Business ethics

Greenwashing in Paradise? Hill v. Roll International Corporation and Fiji Bottled Water Labeling

The California First District Court of Appeal released its decision yesterday [May 26, 2011] in the case of Hill v. Roll International Corporation. The case was brought by an alleged consumer of Fiji brand bottled water, San Francisco resident Ayana Hill, who asserted that a picture of a green water drop on the label (shown below) led her to believe that Fiji water was environmentally superior and endorsed by an independent environmental organization, when in fact it is not. Her suit claimed that Fiji Water Company LLC and Roll International Corporation (an unrelated company owned by the owners of Fiji Water, Stewart and Lynda Resnick) violated the California Unfair Competition Law, False Advertising Law and Consumers Legal Remedies Act, as well as common law fraud and unjust enrichment doctrines. Ms. Hill sought certification of the suit as a class action.

Ms. Hill asserted in her complaint that Fiji is guilty of “greenwashing” its product, as the practice of making false or misleading claims to environmental benefits has come to be known. Such accusations are commonplace against a wide range of companies by environmental activists, as more and more companies have started making statements about their environmental practices (itself largely in response to the same environmental activists).

The Court asked and answered the question simply: “Does the green drop on Fiji water bottles convey to a reasonable consumer in the circumstances that the product is endorsed for environmental superiority by a third party organization? No.” The Court reached this conclusion because the drop does not contain the name or recognized logo of any organization, does not include any stylistic elements common to certification seals, such as a check mark or other sign of approval, and is accompanied on the back of the label by a reference to the website fijigreen.com, which a consumer can clearly tell is operated by Fiji rather than an independent third party organization. Because a reasonable consumer would not understand the green water drop to make false, misleading or deceptive claims regarding endorsement by an independent environmental organization, and Ms. Hill did not explain how she could amend her complaint to allege such claims, the Court dismissed the case without leave to amend.

Even though the Court ultimately held that Fiji water did not violate state laws regarding environmental marketing claims, the Hill case draws attention to the care that companies must take when marketing their products. Accusations of greenwashing are almost certain to grow in future, whether deserved or not, and companies should be aware that overreaching claims may result in litigation.