A recent law review article in the Penn State Environmental Law Review, "Thinking Green or Scheming Green? How and Why the FTC Green Guide Revisions Should Address Corporate Claims of Environmental Sustainability," (permission to post received from the Author, the Law Review, and Westlaw) focuses renewed attention on whether the FTC has jurisdiction over corporate imaging advertising. The article assumes that the FTC’s green guides do not currently encompass general claims by corporations that their business practices are “environmentally friendly, socially responsible, and sustainable” and calls upon the agency to expand the reach of its Green Guides to cover such practices. As the law review article points out, many corporations want to be considered “green” not only to bolster their image, but also to remain competitive in their respective industries.
One of the key issues here is whether the First Amendment permits the FTC to pursue Section 5 cases against allegedly misleading corporate image advertising. Opinions on this issue are divided. FTC Commissioner Rosch, in a speech at the National Advertising Division’s annual law conference. expressed the view that whether the First Amendment protects corporate environmental image advertising poses “difficult constitutional issues.” He concluded that the first amendment “shield” is likely available to many corporate image environmental ads regardless of whether the “message” is true or false. However, he went on to say that he does not believe that all such ads are shielded, particularly those that may be “predominantly commercial in their purpose and effect.” He concluded that “the closer the image claims are associated with specific branded products…the less likely it is that the First Amendment provides absolute protection.”
The California Supreme Court in a 2002 case reached an arguably narrower conclusion about the scope of the First Amendment. In a challenge to an advertisement by Nike relating to working conditions in its overseas factories the California Supreme Court reversed the lower court and concluded that “because the messages in question were directed by a commercial speaker to a commercial audience, and because they made representations of fact about the speaker’s own business operations for the purpose of promoting sales of its products, . . . [the] messages are commercial speech.” [Nike v. Kasky 45 P.3d 243] The U.S. Supreme Court had an opportunity to review the Nike case and perhaps offer some more concrete guidance in this area but determined instead that certiorari had been improvidently granted.
So, making sure that your corporate image environmental advertising is accurate may just be a good business practice or it may be a smart legal practice as well.