Allbirds' environmental and sheep treatment claims not plausibly misleading, court rules

Dwyer v. Allbirds, Inc., 2022 WL 1136799, No. 21-CV-5238 (CS) (S.D.N.Y. Apr. 18, 2022)

Allbirds makes shoes from wool. Dwyer, a customer, challenged Allbirds’ advertising, which focuses on the shoes’ environmental impact, e.g., “Sustainability Meets Style,” “Low Carbon Footprint,” “Environmentally Friendly,” “Made with Sustainable Wool,” “Reversing Climate Change ...” and “Our Sustainable Practices.” Allberts uses a life cycle assessment (LCA) tool to estimate its products’ carbon footprint, which it defines as “the kg CO2e emitted to create our products.” Defendant also “measure[s] other greenhouse gases, like methane, and convert[s] them to CO2.” Defendant states that the average carbon footprint of its products is 7.6 kg CO2e, and provides individual carbon footprint figures for particular products, with emissions from materials accounting for the most significant component. It says that “Allbirds transportation emissions are calculated separately and our entire footprint is offset to zero.”

Dwyer alleged that this was misleading and brought NY claims.

First, the advertising was allegedly misleading because its use of the Higg Material Sustainability Index, a standard developed by the Sustainable Apparel Coalition to measure the environmental impact of apparel materials, addresses only raw materials and lacks standards for comparing different materials. The SAC itself allegedly recognizes these limitations and “is revamping the Higg MSI to incorporate ‘product level environmental impacts.’ ” Dwyer also criticized Allbirds’ LCA tool for assessing only the carbon footprint of each product, not other impacts of wool production, including on water, eutrophication, or land occupation. If Allbirds calculated the carbon footprint from sheep farming overall – including items such as methane emitted by sheep and runoff of chemicals used in cleaning or pesticides – as opposed to the carbon footprint from its products, the carbon footprint figures would allegedly be significantly higher. The LCA tool also allegedly uses data from several sources, and there are unspecified “discrepancies in industry-sourced data,” allegedly “render[ing] it unreliable.”

But Dwyer failed to allege material misleadingness. Criticizing the tools’ methodologies didn’t identify a false, deceptive, or misleading statement about the shoes. Dwyer “does not allege that the calculations Defendant provides are wrong or that Defendant falsely describes the way it undertakes those calculations.” Disagreement about what measurement to use didn’t plausibly plead material misleadingness, and the allegations about unreliability were too vague besides.

Dwyer didn’t allege that a reasonable consumer would expect Allbirds to use a different calculation method or would be misled by the use of LCA/Higg MSI.  Allbirds describes the exact components of the calculation in its advertising, and Dwyer didn’t allege that it wasn’t doing the advertised calcuations. Allbirds never claimed that it includes methane emissions from land occupation or eutrophication, or that it accounts for the entire life-cycle of wool production. Nor did Dwyer allege that a reasonable consumer would expect a carbon footprint calculation for a shoe manufacturer to include non-atmospheric inputs, such as land occupation and eutrophication, or to include carbon generated from the production of raw materials before they come into the manufacturer’s hands.

Nor did Dwyer allege that Allbirds had special knowledge it needed to disclose. “Defendant clearly did not alone possess the allegedly omitted information, given that Plaintiff cites to environmental researchers, PETA, the 2017 Pulse of the Fashion Industry Report, ‘industry sources,’ and the United Kingdom’s House of Commons Environmental Audit Committee as discussing the environmental impact of the wool industry and sheep farming.” The allegation that “the onus is on Defendant” to not omit this information because “[r]easonable consumers are not likely to know of eutrophication and methane emissions from sheep,” was insufficient; “[t]here is no obligation under GBL § 349 or § 350 to provide whatever information a consumer might like to know,” and again, Allbirds disclosed how it calculated emissions, based on the production, extraction, processing, and packaging of raw materials. “Plaintiff provides no basis to find it plausible that a reasonable consumer would expect that calculation to include non-atmospheric effects or effects from the farming that precedes the production of the raw materials.”

Animal welfare-based claims also failed. Dwyer alleged that Allbirds’ depictions of “happy” sheep in “pastoral settings” rested on “empty welfare policies that do little to stop animal suffering.” But Plaintiff But Dwyer didn’t identify any misrepresentations. For example, Allbirds ran ads that show sheep in a field, one of which says, “What if every time you got a haircut they made shoes out of it? That would be pretty cool,” and the other of which says, “Behind every shoe is a sheep. And behind every sheep, is another sheep, probably.” But “[t]hese ads, which are obviously intended to be humorous, make no representations at all.”  Nor did Dwyer, by citing evidence that there was cruelty to sheep at over 100 large-scale operations, plead anything about the wool Allbirds used. Allbirds also touted its “use of discarded crab shells as ‘better for the planet,’” which was allegedly false, deceptive, and misleading,” because the crab industry is “inherently harmful,” given endangered whales being caught in crab fishing gear and the effects of climate change on crab populations. “These general, industry-wide criticisms of the crab business do not begin to suggest that Defendant recycling the shells is not better for the planet than leaving them as trash.”

Dwyer did specifically criticize Allbirds’ certified wool supplier, but none of her criticisms plausibly suggested that the sheep from which it gets its wool are treated cruelly. She alleged that sheep at certified farms didn’t receive individual care, “but no reasonable consumer would expect farm animals to receive such care, and in any event the lack of individual care hardly shows inhumane treatment.” Criticism of the certifier for not auditing as frequently as PETA would like, not posting its standards online, working in countries “where animal welfare standards are routinely ignored,” and certifying only farms themselves, not those involved in the transportation or slaughtering of sheep, did not show deceptiveness. “At most these allegations suggest that a … certification is no guarantee that animals at the farms it certifies could never be treated cruelly, which is not enough to render plausible the allegation that Defendant made a materially misleading statement when it allegedly described its wool harvesting practices as humane.”

Allbird’s statement “Our Sheep Live The Good Life” was classic puffery.