On Thursday, the D.C. Court of Appeals revived a lawsuit against Coca-Cola over allegedly deceptive environmental marketing claims. The appeals court reversed a trial court's decision dismissing a complaint brought by Earth Island Institute and remanded the case for further proceedings.
The case centers around a complaint initially brought by Earth Island Institute, a nonprofit environmental group, in 2021. Earth Island alleged that Coca-Cola deceptively represented itself as "a sustainable and environmentally friendly company, despite being one of the largest contributors of plastic pollution in the world." One of the notable aspects of the case is that many of the specific claims challenged were aspirational claims, i.e., where Coca-Cola made forward looking statements about sustainability goals and initiatives. They included things like "make 100% of our packaging recyclable globally by 2025" and "use at least 50% recycled material in our packaging by 2030."
Then, in late 2022, the D.C. Superior Court dismissed the case, finding that Earth Island had failed to state a claim because (1) the claims were aspirational in nature; (2) the statements were not "tied to a product or service" and (3) the statements were "not sufficient to create a misleading 'general impression' or a 'mosaic of representations' to a reasonable D.C. consumer as a matter of law." The court specifically questioned how a reasonable juror would be able to decide whether or not Coca-Cola's future goals could be met, noting that "courts cannot be expected to determine whether a company is actually committed to creating a 'world without waste' or to 'doing business the right way.'"
But now, the appeals court has reversed that decision. In it's opinion published this week, the court found that Earth Island had sufficiently stated a facially plausible misrepresentation claim, and that none of the lower court's bases for dismissal fatally undermined it, finding (contrary to the three arguments noted above) that (1) under D.C.'s consumer protection act (the "CPPA"), even aspirational statements can be actionable "because they can convey to reasonable consumers that a speaker is taking (or intends to take) steps that at least have the potential of fulfilling those aspirations"; (2) Coca-Cola's claims about its plastic packaging are in fact statements about its "goods and services," because the CPPA defines that term broadly to include "any and all parts of the economic output of society, at any stage or related . . . in the economic process" and (3) "the CPPA does not require that misleading representations be contained in a single statement in order to be actionable; a series of statements can in combination be misleading even when, taken individually, they fall short of that."
While the court refrained from offering "any view about the veracity of Earth Island's claims," they highlighted Earth Island's argument that "Coca-Cola's continued reliance on single-use plastics on a massive scale makes it so fundamentally unsustainable that when it touts its efforts to marginally offset the very harms it inflicts on the environment, that serves only to distract consumers from its environmental evils" and drew a comparison to cigarette manufacturers, saying that the claims are akin to cigarette manufacturers marketing light or low tar cigarettes as if they were "healthier."
This case is just one of the instances in recent years where consumers, industry groups, and even regulators have alleged that environmental marketing claims are misleading where the company's broader impact overall contributes negatively to the environment, and how it ultimately turns out will be significant to marketers looking to make these sorts of claims (at least in D.C.).
This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.