An appellate court rejected the city’s claim that the firms mislead consumers into thinking their products do not contribute to climate change.
New York City suffered a major setback earlier this month in its campaign to hold fossil fuel companies responsible for climate change.
A New York state appellate court rejected New York City’s claims that major fossil fuel companies misled consumers through allegedly deceptive environmental “greenwashing” campaigns, with the five-judge panel unanimously affirming the lower court’s dismissal of the case.
The city’s consumer protection lawsuit, City of New York v. Exxon Mobil Corp., et al., alleged that fossil fuel companies “take advantage of NYC consumers and prevent them from making informed choices by falsely buying consumer goodwill, and by misrepresenting their investments in renewable energy or playing up environmental aspects of their products without disclosing that their primary business — fossil fuels — is also the primary driver of climate change.”
The city argued in its suit that these fossil-fuel companies — BP, ExxonMobil, and Shell — promoted certain gasoline products as cleaner or emissions-reducing through a marketing tactic known as “product greenwashing,” in which a company advertises a product as more environmentally friendly than it actually is. According to the city’s complaint, the ads did not disclose that using these products still produces greenhouse gas emissions. The suit also alleged that the companies exaggerated their investments in renewable energy to cultivate a more positive public image.
But, First Appellate Division Associate Justice David Friedman strongly rejected that claim.
“Not even the least sophisticated consumer could be led to believe that, by using the advertised gasoline products, he or she would be able to drive a vehicle without producing a significant amount of emissions,” Friedman wrote in the ruling.
Friedman compares the city’s claim to an earlier case rejected by the Second Circuit, in which it was alleged “that the marketing of Diet Coke had the capacity to mislead consumers, through the use of the term ‘diet,’ to believe that consuming the drink would ‘assist in weight loss.'”
“New York City tried to resurrect its failed climate lawsuit by disguising it as a consumer protection case, and the courts rejected it again,” Jason Isaac, CEO of the American Energy Institute said in a statement. “This is another example of politicians attempting to use the judiciary to accomplish what they cannot achieve through the legislative process. These lawsuits threaten to impose enormous costs on American energy producers that ultimately risk being passed along to families and businesses.”
The ruling out of New York comes weeks after the Supreme Court heard oral arguments in Suncor Energy (U.S.A.) Inc. v. County Commissioners of Boulder County. The case will determine whether federal law preempts state-law suits seeking to punish fossil fuel companies for how their industry allegedly contributed to climate change. If Boulder prevails in this case, the suit can proceed in state court, and potentially allow jurisdictions to sue companies for substantial damages. The fossil fuel industry could be completely bankrupted in the aftermath, Carrie Severino, president of the Judicial Crisis Network, previously told National Review.
“This ruling from New York is a reminder that the Left is in the midst of a multi-phase campaign to reshape our economy, and cripple the disfavored energy industry, by using every state court lawsuit imaginable,” O. H. Skinner, executive director of Alliance for Consumers, said in a statement.
While Democratic-led cities and states have repeatedly brought similar climate lawfare suits against big fossil fuel companies, the five-judge appellate panel unanimously upheld the lower court’s dismissal of the city’s lawsuit, noting the ads are clear in that “the advertised products are gasolines.”
“It only takes one bad court ruling from an extreme jurisdiction to enact radical policies on every American. National energy policy should be set by Congress and not dictated by Blue state courts in Hawaii, Colorado, and New York. Hawaii’s courts, for example, have proven they will go to any lengths necessary to force their political agenda on the rest of the country, including climate policy and gun rights,” Severino said in a statement. “The Supreme Court has the opportunity to send a message to lower courts in the Suncor v. Boulder case.”
When evaluating NYC’s product-greenwashing claims, the appellate court noted that the ads made comparative claims, not assertions that the fuel was an emissions-free alternative. Similarly, the appellate court also upheld the lower court’s dismissal of the corporate-greenwashing claims. It found the challenged statements about the companies’ clean-energy investments were not sufficiently connected to the sale of consumer goods or services under the city’s consumer-protection law.
“If anything, the new ruling from New York is a testament to why the Supreme Court’s decision in Suncor is more necessary than ever to ensure our nation’s energy policy isn’t dictated by state court rulings in left-wing jurisdictions and that public nuisance and other far-fetched claims aren’t able to reshape our nation’s economy through court verdicts,” Skinner said.