Merrell v. Florida Crystals Corp.

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.

A greenwashing consumer class action filed in the federal district court for the Northern District of California alleged that Florida Crystals and its parent company deceived and misled consumers into purchasing their sugar products. The complaint alleged that the defendants advertised their products as beneficial for the environment and as helping to fight climate change when in fact the companies’ sugarcane harvesting involves pre-harvest burns that result in “substantial volumes of unnecessary greenhouse gases,” as well as other air pollutants. The complaint alleged that “[r]esearchers have found that switching from burning to green harvesting—i.e., slashing—reduces greenhouse gas emissions during the harvest period by approximately 24 percent.” The complaint also alleged that beyond the harvest period burned sugarcane fields release approximately 37% more soil-bound carbon dioxide than green-harvested fields. The complaint also alleged that the burn-harvesting methods cause localized impacts including soil damage. The plaintiffs asserted violations of California’s False Advertising Law, Consumer Legal Remedies Act, and Unfair Competition Law, as well as breach of warranty and unjust enrichment/restitution claims. The relief sought included declaratory and injunctive relief; damages, restitution, and/or disgorgement; punitive damages, statutory penalties, and/or monetary fines; and attorney fees and costs.