Class Action "Greenwashing" Bottled Water Lawsuit Survives Motion to Dismiss in New York Federal Court

On January 10, 2024, a class action lawsuit survived a motion to dismiss a complaint alleging injury due to misleading "carbon neutrality" branding on bottled water. Dorris v. Danone Waters of America, Case No. 22 Civ. 8717 (NSR) (S.D.N.Y). The case, filed in the midst of a global rise in greenwashing litigation against a variety of industries, exemplifies the risks associated with green campaigns.

The putative class action lawsuit was filed in the United States District Court for the Southern District of New York on October 13, 2022. The subject of the suit is the defendant's bottled water, which displays the term "carbon neutral" alongside a third-party carbon neutral certification from Carbon Trust. Plaintiffs alleged "violations of the consumer protection statutes of New York, Massachusetts, and California, breach of express and implied warranties, unjust enrichment, and fraud." 

Plaintiffs claim economic injury from buying the defendant's bottled water. Plaintiffs argue they would not have purchased the water had they known that "carbon neutral" was not synonymous with carbon-free. In support, plaintiffs argue that reasonable consumers do not know the technical definition of "carbon neutrality" and that use of the Carbon Trust certification is "false and misleading" because the defendant did not disclose the standard's meaning and its compliance mechanisms in an accessible way. 

In turn, the defendant sought to dismiss plaintiffs' complaint on the grounds that no "reasonable consumer" could believe bottled water can be produced and sold internationally without emitting any carbon dioxide. The defendant also asserted that its Carbon Trust certification is accurate and that plaintiffs could not support their claims by alleging violations of the U.S. Federal Trade Commission ("FTC") Guides for the Use of Environmental Marketing Claims ("Green Guides"). 

While Judge Nelson S. Román granted the defendant's motion to dismiss some of plaintiffs' claims due to their inability to meet requisite pleading standards, he denied it for two state statute violation claims, a breach of express warranty claim, an unjust enrichment claim, and a fraud claim. In his order, Judge Román found it "plausible . . . that the ambiguous term 'carbon neutral' . . . could mislead a reasonable consumer." Further, the court allowed plaintiffs use of the Green Guides, which "illustrate" deceptive greenwashing, to support their claims. The court also noted that consumers should not have to take multiple steps, such as visiting two separate websites, to understand the defendant's label. In sum, the court found the question of whether the defendant's label is misleading best suited for a jury. The court has granted a joint motion by the parties, allowing them to exchange briefing on defendant's motion for partial reconsideration prior to filing all such briefing with the court by the extended deadline of March 27, 2024. 

One relevant action on the horizon is the FTC's review of the Green Guides. The FTC's goal of the review is to determine whether to retain, modify, or rescind the Green Guides. The outcome may provide companies with concrete steps they can take towards protecting themselves from litigation when pursuing environmental marketing campaigns. In the meantime, companies can infer the following tips from Dorris for reducing their carbon neutral branding litigation risks:

• Define environmental terms of art, such as "carbon neutral," on products; 
• Substantiate emissions reduction claims and certifications with documentation; and
• Compile all off-label explanations of environmental claims on one accessible web page.

Read the full Climate Report.