Learn more about the Product Regulatory Team at Schiff Hardin. Attorneys In This Practice Susan M. Carlson Daniel J. Deeb Nathan A. Engel Nicole Finitzo Jeremy Hojnicki Michael J. Huft Charlene Q. Kalebic Katherine J. Levy Kathryn McCollough Long P. Mark Mahoney Henry Lee Mann William E. Meyer Jr. Joshua R. More Mary Ann Mullin Randolph M. Perkins Gabriel M. Rodriguez Richard L. Verkler Sarah D. Youngblood Schiff Hardin Offices One Atlantic Center, Suite 2300 1201 West Peachtree Atlanta, GA 30309 225 Franklin Street, Suite 2600 Boston, MA 02110 233 S Wacker Drive Suite 6600 Chicago, IL 60606 One Westminster Place Suite 200 Lake Forest, IL 60045 900 Third Avenue New York, NY 10022 One Market, Spear Tower 32nd Floor San Francisco, CA 94105 1666 K Street, NW Suite 300 Washington, DC 20006 - - - - - - - - - Join our mailing list. Forward this update to a friend or colleague. - - - - - - - - -

Schiff Hardin Product Regulatory Team Update

In this Update: "Green" Claims

-	FTC Steps Up Enforcement Against Manufacturers and Retailers for False "Green" Claims
-	EPA Enforcement Against Manufacturers for Antimicrobial Claims
-	Canada Steps Up Enforcement of False Green Claims

Federal Trade Commission Targets Misleading "Green" Claims

The Federal Trade Commission (FTC) recently increased its enforcement of false advertising laws against businesses alleged to have made inaccurate claims about the environmental benefits of products.¹ Examples of recent enforcement activity include the following:

• On October 22, 2009, the FTC announced a proposed settlement with a company that allegedly falsely claimed its rayon clothes were made of bamboo fiber, retained bamboo's antimicrobial properties, and were biodegradable. The settlement also addressed the FTC's allegations that the company violated the Textile Fiber Production Identification Act (Textile Act) and the FTC's Textile Rules by falsely labeling and advertising its clothing and textile products as bamboo, when they should be labeled and advertised as rayon. Under the settlement, which will be in place for 20 years, the company agreed not to make any representation in any label, advertisement, promotion or product name, that products were made of bamboo or were antimicrobial or biodegradable unless the company has in its possession competent and reliable scientific evidence that substantiates such a representation. The settlement imposed additional record keeping and notification obligations on the company for the next 20 years.


• In August 2009, the FTC entered into similar settlements with three other sellers of clothing and textile products that allegedly made false claims that their products were made of "100% bamboo fiber," when in fact, the products were made of rayon. The FTC cited the companies for inaccurately claiming that their products retained the bamboo plant's antimicrobial properties, for misleading claims that the products were made using "environmentally-friendly" manufacturing processes, and for claims that the products were biodegradable.


• On July 17, 2009, the FTC and K-Mart reached a settlement over allegations that K-Mart made false claims that paper products sold in K-Mart stores were biodegradable. The FTC contended that the claims were false because a substantial majority of household waste is disposed of in landfills, incinerators and recycling facilities, and these methods of disposal do not involve conditions needed to achieve biodegradation. The FTC alleged that K-Mart lacked scientific evidence substantiating this biodegradable claim. The Consent Order resulting from the settlement will remain in place for 20 years. It requires K-Mart to retain copies of relevant advertisements and also appropriate materials to substantiate claims made in the advertisements. K-Mart is also obligated to notify the FTC of changes in K-Mart's corporate structure that might affect compliance obligations under the order, file an initial report with the FTC detailing the manner and form in which K-Mart has complied with the FTC's requirements, and respond to future inquiries from the FTC by issuing written compliance reports.


• Similar actions have also been brought against Tender Corp. (for claiming that its moist wipes were biodegradable) and Dyna-E International (for claiming that its compressed paper towels were biodegradable). The FTC used materials from the Web sites of these companies as evidence of the alleged violations.

Environmental Protection Agency Targets Enforcement Against Manufacturers for Antimicrobial Claims

The U.S. Environmental Protection Agency (EPA) is continuing its enforcement efforts against manufacturers who claim that their products possess antimicrobial properties without registering the product as a pesticide as required by the Federal Insecticide, Fungicide and Rodenticide Act ("FIFRA"). In addition to enforcement efforts, EPA has proposed regulations which would expand the scope of FIFRA's definition of "antimicrobial products" to include (i) pesticide products for antimicrobial uses in or on food or feed, (ii) antifoulant paints and coatings, (iii) wood preservatives, and (iv) pesticide products intended to be included in any of the products mentioned above.² Examples of recent enforcement activity involved the following:

• On October 21, 2009, EPA and Samsung settled an action against Samsung arising from EPA's allegations that Samsung made false claims that certain of its keyboards were "antimicrobial" keyboards that inhibited germs and bacteria. EPA asserted that these claims caused the products to be properly characterized as pesticides and that Samsung had failed to register the products as such. The settlement requires Samsung to pay a $205,000 fine, certify its current FIFRA compliance, and notify retailers and distributors to remove any pesticidal claims from labels, promotional brochures and Internet or Web-based content for the products in question.


• On October 20, 2009, EPA announced it reached an agreement with Behr Processing Corporation to settle allegations that the company sold and distributed a cleaner without properly registering the cleaner as a pesticide. EPA took the position that because the label on Behr's No. 62 Interior and Exterior Multi-Surface Cleaner and Mildew Stain Removal product had claims that the product removed algae and fungus, the product was considered a pesticide and must be registered with the EPA. Behr agreed to pay a $15,000 fine and to remove the claims from the product's label.


• On July 31, 2009, EPA and Lonza, Inc., a manufacturer of hospital-grade disinfectants, entered into a settlement arising from EPA's allegations that Lonza violated FIFRA by making misleading claims about the efficacy of some of its products. EPA alleged that two of Lonza's products were ineffective against the microbes that they were claimed to kill, and that a third product was mislabeled in that the label did not include first aid information. Lonza agreed to pay $550,000 in fines to resolve this matter.

Canadian Enforcement of False Green Claims

The Canadian Competition Commission (the "Commission") recently completed an enforcement action brought against several Canadian retailers for allegedly making false or misleading "green" product claims. The action was grounded in the federal Competition Act (the "Act"). It involved products which retailers claimed were eligible for the Canadian Energy Star Program (an energy efficiency program similar to the U.S. program of the same name). Under the Consent Agreement, the retailers must remove all Energy Star references from existing inventory and provide corrective notices to all prior purchasers of products about which an erroneous Energy Star eligibility claim was made. In June 2008, the Commission published guidance concerning environmentally-related product claims, stating that it would afford a one-year transition period before enforcement to allow sellers time to modify their advertising practices.

¹In 1992, the Federal Trade Commission issued the "Green Guides" to provide marketers guidance on the lawful use of green environmental claims such as "environmentally friendly," "recyclable," and "biodegradable." The FTC is currently updating these guides and is considering adding guidance on such terms as "carbon neutral" and "sustainable."

²Federal Register, Oct. 8, 2008 (Vol. 73, No. 196) p. 59382; 40 CFR parts 158 and 161.

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