Lawsuits Against Mobil Draw Attention to “Green” Marketing Summary

  • Last updated on November 10, 2022

When Mobil Corporation was sued for falsely claiming that its Hefty garbage bags were degradable, the lawsuits initiated a trend toward greater accountability in “green” marketing practices.

Summary of Event

The 1990’s may ultimately be designated as the environmental decade. In 1990, the second Earth Day Earth Day was celebrated by millions of people in the United States and abroad. The early years of the decade also heralded a coming-of-age for environmental groups and a growing recognition by business that the environment is important to most people. Polls conducted by respected organizations revealed not only that people were increasingly interested in and apprehensive about the state of the environment but also that a significant number were willing to put money behind their concerns. For example, a 1990 poll found that 78 percent of consumers were willing to pay 5 percent more for products that were environmentally safe. Marketing;green Mobil Corporation Lawsuits;Mobil Corporation Green marketing Hefty garbage bags Environmental awareness;marketing [kw]Lawsuits Against Mobil Draw Attention to “Green” Marketing (June 12, 1990) [kw]Mobil Draw Attention to “Green” Marketing, Lawsuits Against (June 12, 1990) [kw]"Green" Marketing, Lawsuits Against Mobil Draw Attention to (June 12, 1990) [kw]Marketing, Lawsuits Against Mobil Draw Attention to “Green” (June 12, 1990) Marketing;green Mobil Corporation Lawsuits;Mobil Corporation Green marketing Hefty garbage bags Environmental awareness;marketing [g]North America;June 12, 1990: Lawsuits Against Mobil Draw Attention to “Green” Marketing[07750] [g]United States;June 12, 1990: Lawsuits Against Mobil Draw Attention to “Green” Marketing[07750] [c]Laws, acts, and legal history;June 12, 1990: Lawsuits Against Mobil Draw Attention to “Green” Marketing[07750] [c]Marketing and advertising;June 12, 1990: Lawsuits Against Mobil Draw Attention to “Green” Marketing[07750] [c]Environmental issues;June 12, 1990: Lawsuits Against Mobil Draw Attention to “Green” Marketing[07750] Humphrey, Hubert H., III Steiger, Janet D.

Businesses in the United States were not far behind in recognizing the importance of being environmentally aware. They began expressing environmental concern in several important ways, not the least of which was the introduction of new or reshaped products that claim many environmentally responsible characteristics. In 1985, only 0.5 percent of new products introduced by business made environmental or “green” claims. By 1990, the figure had increased to more than 9 percent, and it was reported that in the first half of 1993, the proportion of new products making green claims had increased to nearly 13 percent.

Environmental claims came to be prominently displayed on many commonly purchased household products, such as laundry detergents, paper products, and lightbulbs. A careful look at the shelves of the local grocery store or supermarket, however, reveals differences between the environmental claims of the early 1990’s and later claims. After the early 1990’s, the packaging claim “Degradable upon exposure to the elements” was replaced by the more carefully worded “Degradable within a short period when disposed of in its customary manner.” The 1990 claim of “Recyclable” on a product was adjusted by the mid-1990’s to “Recyclable—Check to see if recycling facilities exist in your area.” The earlier claim “Ozone-friendly” was replaced by something like “This product is 95 percent less damaging to the ozone layer than past formulations that contained CFCs (chlorofluorocarbons).”

The continued increase in environmental, or green, claims on the part of manufacturers was the result of the sustained conclusion by business executives that what is good for the environment can be good for business. The greater precision in labeling that took place over time is attributable to increased government action on both the state and federal levels, supported by consumers, businesses, and environmental activist groups.

At the national level, the Federal Trade Commission Federal Trade Commission;advertising (FTC) is the principal agency charged with restraining deceptive advertising, and most states have deceptive-trade laws modeled after FTC guidelines. Although the agency was established in 1914, it was not until an amendment in 1938 that the FTC was charged with protecting consumers from deceptive advertising. The FTC did little with respect to environmental claims for products before the early 1990’s in part because of a lack of scientific agreement about what was bad for the environment and in part because of political circumstances. During the late 1970’s, a move toward deregulation of business in the United States was reflected by a noticeable cutback in rule making at the FTC. During the 1980’s, the deregulation atmosphere of the late 1970’s was heightened by the elections of Ronald Reagan Reagan, Ronald and George H. W. Bush Bush, George H. W. to the presidency. The arrival of these two Republican administrations dampened whatever enthusiasm employees of the FTC might have had for an active policy on environmental marketing assertions.

It was into this vacuum that a group of nine state attorneys general stepped when they formed the State Attorneys General Task Force State Attorneys General Task Force in late 1989. The task force, headed by Hubert H. Humphrey III (attorney general of Minnesota and son of the late senator and vice president), was created to study the trend toward increased green advertising, to learn the extent to which this advertising was deceptive, and to suggest appropriate policy for state and federal governments regarding such advertising.

Shortly after formation of the initial task force, ten states—California, Massachusetts, Minnesota, Missouri, New York, Texas, Utah, Washington, and Wisconsin (the original nine), plus Tennessee—issued the Green Report Green Report (1990) in 1990. This was followed by Green Report II, published in 1991, as the task force grew to include eleven attorneys general (the additional state was Florida). The 1990 Green Report offered an overview of the problem and guidelines for environmental marketing claims. In Green Report II, the task force made some changes in the original recommendations after conducting hearings for comments from industry, environmental groups, and consumers.

Media and public attention was drawn to the State Attorneys General Task Force when seven of the nine original members filed lawsuits in their states against Mobil Corporation on June 12, 1990. The suits challenged Mobil’s claim that its Hefty trash bag was degradable even if buried in a landfill. Plastics;degradability Controversy remains over what initiated the series of suits against one of the nation’s largest companies, but there is agreement about some facts. Mobil launched its restaged Hefty degradable product line in the summer of 1989 after being beaten to store shelves by its major competitor, First Brands, First Brands the manufacturer of Glad Bags. The introduction of the degradable Hefty bags represented a turnabout in company policy for Mobil, which had for some five years vigorously argued against the potential of degradability as an ecological cure for the plastics industry. This view was promulgated through symposia conducted around the country in the summer of 1988.

Essentially, Mobil took the same position as the U.S. Environmental Protection Agency Environmental Protection Agency (EPA), that the solution to the country’s problem with solid-waste disposal would best be found in source reduction, recycling, Recycling incineration, and selective landfilling rather than in degradability. Waste;management At one seminar held in Chicago in 1988, Robert Barrett, Barrett, Robert appointed as Mobil’s head of solid-waste management, declared that although degradable plastics would not solve the solid-waste problem, there was public relations value to marketing them. By the fall of 1988, Mobil responded to marketplace pressure and introduced a degradable product.

By 1990, however, there was growing awareness among environmentalist groups that manufacturers’ claims of degradability were not justifiable. In late 1989, the Environmental Defense Fund Environmental Defense Fund called for a consumer boycott of companies that were making degradability claims for their plastic products. Both Mobil and its principal competitor, First Brands, were on the boycott list. The FTC and the State Attorneys General Task Force asked both companies for substantiation of their claims. By March, 1990, Mobil voluntarily decided to remove all references to degradability from the Hefty packaging. Nevertheless, on June 12, 1990, seven suits against Mobil Corporation were brought by the attorneys general from California, Massachusetts, Minnesota, New York, Texas, Washington, and Wisconsin. The charge was deceptive advertising and consumer fraud concerning Mobil’s degradability claims for its Hefty product line.

Mobil settled with Texas later in June, and one year later, Mobil settled with the other states by agreeing to remove the offending claims from its packaging and paying each of the six states $25,000 as a donation to help develop national standards for environmental marketing. On February, 1, 1993, the FTC issued a decision and order notice to Mobil that, among other things, required the company to stop using claims of “degradability” or similar terms in marketing its plastic bags and prohibited the company from making any claims of environmental benefit when such bags are used to dispose of trash in a sanitary landfill.

Significance

The Mobil case coincided with the publication of the first Green Report, followed in less than one year by Green Report II and the issuance of the Federal Trade Commission’s “Guides for the Use of Environmental Marketing Claims” in July, 1992. The Mobil case helped to focus debate on the issue of environmental advertising by business. At issue was the ability of the unfettered marketplace to respond to the clear call by consumers for products that were less damaging to the environment.

Consumers wanted products that were not only environmentally safe but also priced competitively, with no loss of product quality. Initially, businesses were caught in a dilemma. They needed to respond to consumer demands in order to remain competitive, but the state of scientific understanding of the environmental impacts of many materials and products was debatable. The promise of degradability provided a case in point. Could plastic be altered in a way that would hasten its degradability when exposed to the elements? Mobil thought so and further believed that, once the degrading process started, it would continue even when the plastic was disposed of in a sanitized landfill. In the course of little more than one year, the conventional wisdom about the degradability of plastic changed radically.

By 1991, there was a consensus among manufacturers and retailers that a set of national guidelines should be issued under the auspices of the FTC. Business groups joined with the State Attorneys General Task Force in calling for issuance of voluntary guidelines. The problems faced and the issues raised were straightforward. There was the desire to reverse years of environmental neglect. Businesses, through their role as providers of goods and services to the consuming public, and motivated by profit, would modify their production processes to be more environmentally benign once consumers started paying attention to the environmental attributes of the goods and services bought. There existed a wide range of opinion about what was good and what was bad for the environment. For example, are disposable diapers more or less environmentally benign than cloth diapers, once the environmental costs of growing cotton and using energy to deliver and wash diapers are factored in? In the face of scientific uncertainty, the typical consumer is considered to be even less informed.

Lack of information leads to the problem that is created by the ability of a company to sway an uninformed consumer through advertising that is not deceitful but is misleading or irrelevant. The claim of recyclability is often misleading because most products or packages have another use. Most packaging is recyclable in some way, but the cost and labor involved may be prohibitive. In the first years of the 1990’s, some paper cups carried the packaging label “Contains no CFCs.” The claim was irrelevant, because chlorofluorocarbons are not used in the production of paper cups. Customers must be informed if they are to make appropriate choices. A further issue is the appropriate source of consumer information.

By the mid-1990’s, U.S. policy embraced a hybrid approach—both state and federal, both governmental and private—to consumer information. The FTC issued national voluntary guidelines for environmental claims about products. Generally less strict than those published in Green Report II, the FTC guides give broad limits, stating that claims should be “substantiated,” “clear,” and “not overstated.” The guidelines discuss eight commonly used environmental claims and their derivatives, such as “degradability,” “recyclable,” and “ozone safe,” and present numerous examples to illustrate the general principles as applied to specific cases. States have continued to enforce their particular statutes whether or not these conform to the FTC guides and those contained in Green Report II, but there has been a trend toward increased standardization.

Private organizations have made steps toward environmental certification. Some industrial associations and retail grocery store chains have attempted to develop their own programs for environmental evaluation and promotion. In addition to these industry-specific programs, a more encompassing approach has been taken by two nonprofit organizations operating in the United States. Green Seal, Green Seal started in 1990, awards a seal to products that meet the group’s standards for a number of environmental attributes. Companies awarded the seal pay a license fee based on the cost of certification and monitoring. Scientific Certification Systems Scientific Certification Systems (SCS) began operations by verifying manufacturers’ claims about single attributes, but since 1991 it has offered an environmental seal based on a product’s total environmental impact using a life-cycle analysis model.

Green marketing can have positive effects on the environment if consumers are provided with accurate and meaningful information. Since the beginning of this trend in marketing, observers have increasingly come to believe that such information will be reliably available only with national regulation of claims. More experience with the results of the hybrid approach to environmental claims is likely to initiate a new phase of marketing guidelines that will include greater emphasis on standard setting at the national level and enforcement at both state and federal levels of government, with private organizations playing a large role in the monitoring of environmental claims. Marketing;green Mobil Corporation Lawsuits;Mobil Corporation Green marketing Hefty garbage bags Environmental awareness;marketing

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Coddington, Walter. Environmental Marketing: Positive Strategies for Reaching the Green Consumer. New York: McGraw-Hill, 1993. One of the best resources available on the subject. Provides an account of environmental marketing from the perspective of protecting the environment for children. Chapter 4 presents an overview of national, state, and local environmental organizations. Includes informative appendixes.
  • citation-type="booksimple"

    xlink:type="simple">Lawrence, Jennifer. “The Green Revolution: Mobil.” Advertising Age 62 (January 29, 1991): 12-13. The article most often cited regarding the story of the 1990 lawsuit against Mobil for deceptive advertising. Emphasizes the circumstances that led to the suit and the surrounding controversy.
  • citation-type="booksimple"

    xlink:type="simple">Ludwig, Dean C., and Judith A. Ludwig. “The Regulation of Green Marketing: Learning Lessons from the Regulation of Health and Nutrition Claims.” Business and Professional Ethics Journal 11 (Fall, 1993): 73-91. Uses the nutritional marketing of food products in the 1980’s as a case study in green marketing. Analyzes regulatory responses of the FTC and the U.S. Food and Drug Administration during the 1980’s to suggest directions for regulatory action with respect to green marketing in the 1990’s.
  • citation-type="booksimple"

    xlink:type="simple">O’Reilly, James T. “Environmental Product Certification: The Legal Implications of Green Endorsements.” Journal of Environmental Law and Litigation 8 (1993): 199-220. Presents a good discussion of the pros and cons of relying on private environmental certification. Expresses pessimism about the long-term effectiveness of private certifiers.
  • citation-type="booksimple"

    xlink:type="simple">Ottman, Jacquelyn A. Green Marketing: Opportunity for Innovation. 2d ed. Lincolnwood, Ill.: NTC Business Books, 1998. Discusses practical options for green marketing and offers two case studies. Includes bibliography and index.
  • citation-type="booksimple"

    xlink:type="simple">Tarsney, Peter J. “Regulation of Environmental Marketing: Reassessing the Supreme Court’s Protection of Commercial Speech.” Notre Dame Law Review 69, no. 3 (1994): 533-574. Reviews the issue of First Amendment rights as applied to commercial speech and concludes that the Supreme Court in 1993 raised commercial speech to a level of protection that would likely make many state environmental laws unconstitutional. Devotes a special section to analysis of the California law.
  • citation-type="booksimple"

    xlink:type="simple">Wasik, John F. Green Marketing and Management: A Global Perspective. Malden, Mass.: Blackwell, 1996. Presents an enthusiastic view of green marketing’s profitability for business. Includes many examples of companies that balance corporate and environmentalist goals. Includes glossary, bibliography, and index.

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