Ellis v. Nike USA, Inc.

The federal district court for the Eastern District of Missouri dismissed a lawsuit in which a plaintiff alleged that she purchased products from Nike’s “Sustainability Collection” at a premium in reliance on Nike’s allegedly false representations that the products were sustainable and made with recycled and organic materials. The plaintiff alleged that Nike marketed the Sustainability Collection as supporting its “journey toward zero carbon and zero waste.” The court found that the plaintiff failed to plausibly allege that the products were not made with any recycled or organic fibers. The court further found that the plaintiff did not plausibly plead that she acted as a reasonable consumer would in light of all circumstances as required under the Missouri Merchandising Practices Act.

A consumer who purchased Nike’s “Sustainability” Collection Products filed a class action complaint in the federal district court for the Eastern District of Missouri asserting that Nike falsely and misleadingly represented that the products were sustainable, made with sustainable materials, and environmentally friendly. The misrepresentations alleged by the plaintiff included that Nike labeled products to claim that they supported a “Move to Zero,” which “is Nike’s journey toward zero carbon and zero waste to help protect the future of sport.” The complaint asserted violations of Missouri’s Merchandising Practices Act and made claims of unjust enrichment, negligent misrepresentation, and fraud.

The Eighth Circuit Court of Appeals affirmed the dismissal with prejudice of a consumer’s putative class action against Nike USA, Inc. and a subsidiary alleging that the defendants falsely and misleadingly advertised “Sustainability Collection” products as sustainable and environmentally friendly. The plaintiff claimed that the marketing and labeling of the products led consumers to believe that the products were “sustainable”; “made with recycled fibers” which “reduce waste and our carbon footprint”; a “move to zero carbon and zero waste”; made from “sustainable materials”; and environmentally friendly. The only issue presented on appeal was whether the district court abused its discretion by dismissing the case with prejudice. The Eighth Circuit therefore did not address the district court’s conclusion that the plaintiff failed to state a claim, including because she failed to plausibly allege that the products were not made with any recycled or organic fibers. On the question of whether dismissal with prejudice was appropriate, the Eighth Circuit found no error of law or abuse of discretion, noting, among other things, that the plaintiff had failed to properly seek leave to file a second amended complaint after the defendants filed a motion to dismiss arguing that the first amended complaint contained the same “glaring pleading deficiencies” that were in the initial complaint.