Competitor Accuses Rival of "Greenwashing" When Advertising Its Products

Last month, an earplug maker sued a rival in federal district court in California, alleging that the competitor had engaged “[i]n a calculated ‘greenwashing’ scheme to capture market share from competitors . . . by falsely advertising its [] products with numerous unqualified environmental benefit claims.”  Specifically, the complaint brought claims under the Lanham Act (false advertising) and California state law (unfair competition).  Notably, California law contains specific provisions that explicitly prohibit misleading environmental marketing claims (e.g., California Business and Professions Code § 17580.5), making it an especially potent jurisdiction in which to assert these types of claims. 

Although this case is only at the initial stage of the proceedings, it is nonetheless highly significant.  Until now, allegations of “greenwashing” had mainly featured in enforcement actions brought by government regulators or by class action plaintiffs focusing on consumer products.  In this case, greenwashing allegations have been weaponized as another legal tool in the arsenal when corporations sue one another in commercial litigation.  (This scenario is not wholly novel—there have been prior disputes before the National Advertising Division (BBB National Programs), for instance, where companies accused one another of greenwashing.)  This development suggests that allegations of greenwashing may soon become another useful litigation strategy in disputes between competing companies.