del percio 2011 greenbuild legal forum presentation - ftc green guides

2011 Greenbuild Legal Forum

THE FTC GREEN GUIDES: UPDATE & GREEN BUILDING MARKETING PRIMER

Presented by

Stephen Del Percio, B.Eng., J.D.

Arent Fox LLP

Washington, DC | New York, NY | Los Angeles, CA

October 6, 2011

FTC GREEN GUIDES: UPDATE & GREEN BUILDING MARKETING PRIMER

What are the FTC Green Guides?

- Federal regulations setting forth how the Federal Trade Commission will apply Section 5 of the FTC Act (15 U.S.C. §§ 41-51), which prohibits “unfair or deceptive advertising,” in the area of environmental marketing claims

- Green Guides first issued in 1992; last updated in 1998

- FTC currently reviewing public comments submitted in response to updates proposed in 2010


What are the FTC Green Guides?

- General environmental benefit claims- Certifications & seals of approval- Compostable claims- Degradable claims- Free-of and non-toxic claims- Ozone-safe and ozone-friendly claims- Recyclable claims- Recycled content claims- Refillable claims- Source reduction claims


Proposed 2010 additions to the FTC Green Guides

- Carbon offsets

- Renewable energy claims

- Renewable materials claims


How are the Green Guides enforced?

- No private cause of action

- Section 5 of the FTC Act allows FTC to file administrative actions or lawsuits in federal court

- Remedies include injunctive relief, corrective advertising, and civil penalties up to $16K per violation of injunctive order


Will the Green Guides apply to commercial actors?

- FTC typically enforces marketing claims made to consumers

- However, it has recognized that “many environmental marketing claims are commercial in nature”, and has stated formally that it will “not hesitate to enforce its standards outside of a traditional consumer context”*

*J. Kohm, Associate Director, Division of Enforcement, “Green Marketing: Communicating Environmental Benefits to Effect Change and Sell Product,” ABA Consumer Protection Conference, June 20, 2009


So how do private parties make environmental marketing claims?

- By asserting false advertising and/or unfair competition claims- Lanham Act (federal)- Consumer protection statutes (state)

- Typically consumer class actions alleging performance levels or environmental benefits advertised cannot be achieved under standard operating conditions

- Illustrative cases- Paduano v. Am. Honda Motor Co., 169 Cal. App. 4th

1453 (2009) (hybrid gas mileage; companion class action )

- Suntech Solar v. Solar Tech Co., No. 08-CV01582 (S.D. Cal. 2008) (non-consumer trademark dispute)


Is there anything in the Green Guides specific to real estate?

- No, but USGBC did provide comments to FTC relating to third-party certification and seals in the context of:- Improper claims of LEED product certification

- Improper claims of LEED building certification

- Improper claims of professional accreditation

- Misleading comparisons of rating systems and certification programs


How does environmental marketing intersect with real estate?


Some takeaways

- Updates to the FTC Green Guides are still pending

- Private parties, including non-consumer parties, seeing increased value in environmental marketing claims, and will assert rights vigorously

- FTC will not hesitate to police non-consumer conduct

- More specific guidance about green building marketing is inevitable


Thank you!

Stephen Del [email protected]

www.greenrealestatelaw.com @StephenDP

del percio 2011 greenbuild legal forum presentation - ftc green guides

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