Back in January I posted about the rise in food and beverage lawsuits over "greenwashing" claims being made on product labels. Greenwashing happens when a company makes a positive environmental claim about the sustainability or climate-friendly aspects of a product that is alleged to be untrue. While many of the initial lawsuits were in the food and beverage space, the litigation has become prevalent across many industries, including CPG companies. 

So far, most of these lawsuits seem to be failing, including a recent case against Procter & Gamble over the "Nature Fusion" labels on its Pantene shampoo and conditioner. Sean McGinity sued P&G in the US District Court for the Northern District of California claiming these products contain potentially harmful ingredients and are unnatural. His Complaint focused, in part, on the portion of the product label that had an image of an avocado on a green leaf, which McGinity claimed was misleading. 

The district court dismissed the Complaint for failure to state a claim and the Ninth Circuit affirmed. The appellate court's decision noted that the product label does not assert that the product is completely natural. And the back of the label clarifies that the natural ingredient being touted is avocado oil and discloses the fact that many of the product's ingredients are synthetic. A reasonable consumer, therefore, would correctly conclude the product contains both natural and artificial ingredients and would not be deceived.

Notably, two of the three Ninth Circuit judges issued a separate concurring opinion expressing concerns about greenwashing. “The phrase ‘Nature Fusion’ may be more ambiguous and less deceptive than ‘green’ or ‘eco-friendly,’” Judge Ronald M. Gould wrote, but it resembled marketing tactics warned of in the Federal Trade Commission’s Green Guides.

So, while this case is clearly a win for business, it is also a cautionary tale for the future. Greenwashing cases are not likely to be considered ipso facto meritless by the Courts. Businesses therefore need to take these issues into consideration when crafting appropriate product labels.