Hill bought bottles of Fiji water, on the label of which was a green drop, which allegedly represented that Fiji was environmentally superior to other waters and endorsed by a third-party organization. She filed a putative class action under California’s UCL, FAL, and CLRA, adding common-law fraud and unjust enrichment claims. The trial court found she failed to state a cause of action, and the court of appeals affirmed.
Hill began with the FTC’s Green Guides, arguing that the processes used to make Fiji cause as much, if not more, environmental damage as those of competitors. (Defendant disagreed with this, but the court accepted it on the pleadings. This article offers an overview of the pros and cons claimed for the water, and a pure critique (no pun intended) is here.) She alleged that the green drop violated the FTC guides by looking like a seal of third-party approval and a claim of superiority over other waters, and also pointed to defendant’s website fijigreen.com and the tagline “every drop is green.”
Hill alleged that she relied to her detriment on Fiji’s representations, paying 15% more than for other bottled water. The court responded that, taking all this as true, “no reasonable consumer would be misled to think that the green drop on Fiji water represents a third party organization's endorsement or that Fiji water is environmentally superior to that of the competition.”
Hill relied on the Environmental Marketing Claims Act, which incorporates the Green Guides into its definition of “environmental marketing claim.” The EMCA provides that advertisers who use various “environmentally friendly”-type claims must maintain specific written documentation supporting those claims, and also bans false or misleading environmental marketing claims generally. Still, the gravamen of a CLRA action based on the EMCA is that a claim must be untruthful, deceptive, or misleading.
Hill argued that the green drop was a general environmental benefit claim, which was deceptive because it was not qualified to explain the specific benefits and thus deceptively conveyed that the product was “green” across every relevant axis. She analogized to the FTC Green Guide example about an environmental seal with a globe icon and the text “Earth Smart.” The FTC says that this “is likely to convey to consumers that the product is environmentally superior to other products. If the manufacturer cannot substantiate this broad claim, the claim would be deceptive.” Specifically, Hill argued that the green drop implied an independent third-party endorsement of Fiji water’s environmental superiority.
But a reasonable consumer would not so conclude. The standard is not the least sophisticated consumer, unless the advertising is specifically targeted to such a consumer. It’s also true that a reasonable consumer “need not be ‘exceptionally acute and sophisticated’” and might not “necessarily be wary or suspicious of advertising claims"; indeed, “in these days of inevitable and readily available Internet criticism and suspicion of virtually any corporate enterprise, … a reasonable consumer also does not include one who is overly suspicious.” It’s the ordinary target consumer.
So, does the green drop convey to a reasonable consumer that the product is endorsed as environmentally superior by a third-party organization? The court had a simple answer: no. The drop bore no name or recognized logo of any group, no TM symbol, and no other indication that it was anything other than a symbol of Fiji water. The FTC Green Guides do talk about a globe icon, “but a symbol of the Earth is more suggestive of a seal of an environmental organization and … could suggest the established Green Seal logo, with a stylized check mark and the words "Green Seal" contoured around a globe.” A drop is the most logical icon for water. The court assumed that reasonable consumers would view the green drop as a reference to the environment, but the Green Guides don’t prohibit touting green features.
For further context, the green drop on the back of the bottle appears right next to the website address, fijigreen.com, “further confirming to a reasonable consumer that the green drop symbol is by Fiji water, not an independent third party organization--and, of course, inviting consumers to visit the website for product information, which includes Fiji Water's explanation of its environmental efforts.” The “every drop is green” slogan doesn’t alter the overall impression.
The court distinguished the refusal to dismiss the class action complaint in Koh v. S.C. Johnson & Son, Inc., 2010 U.S. Dist. Lexis 654 (N.D. Jan. 6, 2010), on the ground that the label there was very different: “It made express representations of environmental superiority, used the trademarked name ‘Greenlist,’ a name not immediately apt to be associated with the product or its manufacturers, and identified the name as a rating system, which further suggested an independent source that rated other manufacturers’ products as well.”
The court agreed that Fiji obviously put the green drop on the label for a marketing purpose, to signify “something to do with the environment.” But no reasonable consumer would think that the green drop represented a third party endorsement or a claim of superiority to the competition.
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