Once again, surveys fail to aid consumer-plaintiffs in greenwashing case

McGinity v. Procter & Gamble Company, --- F.4th ----, 2023 WL 3911531, No. 22-15080 (9th Cir. Jun. 9, 2023)

The court affirmed the dismissal of consumer protection claims against P&G products that used “Nature Fusion” in bold, capitalized text, with an image of an avocado on a green leaf. A concurrence expressed some discomfort, given the prevalence of “greenwashing.”

McGinity alleged that P&G’s packaging “represents that the Products are natural, when, in fact, they contain non-natural and synthetic ingredients, harsh and potentially harmful ingredients, and are substantially unnatural.” A survey of more than 400 consumers who saw only the front label indicated that 74.9% of consumers thought the label conveyed that the shampoo contained more natural than synthetic/artificial ingredients, and 77.4% of consumers thought the same about the conditioner. When asked about the phrase “Nature Fusion,” 52.6% of consumers thought that the phrase “Nature Fusion” meant that the product did not contain synthetic ingredients; 49.1% of consumers thought that the phrase “Nature Fusion” meant that the product contained only natural ingredients; and 69.2% of consumers thought that the phrase “Nature Fusion” meant that the product contained both natural and synthetic ingredients.

The court found that the front label was ambiguous, but not misleading, as shown by “the nearly 50/50 split in survey responses interpreting whether the phrase means that the products are all-natural and lack synthetic ingredients.” (I teach that false advertising is probabilistic: if a representation is likely to deceive a substantial number of reasonable consumers, it is deceptive, even if not everyone is misled—but that conclusion is most reliable for competitor-plaintiffs, as this case shows. The court doesn’t discuss “don’t know/not sure” answers, but those answers are arguably the only ones perceiving ambiguity, a concept that is maybe not super helpful as applied to a population.)

The court also used the survey’s nearly 70% “both natural and synthetic ingredients” results to reason that the back label was relevant to what consumers would reasonably take away. Whether a back label ingredients list “can ameliorate any tendency of [a] label to mislead” depends on whether the “back label ingredients list ... conflict[s] with” or “confirm[s]” a front label claim. … However, the front label must be unambiguously deceptive for a defendant to be precluded from insisting that the back label be considered together with the front label.

“Unambiguously deceptive,” based on my reading of the cases, seems to mean that the court agrees that it would be reasonable for a consumer to conclude that she need seek no further information based on the front label. But that suggests that the court is holding that nearly half of consumers who thought that the product contained only natural ingredients were unreasonable. Why? It is perfectly workable to have a normative definition of reasonability, but it’s a bit odd to have it only in consumer protection cases and use an empirical definition in Lanham Act cases.

Anyway, the front label here was ambiguous, not misleading. [This distinction also seems a bit lawyerly to me.]

“Unlike a label declaring that a product is “100% natural” or “all natural,” the front “Nature Fusion” label does not promise that the product is wholly natural. Although the front label represents that something about the product bears a relationship to nature, the front label does not make any affirmative promise about what proportion of the ingredients are natural. Instead, as the parties point out, “Nature Fusion” could mean any of a number of things: that the products are made with a mixture of natural and synthetic ingredients, that the products are made with a mixture of different natural ingredients, or something else entirely….

We hold that when, as here, a front label is ambiguous, the ambiguity can be resolved by reference to the back label. In addition to the ingredient lists, the back labels of the Nature Fusion shampoo and conditioner contain the phrases “Smoothness Inspired by Nature” and “NatureFusion® Smoothing System With Avocado Oil.” Upon seeing the back labels, it would be clear to a reasonable consumer that the avocado oil is the natural ingredient emphasized in P&G’s labeling and marketing. The ingredients list, which McGinity alleges includes many ingredients that are synthetic and that a reasonable consumer would not think are natural, clarifies that the rest of the ingredients are artificial and that the products thus contain both natural and synthetic ingredients.

The survey didn’t help because it didn’t provide access to the back label. The court says that the results confirmed the ambiguity of the term, because, “[h]ad the survey participants had access to the products’ back labels, they would have had an immediate answer to this question—they could see that the products contain avocado oil, a natural ingredient, as well as many synthetic ingredients.” But that’s not a satisfactory rebuttal to the survey because the survey suggests that nearly half the respondents didn’t think there was a question to be answered, and thus would have had no particular reason to consult the back. Now, it’s quite possible that the survey was bad—that a “don’t know/not sure/need more information” option would have received substantial endorsement—but that’s a different objection. According to the survey, most consumers didn’t find the label ambiguous, they just didn’t agree on what message was delivered, which is not the same thing as having questions about it.

Basically, courts want the flexibility to find deceptiveness when the back and the front are, in the court’s view, too distinct:

Although a back label cannot contradict deceptive statements made on the front label, the back label can be used to interpret what is conveyed by the labeling when the front label is ambiguous, as here. With the entire product in hand, we conclude, no reasonable consumer would think that the products are either completely or substantially natural. The survey results do not make plausible the allegation that the phrase “Nature Fusion” is misleading.

The court also cautioned: “it is important that potential or current litigants draft questions for consumer surveys with utmost care. Although the particular survey proved noninformative in the context of this case and the results of the survey, consumer surveys may well be relevant and helpful in other cases.” That is, as McCarthy says in the Lanham Act context, the survey will help when it reinforces the conclusion the judge has already drawn, and not otherwise.

Judge Gould, joined by Judge Berzon (odd, but ok): Concurred to express concern that P&G was treading close to “greenwashing,” “a set of deceptive marketing practices in which an entity publicly misrepresents or exaggerates the positive environmental impact or attributes of a product[.]”  The concurrence pointed to the FTC’s Green Guides, which “give general principles that all marketers can use to avoid deceiving consumers unintentionally or from mere negligence.”

Here, although there is only one natural ingredient in the products, the word “Nature” is in bold, capitalized text on the front labels and is one of the largest words on the bottles, second only to the brand name, “Pantene.” As a consumer hoping to purchase natural personal care products, McGinity was drawn to the emphasis on “Nature” and thought that the labeling meant that the products were “of, by, and from ‘Nature.’ ” … The phrase “Nature Fusion” may be more ambiguous and less deceptive than “green” or “eco-friendly,” but I still note how the use of such a phrase sounds alarm bells similar to those sounded in the Green Guides.