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FTC GREEN GUIDES: UPDATE & GREEN BUILDING MARKETING PRIMER 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

Del Percio 2011 Greenbuild Legal Forum Presentation - FTC Green Guides

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This presentation analyzes the recent changes to the FTC Green Guides in the context of marketing green buildings and real estate, using images of actual green building projects to suggest best practices for owners and operators.

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Page 1: 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

Page 2: Del Percio 2011 Greenbuild Legal Forum Presentation - FTC Green Guides

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

Page 3: Del Percio 2011 Greenbuild Legal Forum Presentation - FTC Green Guides

FTC GREEN GUIDES: UPDATE & GREEN BUILDING MARKETING PRIMER

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

Page 4: Del Percio 2011 Greenbuild Legal Forum Presentation - FTC Green Guides

FTC GREEN GUIDES: UPDATE & GREEN BUILDING MARKETING PRIMER

Proposed 2010 additions to the FTC Green Guides

- Carbon offsets

- Renewable energy claims

- Renewable materials claims

Page 5: Del Percio 2011 Greenbuild Legal Forum Presentation - FTC Green Guides

FTC GREEN GUIDES: UPDATE & GREEN BUILDING MARKETING PRIMER

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

Page 6: Del Percio 2011 Greenbuild Legal Forum Presentation - FTC Green Guides

FTC GREEN GUIDES: UPDATE & GREEN BUILDING MARKETING PRIMER

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

Page 7: Del Percio 2011 Greenbuild Legal Forum Presentation - FTC Green Guides

FTC GREEN GUIDES: UPDATE & GREEN BUILDING MARKETING PRIMER

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)

Page 8: Del Percio 2011 Greenbuild Legal Forum Presentation - FTC Green Guides

FTC GREEN GUIDES: UPDATE & GREEN BUILDING MARKETING PRIMER

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

Page 9: Del Percio 2011 Greenbuild Legal Forum Presentation - FTC Green Guides

FTC GREEN GUIDES: UPDATE & GREEN BUILDING MARKETING PRIMER

How does environmental marketing intersect with real estate?

Page 10: Del Percio 2011 Greenbuild Legal Forum Presentation - FTC Green Guides

FTC GREEN GUIDES: UPDATE & GREEN BUILDING MARKETING PRIMER

How does environmental marketing intersect with real estate?

Page 11: Del Percio 2011 Greenbuild Legal Forum Presentation - FTC Green Guides

FTC GREEN GUIDES: UPDATE & GREEN BUILDING MARKETING PRIMER

How does environmental marketing intersect with real estate?

Page 12: Del Percio 2011 Greenbuild Legal Forum Presentation - FTC Green Guides

FTC GREEN GUIDES: UPDATE & GREEN BUILDING MARKETING PRIMER

How does environmental marketing intersect with real estate?

Page 13: Del Percio 2011 Greenbuild Legal Forum Presentation - FTC Green Guides

FTC GREEN GUIDES: UPDATE & GREEN BUILDING MARKETING PRIMER

How does environmental marketing intersect with real estate?

Page 14: Del Percio 2011 Greenbuild Legal Forum Presentation - FTC Green Guides

FTC GREEN GUIDES: UPDATE & GREEN BUILDING MARKETING PRIMER

How does environmental marketing intersect with real estate?

Page 15: Del Percio 2011 Greenbuild Legal Forum Presentation - FTC Green Guides

FTC GREEN GUIDES: UPDATE & GREEN BUILDING MARKETING PRIMER

How does environmental marketing intersect with real estate?

Page 16: Del Percio 2011 Greenbuild Legal Forum Presentation - FTC Green Guides

FTC GREEN GUIDES: UPDATE & GREEN BUILDING MARKETING PRIMER

How does environmental marketing intersect with real estate?

Page 17: Del Percio 2011 Greenbuild Legal Forum Presentation - FTC Green Guides

FTC GREEN GUIDES: UPDATE & GREEN BUILDING MARKETING PRIMER

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

Page 18: Del Percio 2011 Greenbuild Legal Forum Presentation - FTC Green Guides

FTC GREEN GUIDES: UPDATE & GREEN BUILDING MARKETING PRIMER

Thank you!

Stephen Del [email protected]

www.greenrealestatelaw.com @StephenDP