"carbon neutral" not plausibly misleading where D bought offsets from 3d-party certifiers, despite methodological disputes

Bell v. R.J. Reynolds Vapor Co., 2026 WL 915295, No. 25-cv-04521-TLT (N.D. Cal. Feb. 20, 2026)

Bell brought the usual California claims based on RJR’s alleged misrepresentation of its products’ carbon neutrality. The court dismissed the complaint.

RJR labeled its Vuse as the “first carbon neutral vape brand,” based on the purchase of carbon-offset credits created from projects that aimed to reduce their carbon emissions. RJR purchased credits through certification by third-party organizations such as Verra and Vertis, mostly reforestation and forest protection projects between 2021 and 2024. Bell alleged that these projects “do not provide genuine, additional carbon reductions” because “forestry activities that would have occurred anyway” or lands were “already at minimal risk of deforestation.” The complaint alleged both consumer surveys and confirmation of the lack of impact through publicly available data, news reports, project documentation, satellite imagery, and third-party evaluations.

Bell’s price premium theory properly alleged standing, but that was it. There’s no statutory definition of “carbon neutrality.” “Merriam-Webster provides a dual definition for the term as (1) having or resulting in no net addition of carbon dioxide to the atmosphere; or (2) counterbalancing the emission of carbon dioxide with carbon-offsets.” And plaintiffs failed to plausibly allege that a reasonable consumer would adopt an interpretation that carbon neutrality must mean no additional carbon emissions to the atmosphere and that RJR must have conducted an independent, primary-source verification of the carbon-offset project. RJR truthfully disclosed its reliance on the third-party verification. “The third parties are allegedly independent organizations that have operated for decades and manage leading standards in the global carbon market.” Though Bell disagreed, disagreements over “statistical methodology and study design” are generally insufficient to allege a materially false statement. Although Bell alleged consumer surveys and studies showing that a significant portion of consumers prefer carbon-neutral products, the complaint failed to plausibly allege how these consumers would reject third-party certifications. “Given the complexity of carbon emission and the fact that Defendants explicitly described achieving carbon neutrality through third-party certifications that further described how underlying projects achieve offsetting carbon emission, the Court finds that a reasonable consumer would not view Defendants’ conduct as inherently counterfactual nor unreasonable.”