Toxic Tort Litigation Blog : Toxic Tort Lawyer & Attorney : Epstein Becker Green Law Firm : Product Liability, Contamination, Pollution

On October 6, 2010, the Federal Trade Commission proposed revised “Green Guides”, the guidance provided to corporate marketers to help them avoid making misleading environmental claims. The Green Guides were first issued in 1992 and revised in 1996 and 1998. The proposed Guides issued last week are designed to significantly strengthen the FTC’s prior guidance and provide new guidance on marketing claims that were not commonly asserted in the 1990’s before the “Green Revolution”. Although the FTC is seeking public comments on the proposed revisions through December 10, 2010, the guidance issued last week is not likely to be significantly modified.

Based upon a review of the new Green Guides, there are some basic rules of the road that, if followed, will help companies avoid “Greenwashing” claims and the consumer class action suits which are likely to become increasingly common: (1) Avoid unqualified general environmental marketing claims that are difficult, if not impossible, to substantiate; (2) General claims of environmental benefit should be accompanied by qualifiers that are clear, specific and accurate; (3) When using a certification or a seal of approval to promote the green nature of a product, use clear and prominent language to clarify that the certification or seal relates to a particular environmental attribute, which the company can substantiate; (4) If the company is endorsing a product with its own seal of approval, use clear prominent and qualifying language to alert consumers that the company created the certifying program, not an independent third-party; and (5) If only a portion of the product is made with recycled or renewable material, clearly and prominently clarify which portion of the product is made from a recycled or renewable source.

Perhaps surprisingly, FTC’s consumer revealed research found that the public overestimates the significance of “Green” claims, which suggests that “greenwashing” is common and probably profitable. Despite consumers’ increasing cynicism, there must be some deep-seated need to believe that you are a buying an “eco-friendly” product. Going forward, companie seeking to comply with the new guidelines may want to rethink their marketing strategies and avoid making general claims of “environmental friendliness” and focus instead on advertising claims that can be are based on scientific research. 

The FTC’s Green Guides are largely devoid of regulatory jargon often found regulations and are easy to read and understand. The Green Guides provide helpful examples of which kind of claims are acceptable and which are not. Following the adoption of the Green Guides, should we expect that FTC will initiate a spate of enforcement actions to emphasize to industry that the new Green Guides should be taken seriously?  You bet!.

BNA Toxics Law Reporter reports that on August 3, 2009, the First Circuit affirmed the dismissal of the American Chemistry Council ("ACC"), formerly known as the Chemical Manufacturers Association, in a case arising from a plaintiff's long-term exposure to vinyl chloride. The First Circuit's decision in June Taylor et al v. ACC, et al is attached. The ACC is the chemical industry's trade association.  The ACC has been effective in improving the image of the chemical industry in the United States and in promoting safety and environmental initiatives within its membership.  The family of Claude Taylor alleged in federal district court in Massachusetts that ACC, along with several chemical manufacturers, should be found liable for failure to warn, conspiracy and fraud for helping to produce false and misleading warnings that were adopted by the PVC industry.  The plaintiff focused on an ACC publication entitled, "Chemical Safety Data Sheet SD-56", which was first published in 1954 and later revised in 1972, claiming that the publication downplayed the danger of VC exposure.  In upholding the trial court's dismissal of the claims against the ACC, the First Circuit held that there was no evidence that the trade association had the "unlawful intent" necessary to establish "substantial assistance liability" under MA law.  The court held that it would have been necessary for plaintiff to prove that ACC was aware of Monsanto's tortious conduct and that it intended to assist or encourage that conduct.  The wide dissemination of SD-56 within the industry was not sufficient to support the claim that the ACC was aware that Monsanto was incorporating SD-56 into its own literature.  ACC's lawyer, Tim Couglin of Thompson Hine, successfully convinced the appeals court that: (1) ACC did not provide "substantial assistance" to Monsanto; (2) ACC had no knowledge of Monsanto's activities; and (3) there was no record evidence to support the underlying conspiracy claim. 

Trade associations do not manufacture or market products, but they have been the targets of toxic tort and product liability plaintiffs nonetheless.  The threshold issue in these cases is whether the association owed a duty of care to the plaintiff.  In cases in which the trade association is alleged to have promulgated a safety standard, the issue often comes down to the degree of control the trade association has over its members.  In the absence of control, the trade association is not as likely to be held liable for failure to warn.  What about a trade association that endorses products?  If a plaintiff's injury is due to a defect in a product bearing the "Good Housekeeping Seal of Approval", for example, is the association potentially liable?  One California court replied in the affirmative if it could be demonstrated that the association obtained economic gain from the endorsement and encouraged the public to purchase the product, and that  the plaintiff relied on the representation to his detriment.  Courts appear to recognize that it is not in the public interest to hold trade associations liable for injuries to remote plaintiffs in tort litigation.  The AAA might rank hotels on the basis of service and cleanliness.  Should the AAA be subject to liability for injuries allegedly resulting from its failing to warn its members that a hotel was located in a bad neighborhood?

ARCADIS, an international engineering and management services company, reported that it has merged with Malcolm Pirnie, an environmental engineering firm headquartered in White Plains, New York.  The hundred year old Malcolm Pirnie, active in water and environmental consulting and engineering, will be the jewel in the crown for ARCADIS, which has mushroomed world-wide to over 13,500 employees.  Malcolm Pirnie's assets extend beyond what the company last reported on its balance sheet.  With over forty years of professional experience, Senior VP Dick Brownell, a veteran problem solver, provides expert engineering services to Malcolm Pirnie clients  for hazardous waste and petroleum materials management, industrial wastewater systems, and air pollution control.  Jerry Cavaluzzi, Malcolm Pirnie's General Counsel, is a highly talented lawyer who is well-regarded not only within the company, but in the legal community as well.  Jerry is frequently tapped to speak at forums on cutting edge environmental and insurance issues hosted by Westchester/Southern Connecticut Chapter of the Association for Corporate Counsel (WESFACCA); the New York State Bar Association, the American Law Institute, and the ABA. We wish both Dick and Jerry continued success within ARCADIS.

In a provocative thought piece appearing in the Wall Street Journal on March 9, 2009, L. Gordon Crovitz predicts that the United States Supreme Court decision in Wyeth v. Levine will usher in an era of increased prices for drug and create a disincentive for new product innovation. Mr. Crovitz compares the American legal culture behind the Court's decision to the Luddites that smashed mechanized looms in England at the beginning of the Industrial Age in 19th century England.  He also suggests that the decision's logic may lead product manufacturers to "carry 50 different warnings, one for each state, updated by local juries from time to time."  Despite his misgivings about the decision, it is not likely that any product manufacturers, drug makers or otherwise, are likely to start tailoring their warning on a state by state basis.  As a practical matter, products are sold nationally, often through distributors, and it would be virtually impossible to  ensure that product warnings for Texas purchasers ended up in Texas and that product warnings intended for California purchasers ended up in California.  Moreover, from a jury standpoint, nothing would please a plaintiff's lawyer more than to be able to argue that the manufacturer provided a less strict warning for the product in the jurisdiction where his client's accident occurred. 

Lost in the learned treatises written in the wake of the Rhode Island Supreme Court's decision in State of Rhode Island v. Lead Industries Association, Inc.  (July 1, 2008),  which properly held that manufacturers of lead pigment are not liable under a nuisance theory for the harm caused by the use of lead paint, is discussion of the significant loss of market capitalization and shareholder value to Sherwin Williams and other manufacturer defendants who have been defending these nuisance claims for the past several years.  Apparently, there is no mechanism in Rhode Island for a defendant to file an interlocutory appeal to challenge a trial court's denial of a defendant's motion to dismiss a complaint as a matter of law.  Had an interlocutory appeal been available to the lead pigment manufacturers, there is no doubt that the Rhode Island Supreme Court would have ended years ago the State Attorney General's misguided crusade to have the defendants pay billions of dollars to remediate lead contamination in an estimated 240,000 houses  and apartments, 12,969 seasonal housing units, 419 child care centers and 339 elementary schools.  Notions of basic fairness suggest that a defendant facing a potential liability of this magnitude should be able to obtain appellate review of the plaintiff's right to proceed before having to incur the cost and uncertainty of a court trial.  A defendant with less resources than the lead pigment manufacturers might have been forced into a premature settlement with the State or even sought bankruptcy protection prior to waiting out the lengthy appeals process.