A Manhattan court could pave the way for broader enforcement of New York City\u2019s consumer protection law if it revives the city\u2019s lawsuit accusing several oil giants of deceptive advertising.<\/p>\n
The city claims BP, ExxonMobil, and Shell engaged in product and corporate greenwashing, purporting that their products are more environmentally friendly than they are and overstating company-wide efforts to address climate change. But the trial court dismissed<\/a> the city\u2019s case last January, applying what New York City described in its brief<\/a> as a \u201crigid standard\u201d that doesn\u2019t adhere to the \u201cbroad protective goals\u201d of the city\u2019s consumer protection law. <\/p>\n If the New York Supreme Court First Appellate Department judges don\u2019t revive the case and lean on the same interpretation as the lower court, it could end up being \u201creally, really hard to bring corporate-level greenwashing claims under New York City law,\u201d said Sarah Light, legal studies and business ethics professor at the University of Pennsylvania\u2019s Wharton School. <\/p>\n But if the panel agrees with the city that a wide swath of consumers can be deceived by product advertising, the city\u2019s law \u201cbecomes a much broader and more powerful enforcement mechanism that will give New York City even more power than the state attorney general to regulate commercial advertising in all sorts of contexts,\u201d said Alex Simkin, a partner at Ropes & Gray LLP.<\/p>\n The case will also tackle the merits of the city\u2019s deception claims, rather than whether they are preempted by federal climate change laws, something that hasn\u2019t occurred in other greenwashing cases brought by cities and states, said Michael Gerrard, founder and faculty director of Columbia University\u2019s Sabin Center for Climate Change Law.<\/p>\n Reasonable Consumer<\/p>\n What kind of consumer does the city\u2019s law protect? That\u2019s the legal question that\u2019ll carry the day, Simkin said.<\/p>\n The trial court said the city was trying to \u201chave it both ways\u201d by arguing that consumers are aware of and concerned about the environmental impact of fossil fuels but are also being duped by the companies\u2019 failure to disclose their products cause climate change. <\/p>\n \u201cHow much of a nexus does there need to be between claims that climate change is or isn\u2019t happening, on one hand, and whether people will really buy gasoline?\u201d Gerrard said. <\/p>\n If the court believes that people are going to drive regardless, and that disclosures from the company won\u2019t affect whether they buy a gas-powered or electric car, \u201cwould deception about climate change make any difference to consumer behavior?\u201d he asked. <\/p>\n A typical greenwashing case would focus on whether the company knew about and failed to disclose pertinent information to consumers. But the city\u2019s allegation is that the companies didn\u2019t disclose the negative impact of fossil fuels, which \u201cisn\u2019t a secret,\u201d Simkin said. The question, he added, is whether or not including that disclaimer in advertisements is the \u201cequivalent of telling a half truth.\u201d<\/p>\n Judges will have to decide whether the law protects a reasonable, knowledgeable consumer or all consumers, regardless of their level of knowledge, Light said. <\/p>\n Whether it\u2019s \u201cpossible to both care about an issue and be misled about it\u201d is most likely an empirical question requiring studies of New York City consumers, and thus legal discovery, Light said.<\/p>\n The court also will have to decide whether the companies\u2019 general statements highlighting their investments in alternative energy sources were made \u201cin connection with\u201d sales of their products; that phrase has generally been read more broadly than the trial court read it, Light said. <\/p>\n If the appellate applies the same narrow reading, the city might \u201cneed to decide whether it wants to amend its consumer protection statute to include broader language,\u201d she said.<\/p>\n Supreme Court Impact<\/p>\n Even if the case is revived, it could get tossed later if the US Supreme Court sides with Exxon and Suncor Energy Inc. in their appeal<\/a> of a Colorado Supreme Court ruling that said the city and county of Boulder could use state law to press a suit against the two companies. The question in that case is whether federal law preempts state law claims seeking relief for injuries caused by greenhouse gas emissions.<\/p>\n That decision \u201chas the ability to render all of this academic,\u201d Simkin said. <\/p>\n