Merrell v. Florida Crystals Corp.

The federal district court for the Northern District of California largely denied Florida Crystals Corporation’s (Florida Crystals’) motion to dismiss a second amended complaint in a greenwashing action asserting that Florida Crystals’ claims regarding its sugar products’ climate and other environmental benefits violated California law. The court first found that the plaintiff’s allegations regarding the adverse impacts of preharvest burning concerned company-wide practices and therefore would not be dismissed just because preharvest burning was not used to produce the particular product purchased by the plaintiff. The court also found that the complaint’s allegations regarding the water impacts of Florida Crystals’ sugar production were sufficient to survive a motion to dismiss. The court also found that Florida Crystals did not establish as a matter of law that no “reasonable consumer” would understand the company’s statements regarding climate and environmental benefits to mean that the company did not engage in allegedly harmful practices. In addition, the court found that the statement “Farming to Help Save the Planet” could not be deemed puffery as a matter of law. The court granted Florida Crystals’ motion to dismiss requests for restitution and disgorgement under California’s Unfair Competition Law and for punitive damages on False Advertising Law, warranty, and unjust enrichment claims.

The federal district court for the Northern District of California granted the sugar producer Florida Crystals Corporation’s motion to dismiss a greenwashing class action but granted the plaintiff leave to file a second amended complaint to clarify her theory of liability. The court found that the first amended complaint’s allegations of deception were related to the defendants’ representations regarding the environmental benefits of particular products but that in opposing the motion to dismiss, the plaintiff focused on her reliance on representations regarding company-wide practices related to the environment, including climate change. The court therefore dismissed the first amended complaint on the grounds that it did not “adequately articulate” the plaintiff’s theory as to how the defendant’s representations were deceptive. The court did not address the defendant’s other grounds for dismissal and denied the motion to dismiss on those grounds without prejudice to the company’s ability to raise them after the plaintiff filed a new complaint.