First Appellate Division: New York City Greenwashing Lawsuit Dismissed

• A New York state appeals court dismissed New York City's greenwashing lawsuit against ExxonMobil, Shell, and BP.
• The court ruled that climate-aware consumers were not reasonably misled by the companies' advertising claims.
• The ads were deemed to make 'relative' rather than 'absolute' claims about product benefits, such as reduced emissions compared to other gasolines.
• The court also found the marketing campaigns were outside the scope of city consumer protection law due to a lack of direct connection to local sales.
• New York City is evaluating its options following this First Appellate Division climate ruling.

The court emphasized that the advertising claims were 'relative' representations about product benefits, rather than 'absolute' guarantees of zero emissions.

A state appeals court has rejected New York City's latest legal effort to hold major energy companies accountable for the financial burdens associated with climate change. The First Appellate Division upheld a lower court's decision, concluding that customers of ExxonMobil, Shell, and BP, who are already aware of climate issues, were not reasonably misled by the companies' "greenwashing" claims regarding their fossil fuel products. This ruling marks a significant development in the ongoing "New York City greenwashing lawsuit dismissed" narrative, clarifying the boundaries of consumer deception claims.

The city initiated the lawsuit in April 2021, alleging that the primary driver of climate change is the "extraction, refinement and combustion of fossil fuels," which prompts consumers to seek more environmentally friendly energy options. New York City contended that the defendant companies engaged in fossil fuel advertising deception by promoting their gasoline products as "cleaner" or "emissions-reducing" without adequately disclosing their detrimental environmental impact. This state-level action followed closely on the heels of a federal suit filed by the city against the same companies, which was dismissed by the Second Circuit three weeks prior.

The appellate court, mirroring the trial court's findings, determined that the advertising and promotional statements made by ExxonMobil, Shell, and BP did not violate the city's consumer protection laws. The courts reasoned that the city had taken the advertisements out of their proper context. Justice David Friedman, an Associate Justice of the First Appellate Division, articulated in the 17-page ruling that if consumers were sufficiently informed to prefer lower-emission alternatives, they would not likely be deceived by the energy companies' eco-friendly assertions.

Specific examples of the advertising claims cited in the complaint included ExxonMobil's assertion that one of its fuels was "2X cleaner for better gas mileage," BP's statement about "working to make all forms of energy cleaner and better," and Shell's portrayal of itself as "a bigger player than you might expect in this budding movement to realize a cleaner and more efficient transportation future." The five-judge panel concluded that these ads clearly identified the products as gasolines and merely claimed they produced fewer carbon emissions compared to other gasoline products. Justice Friedman emphasized that "Not even the least sophisticated consumer could be led to believe that, by using the advertised gasoline products, he or she would be able to drive a vehicle without producing a significant amount of emissions."

The court drew a parallel to a case rejected by the Second Circuit concerning Diet Coke marketing, where the word "diet" was not found to mislead consumers into believing the drink would cause weight loss. In both instances, the panel found that the defendants were making "relative (rather than absolute)" representations about product benefits, meaning a "diet" drink is lower in calories than its "non-diet" counterpart, and certain gasolines produce fewer emissions than others. This distinction is central to understanding the court's stance on "relative greenwashing claims New York" cases.

Beyond the nature of the advertising claims, the First Appellate Division climate ruling also established another critical ground for dismissal: the marketing campaigns in question fell outside the jurisdictional scope of New York City's consumer protection laws. The court found that these campaigns were not directly linked to the sale of goods or services within the city itself. This aspect of the ruling is particularly significant for future "New York consumer protection greenwashing" litigation, as it suggests limits on municipal authority over advertising not directly tied to local transactions.

New York City officials have indicated they are currently evaluating the decision and considering their next steps. Representatives for ExxonMobil, Shell, and BP did not immediately respond to requests for comment following the ruling.

This dismissal contributes to a growing body of "climate change litigation precedent" that grapples with how to address the global issue of warming through local or state legal frameworks. The prior federal lawsuit filed by New York City against the same energy companies was dismissed on the grounds that global warming is an inherently international problem, ill-suited for resolution under state law, as articulated by U.S. Circuit Judge Richard Sullivan. This highlights the ongoing challenge of applying localized legal remedies to a worldwide environmental crisis.

The broader landscape of climate accountability lawsuits continues to evolve, with the U.S. Supreme Court recently hearing a case originating from Boulder, Colorado, which could influence numerous similar actions across the country. The "NYC v ExxonMobil Shell BP" case, therefore, is not an isolated incident but part of a larger, complex legal battle over corporate responsibility for climate change impacts.

This ruling clarifies the scope of New York City's consumer protection laws regarding 'greenwashing' claims, particularly distinguishing between absolute and relative product benefits. Lawyers advising companies on environmental marketing should note that 'relative' claims may be less vulnerable to consumer deception challenges, and that municipal consumer protection laws may not apply to advertising not directly tied to local sales, influencing future litigation strategies and compliance efforts in New York.

Source: Original reporting via Courthouse News Service