S.D.N.Y. Waters Down Prior Ruling on “Carbon Neutral” Consumer Deception Claim

The Southern District of New York recently reconsidered its partial denial of Defendant Danone Waters of America’s motion to dismiss claims alleging Danone falsely advertised Evian water as “carbon neutral.” Reversing his prior ruling, Judge Nelson S. Román concluded that the carbon neutral labeling on Evian water bottle products was not plausibly misleading to reasonable consumers. He reasoned that absent an industry convention of disclosure on the front label or governing regulation that says otherwise, a reasonable consumer should be expected to look beyond the front label to learn more, consult additional information available, and know that there is no such thing as a “carbon zero” product. Dorris v. Danone Waters of America, No. 22-CV-8717 (S.D.N.Y. Nov. 14, 2024).

The Evian water bottle products at issue included a label claim that the products are “Carbon Neutral,” as well as a logo for “Carbon Trust,” a third-party agency that relies on the international PAS standard in certifying whether a company or product is carbon neutral. Plaintiffs alleged this carbon neutral labeling on Evian water bottles was a form of “greenwashing,” which misled them to believe that “the Product’s manufacturing did not produce CO2 or otherwise cause pollution.”

The Court initially granted Danone’s motion to dismiss consumer deception claims under New York law, but denied its motion to dismiss claims brought under Massachusetts and California law. Reasoning that the term “carbon neutral” was “an ambiguous term that lacked precision and could plausibly mislead a reasonable consumer,” the Court held that under Massachusetts and California law, it would be premature to determine as a matter of law that a reasonable consumer could not be misled. In its reconsideration opinion, the Court reversed course and dismissed the balance of Plaintiffs’ claims (with leave to amend).

The Court retracted the previous weight it gave to Plaintiffs’ argument that “carbon neutral” was an unqualified general environmental benefit claim prohibited by the FTC Green Guides. On reconsideration, the Court differentiated “carbon neutral” from the types of general environmental benefit claims identified in the Green Guides such as “eco-friendly,” “greener,” “eco-smart,” and “environmentally friendly,” finding that those claims seemed “more general and vaguer” than the term “carbon neutral.” The Court pointed out that, unlike those more general environmental claims, the Merriam-Webster dictionary includes “only two codified definitions of ‘carbon neutral,’ which does not include carbon zero.” Thus, the Court “presume[d] without holding that ‘carbon neutral’ is not a general environmental claim.”

The Court noted that the FTC Green Guides are unclear in how they treat “carbon neutral” claims and there is no other industry convention or governing regulation that provides assurances to consumers about the veracity or clarity of the front label claim. Therefore, the Court reasoned, consumers should have consulted the back label, which provided “a link to Evian’s website to learn more.” On the website, Danone explains that “carbon neutral” means “contributing to reduce our emissions day after day” and “emissions that remain are then offset through our work with Livelihood Funds that has planted 130 million trees.” Evian’s website also provided a link on the website to Carbon Trust’s website, which provided a fuller explanation of the certification process and relevant standards. The Court held that these types of disclosures “mitigate[d] concerns of consumers being misled at the point of sale.” The Court further noted that the back label of the products disclosed that Evian water was sourced from the French Alps, which would have put a reasonable consumer on notice that the products could not have been produced without carbon emissions and a reasonable consumer would have looked to other sources of information for further clarity.

Advertisers are collectively breathing a sigh of relief at this decision. The prior decision effectively placed a blanket prohibition on making “carbon neutral” claims without onerous front label disclosures since, of course, no product can be produced without generating any carbon. The reconsideration decision may cause plaintiffs’ lawyers to reconsider bringing similar claims against other companies going forward, and gives advertisers some reassurance that in the event of a challenge courts appear to understand the limits of “carbon neutral” claims. With that said, including appropriate disclosures with “carbon neutral” claims remains critical to avoid conveying a broader or different message than intended.

***

Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at bvinti@proskauer.com /212-969-3249

Privacy Class Action Spotlight: Surge of Privacy Class Actions in Arizona Targeting Email Pixel Tracking

By Leslie Shanklin, Jeff Warshafsky, Aaron Francis and Anna W. Chan on September 5, 2024 Posted in Class Actions, Regulatory

Class action lawsuits targeting pixels and other tracking technologies are showing no signs of slowing, and while most of these cases have focused on website tracking tech and California’s wiretapping law, there has been a more recent surge of cases in Arizona alleging violations of Arizona Telephone, Utility, and Communication Service Records Act A.R.S. § 44-1376 et seq. (the “Arizona Law”) based on email pixel tracking. As we previously reported, a few cases focused on tracking pixels in emails popped up late last year, based both on the California Invasion of Privacy Act (CIPA) and the Arizona Law, and a new group of these cases has recently been filed accusing several companies, including Target, Gap, Lowe’s and Salesforce of embedding “spy pixels” in marketing emails in violation of the Arizona Law.

Read the full post on the Proskauer on Privacy blog.

Tags: Arizona Telephone_Utility and Communication Service Records Act, California Invasion of Privacy Act (CIPA), Privacy, privacy class action, Privacy Law, State Privacy Laws, Telephone Records and Privacy Protection Act

Amid Rise in Forever Chemicals Cases, Courts Dismiss PFAS Claims Which Rely on Inadequate Product Testing

By Baldassare Vinti, Jessica Griffith, Nicole Sockett and Michael Beckwith on July 29, 2024 Posted in Class Actions, Deceptive Trade Practices

As chemicals of concern litigation continues to surge across the nation, companies increasingly find their products under scrutiny for alleged contamination of these “forever chemicals.” These “forever chemicals” have become a focal point for environmental and consumer protection lawsuits, as plaintiffs’ attorneys increasingly target companies to leverage the frequent media attention surrounding per- and polyfluoroalkyl substances (“PFAS”) chemicals. However, a closer examination of these allegations often reveals that they hinge on speculative claims or flawed testing methodologies. Indeed, plaintiffs frequently rely on inconclusive or misinterpreted data, leading to cases built more on sensationalism than on solid scientific evidence. Courts have dismissed such cases in recent months on grounds that such claims are inadequately supported.

For example, in Brown v. Coty, Judge Analisa Torres of the Southern District of New York dismissed a proposed class action alleging Coty, Inc. failed to disclose the presence of PFAS in two of their CoverGirl waterproof mascara products, Lash Blast and Clump Crusher. Brown v. Coty, Inc., No. 22-cv-2696 (S.D.N.Y. Mar. 1, 2024). The plaintiffs argued Coty misled consumers by failing to disclose the alleged presence of PFAS in light of Coty’s self-professed use of “strict quality control measures” and “rigorous testing.”

The plaintiffs relied on two studies to support their allegations. The “Notre Dame Study,” published by two Notre Dame scientists in 2021, found that certain beauty products from a variety of brands contain high proportions of fluorine, to which the plaintiffs pointed as a “scientifically valid, widely used method to investigate whether PFAS are present” in cosmetics. The plaintiffs also commissioned their own study, which found that Lash Blast and Clump Crusher each contained up to five different types of PFAS.

The Court found the cited studies did not support plaintiffs’ claims that the challenged products contained PFAS. As to the Notre Dame study, the Court found the plaintiffs did not allege the total number of mascara products tested, whether the presence of fluorine in those products necessarily indicated the presence of PFAS, or whether Lash Blast or Clump Crusher were even among the products tested. The Court similarly found the plaintiffs’ study did not establish that the PFAS found in the tested tubes of Lash Blast and Clump Crusher—which were not those purchased by the plaintiffs—supported an inference that PFAS contamination was so “systemic” in the products that the tubes purchased by the plaintiffs must also have contained PFAS.

In Onaka v. Shiseido Americas Corporation, Judge Loretta Preska of the Southern District of New York likewise dismissed a putative class action alleging Shiseido deceptively labeled its bareMinerals beauty products as “clean” and “natural” when the products allegedly contained PFAS. Onaka v. Shiseido Americas Corporation, No. 1:21‑cv‑10665‑PAC (S.D.N.Y. Mar. 19, 2024). In dismissing the suit, the Court found plaintiffs lacked standing because they failed to plausibly allege that any of the products they purchased did, in fact, contain PFAS.

To support their allegations, plaintiffs tested two samples of five products within the same product line as the items they bought (rather than testing their own items) for the presence of PFAS. The Court found plaintiffs failed to “meaningfully link the results of their independent test to Plaintiffs’ actual Purchased Products” because plaintiffs did not allege they tested the products near in time to their purchases of those products. The plaintiffs alleged the testing was conducted in September and October 2021, but did not allege that they purchased any of the tested products reasonably near that time period.

Moreover, the Court found it could not extrapolate plaintiffs’ isolated testing broadly to Shiseido’s products. Plaintiffs’ reliance on the same Notre Dame study as the Brown plaintiffs was insufficient because it did not specify which line of products were tested, and only tested products purchased well before any of plaintiffs’ alleged purchases. The Court noted that other courts considering the same study in relation to similar claims found it to be unhelpful for standing purposes—for reasons including that the plaintiffs in those cases failed to allege whether the Notre Dame study detected the same type of PFAS as detected in plaintiffs’ own testing, as well as how many of the products tested in the Notre Dame study were found to have high fluorine levels.

Most recently, Judge Margo Brodie of the Eastern District of New York dismissed claims that Keurig Dr. Pepper’s Nantucket Nectars and Snapple product lines were misbranded as “all natural” because they allegedly contained PFAS. Walker v. Keurig Dr. Pepper, Inc., No. 22-cv-5557 (E.D.N.Y. July 16, 2024). Citing to Brown and Onaka (among other decisions), the Court found the plaintiff failed to allege he suffered an injury in fact because his allegations detailing his independent testing of the products was too vague to conclude he purchased and consumed products containing PFAS. Among other things, the plaintiff did not allege that he tested the actual products he purchased, nor did he claim the testing was performed reasonably close in time to his own actual purchase of the tested products.

The Court also rejected the plaintiff’s assertion that the products were “systematically contaminated.” Though the plaintiff claimed his independent testing revealed “the Products all contain PFAS in amounts that dramatically exceed” the EPA recommended limit for PFAS in drinking water, the plaintiff’s allegations did not confirm “how many of each type of Product was tested, when they were tested, or which Products are within the bucket of the ‘some Products’” the plaintiff claimed contained PFAS in excess of the EPA’s recommended limit for drinking water. The plaintiff also failed to specify which types or flavors of the products he had purchased. The Court found that without more information regarding the testing performed or the actual products the plaintiff purchased, it could not conclude it was plausible the plaintiff had purchased a contaminated product.

These decisions demonstrate that courts will reject allegations of deception that rely on inadequate testing and speculative inferences regarding alleged product contamination. Companies faced with such lawsuits should demand that plaintiffs perform a reasonable pre-suit investigation and meet their pleading burden by providing specific facts which support a plausible inference that the products at issue contain the alleged chemical of concern. It is crucial to hire defense counsel with strong scientific backgrounds capable of scrutinizing and contesting the methodologies, data interpretation, and statistical analyses presented by plaintiffs. This approach ensures that only well-substantiated claims proceed, protecting companies from speculative litigation. At Proskauer, we routinely advise clients on PFAS-related matters, ensuring they are well-prepared to challenge and defend against such claims with the necessary scientific and legal expertise.

***

Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at bvinti@proskauer.com /212-969-3249

Game Over: Court Dismisses Class Action Lawsuit Over Gaming Computer Performance

By Baldassare Vinti, Anisha Shenai-Khatkhate and Nicole O. Swanson on June 27, 2024 Posted in Class Actions, Deceptive Trade Practices

The gaming industry is increasingly becoming a target for consumer class actions, as plaintiffs’ attorneys are scrutinizing the marketing and performance claims of gaming PCs and accessories. However, gaming companies are not without recourse. Recent legal decisions demonstrate that courts are willing to dismiss cases where plaintiffs fail to provide specific facts that support their allegations. For instance, Judge Paul L. Maloney of the Western District of Michigan dismissed a putative class action lawsuit against Lenovo which alleged the computers do not live up to their advertised performance capabilities for resource-intensive uses like gaming and graphic design. In dismissing plaintiff’s complaint, Judge Maloney found the plaintiff had “[i]n essence, … strung together some marketing language … [to] plead[] fraud in a deficient manner.” Dinwiddie v. Lenovo, Case No. 2:22-cv-00218 (W.D. Mich. March 27, 2024).

Plaintiff alleged the computer had been marketed as having advanced features like an “Intel Core i5 2.90 GHz processor [that] provides [a] solid performance” and “a NVIDIA GeForce GTX 1650 Super discrete graphic card for gaming and graphic designing, [to deliver an] optimal visual experience.” Plaintiff alleged these representations communicated that the computer would “function reliably, not freeze or crash, and run smoothly during operation subject to normal use.” Plaintiff alleged Lenovo’s advertising was misleading, because he and other users frequently experienced freezing and crashes when using their computers. He included in his complaint a handful of anonymous internet posts claiming to be from people who owned this computer and experienced similar problems.

The Court was unconvinced. Critically, the Court noted that nowhere did defendant actually promise that the product would “not freeze or crash,” “function reliably,” or “run smoothly”; those takeaways were based on plaintiff’s own assumptions. The Court also found that Lenovo’s “solid performance” advertising claim was too general and vague to maintain a misrepresentation claim. The court analogized the Plaintiff’s claims to those previously dismissed in Vivar v. Apple Inc., No. 22 Civ. 0347 (S.D.N.Y. Sept. 12, 2022), a similar case brought by the same Plaintiff’s counsel. There, the Court dismissed fraud claims that were similarly predicated on “general advertisements.” In Vivar, the Court similarly noted that while Apple advertised its earbuds as having “up to 9 hours of listening time,” and “powered by the Apple H1 Chip” with “dual audio control,” it never represented that the earbuds would be defect-free.

This decision serves as an important reminder that theories of deception grounded only in a plaintiff’s unsupported assumptions are ripe for dismissal. A complaint alleging injury as a result of purported advertising misrepresentations must be grounded in the text of the advertising itself. Companies in the gaming industry facing similar legal challenges can rely on Proskauer’s deep expertise in this sector. Our class action defense team has significant experience defending gaming companies against claims related to performance advertising, under both consumer protection laws and the Lanham Act. We understand the unique challenges of the gaming market and provide tailored legal strategies to effectively counter unfounded allegations, ensuring the protection of your business interests and brand reputation.

***

Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at bvinti@proskauer.com /212-969-3249

Eco-Friendly Claims Under Fire: The Legal Risks of Greenwashing for Businesses

By Baldassare Vinti, Jessica Griffith and Peter Angelica on June 24, 2024 Posted in Deceptive Trade Practices

In today’s market, eco-friendly claims can serve as a tool for companies looking to attract environmentally conscious consumers. However, this surge in green marketing has also caught the attention of the plaintiffs’ bar, which is increasingly scrutinizing these claims for lucrative opportunities in potential lawsuits. As demonstrated by recent legal actions, companies must tread carefully to avoid the pitfalls of greenwashing and the ensuing legal challenges. In one such action, the Northern District of California affirmed its refusal to dispose of claims challenging the use of eco-friendly labeling on Rust-Oleum’s KRUD KUTTER products. Bush v. Rust-Oleum Co., No. 20-cv-3268 (N.D. Cal. Jan. 26, 2024). At the center of the case are the Green Guides—guidance published by the FTC which provides direction on the use of environmental marketing claims in connection with “green” products and services.

The plaintiff alleged Rust-Oleum improperly labeled its KRUD KUTTER products as “Non-Toxic” and “Earth Friendly,” allegedly contradicting warnings on the packaging stating the products were eye and skin irritants. In support, the plaintiff cited the Safety Data Sheets for each product, which outlined hazards associated with the products including “serious eye damage,” “skin irritation,” and harm “if inhaled . . . or swallowed.” Rust-Oleum moved to dismiss, arguing that a reasonable consumer would not understand “non-toxic” to mean that the product “did not pose any risk to humans, animals or the environment”—as argued by the plaintiff—because the plaintiff’s proposed understanding differed from the dictionary definition of the word “toxic,” as well as FTC guidance on the term “non-toxic” in the Green Guides. The Court denied that motion in 2021.

The Court revisited these issues on Rust-Oleum’s motion for summary judgment, and denied that motion too. Like at the pleading stage, the Court found it could not say as a matter of law that the plaintiff’s proffered definitions of “non-toxic” and “earth friendly” were unreasonable, and Rust-Oleum had failed to show that no reasonable consumer would be misled. The Court noted that while the Green Guides were not dispositive under the reasonable consumer test, Rust-Oleum’s reliance on deposition testimony from the plaintiff and his expert acknowledging that it was impossible to reduce all toxic risk was insufficient to show there was no risk of consumer deception. The Court also rejected Rust-Oleum’s argument that “earth friendly” was puffery, finding the term was not so general or nonspecific as to make it “extremely unlikely” that a consumer would rely on it, and that any puffery argument was undermined by California statutory law defining the term.

As seen in this case, “going green” isn’t as simple as it might seem. While not binding, the Green Guides can play a key role in shaping the contours of both how environmental claims are made and how they may be interpreted. Advertisers can avoid costly legal battles by carefully reviewing relevant guidance before touting the environmental benefits of their products. It’s crucial to engage experienced trial counsel knowledgeable in the Green Guides and environmental sciences to meticulously review advertising claims and to defend against overaggressive enforcement by the plaintiffs’ bar. Our team is equipped to provide the expertise needed to navigate these complex issues and protect your business from allegations that threaten your business and its reputation.

***

Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at bvinti@proskauer.com /212-969-3249

What’s in a Word? The Legal Battle over “Natural” in False Advertising

By Baldassare Vinti, Jennifer Yang and Evelyn Blanco on June 19, 2024 Posted in Class Actions, Deceptive Trade Practices, Labeling Claims

While class actions centered around “natural” claims remain popular with the plaintiffs’ bar, this past year has seen some growing skepticism from courts towards such lawsuits, particularly where plaintiffs fail to adequately explain what is deceptive about the term.

In January, Judge Kimba M. Wood of the Southern District of New York granted summary judgment to Colgate-Palmolive and its subsidiary Tom’s of Maine in a putative class action challenging the use of the term “natural” on Tom’s toothpaste and deodorant products. De Lacour v. Colgate-Palmolive Co., No.16-cv-8364 (S.D.N.Y. Jan. 3, 2024). The Court found that the plaintiff’s evidence was insufficient to demonstrate that a reasonable consumer would understand “natural” to convey that the challenged products do not contain synthetic and/or highly chemically processed ingredients. The Court dismissed the plaintiff’s surveys as “fatally flawed” because they defined “natural” and “artificial” only in relation to each other (i.e., “natural” as meaning “not artificial”, and “artificial” as meaning “not natural”) and failed to provide respondents with adequate definitions of those otherwise ambiguous terms. Additionally, when asked what other things the word “natural” communicated, respondents gave responses as varied as “certified organic,” “earthy,” “[n]o animal testing, recyclable,” “[n]o aluminum,” and, “natural.” Looking at these surveys and other evidence in the record, including the fact that there is no governmental guidance regarding the use of “natural” labeling on personal care products, the Court found that the evidence demonstrated “that there are many interpretations of the word ‘natural,’” and the named plaintiff’s subjective interpretation of the term was insufficient to establish evidence of widespread consumer confusion.

Other cases have followed similar reasoning. For instance, in McGinity v. Proctor & Gamble, 69 F. 4th 1093 (9th Cir. 2023), consumers sued P&G, alleging that the “Nature Fusion” label on P&G’s Pantene Pro-V hair products misled consumers into believing the items were natural, despite containing synthetic ingredients. The district court dismissed the complaint, holding that a reasonable consumer would not be deceived by the label.

The Ninth Circuit affirmed the dismissal, emphasizing the ambiguity of the term “Nature Fusion.” The Court found that this ambiguity was resolved by reading the back label, which clarified that the products contain both natural and synthetic components, rendering the labeling of the product not deceptive as a matter of law.

Given the continued prevalence of lawsuits surrounding “natural” claims, companies should continue to exercise caution in assessing the messages conveyed by such claims in context. However, if courts continue to recognize the potential ambiguity in “natural” claims, as they have increasingly done over the past year, such claims may finally become a less popular target going forward, given their susceptibility to motions to dismiss and the difficulty of certifying a class.

***

Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at bvinti@proskauer.com /212-969-3249

Reasonable Consumer Analysis Leads to Dismissal of Claims of Greenwashing

By Baldassare Vinti, Jeff Warshafsky and Jessica Griffith on June 13, 2024 Posted in Class Actions, Deceptive Trade Practices, Labeling Claims

Many brands have reformulated beloved products with “cleaner” ingredients, while others have curated a special selection of “clean” products to offer their customers. Advertisers’ efforts, however, can run into trouble if consumers reasonably believe the “clean” labeling does not match what is contained in the product. Sephora recently faced this issue in a purported class action challenging its “Clean at Sephora” seal. However, Judge David Hurd of the Northern District of New York dismissed the claims, finding the plaintiff had failed to adequately allege what exactly a reasonable consumer would find misleading about the seal. Finster v. Sephora USA, Inc., No. 22-cv-1187 (N.D.N.Y. Mar. 15, 2024).

Sephora, a cosmetic goods retailer, labels certain of its brands and products with the “Clean at Sephora” seal if they meet certain criteria set by Sephora. According to information on Sephora’s website, the “Clean at Sephora” seal signifies that a product complies with certain requirements focused on transparency in formulation and sourcing, as well as the avoidance of certain ingredients. For example, all “Clean at Sephora” products are formulated without parabens, sulfates, SLS and SLES, phthalates, mineral oil, formaldehyde, and other undesirable ingredients.

In Finster, the plaintiff claimed she bought certain products from Sephora in reliance on the “Clean at Sephora” seal believing that the products were “clean.” However, plaintiff claimed that Sephora’s representation mislead her because, contrary to her understanding, some “Clean at Sephora” products nonetheless contain alleged synthetic and harmful ingredients. In support of this allegation, plaintiff cited a laundry list of synthetic ingredients found in “Clean at Sephora” cosmetics she alleged were known to cause irritation or other human harm.

Judge Hurd disagreed, finding that plaintiff had failed to allege that a reasonable consumer would understand the “Clean at Sephora” label to mean that the products contained no synthetic or harmful ingredients whatsoever. The Court noted that none of the “Clean at Sephora” marketing materials cited by the plaintiff made any representation that those products were free of all synthetic or harmful ingredients—indeed, the advertising cited by the plaintiff explicitly said that products bearing the “Clean at Sephora” seal were formulated without specific ingredients known to be harmful to human health or the environment. Further, the Court found that the plaintiff had not alleged the purported harmful ingredients she claimed were in “Clean at Sephora” products were among those Sephora said were excluded. As such, the plaintiff had failed to allege Sephora materially misled consumers by selling “Clean at Sephora” products.

This case serves as a reminder to carefully scrutinize claims of consumer deception which rely on interpretations of advertising that run counter to definitions provided by marketers. Courts will dismiss claims of consumer deception where a plaintiff relies solely on his or her unreasonable understanding of a challenged term.

Summer Associate, Gabriella Lee, assisted with writing this post.

***

Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at bvinti@proskauer.com /212-969-3249

Proskauer and our platform provider LexBlog each use cookies to personalize content and ads, to provide social media features and to analyze traffic. Each of us also share information about your use of our site with our social media, advertising and analytics partners. If you are happy for us to store these cookies on your device please click 'Accept Cookies.' For more information, please see here and here.