The federal district court for the Central District of California ruled that plaintiffs in a putative greenwashing class action against Etsy, Inc. lacked standing for their false advertising claims, which were based on allegations that Etsy made false representations regarding its offsetting of carbon emissions from its shipping activities. The complaint alleged that “nearly all offsets issued by the voluntary carbon offset market over promise and under deliver on their net carbon impact due to endemic methodological errors and fraudulent accounting on behalf of offset vendors.” The court found that the complaint failed to plausibly allege that the plaintiffs paid a price premium caused by Etsy’s statements about carbon offsetting, noting that the price of the unique handmade products sold on Etsy “may result from a variety of factors that may have nothing to do with whether the platform on which it was sold attempted to offset the carbon from the platform’s shipping activities.” The court therefore dismissed the plaintiffs’ claims of violations of the California Consumers Legal Remedies Act, California False Advertising Law, and California Unfair Competition Law without prejudice. The court dismissed the plaintiffs’ negligent misrepresentation claim with prejudice because the plaintiffs did not make an argument concerning the claim or why the economic loss doctrine did not bar the claim in their opposition to the motion to dismiss.

Greenwashing lawsuit alleging that Etsy made false representations regarding its offsetting of carbon emissions from its shipping activities.

Blackburn v. Etsy, Inc.

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Federal Court Said Plaintiffs Lacked Standing for Case Alleging Etsy Misrepresented Effectiveness of Carbon Offsets for Shipping Emissions

Filed

United States of America

California

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Federal Court Said Plaintiffs Lacked Standing for Case Alleging Etsy Misrepresented Effectiveness of Carbon Offsets for Shipping Emissions

Policy instrument

Greenhouse gas

Economic sector

Finance