1 00:00:03,160 --> 00:00:11,840 Speaker 1: This is Bloombird Law with June Brusso from Bloomberg Radio. Greetings, 2 00:00:11,880 --> 00:00:15,800 Speaker 1: Bill Ni, here today, I'm made of plastic, recycled plastic. 3 00:00:16,160 --> 00:00:19,400 Speaker 1: Bill Ny the Science Guy, teamed up with Coca Cola 4 00:00:19,480 --> 00:00:23,080 Speaker 1: to promote the company's World Without Waste campaign and it's 5 00:00:23,160 --> 00:00:26,440 Speaker 1: recycling efforts. So the good people at the Coca Cola 6 00:00:26,480 --> 00:00:31,040 Speaker 1: company are dedicating themselves to addressing our global plastic waste problem. 7 00:00:31,200 --> 00:00:34,200 Speaker 1: They know they have a responsibility to help solve this issue, 8 00:00:34,440 --> 00:00:38,800 Speaker 1: and their goal create a world without waste. They want 9 00:00:38,840 --> 00:00:42,280 Speaker 1: to turn every single plastic bottle of whatever you wanted 10 00:00:42,320 --> 00:00:45,560 Speaker 1: before into a new bottle of whatever you want now. 11 00:00:46,159 --> 00:00:50,320 Speaker 1: Some call foul because Coke has been consistently recognized as 12 00:00:50,360 --> 00:00:53,880 Speaker 1: one of the world's worst plastic polluters. But Coke is 13 00:00:53,920 --> 00:00:57,680 Speaker 1: just one of the companies accused of greenwashing or making 14 00:00:57,720 --> 00:01:01,600 Speaker 1: their products sound more environmental friendly than they really are. 15 00:01:02,080 --> 00:01:05,399 Speaker 1: And it's uncharted waters for the food and beverage industry 16 00:01:05,640 --> 00:01:08,760 Speaker 1: as it grapples with a flood of lawsuits over what 17 00:01:09,000 --> 00:01:12,920 Speaker 1: can and can't be said about their products. Climate impact 18 00:01:13,240 --> 00:01:17,240 Speaker 1: and mixed judicial opinions make the waters even murkier. Just 19 00:01:17,480 --> 00:01:21,919 Speaker 1: what does sustainable or recyclable mean joining me to answer 20 00:01:21,959 --> 00:01:26,200 Speaker 1: that question is environmental law expert Pat Parento, a professor 21 00:01:26,240 --> 00:01:29,320 Speaker 1: at the Vermont Law and Graduate School. Pat Coca Cola 22 00:01:29,360 --> 00:01:33,000 Speaker 1: has had courtroom wins in two cases, one in d 23 00:01:33,200 --> 00:01:37,400 Speaker 1: C and one in California, where judges found that Coke's 24 00:01:37,520 --> 00:01:42,800 Speaker 1: environmental statements weren't misleading to consumers. In the DC case, 25 00:01:42,920 --> 00:01:45,880 Speaker 1: the issue was with a tweet that said business and 26 00:01:45,959 --> 00:01:50,080 Speaker 1: sustainability are not separate stories for the Coca Cola company, 27 00:01:50,360 --> 00:01:53,560 Speaker 1: but different facets of the same story. How can you 28 00:01:53,600 --> 00:01:58,760 Speaker 1: sue on a statement like that which sounds so ambiguous. Yeah, 29 00:01:58,920 --> 00:02:02,920 Speaker 1: that's the aspiration sational argument, right, that we aspired to 30 00:02:03,040 --> 00:02:06,880 Speaker 1: be a company that is sustainable. But because we don't 31 00:02:06,920 --> 00:02:11,480 Speaker 1: have a definition in law of sustainability, it's really difficult 32 00:02:11,520 --> 00:02:15,079 Speaker 1: to win a lawsuit like that. The FTC guides are 33 00:02:15,160 --> 00:02:20,600 Speaker 1: the major source of definitions of green labeling, but they're 34 00:02:20,680 --> 00:02:23,720 Speaker 1: vague and they keep getting updated, and the Federal Trade 35 00:02:23,760 --> 00:02:27,799 Speaker 1: Commission is once again asking for public comments to upgrade 36 00:02:28,080 --> 00:02:31,800 Speaker 1: and update the guides once more and try to put 37 00:02:31,919 --> 00:02:38,160 Speaker 1: some definition to terms like sustainability and recyclability and recycled 38 00:02:38,240 --> 00:02:41,800 Speaker 1: content and carbon neutral and all the rest. Of the 39 00:02:42,440 --> 00:02:45,919 Speaker 1: advertising that's out there. But we in this country do 40 00:02:46,080 --> 00:02:50,440 Speaker 1: not have a standard that of rules that would be 41 00:02:50,560 --> 00:02:55,400 Speaker 1: enforceable in a court that really gives definition to these terms. 42 00:02:55,440 --> 00:02:58,720 Speaker 1: That's the basic problem. Yeah, And in the California suit, 43 00:02:58,919 --> 00:03:02,040 Speaker 1: the issue was claims on coke bottles. That's say the 44 00:03:02,080 --> 00:03:06,680 Speaker 1: product is recyclable when most bottles the plane disclaim en 45 00:03:06,680 --> 00:03:10,440 Speaker 1: didn't landfills or incinerators. But that doesn't mean it's not 46 00:03:10,440 --> 00:03:14,919 Speaker 1: a recyclable if you do recycle it, right, And that's 47 00:03:14,960 --> 00:03:18,600 Speaker 1: one thing the FTC can actually address if they're willing to, 48 00:03:19,000 --> 00:03:21,959 Speaker 1: and that is to say, if you're going to say 49 00:03:22,040 --> 00:03:26,399 Speaker 1: that your product is recyclable, you're gonna have to somehow 50 00:03:26,440 --> 00:03:28,880 Speaker 1: and this starts to get crowded on the label, right, 51 00:03:29,120 --> 00:03:32,320 Speaker 1: but you're gonna also have to say something about it 52 00:03:32,360 --> 00:03:38,360 Speaker 1: doesn't mean that this product will be recycled, okay, And 53 00:03:38,360 --> 00:03:40,760 Speaker 1: of course that kind of defeats the whole point of 54 00:03:40,800 --> 00:03:44,320 Speaker 1: the green advertising. If you have to disclaim what you've 55 00:03:44,400 --> 00:03:47,760 Speaker 1: just said, then you're not really gaining much in terms 56 00:03:47,800 --> 00:03:52,480 Speaker 1: of consumer approval. So it's the tricky, tricky issue to 57 00:03:52,600 --> 00:03:57,640 Speaker 1: figure out how much information can you communicate on the 58 00:03:57,760 --> 00:04:01,760 Speaker 1: label of your product. Or in the advertise before consumers 59 00:04:01,800 --> 00:04:05,480 Speaker 1: just get more confused, right, So it's tricky. Of course, 60 00:04:05,520 --> 00:04:07,640 Speaker 1: there are lots of cases where the judges have not 61 00:04:07,760 --> 00:04:12,400 Speaker 1: been so sympathetic to the companies. For example, Nestle's lost 62 00:04:12,400 --> 00:04:16,520 Speaker 1: emotion to dismiss a case about allegedly deceptive social and 63 00:04:16,680 --> 00:04:21,080 Speaker 1: environmental benefits on its hot Coco packaging. Do these decisions 64 00:04:21,160 --> 00:04:24,960 Speaker 1: depend on the consumer laws in each state? They do. Now, 65 00:04:25,320 --> 00:04:29,760 Speaker 1: if we had, you know, enforceable federal standards that were national, 66 00:04:30,120 --> 00:04:32,800 Speaker 1: that would change that. But right now, that's why you 67 00:04:32,839 --> 00:04:35,760 Speaker 1: see these cases being filed all over the country, every state. 68 00:04:36,080 --> 00:04:38,240 Speaker 1: Many of them are in the District of Columbia, which 69 00:04:38,279 --> 00:04:41,719 Speaker 1: is interesting, or California, which is not so surprising because 70 00:04:41,800 --> 00:04:45,880 Speaker 1: California has a reputation of being plaintive friendly in cases 71 00:04:45,920 --> 00:04:48,680 Speaker 1: like this. But yeah, it's state by state and that 72 00:04:48,800 --> 00:04:53,279 Speaker 1: gives rise to a patchwork of regulation and definition and 73 00:04:53,360 --> 00:04:56,240 Speaker 1: the companies you have to be aware that when they're 74 00:04:56,279 --> 00:04:59,120 Speaker 1: marketing their products in these different states, they've got to 75 00:04:59,160 --> 00:05:01,760 Speaker 1: know what the law as of those states are, and 76 00:05:01,760 --> 00:05:03,599 Speaker 1: of course they have to be worried about being sued 77 00:05:03,640 --> 00:05:07,400 Speaker 1: by the states themselves. All told, there's over twenty lawsuits 78 00:05:07,440 --> 00:05:11,800 Speaker 1: brought by attorneys general, mostly against the fossil fuel industry, 79 00:05:11,800 --> 00:05:14,720 Speaker 1: oil companies and so forth, but more and more they're 80 00:05:14,720 --> 00:05:18,560 Speaker 1: branching out to the plastics manufacturers, for example. So as 81 00:05:18,560 --> 00:05:21,520 Speaker 1: a manufacturer and a marketer, you have to be worried 82 00:05:21,560 --> 00:05:27,240 Speaker 1: about being sued by class action by consumers or shareholders, 83 00:05:27,279 --> 00:05:31,719 Speaker 1: being sued by attorneys general or eventually by the Federal 84 00:05:31,720 --> 00:05:35,360 Speaker 1: Trade Commission itself, and maybe even the Securities and Exchange Commission, 85 00:05:35,400 --> 00:05:38,880 Speaker 1: which is also developing its own set of rules, which 86 00:05:38,880 --> 00:05:41,279 Speaker 1: have been delayed and delayed and delayed. We're still waiting 87 00:05:41,320 --> 00:05:44,240 Speaker 1: for those, and those are trying to flesh out this 88 00:05:44,320 --> 00:05:47,960 Speaker 1: whole concept of e s g. Right environment, social governance, 89 00:05:48,360 --> 00:05:51,360 Speaker 1: and what kinds of claims that you're making on each 90 00:05:51,400 --> 00:05:55,640 Speaker 1: one of those elements that are either misleading or exaggerated 91 00:05:55,960 --> 00:05:58,960 Speaker 1: and so on. So we are really in an incredibly 92 00:05:59,120 --> 00:06:04,279 Speaker 1: dynamic area of combination of environmental law and consumer law. 93 00:06:04,839 --> 00:06:07,880 Speaker 1: What kind of standards are the judges using? Are they 94 00:06:07,960 --> 00:06:11,400 Speaker 1: different in each state? They do look to the FTC. 95 00:06:11,760 --> 00:06:15,160 Speaker 1: Green Guides. Some of the judges anyway, do look to those, 96 00:06:15,200 --> 00:06:17,760 Speaker 1: but as I said, they don't answer all the questions. 97 00:06:17,800 --> 00:06:21,880 Speaker 1: They for example, they don't define sustainability. Nobody has really 98 00:06:22,279 --> 00:06:26,680 Speaker 1: come up with a durable, sort of measurable definition of 99 00:06:26,800 --> 00:06:30,719 Speaker 1: what does that mean? What metrics do you use to 100 00:06:30,839 --> 00:06:36,000 Speaker 1: measure whether what your business plan is, whether it's sustainable 101 00:06:36,120 --> 00:06:38,600 Speaker 1: or not sustainable in terms of what in terms of 102 00:06:38,640 --> 00:06:43,960 Speaker 1: protecting biodiversity, in terms of protecting the climate, both of those, 103 00:06:44,120 --> 00:06:48,000 Speaker 1: and even more in terms of not containing any toxic 104 00:06:48,080 --> 00:06:52,640 Speaker 1: chemicals anywhere in the life cycle of the product, either 105 00:06:52,720 --> 00:06:57,120 Speaker 1: it's production, it's transportation as disposal. It really is a 106 00:06:57,400 --> 00:07:02,400 Speaker 1: fiendishly complicated matter to try to put definition that you 107 00:07:02,440 --> 00:07:05,360 Speaker 1: can take to court and say to the judge, this 108 00:07:05,440 --> 00:07:08,240 Speaker 1: is the line they crossed, your honor. Here's the bright 109 00:07:08,320 --> 00:07:12,240 Speaker 1: line that they crossed. And that's why these judges, I think, 110 00:07:12,280 --> 00:07:15,360 Speaker 1: are struggling to come up with that kind of yardstick, 111 00:07:15,440 --> 00:07:19,080 Speaker 1: that kind of measuring device. Is it worth it to 112 00:07:19,160 --> 00:07:24,120 Speaker 1: these companies to put these claims on their cans and bottles. 113 00:07:24,160 --> 00:07:27,400 Speaker 1: Probably not in some cases. I mean, they're seeking to 114 00:07:27,440 --> 00:07:30,600 Speaker 1: gain market advantage, obviously. And by the way, there's another 115 00:07:30,720 --> 00:07:34,400 Speaker 1: law that their competitors can use to sue them if 116 00:07:34,400 --> 00:07:37,560 Speaker 1: they're claiming that their product is cleaner or better or 117 00:07:37,600 --> 00:07:41,680 Speaker 1: more sustainable than somebody else's. So that's yet another aspect 118 00:07:41,680 --> 00:07:44,720 Speaker 1: of this issue, and that leads to litigation. But yeah, 119 00:07:44,800 --> 00:07:48,600 Speaker 1: I think in some cases in house lawyers probably need 120 00:07:48,680 --> 00:07:54,000 Speaker 1: to be more involved with the kinds of marketing claims 121 00:07:54,080 --> 00:07:59,120 Speaker 1: that companies are making and weighing is it worth the 122 00:07:59,240 --> 00:08:01,400 Speaker 1: risk of being sued, because as I have just said, 123 00:08:01,480 --> 00:08:03,880 Speaker 1: you can get suped from many different angles, and even 124 00:08:03,920 --> 00:08:06,600 Speaker 1: if you end up winning the case, you know, there's 125 00:08:06,640 --> 00:08:10,080 Speaker 1: some impact on companies just by the virtue of being sued, 126 00:08:10,320 --> 00:08:12,840 Speaker 1: let alone if they actually get a verdict against them. 127 00:08:13,040 --> 00:08:17,880 Speaker 1: So yeah, I think companies have to weigh the reputational 128 00:08:18,080 --> 00:08:21,160 Speaker 1: risk of stretching the truth, so to speak. Or but 129 00:08:21,200 --> 00:08:24,600 Speaker 1: we used to call this kind of activity puffery. You know, 130 00:08:24,880 --> 00:08:28,320 Speaker 1: companies were entitled to puff their product, best cup of 131 00:08:28,360 --> 00:08:31,480 Speaker 1: coffee in the world, kind of statements like that, right, 132 00:08:31,800 --> 00:08:35,559 Speaker 1: But nowadays you know you can't get away with making 133 00:08:35,679 --> 00:08:39,679 Speaker 1: bold claims like that and feel like there's no recourse 134 00:08:39,720 --> 00:08:42,880 Speaker 1: for anyone. Because there is recourse. They may not win 135 00:08:42,920 --> 00:08:45,800 Speaker 1: their lawsuit, but they can do damage to your brand 136 00:08:46,160 --> 00:08:50,720 Speaker 1: in the process. I also wonder someone who goes into 137 00:08:50,760 --> 00:08:54,439 Speaker 1: buy PEPSI, let's say they know what they want, are 138 00:08:54,480 --> 00:08:57,080 Speaker 1: they going to change their mind and buy coke because 139 00:08:57,080 --> 00:09:02,760 Speaker 1: it's bottle says it's recycle. The data suggest that gen 140 00:09:02,920 --> 00:09:09,160 Speaker 1: Z generation is more discerning when it comes to buying 141 00:09:09,559 --> 00:09:12,000 Speaker 1: eco friendly products, if we want to call them that 142 00:09:12,040 --> 00:09:15,439 Speaker 1: our services. I do think this generation, you know, I mean, 143 00:09:15,559 --> 00:09:18,079 Speaker 1: they can pick up all kinds of information off of 144 00:09:18,200 --> 00:09:20,679 Speaker 1: social media and regular media, right. I think there are 145 00:09:20,679 --> 00:09:23,000 Speaker 1: more alert to this, you know, these kinds of claims, 146 00:09:23,000 --> 00:09:27,760 Speaker 1: and they are looking for environmentally friendly products and services. 147 00:09:27,800 --> 00:09:31,200 Speaker 1: So that market, you know, is one that companies I think, 148 00:09:31,200 --> 00:09:34,559 Speaker 1: do have to pay attention to. Certainly in the fashion industry, 149 00:09:34,559 --> 00:09:37,760 Speaker 1: clothing industry and so forth, they do have to not 150 00:09:37,880 --> 00:09:42,520 Speaker 1: only market themselves appropriately, but actually be changing their methods 151 00:09:42,520 --> 00:09:45,720 Speaker 1: of production, their supply chains, if you will, to try 152 00:09:45,720 --> 00:09:48,959 Speaker 1: to green them up, try to become more environmentally responsible. 153 00:09:49,280 --> 00:09:52,120 Speaker 1: But in the end, if you're just thinking that you 154 00:09:52,160 --> 00:09:54,800 Speaker 1: can say whatever you want to say about your product 155 00:09:54,920 --> 00:09:57,959 Speaker 1: and not suffer any consequences, I think that day is over. 156 00:09:58,480 --> 00:10:02,760 Speaker 1: I mean, when does the ft see bring enforcement actions. 157 00:10:02,800 --> 00:10:06,800 Speaker 1: I read about the allegation that Walmart and Cole's falsely 158 00:10:06,920 --> 00:10:10,800 Speaker 1: marketed sheets, towels, and other textile products as being made 159 00:10:10,800 --> 00:10:14,000 Speaker 1: of eco friendly bamboo when they were actually made of rayon. 160 00:10:14,400 --> 00:10:16,600 Speaker 1: And then there was a two and a half million 161 00:10:16,640 --> 00:10:19,520 Speaker 1: dollar and three million dollars civil penalty. What does it 162 00:10:19,559 --> 00:10:22,840 Speaker 1: take to for the FTC to come in? Yeah, that's 163 00:10:22,840 --> 00:10:26,400 Speaker 1: that's their enforcement discretion. So they picked the cases obviously 164 00:10:26,760 --> 00:10:30,920 Speaker 1: they were they have the strongest facts and and uh, 165 00:10:31,160 --> 00:10:35,000 Speaker 1: you know the high probability of success they keep They 166 00:10:35,000 --> 00:10:38,360 Speaker 1: tracked on the FTC website, they track all their cases, 167 00:10:38,400 --> 00:10:40,400 Speaker 1: so you can go there and look at I'm looking 168 00:10:40,440 --> 00:10:42,360 Speaker 1: at it right now, and there's at least fifty I'm 169 00:10:42,400 --> 00:10:46,319 Speaker 1: looking at right here going back to two thousand, and 170 00:10:46,360 --> 00:10:52,320 Speaker 1: they're against big companies, Yeah, Benjamin Moore, Volkswagen, uh, Bed, 171 00:10:52,400 --> 00:10:57,240 Speaker 1: Bath and beyond, Nordstrom, j C. Penney, Cole's, Walmart. So 172 00:10:57,840 --> 00:11:00,720 Speaker 1: you know they're they're taken on some of the big 173 00:11:00,760 --> 00:11:04,880 Speaker 1: players in the marketplace and they are recovering million dollar 174 00:11:05,000 --> 00:11:10,320 Speaker 1: plus penalties. Um. But you know that that may represent 175 00:11:11,040 --> 00:11:13,280 Speaker 1: at the tip of the proverbial tip of the iceberg, 176 00:11:13,400 --> 00:11:16,400 Speaker 1: right in terms of how many cases can these f 177 00:11:16,840 --> 00:11:19,439 Speaker 1: can FTC actually bring. That's a function of how much 178 00:11:19,480 --> 00:11:23,120 Speaker 1: staff they have and how much you know, time and 179 00:11:23,160 --> 00:11:25,960 Speaker 1: money they can spend. It's kind of the same thing 180 00:11:26,000 --> 00:11:27,839 Speaker 1: with the I R s. You know, they have to 181 00:11:28,480 --> 00:11:32,240 Speaker 1: you know, target uh some cases to try to make 182 00:11:32,280 --> 00:11:35,520 Speaker 1: a point and send a message to the marketplace. But 183 00:11:35,559 --> 00:11:40,599 Speaker 1: they can't police every single instance where there might be misrepresentation. 184 00:11:40,720 --> 00:11:45,559 Speaker 1: But they can certainly beef up the number of enforcement 185 00:11:45,559 --> 00:11:49,679 Speaker 1: actions they take and the penalties that they see the laws. Uh. 186 00:11:49,679 --> 00:11:54,160 Speaker 1: You know, the Federal Trade Commission Act, it does include 187 00:11:54,679 --> 00:11:58,080 Speaker 1: you know, the potential force some significant penalties that can 188 00:11:58,120 --> 00:12:02,640 Speaker 1: even include unjust in Richmond, and profits you'll gotten gains, 189 00:12:02,760 --> 00:12:06,040 Speaker 1: I guess would be the term to use for that. Um. 190 00:12:06,080 --> 00:12:09,280 Speaker 1: So yeah, I mean, the federal government, if it wants 191 00:12:09,320 --> 00:12:12,480 Speaker 1: to take a stronger rule in these enforcement cases, can 192 00:12:12,559 --> 00:12:17,720 Speaker 1: probably begin to send the message to the marketplace louder 193 00:12:18,160 --> 00:12:21,960 Speaker 1: than these random class action cases. I mean, those always 194 00:12:22,000 --> 00:12:26,439 Speaker 1: depend on the quality of the evidence, um, the quality 195 00:12:26,440 --> 00:12:29,160 Speaker 1: of the lawyers, frankly, and how familiar they are with 196 00:12:29,360 --> 00:12:33,000 Speaker 1: mitigating these kinds of cases. UM. The judges that you 197 00:12:33,120 --> 00:12:38,319 Speaker 1: draw that are may be disposed towards uh one side 198 00:12:38,360 --> 00:12:40,120 Speaker 1: or the other in the case. You know, they may 199 00:12:40,160 --> 00:12:44,120 Speaker 1: be business friendly UH judges as opposed to consumer friend 200 00:12:44,160 --> 00:12:47,839 Speaker 1: There's there's so many variables. As we say, litigation is 201 00:12:47,880 --> 00:12:51,520 Speaker 1: a crapshoot, right, There's so many things that have to 202 00:12:51,559 --> 00:12:54,240 Speaker 1: go right in a case for you to win it 203 00:12:54,760 --> 00:12:57,959 Speaker 1: that you know you're going to see different results across 204 00:12:58,000 --> 00:13:01,160 Speaker 1: the country. For sure, is the are most of the 205 00:13:01,280 --> 00:13:08,559 Speaker 1: FTC cases not litigated at trial but settled? Yes, yeah, 206 00:13:08,600 --> 00:13:11,280 Speaker 1: that is clear. From the lineup of cases that I'm 207 00:13:11,360 --> 00:13:14,720 Speaker 1: looking at, almost every single one of these have resulted 208 00:13:14,760 --> 00:13:18,640 Speaker 1: in settlements. Um. And again, you know, companies don't want 209 00:13:18,679 --> 00:13:21,080 Speaker 1: to be in the news and they don't want to 210 00:13:21,120 --> 00:13:24,679 Speaker 1: be on somebody's you know, most wanted list or hit list. 211 00:13:24,840 --> 00:13:29,120 Speaker 1: So the inclination I think for companies when they certainly 212 00:13:29,120 --> 00:13:32,680 Speaker 1: when they're sued by the Federal Trade Commission, they're instinct 213 00:13:32,720 --> 00:13:35,880 Speaker 1: their lawyers are gonna say, let's get this over with 214 00:13:36,720 --> 00:13:40,920 Speaker 1: um sooner rather than later. Even even if we have defenses, 215 00:13:41,160 --> 00:13:44,760 Speaker 1: even if we have arguments. In the end, it's probably 216 00:13:44,800 --> 00:13:47,400 Speaker 1: better to get this thing behind us than it is 217 00:13:47,440 --> 00:13:50,560 Speaker 1: to keep fighting over it. Not every company's like that. 218 00:13:50,600 --> 00:13:53,120 Speaker 1: Excen is not like that. Excen is going to fight 219 00:13:53,200 --> 00:13:57,040 Speaker 1: to the death. But my Volkswagen, come on, they don't. 220 00:13:57,080 --> 00:14:00,520 Speaker 1: They don't want to be you know, written up as 221 00:14:00,559 --> 00:14:05,240 Speaker 1: a company that's dishonest they've already got enough problems with that. 222 00:14:05,520 --> 00:14:09,400 Speaker 1: Has the FTC updated the rules and they're out for 223 00:14:09,640 --> 00:14:14,480 Speaker 1: now for comment? Uh, they're they're they're in the process 224 00:14:14,640 --> 00:14:19,960 Speaker 1: of requesting comment to make yet another update. I think 225 00:14:20,000 --> 00:14:23,880 Speaker 1: they've had they started in and I know they've had 226 00:14:23,920 --> 00:14:28,400 Speaker 1: at least four different versions since then. So we're talking 227 00:14:28,400 --> 00:14:32,480 Speaker 1: about something like the fifth iteration um of these guides. 228 00:14:32,520 --> 00:14:35,320 Speaker 1: And and by the way, these are not rules. Okay, 229 00:14:35,360 --> 00:14:38,240 Speaker 1: so the FTC can use these if it wants to 230 00:14:38,320 --> 00:14:42,880 Speaker 1: bring an enforcement action, but it still has to prove um, 231 00:14:42,920 --> 00:14:46,840 Speaker 1: you know, the merits of the false advertising. Let's say 232 00:14:47,400 --> 00:14:50,360 Speaker 1: that's that's an issue. So the guides are not like 233 00:14:50,880 --> 00:14:54,200 Speaker 1: they don't have the force of law by themselves. Um, 234 00:14:54,240 --> 00:14:58,160 Speaker 1: you could turn those guides into rules. You could even 235 00:14:58,240 --> 00:15:02,840 Speaker 1: give citizens the right to enforce those rules. Um. And 236 00:15:02,840 --> 00:15:05,360 Speaker 1: and that would be taking it up yet another level 237 00:15:05,920 --> 00:15:12,360 Speaker 1: of enforcement. Do they do those rules define sustainability compost ability, 238 00:15:12,680 --> 00:15:17,480 Speaker 1: Know that they've asked for comments on both of those items, yeah, 239 00:15:17,600 --> 00:15:22,640 Speaker 1: and recyclable what more? Uh? You know, should we say 240 00:15:22,760 --> 00:15:27,440 Speaker 1: in the guides that companies must disclose and explain? And 241 00:15:27,640 --> 00:15:31,080 Speaker 1: you know it gets down to things like, don't put 242 00:15:31,120 --> 00:15:34,480 Speaker 1: all these disclaimers in the fine print on the back 243 00:15:34,520 --> 00:15:36,760 Speaker 1: of the label or the back of the bottle, right, 244 00:15:37,000 --> 00:15:40,360 Speaker 1: don't stay on the front of the bible of bottle. Um. 245 00:15:40,400 --> 00:15:43,160 Speaker 1: You know this is uh, you know, pure ingredients, and 246 00:15:43,240 --> 00:15:45,360 Speaker 1: then on the back say ah, well we didn't really 247 00:15:45,400 --> 00:15:48,960 Speaker 1: mean that, not purely, you know pure. So there you 248 00:15:49,000 --> 00:15:52,280 Speaker 1: know that's what I mean. You you're talking about the design, 249 00:15:53,120 --> 00:15:58,240 Speaker 1: the front sive of of what you're putting on your labels, 250 00:15:58,360 --> 00:16:00,600 Speaker 1: and at some point you just run out of space. 251 00:16:01,200 --> 00:16:03,800 Speaker 1: Um and in any case, you run out of people's patients. 252 00:16:04,360 --> 00:16:06,880 Speaker 1: You know in reading it. Now you can use bar codes, 253 00:16:07,440 --> 00:16:10,120 Speaker 1: I guess you know. That's another device that at least 254 00:16:10,160 --> 00:16:13,440 Speaker 1: I've read about where you know, and I've even talked 255 00:16:13,440 --> 00:16:15,680 Speaker 1: to some of my students who do this. You know, 256 00:16:15,760 --> 00:16:19,240 Speaker 1: you can turn if you have the right QR code, 257 00:16:19,880 --> 00:16:22,960 Speaker 1: you can you can you can scan a bar code 258 00:16:23,040 --> 00:16:26,480 Speaker 1: on a product you're looking at and find out it's 259 00:16:26,520 --> 00:16:29,240 Speaker 1: it's a sort of genealogy, if you will, where did 260 00:16:29,280 --> 00:16:33,120 Speaker 1: it come from? If they say that it's responsibly sourced 261 00:16:33,400 --> 00:16:39,640 Speaker 1: palm oil, well there's there's apparently there's devices and programs 262 00:16:39,680 --> 00:16:42,320 Speaker 1: out there that can double check that. Or if they 263 00:16:42,320 --> 00:16:46,880 Speaker 1: say it's been certified by you know, some independent uh 264 00:16:47,000 --> 00:16:51,560 Speaker 1: certifier of products. You can go to that certific certification 265 00:16:52,040 --> 00:16:55,240 Speaker 1: source and find out whether that's true. Now, how many 266 00:16:55,360 --> 00:16:57,480 Speaker 1: consumers are going to be willing to go to that 267 00:16:57,600 --> 00:17:02,000 Speaker 1: much trouble, I don't know, but I know that with 268 00:17:02,120 --> 00:17:05,320 Speaker 1: our technology, we're getting to the point where you can 269 00:17:05,359 --> 00:17:07,720 Speaker 1: find out a whole lot more about products than we 270 00:17:07,800 --> 00:17:10,960 Speaker 1: ever used to if you want to. Yeah to Lena Khn. 271 00:17:11,240 --> 00:17:13,840 Speaker 1: It struck me that the head of the FDC, Lena Khn, 272 00:17:13,920 --> 00:17:17,160 Speaker 1: said that consumers have almost no way of knowing if 273 00:17:17,200 --> 00:17:21,720 Speaker 1: they're being fed misleading climate assertions. For consumers, she said, 274 00:17:21,840 --> 00:17:26,239 Speaker 1: it's really impossible to be verifying these claims. Yes, so 275 00:17:26,320 --> 00:17:29,600 Speaker 1: you do have to rely on these third party verification. 276 00:17:30,119 --> 00:17:32,639 Speaker 1: And this is really true for carbon off sets. You know, 277 00:17:32,960 --> 00:17:36,680 Speaker 1: there's all kinds of different now protocols and standards for 278 00:17:37,080 --> 00:17:40,879 Speaker 1: if you're going to claim carbon zero, net zero carbon 279 00:17:40,920 --> 00:17:45,119 Speaker 1: and so forth, carbon neutrality, um, and you're doing that 280 00:17:45,240 --> 00:17:48,919 Speaker 1: because you're buying offsets, then the question is who's certifying 281 00:17:49,240 --> 00:17:53,880 Speaker 1: certifying that those offsets are legitimate? And there's a bunch 282 00:17:53,880 --> 00:17:58,240 Speaker 1: of different entities out there claiming to be doing this 283 00:17:58,320 --> 00:18:00,560 Speaker 1: certification but then you have to ask, well, who are 284 00:18:00,560 --> 00:18:03,720 Speaker 1: they right and where are they getting their money uh 285 00:18:03,720 --> 00:18:07,480 Speaker 1: to do this certification? And is it valid? So consumers 286 00:18:07,520 --> 00:18:11,280 Speaker 1: can't independently certify this stuff, we are going to be 287 00:18:11,359 --> 00:18:18,159 Speaker 1: increasingly relying on third party certification. But who's certifying the certifier? 288 00:18:18,280 --> 00:18:21,280 Speaker 1: That's that's what that becomes. Yeah, well, I'm sure we're 289 00:18:21,280 --> 00:18:23,959 Speaker 1: going to see a lot more of these types of 290 00:18:24,080 --> 00:18:27,480 Speaker 1: lawsuits going forward. Thanks so much, Pat, I always appreciate 291 00:18:27,520 --> 00:18:31,000 Speaker 1: your coming on the show. Thanks Pat. That's Pat Parento, 292 00:18:31,119 --> 00:18:39,119 Speaker 1: a professor at the Vermont Law and Graduate School. Some 293 00:18:39,280 --> 00:18:43,359 Speaker 1: hacker are I sitting off financial markets, four major banks, 294 00:18:43,800 --> 00:18:47,000 Speaker 1: and that's just what we know about. If we want 295 00:18:47,000 --> 00:18:49,960 Speaker 1: clues to the hacker's identity, we need men named Hathaway. 296 00:18:50,880 --> 00:18:53,960 Speaker 1: Let me know about this guy. He's convicting hacker serving 297 00:18:54,000 --> 00:18:57,760 Speaker 1: fifteen years genius coda. There are so many movies like 298 00:18:57,840 --> 00:19:01,800 Speaker 1: Black Cat where a genius hacker breaks into computer systems 299 00:19:01,840 --> 00:19:05,560 Speaker 1: that everyone thought were absolutely secure. But in real life, 300 00:19:05,920 --> 00:19:10,200 Speaker 1: sometimes it doesn't even take a hacker to steal sensitive information. 301 00:19:10,600 --> 00:19:14,639 Speaker 1: Case in point, the international law firm Proscauer Rose is 302 00:19:14,680 --> 00:19:18,360 Speaker 1: suing its former chief operating officer for swiping more than 303 00:19:18,440 --> 00:19:22,879 Speaker 1: thirty four gigabytes of sensitive information. In the lawsuit, Prostcauer 304 00:19:23,000 --> 00:19:28,000 Speaker 1: alleges that Jonathan O'Brien downloaded confidential documents onto a thumb 305 00:19:28,119 --> 00:19:32,399 Speaker 1: drive after tricking a tech employee into letting him bypass 306 00:19:32,520 --> 00:19:37,520 Speaker 1: the firm's internal security controls. O'Brien denied the charges through 307 00:19:37,560 --> 00:19:41,240 Speaker 1: his attorney joining me. His attorney, Jeff Lewis of Jeff 308 00:19:41,320 --> 00:19:44,840 Speaker 1: Lewis Law. Proscauer, which is nearing it's a hundred and 309 00:19:44,840 --> 00:19:49,560 Speaker 1: fifty anniversary, said the firm is unaware of any employee, 310 00:19:49,880 --> 00:19:53,879 Speaker 1: much less an officer ever acting in such a corrupt, debased, 311 00:19:53,960 --> 00:19:57,600 Speaker 1: and illegal manner. Have you heard of anything like this 312 00:19:57,840 --> 00:20:01,720 Speaker 1: at any other law firm. Oh, I've handled trade secrets 313 00:20:01,800 --> 00:20:05,159 Speaker 1: litigation cases, not in the law firm context where this 314 00:20:05,280 --> 00:20:08,320 Speaker 1: kind of thing happened to scruntled employee goes to work 315 00:20:08,359 --> 00:20:11,400 Speaker 1: for a competitor. But I've never read such a high 316 00:20:11,520 --> 00:20:14,800 Speaker 1: level employee of a big law offer doing this. In 317 00:20:14,960 --> 00:20:20,480 Speaker 1: the complaint, Proscauer calls him a crafty plotter. O'Brien allegedly 318 00:20:20,560 --> 00:20:26,080 Speaker 1: pilford electronic files relating to Proscauer financials, practice information and 319 00:20:26,280 --> 00:20:30,240 Speaker 1: billing rates. From your look at it has he allegedly 320 00:20:30,320 --> 00:20:34,480 Speaker 1: taken information that's very important to the firm. That would 321 00:20:34,520 --> 00:20:39,000 Speaker 1: be something considered like trade secrets. Absolutely, it's one thing 322 00:20:39,080 --> 00:20:41,800 Speaker 1: for an employee to leave one firm and work for another. 323 00:20:42,320 --> 00:20:45,840 Speaker 1: Things that reside in an employee's head stay in his head, 324 00:20:46,119 --> 00:20:48,720 Speaker 1: and that's not a protectable trade secret. But when you 325 00:20:48,760 --> 00:20:52,119 Speaker 1: take a thumb drive and you bypass security and you 326 00:20:52,280 --> 00:20:58,120 Speaker 1: download compensation of various partners or how various practice areas 327 00:20:58,320 --> 00:21:02,119 Speaker 1: are doing within a firm, you're giving a playbook to 328 00:21:02,200 --> 00:21:06,040 Speaker 1: a competitor who could use that to strategize how to 329 00:21:06,119 --> 00:21:10,600 Speaker 1: pick off or take practice areas clients or partners or 330 00:21:10,640 --> 00:21:13,280 Speaker 1: associates from a competing law offer. The firm said that 331 00:21:13,320 --> 00:21:17,760 Speaker 1: its computer systems are program to prevent copying information onto 332 00:21:17,760 --> 00:21:22,159 Speaker 1: removable drives like the USB drive that allegedly O'Brien used, 333 00:21:22,640 --> 00:21:27,200 Speaker 1: and that O'Brien allegedly trick to technology employee into letting 334 00:21:27,240 --> 00:21:29,879 Speaker 1: him copy the data by saying it had been requested 335 00:21:29,920 --> 00:21:33,600 Speaker 1: by an outside consultant, and in an affidavit at one 336 00:21:33,680 --> 00:21:36,959 Speaker 1: from the director of technical support, he said, because of 337 00:21:37,240 --> 00:21:41,880 Speaker 1: O'Brien's status as the firm CEO, we treated his request 338 00:21:41,960 --> 00:21:45,520 Speaker 1: to copy files to a USB drive as fully authorized. 339 00:21:45,560 --> 00:21:49,040 Speaker 1: It didn't require a review by anyone else. I can 340 00:21:49,080 --> 00:21:51,199 Speaker 1: tell you this much. From this point forward, I imagine 341 00:21:51,200 --> 00:21:53,800 Speaker 1: big law firms and other big companies that are outside 342 00:21:53,800 --> 00:21:57,119 Speaker 1: the law firm context will not allow I T officials 343 00:21:57,240 --> 00:22:00,920 Speaker 1: to accept one person, even an officer, his word that 344 00:22:01,000 --> 00:22:04,639 Speaker 1: a security measures got the over ridden. One thing that 345 00:22:04,680 --> 00:22:07,879 Speaker 1: I found interesting there's a suggestion there are an accusation 346 00:22:08,200 --> 00:22:11,840 Speaker 1: that he lifted a litigation hold and caused thousands of 347 00:22:11,840 --> 00:22:15,240 Speaker 1: his emails to be deleted, and if true, there may 348 00:22:15,240 --> 00:22:20,040 Speaker 1: be some loss there of client related data. So forgetting 349 00:22:20,080 --> 00:22:21,960 Speaker 1: what he put in his pocket in terms of what 350 00:22:22,119 --> 00:22:25,240 Speaker 1: the firm lost access to, there's a lot of the 351 00:22:25,280 --> 00:22:28,960 Speaker 1: emails with pending litigation that will never see the light 352 00:22:29,000 --> 00:22:31,800 Speaker 1: of day because of what this guy did. He denied 353 00:22:31,840 --> 00:22:35,600 Speaker 1: the allegations through his attorney. His lawyer said, as you 354 00:22:35,640 --> 00:22:39,159 Speaker 1: can imagine, Mr O'Brien has a very different perspective on 355 00:22:39,200 --> 00:22:42,120 Speaker 1: the case and is eager to tell his story, which 356 00:22:42,160 --> 00:22:46,680 Speaker 1: will provide the truth of what actually happened. And I'm wondering, 357 00:22:47,160 --> 00:22:50,280 Speaker 1: you know, if someone has that information, what kind of 358 00:22:50,320 --> 00:22:55,200 Speaker 1: excuse could there be. Yeah, that's a great question. So 359 00:22:55,320 --> 00:22:58,600 Speaker 1: if the allegations are to be believed that he not 360 00:22:58,680 --> 00:23:03,399 Speaker 1: only took data, but took a proprietary software that the 361 00:23:03,440 --> 00:23:07,080 Speaker 1: firm has spent money developing. I can't imagine any spin 362 00:23:07,280 --> 00:23:11,800 Speaker 1: or explanation that would authorize an employee to take firm 363 00:23:11,880 --> 00:23:15,639 Speaker 1: software with them. The data, you know, he might claim 364 00:23:15,680 --> 00:23:18,080 Speaker 1: that some of it was his work product, that's it's 365 00:23:18,520 --> 00:23:21,520 Speaker 1: documents that he created and he was entitled to take, 366 00:23:21,880 --> 00:23:23,800 Speaker 1: you know, there's a way to spin that. But the 367 00:23:23,920 --> 00:23:27,040 Speaker 1: software and the data, and as I indicate earlier, the 368 00:23:27,160 --> 00:23:31,200 Speaker 1: deletion of thousands of emails, there's no explanation that will 369 00:23:31,240 --> 00:23:34,399 Speaker 1: be good enough to explain that away. So if someone 370 00:23:34,480 --> 00:23:37,480 Speaker 1: has information like that, let's not talk about this case, 371 00:23:37,520 --> 00:23:40,840 Speaker 1: but just in general, if someone has information like that, 372 00:23:40,840 --> 00:23:43,600 Speaker 1: that would be helpful to work at a competing firm 373 00:23:43,920 --> 00:23:46,760 Speaker 1: to give them that information. Yeah, if you think you 374 00:23:46,800 --> 00:23:49,800 Speaker 1: know right now, it's a tough time to hire associate lawyers, 375 00:23:49,800 --> 00:23:53,159 Speaker 1: all right, is the employees market, in my opinion, And 376 00:23:53,200 --> 00:23:57,840 Speaker 1: if employers want to make enticing um offers to employees 377 00:23:58,119 --> 00:23:59,800 Speaker 1: and they already know whether they're going to be paid 378 00:23:59,880 --> 00:24:02,120 Speaker 1: or what the bonus structure is at a competing firm, 379 00:24:02,480 --> 00:24:05,240 Speaker 1: they can tailor, who they're going to make offers to, 380 00:24:05,359 --> 00:24:07,240 Speaker 1: and what those offers will be in higher away the 381 00:24:07,280 --> 00:24:11,320 Speaker 1: best talent in the complaint, proscower allegence O'Brien's conduct was 382 00:24:11,400 --> 00:24:15,679 Speaker 1: so brazen and malicious that it rises to criminal law violation. 383 00:24:16,080 --> 00:24:18,480 Speaker 1: Let's say someone is guilty of doing what he did. 384 00:24:18,680 --> 00:24:21,840 Speaker 1: Is that a criminal violation as well would be you know, 385 00:24:22,040 --> 00:24:27,720 Speaker 1: misasing your authority to take valuable InformATE and uh, there's 386 00:24:27,760 --> 00:24:31,960 Speaker 1: computer hacking laws that this vale this violates. And in addition, 387 00:24:32,800 --> 00:24:36,680 Speaker 1: it's marceny or embezzlement. Takes such valuable things that could 388 00:24:36,680 --> 00:24:39,920 Speaker 1: be taken and given to a competitor. There there's a 389 00:24:40,000 --> 00:24:43,080 Speaker 1: number of crimes that could be charged here. Jeff would 390 00:24:43,119 --> 00:24:47,280 Speaker 1: have taken independent investigation by the Manhattan District Attorney's office 391 00:24:47,359 --> 00:24:50,399 Speaker 1: to bring any criminal charges in this case. Yeah, And in 392 00:24:50,359 --> 00:24:52,800 Speaker 1: in my experience, most of the time, when the d 393 00:24:52,840 --> 00:24:57,080 Speaker 1: A sees that a civil lawsuit has already been filed, 394 00:24:57,440 --> 00:25:01,600 Speaker 1: they're not likely to jump in and also see criminal charges. 395 00:25:02,000 --> 00:25:05,000 Speaker 1: It's not a high priority for d a's offices in 396 00:25:05,359 --> 00:25:10,280 Speaker 1: my experience. Prostcauer is this billion dollar law firm, and 397 00:25:10,720 --> 00:25:12,640 Speaker 1: you know, it's got a great name and what kind 398 00:25:12,640 --> 00:25:15,200 Speaker 1: of a hit could it take to its reputation from 399 00:25:15,240 --> 00:25:18,320 Speaker 1: something like this. Well, think about this. If you're a 400 00:25:18,400 --> 00:25:21,760 Speaker 1: client in your rely on this law firm to protect 401 00:25:21,800 --> 00:25:24,199 Speaker 1: your secrets. If they can't keep their own house in 402 00:25:24,320 --> 00:25:27,760 Speaker 1: order and keep their own secret secret and one major 403 00:25:27,880 --> 00:25:32,000 Speaker 1: security measure can be overturned with one person directive to 404 00:25:32,040 --> 00:25:35,760 Speaker 1: an I T person, clients might become doubtful that firm's 405 00:25:35,760 --> 00:25:39,879 Speaker 1: ability to safeguard client data, and employees and partners of 406 00:25:39,920 --> 00:25:44,320 Speaker 1: that firm may have concerns about the leadership and security 407 00:25:44,359 --> 00:25:46,640 Speaker 1: of their files and whether or not their houses being 408 00:25:46,720 --> 00:25:51,119 Speaker 1: on an appropriate fashion. Thanks Jeff. That's Jeff Lewis, and 409 00:25:51,160 --> 00:25:53,280 Speaker 1: that's it for this edition of The Bloomberg Law Show. 410 00:25:53,640 --> 00:25:56,120 Speaker 1: Remember you can always get the latest legal news, honor 411 00:25:56,160 --> 00:25:59,680 Speaker 1: Bloomberg Law Podcast. You can find them on Apple Podcasts 412 00:25:59,760 --> 00:26:03,520 Speaker 1: by f I and at www dot Bloomberg dot com, 413 00:26:03,600 --> 00:26:06,960 Speaker 1: slash podcast, Slash Law, and remember to tune into The 414 00:26:06,960 --> 00:26:10,320 Speaker 1: Bloomberg Law Show every week night at ten pm Wall 415 00:26:10,359 --> 00:26:14,240 Speaker 1: Street Time. I'm June Grosso, and you're listening to Bloomberg