United States: FTC Takes Plastic Lumber Manufacturers To The Wood Shed For Misleading Green Claims

Last Updated: July 22 2014

Article by Leonard L. Gordon and Michael S. Isselin*

While enjoying these lovely summer days, did you ever wonder how many milk jugs or detergent bottles went into making that "green" picnic table you're sitting at? You may now. The already peculiar concept of "plastic lumber" is further complicated when manufacturers make false statements about its contents. As new products emerge touting environmental attributes, the FTC continues to warn manufacturers, distributers, and marketers of environmentally-friendly products against misleading consumers as to how "green" the product is.

In two recent cases, the FTC took aim at a plastic lumber marketer and a manufacturer, both advertising and marketing products said to be made (almost) entirely of recycled plastics. Both companies have now settled with the FTC and are prohibited from making such misleading representations.

On Thursday, the FTC settled with Engineered Plastics Systems, LLC ("EPS"), a manufacturer, advertiser, and distributer of plastic lumber products such as picnic tables and benches. In its complaint, the FTC alleged that EPS's advertisements and marketing materials deceived consumers into believing the plastic lumber products were made entirely of recycled plastic. For example, the materials read "Made entirely of recycled plastic lumber" and "All recycled plastic design." According to the FTC, these representations would lead the average consumer to believe that the products were composed entirely of, or almost entirely of, recycled plastic, however, the FTC found that the products contained an average of only 72 percent recycled plastic. This deceptive and misleading conduct, in violation of the FTC Act, put EPS in hot water with the FTC.

Under the settlement, EPS is prohibited from making similar claims that deceive consumers, and EPS must ensure claims are true, not misleading, and substantiated by proper evidence before stating information about recycled contents or environmental benefits of a product (or packaging). Additionally, EPS may be required to provide scientific research to verify its claims, and must give evidence that the materials used were taken from the waste stream according to the FTC's "Green Guides for Environmental Marketing."

The EPS settlement came less than a month after the FTC settled a similar case with American Plastic Lumber, Inc. ("APL"). Like EPS, APL distributes plastic lumber products such as picnic tables, benches, and speed bumps. APL hit a speed bump of its own after the FTC alleged its advertising and marketing materials deceived consumers into believing the products were made of virtually all recycled plastic. In fact, APL's products averaged less than 79 percent of recycled plastic, and the FTC found no recycled content at all in nearly eight percent of APL's products.

Similar to EPS, the settlement prohibits APL from making false representations about the recycled content of its products unless it is true, not misleading, and is backed up with evidence. APL is also required to maintain and make advertisements and marketing materials with claims covered by the settlement available to the FTC for five years.

These cases confirm that Green Claims remain a priority at the FTC. As "green" products continue to hit the market, the FTC continues to enforce its "Green Guides" and pursue "green" claims through consent orders with the violating companies without providing consumer redress. To avoid deceptive pitfalls, companies advertising and marketing products with recycled content should carefully review the FTC's "Green Guides." Otherwise, you might end up in the FTC woodshed.

* Michael Isselin is a Venable summer associate and not admitted to practice law.

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