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Out of Vogue: Greenwashing litigation on the rise for fashion retailers | Eversheds Sutherland (US) LLP


As consumer interest in climate change and sustainability continues to evolve, an increase in “greenwashing” claims directed towards fashion retailers has generated a series of headline-grabbing lawsuits. Over the last year, the fashion industry has become a target of consumer class action, as well as state and federal investigations, for sustainability representations by major fashion retailers. This trend is likely to continue as more and more consumers become environmentally conscious—demanding more eco-friendly products and sustainable business practices, thus creating a need for businesses to increase sustainability efforts or lose out on market share.

Background. In recent years, “greenwashing” claims have taken many different roles—but at their core remain claims of fraud, false advertisement and fraudulent misrepresentation. Plaintiffs’ attorneys seeking the financial windfalls of large class action settlements or jury awards target large and well-known retailers with such fraud allegations. As further discussed below, foreign companies such as H&M are a favored target because of their prominence in the retail market, as well as the European Union’s more active pursuit on environmental sustainability.

“Greenwashing” claims are alleged most commonly when a retailer makes a public statement, advertisement, or product labeling that include sustainability representations designed to appeal to environmentally conscious consumers. “Greenwashing” within the fashion industry has been most commonly observed with companies that make affirmative statements regarding their “sustainability” efforts and with companies that advertise or label their products using targeted buzzwords, including, but not limited to, “eco-friendly,” “recycled,” “organic,” “natural,” and “sustainable”—so-called “greenwashed products.”

To date, “greenwashing” litigation has been most prevalent in California due to California’s plaintiff-friendly consumer protection laws—brought under violations of California Unfair Competition Law, Consumers Legal Remedies Acts, False Advertising Laws, and other common law fraud claims. However, as “greenwashing” litigation becomes more widespread, other states should see an increase in similar types of lawsuits—as recently observed in New York and Missouri.

Fashion-Related Lawsuits. Commodore v. H&M (New York)1 was the first putative class action brought against Swedish fashion giant H&M over its use of Higg Sustainability labels on garments. Plaintiffs claimed that H&M used Higg scorecards to justify charging premium prices for its “sustainably-made” clothing—known as the H&M Conscious Collection—arguing that such products are “no more sustainable than items in [H&M’s] main collection, which are also not sustainable.” The allegations in this lawsuit exemplify the potential pitfalls of making unverified sustainability and “eco-friendly” representations can lead. Further, H&M made these sustainability claims specifically and directly, displaying them on their products by publishing “environmental scorecards” and “eco-friendly” tags. Although this case is in its early stages of litigation, the court has set the briefing schedule for H&M’s motion to dismiss for February 23, 2023. While it is yet unknown precisely how H&M may move on the plaintiff’s argument, as with other false-advertising claims, H&M’s best defense may be the truth—and pointing to publicly available data and records supporting its “sustainably-made” clothing line should be enough for a quick dismissal.

Lizama v. H&M (MO)2 marks the second putative class action against H&M, similarly alleging that “H&M’s representations that [its] Products are a “Conscious Choice,” more “sustainable,” and environmentally friendly…” are “false and misleading representations.” Notably, this case not only included the typical “greenwashing” causes of action (false advertising, deceptive acts and practices, unjust enrichment, etc.), but also included five counts of Violation of Missouri’s Merchandising Practices Act (MMPA). On December 6, 2022, H&M filed a motion to dismiss, arguing plaintiffs failed to plead sufficient facts alleging false advertising related to the H&M Conscious Collection. More specifically, H&M’s motion argues that H&M is merely making comparative claims that its product materials are “more sustainable” than their regular clothing line, and because H&M is using comparative language, a reasonable consumer would not be deceived that the clothing was fully sustainable or more sustainable than its competitors. Further, H&M argues that plaintiffs have not suffered any loss because the customers purchased the clothing from the Conscious Collection, and the clothes were, in fact, a part of that collection. To date, no response or court order has been filed.

Examples of recent “greenwashing” fashion-related litigation dismissals include Lin v. Canada Goose3, a class action filed in New York, where plaintiffs alleged several violations of NY General Business Law and common law based on Canada Goose’s marketing and advertising of its fur as sustainable and certain environmental claims. More specifically, plaintiffs call out Canada Goose’s representations that “[t]he Canada Goose Fur Transparency StandardTM is our commitment to support the ethical, responsible, and sustainable sourcing and use of real fur” and “[t]he standard certifies that we never purchase fur from fur farms, never use fur from endangered animals, and only purchase fur from licensed North American trappers strictly regulated by state, provincial and federal standards.” On November 14, 2022, the court dismissed the complaint in its entirety, while not specifically addressing any of Canada Goose’s environmental claims, because the complaint alleged several misrepresentations under the NY statutes, which the plaintiffs failed to adequately plead.

Similarly, Dwyer v. Allbirds4, a class action filed in New York, evidences how suitability representations regarding product life-cycle could lead to “greenwashing” claims. In this case, plaintiffs alleged Allbirds was making false statements regarding the environmental impact of its wool shoes as described using a life-cycle assessment tool to estimate the product’s carbon footprint and its sustainability index. More specifically, plaintiffs attacking Allbirds’ representation that “the average footprint of [Allbirds’] products is 7.6 kg CO2e” and about them working “with leading organizations like ZQ Merino to ensure our wool is held to high standards of farming, land management and animal welfare.” On April 21, 2022, the court dismissed the complaint, reasoning that Allbirds’ statements regarding its use of metrics were factually accurate and would not mislead a reasonable consumer. Notably, the court declined to second-guess the quality of the metrics themselves.

Takeaways. One of the lessons to be taken from these fashion-related “greenwashing” lawsuits is that all fashion brands should consider tightening up the language in their marketing efforts used around sustainability, especially if they are making very specific claims. In addition, companies should avoid wide-sweeping, broad statements about their sustainability efforts and avoid labeling products as “sustainable” without concrete evidence and independent verification. Like all claims for misrepresentation, the truth is the best defense. Before making any representations and labeling products, businesses should aim to conduct diligent studies and investigations—better able to support their sustainability statements with concrete firm data, thus becoming better able to neutralize and defend the “greenwashing” claims that are now flooding the US litigation landscape.

___________

1 Commodore et al v. H&MCase No. 7:22-cv-06247 (S.D.N.Y. July 22, 2022).

2 Lizama et al v. H&M, no. 4:22-cv-01170 (ED Mon. Nov. 3, 2022).

3 Lin v. Canada Goose US, No. 1:21-cv-07614 (S.D.N.Y. Sept. 12, 2021).

4 Dwyer v. Allbirds, Inc., No. 7:21-cv-05238 (S.D.N.Y. June 13, 2021).

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