New York Court Dismisses NYAG's Green Marketing Lawsuit Against Pepsi, Saying it "Strains the Bounds of Credulity"

In late 2023, New York Attorney General Letitia James sued PepsiCo, alleging, among other things, that Pepsi failed to warn consumers about the potential health and environmental risks of its single-use plastic packaging, and that the company misled consumers about its efforts to combat plastic pollution.  Pepsi moved to dismiss what was potentially a groundbreaking lawsuit, and a New York State court just granted the motion, saying that the NYAG's claims “strain the bounds of credulity.”  Here's why. 

New York law prohibits “[d]eceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in the state.”  In order to establish liability for deceptive or misleading conduct, the NYAG must demonstrate that the advertiser "engaged in materially misleading acts and that they were likely to mislead the consumer.”  

Regarding the NYAG's allegation that Pepsi was obligated to include a warning about the potential risks associated with the use of plastic packaging, the court held that there is “no affirmative obligation that requires Pepsi/Frito Lay to provide any warning.”  

Regarding the NYAG's allegation that Pepsi's statements about its recycling-related efforts are misleading, the court held that the company's promises to reduce its use of plastics “does not amount to deception.”  The court explained that, “a representation or a prediction of something which is hoped or expected to occur in the future is not a misrepresentation of fact.”   Here, the court really doesn't see Pepsi's aspirational statements as claims that require substantiation.  The court further explains, “Plaintiff seeks to impose a regulatory burden on Defendants that does not exist.  Plaintiff also seeks to create liability for Defendants' aspirational statements to certail a plastic footprint.  However, Plaintiff has failed to point to any statutory framework from which to impose such a burden or to establish a theory of liability." 

At the end of the day, the court saw this enforcement action as an attempt by the NYAG to make the law, rather than just to enforce it.  Viewing Pepsi's actions here as nothing more than selling a lawful product, and making aspirational statements about what its plans are for the future, the court called the enforcement action “simply policy idealism.”  The court concluded, “While I can think of no reasonable person who does not believe in the imperatives of recycling and being better stewards of our environment, this does not give rise to phantom assertions of liability that do nothing to solve the problem that exists.”