dismissal of NYC's consumer protection claims against fossil fuel companies affirmed

City of New York v. Exxon Mobil Corp., 2026 WL 3023932, Appeal No. 6583, --- N.Y.S.3d ---- (App. Div. Oct. 8, 2026)

False advertising claims against fossil fuel companies for contributing to climate change are hard to win. The City alleged that defendants engaged in “deceptive ... trade practice[s]” proscribed by the City’s Consumer Protection Law (CPL) “by misrepresenting the purported environmental benefits of using their fossil fuel products” (“product greenwashing”) and “by creating a misleading impression of the role of renewables [i.e., renewable energy] in their businesses” (“corporate greenwashing”). The appellate court affirmed the dismissal of the claims.

Product greenwashing: The alleged deceptiveness came from failure to disclose that fossil fuels contribute to climate change, but the connection was already public information. If, as alleged, consumers care about fossil fuels’ contribution to climate change, they couldn’t be duped by failure to disclose. This was true even if the court didn’t apply the reasonable consumer standard but rather the older standard: the effect the statement would have upon a consumer falling within the ranks of “the ignorant, the unthinking and the credulous who, in making purchases, do not stop to analyze but are governed by appearances and general impressions.” “Because the statements at issue disclose that the improved products are gasoline, even unsophisticated consumers – given the City’s foundational assumption of near-universal understanding of the link between gasoline use and climate change – would necessarily understand that use of the improved products contributes to climate change.” Comparative statements that improved products would produce fewer emissions than other gasoline products could not “lead even an incautious consumer to understand defendants to be representing that the environmental impact of use of the new products to power private vehicles would be comparable to the impact of taking public transportation, bicycling, walking, or using electric or hybrid cars.” Nor were defendants required to quantify the reduction in emissions in their ads. “Nor has the City come forward with evidence that the reduction in emissions made possible by the gasoline products at issue is so minute, as compared to other gasolines, as to be legally insignificant.”

As to the corporate greenwashing claim, the court concluded that the complaint did not sufficiently allege that the statements were “made in connection with the sale” or “offering for sale” of “consumer goods or services” “because none of the clean alternative energy products referenced in the statements were sold to consumers, either in New York or anywhere else.”

Although the CPL bans conduct that “has the capacity, tendency or effect of directly or indirectly deceiving or misleading consumers,” “[e]ven an allegation that a statement has the tendency to indirectly deceive a consumer must still be ‘made in connection with the sale’ of a consumer good or services” to fall within the scope of the prohibition.