ChicoBag Fends off False Advertising Suit

Posted by | September 13, 2011 | Disputes, General | 2 Comments
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Back in May, I wrote about a lawsuit filed by plastic bag makers Hilex Poly, Superbag and Advance Polybag against multi-use bag manufacturer ChicoBag.  The lawsuit alleges that ChicoBag engaged in false advertising and unfair competition by making certain claims on its website regarding multi-use bags and disposable plastic bags.  ChicoBag’s website had touted the benefits of multi-use bags and raised awareness of the harm resulting from use and disposal (or lack thereof, in terms of bag litter) of plastic bags.  The lawsuit felt like a bit like the Twilight Zone or What Happens When the Green Guides Go Awry to many in the CSR (corporate social responsibility) community.

It is the general opinion of those in the social enterprise community (including 25,000 petition signers) that this lawsuit was a SLAPP suit, something with which I was not familiar before I learned about this case.  SLAPP suits kinda resemble slapstick comedy in that both involve activities that exceed normal boundaries of common sense.  Sadly though, while slapstick is intended to entertain, SLAPP suits are intended to intimidate.

SLAPP is an acronym for Strategic Lawsuit Against Public Participation.  SLAPP suits are filed to silence criticism or quell opposition.  The case against ChicoBag was filed in January in South Carolina, which has no anti-SLAPP statute, no laws to specifically prohibit the bringing of such lawsuits.  SLAPP suits are similar to trademark bullying — about which I wrote frequently last April — in that they abuse the court system to bully defendants, though SLAPP suits typically involve claims of defamation (libel or slander), invasion of privacy, interference with contractual relations or negligent or intentional infliction of emotional distress.  Being a defendant in a SLAPP suit easily could result in emotional distress, but that condition generally has to be documented by a mental health professional in order to be actionable, so I doubt it could be a viable counterclaim.

Hilex Poly and ChicoBag litigated vigorously from the start.  As shown on the docket report, the complaint was amended twice and the parties engaged in expedited discovery during which each filed and opposed motions to compel.  As with trademark bullying, a substantial goal of SLAPP suits is to litigate the defendant out of existence — or at least into submission (silence) — by causing them to incur huge legal bills in defense of the action until they can no longer afford to fight back.

Happily, today my friends at my client Green America told me that ChicoBag issued a press release this morning announcing it settled the case with Hilex Poly, which was the only plastic bag manufacturer still pursuing the lawsuit.  As part of the settlement, both sides have amended or agreed to amend various claims made on their websites. ChicoBag also achieved a substantial victory for the whole planet by obtaining Hilex Poly’s agreement to communicate to consumers at several points of contact that they should “Tie Bag in Knot Before Disposal” in order to reduce plastic bag litter.  Both parties also agreed to provide citations and dates for all facts and statistics on any web page or other advertising, excluding product labels and hangtags.

As this case showed, while the Green Guides were designed for good, they can be used for evil.  Substantiate, substantiate, substantiate!  Did I mention substantiation?  It’s the only sure-fire way to stay out of trouble when making green claims.

 

 

 

 

 

 

About Lara

Lara Pearson is a trademark attorney with Exemplar, where she also serves as the firm's Sustainability Steward. Lara's legal practice focuses on trademark and copyright law, including: intellectual property audits; trademark search & clearance; trademark and copyright registration & maintenance; intellectual property transfers; transactional work; and dispute resolution, including litigation when necessary. Lara primarily represents other social enterprises -- those leveraging their businesses and brands as catalysts for positive social and environmental change. Such businesses engage in CSR (Corporate Social Responsibility) to have a positive "triple bottom line" of people, planet and profit. As Exemplar's Sustainability Steward, Lara works with others in her law firm to measure and reduce the firm's carbon emissions and encourage engagement in social responsibility initiatives, including pro bono legal work and volunteering. Lara is a proud member of the Social Venture Network. Brand Geek is a member of 1% for the Planet and a Certified B Corporation, whose Incline Village office is certified under the regional Keep the Sierra Green program. Exemplar Companies is the most innovative professional services firm in the New Economy. Our unique, diversified expertise spans the disciplines of corporate law, business advisory, and capital/investment banking to better meet the needs of our high-potential customers. We have assembled a comprehensive suite of service to meet the complex issues facing companies in today’s challenging business environment. Our unique, holistic approach ensures the growth and success – and greatly increases the competitive advantage - of our customers. The Exemplar team is comprised of knowledgeable, highly skilled experts in a wide range of industries and disciplines. They work closely with our customers to provide trusted advice, incomparable support, expert guidance and the ultimate competitive advantage as they accelerate their businesses and position themselves to transform industries.

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