Greenwashing Class Actions Forge Ahead in Court
As companies continue to face pressure to make Environmental, Social and Governance (ESG) disclosures and to market themselves as environmentally sustainable, class action lawsuits for so-called “greenwashing” will continue to make their way through the courts in 2023, with potentially significant decisions on class certification and the merits of these claims expected in the coming year. Among the cases to keep an eye on are:
- Woolard v. Reynolds Consumer Prods., Inc., et al., No. 22-CV-1684 (S.D. Cal.): This is a putative nationwide class action lawsuit against the manufacturer of Hefty trash bags for allegedly misrepresenting that its “Recycling” trash bags are recyclable. According to the complaint, Hefty “Recycling” trash bags are made from low-density polyethylene and are not in fact recyclable. Instead, the complaint alleges, “the bags and all of the otherwise recyclable items within them are not delivered to a recycling facility but are treated as regular solid waste materials,” finding their way to landfills or incinerators.
- Dorris v. Danone Waters of America, No. 7:22-cv-08717 (S.D.N.Y.): In this case, the manufacturer and seller of Evian Natural Spring Water has been targeted for making the allegedly false and misleading representation that its water bottles are “carbon neutral” and charging a price premium based on this representation. Seeking class certification on behalf of all persons nationwide who purchased the water bottles at issue, the plaintiff alleges that the product causes carbon dioxide to be released into the atmosphere, making the “carbon neutral” claim not true. The complaint further alleges that even if the defendant relied on carbon offsets in making its claim of carbon neutrality, “that too would be false and misleading, as experts note carbon offsets are ‘awash with challenges, fuzzy math and tough-to-prove claims….’ ”
The plaintiffs in these cases will be pursuing their greenwashing claims in the face of a recent defeat, albeit in a state court case that the federal courts may or may not embrace. In Earth Island Institute v. The Coca-Cola Co., No. 2021 CA 001846 B (D.C. Super. Ct. Nov. 10, 2022), a Washington D.C. trial court rejected a non-profit organization’s claims that statements made on Coca-Cola’s website and on social media were false and deceptive. The court found that neither the company’s general statements about sustainability, nor its more specific statements espousing its recycling goals, were sufficient to support a valid consumer fraud claim under D.C. consumer protection laws. According to the court, the statements at issue were “aspirational, limited and vague,” and nothing in the law “prohibits an entity from cultivating an image” or branding itself.
Although the analysis can at times be nuanced, there is likely a meaningful distinction between the aspirational, forward-looking statements that were challenged in Earth Island Institute and measurable, verifiable statements that promote a company’s past or present results. As we embark on a new year, it is a good time for companies of any size to take a hard look at their ESG disclosure programs.