NYC loses greenwashing case against Exxon and pals

City of New York v. Exxon Mobil Corp., --- N.Y.S.3d ----, 2025 WL 209843, No. 451071/2021 (N.Y.S. Ct. Jan. 14, 2025)

Probably not the last we’ll hear about this, but the court dismissed the City’s two consumer protection claims against defendants for: (1) misrepresenting the purported environmental benefit of their fossil fuel products, and failing to disclose the attendant climate change risks of these products, and (2) engaging in false and misleading greenwashing campaigns. Previously, the courts dismissed public nuisance, private nuisance, and trespass claims as preempted. See City of New York v. BP P.L.C. et al., 325 F. Supp. 3d 466 (S.D. NY 2018), aff’d City of New York v. Chevron Corp., 993 F.3d 81 (2d Cir. 2021). The court summarized its key holdings:

First, the City’s allegations that NYC consumers are climate conscious, yet are being misled by Defendants’ failure to disclose that fossil fuels cause climate change is not sustainable because the City propounds that the connection between fossil fuels and climate change is publicly known information. Second, the City has not sufficiently pled that Defendants’ alleged greenwashing campaigns, involving statements about clean energy and alternative energy sources, are “made in connection with the sale” of a consumer good (i.e., fossil fuel products) in NYC, as required under the CPL. The Court further determines that claims for statements that predate April 22, 2018 are time-barred.

The greenwashing allegations related to: (1) “product greenwashing” statements intended to mislead consumers as to the climate benefits of specific gasoline products without disclosing the adverse impacts of those products on the climate, and (2) “corporate greenwashing” statements intended to present Defendants as climate-friendly thereby inducing consumers to purchase their fossil fuel products. As an example of product greenwashing, BP advertises Invigorate, “an additive that BP describes on its website as better than ‘ordinary fuels’ that have problems like ‘increased emissions’.” Shell advertises the Shell Nitrogen Enriched Cleaning System and a line for its premium grade of fuel called V-Power Nitro+ Premium as “produc[ing] fewer emissions.” Exxon advertises that Synergy Diesel Efficient fuel is the “latest breakthrough technology” that helps consumers “[r]educe emissions and burn cleaner,” and “was created to let you drive cleaner, smarter and longer.” And lots more. The City argued that these statements were misleading “by emphasizing the climate-friendly benefits of the product without disclosing the material fact that the product still causes climate change despite the claims of reduced emissions.”

“New York courts have determined that where the plaintiff does not plead facts that the defendant alone possessed the purported material information, a reasonable consumer cannot have been misled.” The fossil fuel/climate change link is public, so consumers can’t have been duped by defendants’ failure to disclose.

Also, some of the alleged product greenwashing statements (I didn’t list them all) were puffery or not misleading in context, referring to keeping an engine cleaner, not the environment.  

As for the corporate greenwashing statements, they weren’t sufficiently alleged to be “made in connection with the sale ... or ... offering for sale ... of consumer goods or services.” The court thought that accepting the City’s interpretation—where brand advertising that makes consumers feel good about a seller counts—would render the “made in connection” requirement meaningless. Thus, “statements as to investments in clean energy resources, such as wind and solar, and alternative energy sources, such as LNG, hydrogen fuel cells, and biofuels,” weren’t actionable.  

The court thus didn’t reach defendants’ arguments that their statements were protected by the First Amendment. It did hold that government enforcement actions weren’t covered by the anti-SLAPP law.