Court Rejects ‘Carbon Neutral’ Claim

A recent ruling by a federal court regarding the term “carbon neutral” is a warning shot to consumer goods marketers, manufacturers and suppliers. In his ruling for the plaintiff, Federal District Judge Nelson S. Román permitted a class action lawsuit against Danon Waters to advance past the motion-to-dismiss stage, based on allegations that the company’s claim that Evian water was “carbon neutral.” The plaintiff said the claim was deceptive under state consumer protection laws. Román denied Danone’s motion to dismiss most of the plaintiff’s claims highlighting the potential legal exposure concerning the use of environmental marketing claims.

According to the law office of Morgan Lewis, Román denied Danone’s motion to dismiss most claims asserted, concluding that the phrase “carbon neutral” is a technical term, which may be confusing and ambiguous to consumers, and that a reasonable consumer could plausibly conclude that “carbon neutral” meant that no carbon is emitted at all during Evian’s bottling.

The court further found that a reasonable consumer could conflate the terms “carbon neutral,” “carbon zero” and “carbon free,” particularly given the plaintiffs’ allegations that nearly 60% of consumers did not understand the meaning of “carbon neutral.” Accordingly, the court concluded at the motion-to-dismiss stage that it had been sufficiently alleged that Danone’s claim that Evian was “carbon neutral” could mislead consumers.

As further support for his conclusion, Román relied on the dictionary definition of carbon neutral—which “lack[ed] specificity and may be difficult to comprehend” —as well as the US Federal Trade Commission’s (FTC’s) Guides for the Use of Environmental Marketing Claims (the Green Guides), which caution marketers against making claims of “unqualified general environmental benefit.” Judge Román reasoned that, as alleged, Danone’s “carbon neutral” claim constitutes such a claim. As Chapter 93A incorporates FTC regulation, Judge Román deemed the Green Guides informative.

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