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FTC Announces Three Enforcement Actions Involving "Green" Marketing Claims

The Federal Trade Commission announced in early June that it had settled charges with Kmart Corp. and Tender Corp., and would be pursuing litigation against Dyna-E International, all relating to claims the companies made about their paper products being "biodegradable."

According to the FTC, the retailers made the following deceptive and unsubstantiated biodegradability claims: Kmart Corp. called its American Fare brand disposable plates biodegradable, Tender Corp. called its Fresh Bath-brand moist wipes biodegradable, and Dyna-E International called its Lightload brand compressed dry towels biodegradable.

The FTC's voluntary Guides for the Use of Environmental Marketing Claims (Green Guides) advise marketers that unqualified biodegradable claims are acceptable only if they have scientific evidence that their product will completely decompose within a reasonably short period of time under customary methods of disposal. In the three complaints, the FTC alleged that the defendants' products typically are disposed in landfills, incinerators, or recycling facilities, where it is impossible for waste to biodegrade within a reasonably short time.

The settlement agreements with Kmart Corp. and Tender Corp. prohibit them from making deceptive "degradable" product claims and require them to have competent and reliable evidence to support environmental product claims. The settlement with Tender Corp. also requires it to disclose clearly whether any biodegradable claim applies to the product, the packaging, or component of either. Both settlements contain record-keeping and reporting provisions to assist the FTC in monitoring the companies' compliance.

These enforcement actions were announced by the FTC during its testimony before Congressional subcommittees. The FTC stated that with the recent growth in "green" advertising and product lines, the agency will continue its efforts to ensure that environmental marketing is truthful, substantiated, and not confusing to consumers. The FTC is currently reviewing its Green Guides, and public comments on the Guides, to ensure that they reflect changes in the marketplace and in consumer perception of environmental claims.

This client alert is a publication of Loeb & Loeb LLP and is intended to provide information on recent legal developments. This client alert does not create or continue an attorney client relationship nor should it be construed as legal advice or an opinion on specific situations.

For more information, please contact a member of Loeb & Loeb's Advertising & Media Group.

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