The Rise of 'Greenwashing' Class Action Litigation
Greenwash is a verb defined by the Marriam-Webster Dictionary; “to make (something, such as a product, policy, or practice) appear to be more environmentally friendly or less environmentally damaging than it really is”. The environmentalist Jay Westervelt, coined the term in a law review article in 1986 describing marketing that intentionally deceived consumers into thinking a product or company was sustainable. Today, Greenwashing has become part of the colloquial language, especially used in response to companies that utilize green slogans and advertising to attract sustainability conscious consumers. Many products include environmental marketing claims such as “biodegradable”, “carbon-neutral”, “recyclable”, and “organic”. Some products also use imagery that give an unjustified green impression, such as pristine forest landscapes or green lettering.
Advertising has also evolved to use meaningless buzzwords and catchphrases such as “eco-friendly”, “natural”, “clean”, and “green”. These phrases suggest to a consumer that a product is good for the planet without providing a substantive claim that is defined or regulated under law. In 2009, Volkswagen used the phrase “being green feels so good” to sell their supposed “clean diesel cars”. Volkswagen would later pay nearly $40 billion after the Environmental Protection Agency discovered that these new vehicles had software installed that allowed them to cheat emissions tests. These types of phrases are catchy and make consumers feel that they are making conscious choices about sustainability, but the problem is that many of these claims are unsubstantiated while companies profit from sales.
The United State’s Federal Trade Commission (FTC) requires that companies do not engage in “unfair or deceptive acts or practices in or affecting commerce” under Section 5 of the FTC Act, 15 U.S.C. Section 45. The FTC drafted Green Guides in 1992 to help marketers avoid making environmental claims that mislead consumers. The Green Guides have been revised three times, most recently in 2012. The FTC expects to release another revision in 2024 to reflect increasing consumer interest in buying environmentally friendly products. Although the FTC plays a vital role in federally regulated commerce, class action civil litigation provides another venue for consumers to challenge companies on their false claims, especially when claims are novel, vague or outside of the FTC’s jurisdiction.
The civil courtroom is giving consumers a forum to challenge deceptive marketing through this ‘greenwashing’ class action litigation. These class action lawsuits are brought as false advertising claims and recently a few have survived companies’ motions to dismiss, showing that courts are starting to take these claims seriously. In a recent case, Bush v. Rust-Oleum Corporation, plaintiffs contended that labels on cleaning products that claimed the product was “non-toxic” and “Earth friendly” were deceptive because the product contains chemicals that pose risks to human health. The defense filed a motion to dismiss, and in January 2024, Laurel Beeler United States Magistrate Judge delivered the opinion stating that it should be up to a jury to determine if the “asserted definitions are reasonable” under the “reasonable consumer test.” It has yet to be seen if the company will settle out of court or continue onto trial to define the reasonableness of these terms. The National Law Review Article “Greenwashing Class Action Litigation: An Emerging Risk for Companies’ Claims of Sustainability” from 2023 gives more case studies and concludes that 8 cases out of 17 that were reviewed by the authors survived the motion to dismiss stage. As companies navigate this emerging litigation, it will be interesting to see how the legal community responds and perhaps holds these companies responsible for their greenwashing advertising.