DC Court of Appeals revives greenwashing suit against Coca-Cola

Earth Island Institute v. Coca-Cola Co., --- A.3d ----, 2024 WL 3976560, No. 22-CV-0895 (D.C. Aug. 29, 2024)

Earth Island sued Coca-Cola under the D.C. Consumer Protection Procedures Act, alleging that Coca-Cola engages in deceptive marketing that “misleads consumers into thinking that its business is environmentally sustainable, or at least that it is currently making serious strides toward environmental sustainability.” In fact, Earth Island alleged, “the sheer scale on which Coca-Cola relies on single-use plastics in its packaging—and the scale on which it intends to continue using them—renders it an environmental blight and a fundamentally unsustainable business.” Coca-Cola touts its efforts to increase recyclability and use more recycled material, but this allegedly hid “the reality that recycling is not a viable means of mitigating the environmental harm that Coca-Cola inflicts via its mass production of single-use plastics—less than ten percent of recyclable plastics are in fact recycled in the United States.” Coca-Cola allegedly “represents itself as working toward environmental sustainability, despite no serious intention of doing the one thing that could actually achieve that goal: severely scaling down its plastic production.”

The court first found that Earth Justice had standing under DC law (the DC courts are not Article III federal courts). Despite the patchwork of sources—Twitter, the Coca-Cola website, other places—from which the complaint quoted, it was plausible that the general public targeted by the ads, including in DC, received the basic message “that Coca-Cola is a company that cares about, and is working meaningfully toward, environmental sustainability” even if no one person saw all the ads.

Reversing the trial court, DC’s highest court held that this greenwashing complaint stated a claim.

The most concrete statements outlined Coca-Cola’s goals: (1) “Make 100% of our packaging recyclable globally by 2025. Use at least 50% recycled material in our packaging by 2030” And (2) “Part of our sustainability plan is to help collect and recycle a bottle or can for every one we sell globally by 2030.” Vaguer statements were more in the vein: “Business and sustainability are not separate stories for The Coca-Cola Company—but different facets of the same story.” And Coca-Cola cosigned a statement from the American Beverage Association: “Together, we’re committed to getting every bottle back. ... Our goal is for every bottle to become a new bottle, and not end up in oceans, rivers, beaches and landfills. ... This unprecedented commitment includes ... [p]artnering with [other organizations] to improve recycling access, provide education to residents and modernize the recycling infrastructure in communities across the country.”

Earth Island specifically alleged that Coca-Cola wasn’t taking the steps necessary to meet its concrete benchmarks of (1) making 100% of its packaging recyclable by 2025, (2) using 50% recycled material in its packaging by 2030, and (3) recycling a bottle or can for every one it sells by 2030. And, it argues, Coca-Cola has a “history of making sustainability promises and failing to deliver on them,” which is “a history that is bound to repeat itself given that none of Coca-Cola’s business plans or lobbying efforts would enable it to actually achieve its alleged recycling goals.” Also, given low recycling rates, even if Coca-Cola could hit the benchmark of making 100% of its packaging recyclable by 2025, it would allegedly still be “push[ing] ineffective ‘recycling’ as a viable tool to assuage their environmental pollution.”

The trial court thought that the challenged statements were merely aspirational/puffery.  But “even aspirational statements can be actionable under the CPPA because they can convey to reasonable consumers that a speaker is taking (or intends to take) steps that at least have the potential of fulfilling those aspirations. Earth Island alleges that Coca-Cola neither takes nor intends to take any such steps, and if that is correct, then its representations could mislead reasonable consumers.”

It was facially plausible that

(1) Coca-Cola is a fundamentally unsustainable business because of its heavy reliance on single-use plastics that it has no immediate intentions of eliminating or substantially reducing; (2) Coca-Cola misleads consumers into thinking that it is serious about hitting its specific sustainability goals, when its practices say otherwise; and (3) Coca-Cola’s statements create the misimpression that recycling is a viable method for substantially mitigating the harm its plastic products cause to the environment, when it is not.

The court analogized to marketing “light” or “low tar” cigarettes; marketing them as a healthier option was misleading when they didn’t offer much if any benefit versus full tar and when they posed substantial health dangers. Given how Coca-Cola promotes its “World Without Waste” initiative and trumpets how it is “[s]caling sustainability solutions,” “a reasonable consumer could plausibly think that its recycling efforts will put a serious dent in its environmental impacts.” But Earth Island plausibly alleged that it wouldn’t given low recycling rates of recyclable plastics. “That is, when it promotes its recycling efforts, it omits the fact that those efforts will not prevent the vast bulk of its plastic products from ending up as waste or pollution, a deception that Earth Island alleges Coca-Cola very much intends.” Likewise, it was plausible that “a reasonable consumer would think Coca-Cola was taking the steps necessary to achieve its stated goals,” and it allegedly was not.

Of course, this was all subject to proof:

We do not presume to know what reasonable consumers understand a company to mean when it claims that it is working to be “more sustainable” or the like. For all we know, reasonable consumers would immediately dismiss that type of speech as vacuous corporate jargon, not to be relied upon. But that is not obviously true; the concerted efforts that companies like Coca-Cola make to cultivate an image of being environmentally friendly strongly suggests that even their vague assurances have a real impact on consumers. Further, even if reasonable consumers take Coca-Cola’s statements to mean that it is taking substantial strides to improve the environment, it is not at all obvious at this stage of the proceedings whether Coca-Cola’s efforts on the ground align with those statements. But those are questions of proof that cannot be settled at the motion to dismiss stage.

So, puffery was still an issue, but it was an issue for the factfinder.

The court rejected “more rigid approaches” to puffery, such as that where a statement’s “truth or falsity ... cannot be precisely determined,” it is puffery. But the cited case that puffery includes “the exaggerations reasonably to be expected of a seller as to the degree of quality of his product, the truth or falsity of which cannot be precisely determined.” The first part of that definition—reasonably expected exaggerations—was vital to the second. “[B]usinesses cannot insulate themselves from suit simply by avoiding concrete claims. Vague and ambiguous statements, incapable of being strictly true or false, may yet be actionable as misrepresentations.” The court here preferred defining puffery as (1) “general claim[s] of superiority ... so vague that [they] can be understood as nothing more than a mere expression of opinion,” and (2) “exaggerated, blustering, and boasting statement[s],” quite capable of being adjudged false, but “upon which no reasonable buyer would be justified in relying.” “Red Bull gives you wings” can’t be taken literally, but “might be actionable if it gave reasonable consumers the impression that Red Bell provided significant benefits over a cup of coffee or caffeine pill, at least if that were not the case.” In short, “statements that might be deemed puffery if interpreted to mean one thing in one context, might very well be actionable misrepresentations if taken to mean a different thing in a different context. The doctrine is not conducive to hard-and-fast rules, and typically raises a question for the factfinder.”

The court also rejected Bimbo Bakeries USA, Inc. v. Sycamore, 29 F.4th 630 (10th Cir. 2022), which overturned a jury verdict finding that a bakery engaged in false advertising when it billed baked goods it sold in Utah as “local,” despite the fact that they were made exclusively out-of-state, as far away as Alaska. The Bimbo Bakeries court concluded that the word “local” was “an indeterminate and unverifiable adjective,” so it was not any “description of fact,” because “the word local cannot be ‘adjudged true or false in a way that admits of empirical verification.’ ” Of course “local” has a range of meanings.

[I]t is just as obviously true that some things fall outside that range of meanings, often depending on context. To illustrate, here in the District, if somebody says they support the “local” NFL team, you would most naturally think they are supporters of the Washington Commanders, though they might also fairly be referring to the Baltimore Ravens, given that Baltimore is less than forty miles away (i.e., there’s a range that “local” might fairly apply to). But if they are in fact fans of the Los Angeles Rams—a team that hails from more than two thousand miles from here (just as some of the baked goods in Bimbo Bakeries came from Alaska, more than two thousand miles away from Utah)—then they have undoubtedly deceived you.

The court here also specifically rejected Bimbo Bakeries’s “hostility toward consumer survey evidence as one viable evidentiary tool for discerning how reasonable consumers understand various advertisements.” The court further noted that the Fifth Circuit’s analysis in Papa John’s contradicted Bimbo Bakeries—Papa John’s held that even a claim as vague and opinion-laced as “Better ingredients. Better Pizza.” could be actionable “when coupled with a comparison to a competitor’s ingredients that were not discernibly different.”

Nor was it dispositive that the statements were aspirational. An aspirational statement can be reasonably “interpreted to be a representation about the defendant’s present intent ... to act as stated.” Mere failure to achieve stated goals couldn’t support a misrepresentation claim, but a showing that Coca-Cola never even intended to do anything that could achieve them would.

Coca-Cola next argued that the statements at issue weren’t about “goods and services” as required by the CPPA. But claims about plastic packaging were very much about “goods and services,” defined broadly in the law to include “any and all parts of the economic output of society, at any stage or related ... in the economic process.”

Finally, the statements could properly be considered in the aggregate, although a litigant would not be allowed to “unfairly strip isolated statements out of their context and then cobble them together to form an unrepresentative tapestry of what has been conveyed.” Earth Island was targeting only statements that Coca-Cola was still making today. Discovery and trial could be reasonably tailored to those. Earth Island was not offering a “grab bag” of statements nor arguing that they should be read out of context. “Businesses can drive points home through repetition or supplementation, and where a consumer sees Coca-Cola billing itself as sustainable in one ad on a Monday, and then sees a different ad on Thursday with a similar message, the mere repetition of a point can have a cumulative effect on a reasonable consumer.” Maybe consumers wouldn’t have reacted that way, maybe not; “[i]t is plausible enough that a consumer curious about Coca-Cola’s environmental impacts would come across the variety of statements relied upon by Earth Island through some casual Googling.”

The First Amendment didn’t bar the suit. Earth Island challenged Coca-Cola’s commercial speech about its goods and services, although relief would have to preserve its First Amendment rights.