US: Recent SDNY decision examines greenwashing claims

On April 18, 2022, a U.S. federal district court for the Southern District of New York granted a motion to dismiss in Dwyer v. Allbirds, Inc. (Case No. 7:21-cv-05238 at ECF No. 22, the "Opinion"), a putative class action against a popular footwear company regarding allegedly misleading environmental and sustainability-related claims. 

The Plaintiff, a purchaser of Allbirds footwear, brought consumer protection claims under New York's General Business Law §§ 349 (prohibiting deceptive trade practices) and 350 (prohibiting false advertising), alongside related claims for breach of express warranty, fraud, and unjust enrichment. 

The Court's dismissal of the Plaintiff's claims contains several noteworthy discussion points relating to commonly-asserted "greenwashing" complaints:

1. Use of sustainability metrics/indexes/certifications: Plaintiff took issue with the company's use of a life-cycle assessment (LCA) tool to estimate its products' carbon footprint and the Higg Material Sustainability Index (Higg MSI) to measure the environmental impact of apparel materials. The Court noted that Plaintiff's objections to the company's use of these metrics and indices amounted to criticisms of their methodology rather than a description of a false, deceptive, or misleading statement: "Defendant does not mislead the reasonable consumer because it makes clear what is included in the [LCA] carbon footprint calculation, and does not suggest that any factors are included that really are not....There may well be room for improvement in the Higg MSI... but that does not suggest that reliance on the current standard is deceptive." (Opinion at 12). The Court similarly found that Plaintiff's objections to the company's reliance on ZQ Merino certification for its supply of wool amounted to criticisms of ZQ Merino's methodology rather than allegations demonstrating an actionable misstatement. (Opinion at 16-17).

2. Subjective, vague statements amounting to "puffery": Plaintiff challenged the company's marketing statement "Our Sheep Live the Good Life" as misleading and deceptive. The Court dismissed this argument, finding that this type of "subjective, non-specific, unmeasurable, and vague" statement constituted non-actionable puffery. (Opinion at 18). 

Given the increasing trend of greenwashing complaints being brought in judicial and administrative forums (in particular, complaints premised on consumer protection laws), the Opinion provides helpful guidance to parties seeking to bring or defend against such claims - particularly when those claims are premised on the use of sustainability metrics, indexes, or certifications, or statements which could be deemed to constitute mere puffery.