Editor’s Note: This article is a “Part 2” paired with December 2022’s Pet Food Insights column, “Litigation trends in the pet food and treat industries.” This article was written by Michael Annis “with special thanks to Tori Matternas, associate attorney with Husch Blackwell.”
In December 2022, I addressed some trends in marketing and advertising litigation faced by the pet food industry, including claims made based on label and adverting statements, generally referred to as “false advertising” claims. There, I noted that to get a peek into the future on likely pet food claims, you can often simply look to what is new and evolving in the human food space — as it is often the harbinger of what the pet food industry will likely face. And what seems to be rapidly evolving in our industry are claims of false or misleading statements made by companies regarding their stated commitments to ESG — or environmental, social and governance practices. To be sure, possible actionable statements are not simply those emblazoned on your product label. Like Jack Webb used to say on Dragnet, “anything you say can and will be used against you.” And there is no doubt that the plaintiffs’ bar looks to all of your attendant public-facing statements, including those relating to company practices and asserted ethos, to cobble together a claim of false advertising.
What is ESG and what are its impacts?
For those who are not tuned into ESG, lore teaches that the term was used first in a 2004 report titled “Who Cares Wins,” authored by joint initiative of financial institutions at the request of the United Nations. In the less-than-20-years since, ESG has blossomed into a worldwide phenomenon, directed, in gross, at improving corporate social responsibility. But as with a number of popular movements, what qualifies as legitimately falling within the confines of ESG can prove elusive to pin down and define.
Perhaps as a result, and within the constructs of ESG-type statements, false advertising claims directed to the concept of “sustainability” are on the rise. As I have previously hypothecated, “sustainable” may well become the new “natural” in the false advertising realm. Both terms have yet to be governmentally defined, thus no protections exist for use of such terms within the strictures of governmental say-so. They both are vague and ambiguous in that if you asked 10 people what the terms mean, you are likely to get at least five different responses. And it is that very vagary that drives the vast amount of false adverting cases.
As consumer decision-making is further impacted by the consumer’s desire to do business with perceived like-minded companies — those that share the customer’s ESG-related values — claims directed to “environmentally friendly” and “sustainable” marketed products will surely multiply. Marketers have undoubtedly received the hint that consumer purchasing decisions are, to a certain extent, driven by “sustainability” claims, and are messaging their products and manufacturing practices to catch that wave.
Concrete claims vs. 'puffery' and consequences of use
An example are the claims lodged against The Coca-Cola Company by the Earth Island Institute, contending that statements made on Coca-Cola’s website and Twitter account, including “Our planet matters. We act in ways to create a more sustainable and better shared future” were measurably false and should subject Coca-Cola to liability. There, the court dismissed the case, finding that the statements were non-actionable, aspirational statements and general goals, sometimes referred to as “puffery.” As such, the statements could not amount to actionable promises made to consumers. That decision, however, is currently on appeal.
To add to the confusion of acceptable uses, similar statements have been found to be actionable, getting past the pleading stage and onto the proof aspects of the case. Gorton’s, the second-largest seafood company in the world, was recently sued for alleged falsely advertising its tilapia offerings, specifically in relation to labeling statements that its fish were “sustainably sourced.” Plaintiffs there assert that they personally believed that the fish in question were sourced in accordance with “high environmental and animal welfare standards” because of Gorton’s “sustainability sourced” statements. According to the Plaintiffs, some of the fish in question had been raised in Chinese fish farms and questioned by certain private U.S.-based environmental organizations as not adhering to what they deemed to be “sustainable farming practices.” Despite the fact that Gorton’s used credible third-party certifiers to back up its alleged “industry best practices,” the court found that Plaintiffs’ claims for false advertising were plausible (but nonetheless hotly disputed) as Plaintiffs alleged the fish were actually sourced from “environmentally destructive and inhumane” practices.
These cases illustrate the thin line courts navigate in determining what can be considered an “aspirational” statement. Further, they show that it is not just label statements that can support a claim for false advertising — you have to be cognizant of all consumer-facing statements made, regardless of where the statements are displayed. Companies should be careful in crafting even “aspirational” statements, regardless of where those statements are displayed, as they could easily cross the line into an actionable, objective marketing statement designed to induce consumers to purchase a product they believe aligns with their values. Moreover, factual, testable and measurable statements regarding the product itself, including how it was made, labor conditions under which it is made, how and in what it is packaged, can more likely support a false advertising claim than those of the “aspirational” flavor. But even ambiguous, non-specific aspirational claims need to be substantiated in order to establish with fact that the claims are not simply illusory.
When statements begin to look like assurances and promises to consumers, courts are more likely to find that there are “measurable standards” to determine if the company has been inaccurate or misleading in its marketing claims. So take care with all of your consumer-facing statements, including those found in shareholder reports, mission statements and websites. The trend is evolving, and the courts have not been consistent in how they treat off-label statements to support a claim for misleading the consumer in making purchasing decisions. And be prepared to back up your claims with evidence, not argument. Substantiate. Substantiate. Substantiate.
Part 1: Litigation trends in the pet food and treat industries
www.PetfoodIndustry.com/articles/11751
Briefly: Top 5 takeaways
- What seems to be rapidly evolving in our industry are claims of false or misleading statements made by companies regarding their stated commitments to ESG.
- ESG has blossomed into a worldwide phenomenon, directed, in gross, at improving corporate social responsibility.
- As consumer decision-making is further impacted by the consumer’s desire to do business with perceived like-minded companies, claims directed to “environmentally friendly” and “sustainable” marketed products will multiply.
- It’s not just label statements that can support a claim for false advertising — you have to be cognizant of all consumer-facing statements made, regardless of where the statements are displayed.
- Be prepared to back up your claims with evidence, not argument. Substantiate. Substantiate. Substantiate.
