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"Seller Beware: How to Avoid Costly Mistakes in Product Labeling"


August 4, 2010, Red Bank - In today’s ever-competitive market, companies often try to attract consumers with claims that products have benefits extending beyond the traditional scope and purpose of the product. Cutting boards that have antimicrobial qualities; sneakers with antifungal treatments; or “green” paper products. But seller beware! The Federal Trade Commission (FTC) and the Environmental Protection Agency (EPA) are actively enforcing the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) and the FTC’s Guidelines for the Use of Environmental Marketing Claims (Green Guidelines). EPA recently announced that four companies, including one located in Lakewood, NJ, would each be paying fines in the range of $98,000 to $220,000 for making unsubstantiated public health claims in violation of FIFRA. The companies included not only the manufacturers who made the claims but also distributors of the products.

FIFRA requires that products containing pesticides be registered with the EPA if claims are made that the products control germs or pathogens. However, registration is not required if the product qualifies for the “Treated Articles Exemption”. This exemption applies where a pesticide is incorporated into a product for the purpose of protecting the product and is not intended to have a separate public health benefit. EPA does not recognize the Treated Articles Exemption where a company makes express or implied public health claims in marketing or sale of the product, such as statements that a product is “anti-bacterial” or will beneficially affect the public health. Companies must carefully market their products to avoid potentially costly enforcement actions by EPA.

Additionally, the FTC in cooperation with the EPA, has developed guidelines to be utilized to ensure that consumers are not misled by environmental marketing claims in advertising, including claims of recycled and renewable goods. The “Green Guidelines” are utilized by FTC in evaluating potentially fraudulent, deceptive and unfair business practices when enforcing the Federal Trade Commission Act.

It is important to consider compliance with these rules and guidelines to avoid potential pitfalls during due diligence or when making contractual representations, such as those found in loan documents or other transactional agreements, attesting that your company complies with all applicable laws. Furthermore, if you are selling a product or incorporating it into another product, such as home builder installing antimicrobial carpets or marketing a house as “green” home, compliance with FIFRA or the Green Guidelines should be evaluated prior to the commencement of any marketing or distribution campaigns.

Giordano Halleran & Ciesla is a multi-specialty law firm dedicated to providing sophisticated, complex legal services and solutions. This information is not to be construed as legal advice. If you have any questions or need assistance in assessing requirements of FIFRA or Green Guidelines with respect to your products, please contact either Steven M. Dalton (sdalton@ghclaw.com) or Melissa V. Skrocki (mskrocki@ghclaw.com) at 732-741-3900.
Tags: Steven M. Dalton, Melissa V. Skrocki, Environmental

Giordano, Halleran & Ciesla, P.C. | Red Bank, NJ | Trenton, NJ | Newark, NJ | New York, NY | www.ghclaw.com | 1-800-842-1LAW