Expert's Opinion

Courts Give Guidance on Greenwashing Claims

By Neal R. Marder and Christian E. Dodd, Winston & Strawn | October 10, 2011

Winston & Strawn attorneys explain what the rulings mean for household and personal care companies.

Many companies are attempting to capitalize on consumers’ heightened concerns about environmental issues by touting the “green” aspects or features of their products or services.Doing so may have its rewards, but it also runs the risk of litigation over “greenwashing,” which is the practice of making false, deceptive or unverifiable claims that a product or service is environmentally friendly. Two recent California court decisions provide guidance on this issue.

In Koh v. S.C. Johnson & Son, Inc., 2010 U.S. Dist. Lexis 654 (N.D. Cal. Jan. 6, 2010), plaintiff alleged that SC Johnson placed a “seal of approval” label on the front of its Windex products, suggesting that such products were environmentally sound. The label had a green background and said “GreenlistTM Ingredients” under a drawing of two leaves and a stem. The reverse side of the label read: “GreenlistTM is a rating system that promotes the use of environmentally responsible products. For additional information, visit[.]” In addressing SC Johnson’s motion to dismiss the lawsuit, Northern District of California Court assessed whether a consumer would interpret the Greenlist label as being endorsed by a third party by examining the context of the symbol and the use of the trademarked term “Greenlist” by several environmental groups to describe environmentally sound products. The Court also relied on an example supplied in the Federal Trade Commission (“FTC”) guidelines, the so-called “Green Guides,” in which the FTC indicated that a product label containing a globe icon surrounded by the words “Earth Smart” would be “likely to convey to consumers the product is environmentally superior to other products” and would be deceptive “if the manufacturer could not substantiate the broad claim.” The Court denied SC Johnson’s motion, concluding that a reasonable consumer could have found the Greenlist label to be misleading.

In Hill v. Roll Int’l Corp., No. A128698 (Cal. App. May 26, 2011), plaintiff alleged that the “Green Drop” appearing on the front of Fiji Water packaging looked similar to the seals of approval used by independent, third-party organizations and that a green water drop on the back of the bottle allegedly conveyed that the product was environmentally sound and superior to other bottled waters that did not contain the drop. The California Court of Appeal found that the Green Drop was not deceptive because it bore “no name or recognized logo of any group, much less a third party organization, no trademark symbol, and no other indication that it is anything but a symbol of Fiji water.” The Court also noted that the symbol was “just a green drop, being the most logical icon for its particular product, water” and was not like the globe icon in the example provided in the FTC guidelines because a symbol of the Earth is more suggestive of the seal of an environmental organization than a drop of water. The Court further found that the placement of the green water drop on the back of the bottle next to Fiji’s own website address showed that it is a symbol of Fiji Water and not that of a third party organization. Ultimately, the Court affirmed the dismissal of plaintiff’s lawsuit.

Taken together, the Koh and Hill decisions provide the following guidance: First, a company should select symbols and wording that reflects the product itself and its own green features and avoid those that could be associated with a third party environmental group, unless the product has been endorsed or recognized by that group. Second, the symbol should not suggest or imply that the product has been ranked by a rating system unless an independent, third-party organization has, in fact, rated the product. hird, companies who market their products as “green” should familiarize themselves with, and adhere to, the FTC Green Guides, as courts assessing whether greenwashing claims have merit may resort to the Green Guides for guidance. By following these guidelines, a company may not avoid greenwashing litigation altogether, but should improve its chances of obtaining a dismissal at the pleading stage.

About the Authors
Neal R. Marder is a partner and the chair of the Litigation group in Winston & Strawn’s Los Angeles office and Christian E. Dodd is a senior associate in that same office. Both concentrate their practice on complex business and commercial litigation, with an emphasis on the defense of class actions. Summer associate Stephanie Leonard also contributed to this article.