bsidiaries, suppliers, customers, and other business partners located abroad. Companies should also carefully assess their worldwide corporate activities (including activities of their customers and suppliers) before making affirmative statements about their products and business operations.BackgroundTwo recent decisions in the Ninth Circuit demonstrate the continued litigation risk that corporations face from alleged involvement in human rights violations abroad. First, in Doe v. Cisco Systems, 2023 WL 4386005 (9th Cir. July 7, 2023), the Ninth Circuit refused to dismiss claims against Cisco alleging aiding and abetting liability under the Alien Tort Statute related to the use of Cisco's technology abroad to violate human rights. And, in Falcone, v. Nestle USA, Inc., 2023 WL 4551083 (S.D. Cal. July 13, 2023), the District Court for the Southern District of California denied a motion to dismiss a putative class action asserting violations of the California Consumer Legal Remedies Act, Cal. Civ. Code § 1750 et seq. and the Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq., alleging that Nestle falsely labelled its chocolate products as environmentally and socially responsible despite Nestle's having bought cocoa from farms that use child labor.These cases, arising in different areas of substantive law, highlight the continued U.S. litigation risk, especially in the Ninth Circuit, corporations face related to alleged human rights violations abroad.Doe v. Cisco: Ninth Circuit allows suit under Alien Tort Statute and Torture Victim Protection Act to proceedOn July 7, 2023, the Ninth Circuit reversed a lower court's dismissal of aiding and abetting claims under the Alien Tort Statute ("ATS") against Cisco Systems, Inc. for alleged use of its technology by Chinese authorities to persecute Falun Gong practitioners. 28 U.S.C. § 1350; Doe, 2023 WL 4386005 at *1. Falun Gong is a religious movement whose practitioners allegedly have been tortured and placed in labor camps by the Chi

mation on that substantiation.In the subject decision, a federal district court permitted a class action lawsuit against Danone Waters to advance beyond the motion-to-dismiss stage based on allegations that the company’s claim that Evian brand water was “carbon neutral” was unfair and deceptive under state consumer protection laws. District Judge Nelson S. Román’s decision denying Danone’s motion to dismiss most of the plaintiffs’ claims highlights the potential legal exposure concerning the use of environmental marketing claims, including the importance of specificity and substantiation.ALLEGED VIOLATIONS OF STATE CONSUMER PROTECTION LAWSThe plaintiff consumers alleged that Danone’s claim of carbon neutrality violated a number of state consumer protection laws barring unfair and deceptive trade parties laws, including New York General Business Law (GBL) Sections 349 and 350, Massachusetts General Laws Chapter 93A (Chapter 93A), and the California Consumers Legal Remedies Act (CCLRA), Cal. Civ. Code §§ 1750 et seq. The plaintiffs also asserted claims again Danone for breach of express warranty, breach of implied warranty, unjust enrichment, and fraud.The central thrust of the plaintiffs’ suit was that Danone’s claim that its Evian brand of water is “carbon neutral” was false and misleading because a reasonable consumer would conclude that this meant the bottling of Evian is sustainable and does not leave a carbon footprint, notwithstanding their allegations that the bottling process releases carbon dioxide. The plaintiffs allege they paid a “price premium” based on Danone’s representations about its carbon emissions.Danone moved to dismiss, arguing that the company’s claim that the bottling process was “carbon neutral” was accurate because (1) when carbon offsets are considered zero net emissions were produced and (2) an independent third party, Carbon Trust, had certified that Evian was “carbon neutral.”Danone further argued that no reasonable consumer would interpret “carbon neutral” t

tes District Court for the Central District of California, takes aim at Delta Airlines’ “carbon neutral” representations, alleging an unreliable carbon offset market renders Delta Airlines’ environmentally friendly representations false and misleading. When marketing carbon reduction achievements, companies should be aware of potential overstatements that may lead to litigation claims and should hire ESG counsel to efficiently and effectively advise on these matters.The LawsuitPlaintiffs’ representative Mayanna Berrin filed the class action lawsuit on behalf of a putative class of consumers, alleging Delta Airlines is “grossly misrepresenting the total environmental impact of its business operation in its advertisements, corporate announcements, and promotional materials, thereby attaining undeserved market share and extracting higher prices from consumers.” The complaint brings three causes of action under California consumer protection statutes: (1) the Consumers Legal Remedies Act, California Civil Code § 1750, et seq.; (2) the False Advertising Law, Business and Professions Code § 17500, et seq.; and (3) the Unfair Competition Law, Business and Professions Code §17200, et seq.At the center of the plaintiffs’ substantive allegations is Delta Airlines’ reliance on its participation in the carbon offset marketand representing itself as “the world’s first carbon-neutral airline.” Plaintiffs allege these carbon offset markets are unreliable due to inaccurate accounting, dubious crediting practices, delayed and speculative emissions reductions, and impermanent projects subject to disease, natural disasters, and human intervention. In other words, the plaintiffs deem the carbon offset markets unreliable as self-regulated and devoid of standardization. The plaintiffs further claim these alleged misrepresentations caused them to purchase and overpay for Delta Airlines’ flight tickets when some of them otherwise would not have, but for Delta Airlines’ “carbon neutral” representations.Broader Trends

rtising and corporate sustainability practices. As consumers continue to prioritize ethical and eco-conscious choices, fashion retailers must be proactive in their sustainability efforts and ensure the accuracy of their environmental claims.________Lizama et al. v. H&M, No. 4:22-cv-01170 (E.D. Mo. Nov. 3, 2022).Counts I-V consisted of Violation of Missouri’s Merchandising Practices Act (MMPA): (1) Deception, 15 CSR 60-9.020; (2) Misrepresentation, 15 CSR 60-9.070; (3) Concealment or Omission of Any Material Fact, 15 CSR 60-9.110; (4) Half-Truths, 15 CSR 60-9.090; and (5) Unfair Practice, 15 CSR 60-8.020. SeeLizama et al. v. H&M, No. 4:22-cv-01170, Complaint (E.D. Mo. Nov. 3, 2022).Counts VI-VIII consisted of (1) Violation of California’s Unfair and Deceptive Acts and Practices Law, Business and Professions Code § 17200, et seq.; (2) Deceptive Advertising Practices Violation of California’s Business and Professions Code § 17500, et seq.; and (3) Consumers Legal Remedy Act, Violation of Cal. Civ. Code § 1750, et seq. SeeLizama et al. v. H&M, No. 4:22-cv-01170, Complaint (E.D. Mo. Nov. 3, 2022).Ellis v. Nike, No. 4:23-cv-00632 (E.D. Mo. May 10, 2023).Violation of Missouri’s Merchandising Practices Act (MMPA).Seehttps://www.reuters.com/business/sustainable-business/totalenergies-sues-greenpeace-over-emissions-report-2023-05-03/[View source.]

e U.S. District Court for the Northern District of California—concerns the “Dogecoin Sweepstakes” Coinbase launched last summer, which offered prizes worth up to $1.2 million in Dogecoin, or DOGE (the popular cryptocurrency named after an Internet meme).The class-action complaint alleges that Coinbase and Marden-Kane designed the sweepstakes’ marketing materials to mislead and confuse Coinbase users as to whether they could participate in the Dogecoin Sweepstakes for free, making them believe they had to buy or sell at least $100 in Dogecoin to enter, even though they could enter also by mailing in an index card with their name, contact information and date of birth.The proposed class of Coinbase users assert claims against Coinbase and its marketing firm for violations of California’s False Advertising Law, Cal. Bus. & Prof. Code § 17500, et seq. (“FAL”), California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq. (“UCL”) and California’s Consumer Legal Remedies Act, Cal. Civ. Code §1750, et seq. (“CLRA”).Coinbase and Marden-Kane challenged the class complaint by moving the district court (i) to compel individual arbitration per the arbitration clause in the Coinbase User Agreement or, alternatively, (2) to dismiss the complaint for failure to state a claim. The district court denied Coinbase’s motion to compel arbitration under its User Agreement because the terms and conditions of the Dogecoin Sweepstakes—which users agreed to after opening Coinbase accounts—contained a forum selection clause designating California courts as the exclusive forum for all sweepstake-related disputes and therefore conflicted with the arbitration clause in the User Agreement.The court determined that the terms of the subsequent sweepstakes contract control such that the forum selection clause supersedes the arbitration clause in the User Agreement.The district court denied Marden-Kane’s arbitration motion as well, holding that the marketing firm was not a party to the Coinbase User Agree

In James River Ins. Co. v. Rawlings Sporting Goods Co. Inc., Case No. CV 19-6658-GW-MAAx (C.D. Cal., January 25, 2021), the district court was called upon to decide whether this exclusion barred coverage for claims that Rawlings misrepresented the weights of its baseball bats on their labeling. The consumers brought these claims in a class action complaint, seeking relief under the following California statutes: (1) Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq.; (2) False Advertising Law, Cal. Bus. & Prof. Code § 17500 et seq.; and (3) Consumer Legal Remedies Act, Cal. Civ. Code § 1750 et seq. There was no question that the claim fell within the coverage for wrongful acts, but Rawlings’ directors and officers liability insurer, Starr, denied coverage under an “Anti-Trust Exclusion,” which stated:This policy shall not cover any Loss in connection with any Claim alleging, arising out of, based upon or attributable to any violation of any law, whether statutory, regulatory or common, as respects any of the following: anti-trust, business competition, unfair trade practices or tortious interference in another’s business or contractual relationships; provided, however, that this exclusion shall apply only to the Company.The term “unfair trade practices” was not defined in the Starr policies.

In Coburn v. Tom’s of Maine (U.S.D.C., C.D. Cal.) filed June 8, 2020, Susan Coburn alleges that she and other similarly-situated consumers in California and nationwide were enticed to purchase Tom’s toothpaste products at premium prices, based upon Tom’s representations on its packaging and corporate website that the products were “all natural” and without artificial ingredients. Plaintiff alleges that Tom’s violated California’s Consumers Legal Remedies Act (CA Civil Code § 1750, et seq.) and Business & Professions Code (§§ 17200, et seq. and §§ 17500, et seq.) by labeling and advertising “natural” products that were not natural, misrepresenting the quality of the products, and creating consumer confusion regarding the word “natural” in the sale of its toothpaste. For relief, Plaintiff seeks consumer refunds, disgorgement of company revenue from the sale of the products to consumers that cannot be identified, and an injunction barring misleading advertising of the toothpaste products.

As background, Plaintiff Yu alleges that he and other similarly-situated consumers in California and nationwide were enticed to purchase several of Defendants’ applesauce and apple juice products at premium prices, based upon Defendants’ representations on their labeling and corporate websites that the products were free from unnatural ingredients, synthetic chemicals (in particular, trace levels of acetamiprid, a pesticide), and other remnants of artificial processing. Plaintiff alleges that Defendants violated California’s Consumers Legal Remedies Act (CA Civil Code § 1750, et seq.) and Business & Professions Code (§§ 17200, et seq. and §§ 17500, et seq.) and common law by labeling and advertising “natural” products that were not natural, misrepresenting the quality of the products, and creating consumer confusion regarding the word “natural” in the sale of its products. For relief, Plaintiff seeks an order requiring complete and accurate labeling of the products, restitution to consumers, disgorgement of company revenue from the sale of the products to consumers, and punitive damages.

In another proposed class action, Coburn v. Tom’s of Maine, filed on June 8, 2020, in the U.S. District Court for the Central District of California, Susan Coburn alleges that she and other similarly-situated consumers in California and nationwide were enticed to purchase Tom’s toothpaste products at premium prices, based upon Tom’s representations on its packaging and corporate website that the products were “all natural” and without artificial ingredients. Plaintiff alleges that Tom’s violated California’s Consumers Legal Remedies Act (CA Civil Code § 1750, et seq.) and Business & Professions Code (§§ 17200, et seq. and §§ 17500, et seq.) by labeling and advertising “natural” products that were not natural, misrepresenting the quality of the products, and creating consumer confusion regarding the word “natural” in the sale of its toothpaste. For relief, Plaintiff seeks consumer refunds, disgorgement of company revenue from the sale of the products to consumers that cannot be identified, and an injunction barring misleading advertising of the toothpaste products.

Companies using such business models to conduct business with consumers in California should ensure that they are in compliance with California’s various consumer protection statutes to avoid costly class actions.Many of these actions are aimed at membership- and subscription-based businesses, such as gyms and sports clubs, ski resorts, and theme parks. Consumers have filed actions in California and several other states, seeking injunctive and declaratory relief, restitution, and damages for claims under the California’s Consumer Legal Remedies Act (“CLRA”), Cal. Civ. Code §§ 1750, et seq., Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200, et seq., and False Advertising Law (“FAL”), Cal. Bus. & Prof. Code §§ 17500, et seq. In the case of one class action complaint brought against a fitness center, the plaintiffs have also asserted claims for breach of warranty, breach of contract, misrepresentation, fraud, conversion, and violation of California’s Health Studio Services Contract Law, Cal. Civ. Code §§ 1812.80, et seq., based on the company’s alleged collection of membership fees after the imposition of stay-at-home and similar orders due to COVID-19.The reach of these laws is not limited to businesses – a former union member has brought a similar action against his union, alleging violations of the Electronic Funds Transfer Act and various provisions of California’s Business and Professions Code for automatic withdrawals of fees following the termination of the plaintiff’s membership in the union.Given such an extensive body of consumer protecti