A lawsuit over allegedly misleading advertising from Canada Goose has come to a close, with the parties seemingly settling their fight out of court. In a joint filing on Wednesday, counsels for plaintiff George Lee and Canada Goose alerted the U.S. District Court for the Southern District of New York that they have “stipulated and agreed … that the action is voluntarily dismissed.” Lee filed suit against Canada Goose in 2020, accusing the Toronto-based outerwear brand of allegedly misleading consumers as to the nature of the trapping methods that are used to source the fur for its buzzy jackets by claiming that it is dedicated to “the ethical, responsible, and sustainable sourcing and use of real fur,” and running afoul of the District of Columbia Consumer Protection Procedures Act in the process.
According to the proposed class action complaint that he filed in November 2020, Lee claimed that when he purchased a fur-trimmed parka from Canada Goose in 2017, he relied on the company’s sustainability-centric representations, including that its fur is sourced using ethical and humane trapping methods, only to learn that “Canada Goose’s suppliers use cruel methods” to trap “coyotes and other animals.” Against that background, Lee argued that the popular outerwear-maker has been unjustly enriched as a result of such misleading advertising because consumers “are willing to pay more for products labeled and marketed … [as being] ethically and sustainably sourced” than they are for “competing products that do not provide such assurances.” Canada Goose knows this, Lee asserted, which is why it “cultivates an image of products [that are] a humane alternative for consumers who wish to avoid fur products that are sourced using inhumane, unsustainable, and unethical trapping practices.”
Lee moved to voluntarily drop the case, which was dismissed by the court in its entirety with prejudice on April 27, and Canada Goose is not believed to have made any financial payment to prompt a settlement.
The proceedings in the Canada Goose lawsuit are notable for at least a couple of reasons. Primarily, it is worth noting that Lee’s allegations survived the motion to dismiss that Canada Goose filed early last year, in which it argued that Lee’s claims should be tossed out on the basis that its allegedly misleading statements about the “sustainability” of its business, for instance, are not actionable because they are too general to be proven or disproven. More than that, Canada Goose argued that Lee’s “subjective views” regarding fur-trapping standards “do not render [its] statements misleading or deceptive,” and that he has failed to show injury anywhere outside of Washington, D.C., and therefore, lacks standing to bring claims under other states’ consumer-protection statutes.
In a decision in June 2021, Judge Victor Marrero of the U.S. District Court for the Southern District of New York refused to dismiss Lee’s DC Consumer Protection Procedures Act claim with respect to Canada Goose’s statement that it is committed to “ethical, responsible, and sustainable sourcing,” holding that Lee had “plausibly alleged that this statement has the tendency to mislead a reasonable consumer.” Specifically, the court held that Canada Goose’s statement may be misleading because the company “obtains fur from trappers who use allegedly inhumane leghold traps and snares,” which Lee alleges “is widely considered inhumane by industry professionals.”
The court held that Lee’s allegations were “thin,” but in viewing the complaint in the light most favorable to him, found that he had plausibly alleged that a reasonable consumer would be misled by Canada Goose’s advertising claims, a determination that could serve as impetus for other potential plaintiffs, particularly in light of a surge in sustainability marketing by brands in fashion and beyond. As Hogan Lovells’ Isabel Carvalho and David Tyler stated recently, sustainability marketing “has become a key component to leverage businesses that are based on” – or allegedly based on – “environmentally and socially conscious practices, since consumers have become increasingly focused on various aspects of sustainability.”
The distinction between sustainability-centric statements that are too forward-looking to be actionable or that amount to mere puffery, and those that are actionable from a false advertising perceptive has been relatively hazy, and largely, unchecked by lawsuits. However, in light of the sheer surge in sustainability-focused marketing by apparel and footwear brands has come widespread claims of greenwashing and a growing wave of lawsuits, which makes the Canada Goose lawsuit significant, as it is one of a growing number of sustainability-related class actions that have been filed over the past couple of years.
Reynolds Consumer Products, for instance, was sued in May 2021 in a California federal court for advertising its bags as “recyclable” and as enabling users to “reduce your environmental impact.” A month later, Red Lobster was sued in federal court in California in connection with its claims that its offerings are “Traceable, Sustainable. Responsible” and made from “Seafood With Standards.” (Both of those cases are still underway.)
And also in June 2021, Allbirds was slapped with a headline-making suit in New York federal court for allegedly failing to live up to the claims that is makes in its sustainability-centric marketing, including about the carbon footprint of its products, and its “sustainable” and “responsible” manufacturing practices. In an order dated April 18, Judge Cathy Seibel granted Allbirds’ motion to dismiss, finding that, among other things, plaintiff Patricia Dwyer failed to plausibly allege that Allbirds advertising statements are materially misleading.
The case is George Lee, et. al., v. Canada Goose US, Inc., 1:20-cv-09809 (SDNY).
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