SC Johnson recently announced that it has settled two separate putative class action lawsuits related to its “Greenlist” logo (a form of which can be seen by clicking here). According to a press release issued by the company, SC Johnson will stop using the logo in its current form on Windex® products, and the parties have agreed to an undisclosed settlement payment. The cases have been closely watched in recent years by advertisers interested in so-called “green” (environmentally-friendly) marketing, as they represented the first and most prominent cases in a wave of private enforcement actions related to green labeling claims.
In Case #1, Petlack v. S.C. Johnson, No. 08-cv-00820, plaintiff Howard Petlack filed suit in federal court in Wisconsin in September 2008, and asserted that the “Greenlist” label deceptively conveyed to consumers that Windex® and other SC Johnson products had “been subjected to a neutral, third party’s testing regime that had determined that Windex is environmentally friendly.” Furthermore, Petlack asserted that “greenlist” has become the generic name used by environmental groups for a list of environmentally sound products, programs or people. Petlack sought damages for himself and other similarly-situated consumers based on alleged violations of Wisconsin’s deceptive trade practices statute and unjust enrichment. Chief Judge Charles N. Clevert, Jr. denied a motion to dismiss in September, 2009.
In Case #2, Koh v. S.C. Johnson, Inc., Case No. 09-00927 RMW, filed in the U.S. District Court for the Northern District of California in March 2009, plaintiff Wayne Koh sued for violations of California’s statutory unfair competition laws, along with common-law fraud and unjust enrichment claims. Represented by the same counsel as Mr. Petlack, Mr. Koh similarly alleged that the company had “greenwashed” its Windex® and Shout® products. In particular, Koh alleged that the “Greenlist” label was deceptively designed to look like a third party seal of approval, and falsely represents to consumers that the products are environmentally friendly, in violation of the Federal Trade Commission (“FTC”) Green Guides. According to Koh’s Complaint, environmentally-conscious consumers will pay up to 50% more for green-labeled products. In January, 2010, Judge Whyte denied a motion to dismiss filed by S.C. Johnson, and declined to stay or transfer the case pending the outcome of the earlier-filed Petlack case.
Throughout both cases, SC Johnson generally denied all allegations of wrongdoing. (Interestingly enough, in its response to the Koh Complaint, SC Johnson claimed to not know the meaning of the term “greenwash”—specifically, it claimed that it “lacks knowledge or information sufficient to form a belief as the truth of plaintiff’s assertion regarding the use of the alleged term ‘Greenwash’ and, on that basis, denies the allegation.”) Not surprisingly then, in its recent press release, SC Johnson stated that despite the settlement the company continues to believe that the “Greenlist™ label met all applicable standards and regulations.” CEO Fisk Johnson admitted the company “could have been more transparent about what the logo signified.” Regardless, Johnson claimed that Greenlist “is such a fundamentally sound and excellent process we use to green our products, that we didn’t want consumers to be confused about it due to a logo on one product.” In particular, the company claimed in its press release that the Greenlist process had helped it make “numerous advances” since 2001, including “cut[ting] nearly 48 million pounds of VOCs” from its products in the last five years alone.
Although this settlement is presumably a relief to SC Johnson, it is nonetheless somewhat disappointing to advertisers who were hoping the cases would result in some additional, concrete guidance on the use of eco-labels. The FTC addressed green “certifications and seals of approval” in its proposed revisions to the Green Guides in October 2010, and has since taken action against Washington, D.C.-based Tested Green (see prior post), but there is little relevant case law. As such, most advertisers are choosing—at least for now—to tread cautiously when it comes to eco-labels.