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ChicoBag False Advertising Suit - Misuse of the FTC Green Guides?

Recently the company ChicoBag, maker of recycled PET bags and totes, was sued by 3 manufacturers of disposable plastic bags for false advertising claims and unfair competition. Their actions beg the question - is this a legitimate suit, or an unintended consequence of the FTC Green Guides substantiation requirements?   By Lara Pearson



ChicoEco is the trade name of the company doing business as ChicoBag Company.  ChicoBag makes super durable bags and totes.  My favorite bag is their water bottle sling, which is just big enough to hold my 40oz Klean  Kanteen, business cards, gum, and car key.  Not only is it useful, but it’s also environmentally conscious, being comprised of 99% recycled content (plastic bottles). It is marketed under the company’s rePETe™ program, which is a clever way to indicate to the consumer which products are made from recycled PETE plastic.  ChicoBag has other cool trademarks as well, including BAG MONSTER . . .




 

 

 

 

 

 

 

Makes you think, doesn’t it?
 
On May 17, the good people at my pro-bono client, Green America, sent out an e-mail alerting their membership to a false advertising lawsuit filed by Hilex PolySuperbag Operating Ltd. and Advance Polybag against ChicoBag.  The lawsuit charges ChicoBag with false advertising and unfair competition, stating that:

 


ChicoBag’s advertisements and promotions of its bags are false and misleading because its statements and implied messages concerning the alleged environmental impact of plastic bags are not correct, cannot be substantiated, and are likely to deceive customers.
***
ChicoBag is engaged in an advertising and promotional campaign in every market nationwide and online in which ChicoBag has made and continues to make false and misleading claims about the environmental impact of ChicoBag products and plastic bags

 


The suit alleges that ChicoBag’s marketing and advertising contains the following unsubstantiated claims:
 
Using [ChicoBag's] products will lessen your environmental impact.
Only one (1) percent of plastic bags are recycled.
Somewhere between 500 billion and a trillion plastic bags are consumed worldwide each year.
Single-use paper and plastic bags cause environmental damage.
A reusable bag needs only to be used eleven (11) times to have a lower environmental impact than using eleven (11) disposable bags.
The world’s largest landfill can be found floating between Hawaii and San Francisco and this ‘landfill’ is estimated to be twice the size of Texas and thousands of pounds of our discarded trash, mostly plastics.
Each year hundreds of thousands of sea birds and marine life die from ingestable [sic] plastics mistaken for food.
Plastic bags damage the natural environment.
 
In its Answer, ChicoBags generally denied that these claims cannot be substantiated and also asserts the affirmative defenses of free speech and opinion, among (9) others.

Sadly, this case seems to be about big industry players hoping to silence a small yet vocal company by litigating it out of existence.  Equally disappointing is the fact that this case takes the primary principle espoused in the FTC’s Green Guides — environmental claims must be substantiated — and uses it for evil.  The Green Guides are intended to prevent greenwashing, not to punish companies who provide access to information and cite articles and studies that industry calls into question.  As stated on plasticbaglaws.org:
 
"This lawsuit is intended to intimidate those involved with this movement just as it begins to gain national momentum . . . the plastic bag manufacturers probably picked South Carolina because it does not provide anti-bullying protection like California’s SLAPP statutes."
 
wrote about the Green Guides back in August and also published an article in Nevada Lawyer on the proposed revisions to them this past January.  I also will be discussing them before the Alameda County Bar Association next Thursday, May 26, as well as on a panel at Sustainable Brands on June 8, 2011.  The substantiation principle of the Green Guides is an important tool in preventing greenwashing, but here it seems to be used for exactly the opposite — to prevent the truth from being revealed.
 
Hopefully, ChicoBag has the resources to defend itself against the plastic bag companies (dare I say it?) bullying.  If it prevails, hopefully it will recover a significant attorneys fee award, though I doubt even that will be enough to dissuade the plastic bag manufacturers from using litigation as a means to silence their opponents.
 
Beware that everything you put in your marketing, advertising and promotional materials may be scrutinized for accuracy, be it an environmental claim or citation of a third party’s findings.  When in doubt, consult counsel first.

 


I have practiced intellectual property (IP) law exclusively for the past decade and handle trademark and copyright issues including identification/audits; clearance; registration; transfers; dispute resolution; and litigation. 

I am the Chief Pontificator at Brand Geek where IP… [Read more about Lara Pearson]