ChicoBag Fends off False Advertising Suit

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.