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February 27, 2014

There's a Great Future in Following the Green Guides

Consumer Advertising Law Blog,

Mr. McGuire: I just want to say one word to you.Just one word.

Benjamin: Yes, sir.

Mr. McGuire: Are you listening?

Benjamin: Yes, I am.

Mr. McGuire: Plastics.

Benjamin: Exactly how do you mean?

This exchange came from one of the most watched films of all time, The Graduate. Young Benjamin responded to that famous "one word" ("plastics") by asking, "Exactly how do you mean?" When advertisers use the one word "recyclable" (or the two words "recycled material"), the Federal Trade Commission (FTC) asks the same question and demands advertisers substantiate the answer, with competent and reliable scientific evidence if experts in the relevant field would consider it necessary.

N.E.W. Plastics, a manufacturer of plastic lumber, learned this the hard way. On February 21, 2014, it entered into a consent decree with the FTC to settle charges that the company violated Section 5 of the FTC Act, by making unsubstantiated and misleading claims about its EVOLVE and TRIMAX plastic lumber. EVOLVE and TRIMAX are plastic products that look similar to wood and have many of the same applications as lumber.

The FTC alleged that from September 2012 to March 2013, N.E.W. Plastics marketed its EVOLVE product as containing over 90% recycled materials, but in reality, this product contained no more than 58% recycled material. Similarly, the FTC charged that N.E.W. Plastics' advertisements claimed that TRIMEX was "derived from post-consumer bottle waste," but the product contained less than 12% recycled content. The FTC found the claims that EVOLVE and TRIMAX were "100% recyclable" were misleading to consumers because local recycling centers did not accept the products due to their size, weight, and other components. The FTC also determined that sending the products back to N.E.W. Plastics' factory for recycling was not a financially reasonable recycling option for most consumers.

As with other environmental benefit claims (such as "biodegradable" claims), the N.E.W. Plastics matter demonstrates again that green-product claims should reflect "real world" (i.e., consumer relevant) conditions. The recyclability of EVOLVE and TRIMAX depended not on whether the materials were technically recyclable, but on whether or not there was a convenient place or method for consumers to recycle the product. To claim properly that a product is recyclable, the FTC’s Green Guides require that 60% of consumers (or communities in which the product is sold) have access to adequate recycling facilities for the product. If this threshold is not met, recyclability claims in advertisements must be accompanied by appropriate qualifications.

The N.E.W. Plastics matter underscores the need to use special care when marketing based on "green" claims. Advertisers should review the FTC's revised "Green Guide" (or our previous blog posts on the Guides) to ensure that green product advertisements are not deceptive or misleading.

© Arnold & Porter Kaye Scholer LLP 2014 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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