (specifically ISO 14020:2000, ISO 14021:1999, (D Md 2008); See also Emily Chasen, Tyson sues USDA over ISO 14024:1999 and ISO 14025:2006). antibiotic-free labeling, Reuters, June 14, 2008; Erin Marie 30. See Consumer Reports, Greener Choices, . June 3, 2008. 31. 7 USCA §§ 6501–22. 15. See Sanderson, 547 F Supp 2d 491 32. 7 CFR § 205. 16. All One God Faith, Inc d/b/a Dr Bronner’s Magic Soaps v The 33. (7 CFR § 205.300 et seq.) Hain Celestial Group, Inc, Case No CGC-08-47401, Superior 34. Above, note 33. Court of California, County of San Francisco, Department 305. 35. Above, note 33. 17. See Jerry Taylor, The Greening of the First Amendment, 36. Above, note 33. Regulation Magazine, Vol 14 No 4 (Fall 1991). 37. In re Aurora Dairy Corp Milk Marketing and Sales Practices 18. See Ryan Davis, Japanese Cos Sanctioned Over “Recycled” Litigation, MDL-1907, E.D. Mo.; Tresa Baldas, Battle Over Paper, Law360, Apr. 8, 2008. Organic Products Turns Toxic, Nat’l L.J., June 24, 2008.

14 australian product liability reporter May 2009