Plaintiff Ayana Hill bought bottles of Fiji water, on the
lаbel of which was a green drop—a drop, she claimed, that represented Fiji bottled water was environmentally superior to other waters and endorsed by an environmental organization. Alleging that it was not, Hill filed a proposed class action on behalf of herself and other consumers of Fiji bottled water, naming Roll International Corporation (Roll) and Fiji Water Company LLC (Fiji Water), asserting violations of California’s unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.), false advertising law (FAL) (id., § 17500 et seq.), and Cоnsumers Legal Remedies Act (CLRA) (Civ. Code, § 1750 et seq.), plus common law fraud and unjust enrichment.
I. BACKGROUND
Hill’s complaint alleges that consumers have become increasingly aware of, and sensitive to, the impact of their purchases on the environment, spawning an environmental “movement” that demands products that are “environmеntally superior” to like products in their manufacturing, packaging, and distribution processes. The term “green” (oddly capitalized throughout the complaint) is commonly used to describe such products and the movement that demands them. Companies designate their products as green through written representations and visual images—“such as a green raindrop or pictures of the Earth”—and consumers who see such representations on products are led to believe that those products are “environmentally superior” when compared to products that lack such designations.
Companies motivated by increased profits have made deceptive, misleading, and false representations, a practice known as “greenwashing” (again, capitalized) that “has become so rampant” that the Federal Trade Commission (FTC) has issued standards known as “ ‘Green Guides.’ ”
Hill further alleges that defendants
Hill’s pleading includes photographic images. One shows the front label of a bottle that bears a circumscribed green drop; another shows four back labels, each with the green drop symbol adjacent to an indicated Internet Web site, “fijigreen.com”; and a third seems to show a store display featuring two of the green drop symbols, and “Every drop is green” between them. A full page of illustrations provided by Hill (and appended to this opinion) shows the green drop—not circumscribed—next to allegedly “independent” seals designating lack of testing on animals or compliance with unstated environmental standards, plus symbols for recyclable products and Earth Day.
Hill’s personal allegations are that, starting in 2008, she bought Fiji water about twice' a week from Walgreens stores in San Francisco, relying on representations that the product was “environmentally friendly and superior.” She paid a price about 15 percent higher than other bottled water, and would not have bought Fiji water “had she known the truth that the Green Drop was the creation of [defendants], not a neutral party or environmental group, and that Fiji bottled [w]ater was not environmentally friendly or superior to similar bottle[d] water available at cheaper prices.”
A. Review Standards
On reviеw of a demurrer sustained without leave to amend, “[t]he reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. [Citations.] The court does not, however, assume the truth of contentions, deductions or conclusions of law. [Citation.]” (Aubry v. Tri-City Hospital Dist. (1992)
A court generally confines itself to the pleading but, as appropriate, may extend its consideration to matters subject to judicial notice. (Smiley v. Citibank (1995)
Our division has stated, in resolving an appeal based on the reasonable-consumer standard following a bench trial, that “[t]he standard to be used in evaluating whether an advertisement is deceptive under the UCL is purely a question of law .. ..” (Lavie v. Procter & Gamble Co. (2003)
B. Statutory Claims
Broadly stated: The UCL prohibits “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by [the FAL]” (§ 17200); the FAL prohibits advertising “which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading” (§ 17500); and the CLRA prohibits specified “unfair methods of competition and unfair or deceptive acts or practices” (Civ. Code, § 1770, subd. (a)). While the operative language of each law differs, Hill bases each claimed violation on an act not itself made a cause action. She uses the Environmental Marketing Claims Act (EMCA) (§ 17580 et seq.), section 17580.5, subdivision (a) of which incorporates into the EMCA definition of “ ‘environmental marketing claim’ . . . any claim contained in the ‘Guides for the Use of Environmental Marketing Claims’ published by the Federal Trade Commission” (see 16 C.F.R. pt. 260 (2011)) (hereafter guides, or FTC guides).
The FTC guides themselves flow from a task force of state attorneys general that loоked into potentially misleading environmental advertising claims growing out of consumers’ increased awareness of the environmental impacts of their purchases, and a “ ‘green marketing’ ” strategy by companies making environmental claims about their products. {Association of National Advertisers, Inc. v. Lundgren (N.D.Cal. 1992)
Hill then invokes this example: “Example 5. A product label contains an environmental seal, either in the form of a globe icon, or a globe icon with only the text ‘Earth Smart’ around it. Either label is likely to convey to consumers that the product is environmentally superior to oilier products. If the manufacturer cannot substantiate this broad claim, the claim would be deceptive. The claims would not be deceptive if they were accompanied by clear and prominent qualifying language limiting the environmental superiority representation to the particular product attribute or attributes for which they could be substantiated, provided that no other deceptive implications were created by the context.” (16 C.F.R. § 260.7(a), example 5 (2011).) More specifically, Hill contends that the Fiji green drop is deceptive because it implies, in the circumstances, that an independent third party organization has endorsed Fiji water as environmentally superior, when in fact, the green drop is purely defendants’ marketing сreation.
Looking to the well-pleaded facts of Hill’s complaint, and ignoring its hyperbole and legal conclusions, we assume as true that consumer demand for “green” products has grown, spawning a competitive “green marketing” strategy by companies to market their products as “green,” a strategy that can be abused through misleading environmental claims. We assume as well that
The problem is that Hill’s beliefs do not satisfy the reasonable consumer standard, as expressed in the FTC guides (16 C.F.R. § 260.7(a) (2011) [material implied claims conveyed “to reasonable consumers”]) and as used in our state’s consumer laws. The reasonable cоnsumer test used in the UCL and FAL derives from parallel parts of the Federal Trade Commission Act (15 U.S.C. § 41 et seq.), which requires a plaintiff to show potential deception of consumers acting reasonably in the circumstances—not just any consumers. (Lavie v. Procter & Gamble Co., supra, 105 Cal.App.4th at pp. 505-506.) Thus, for example, the standard is not a least sophisticated consumer (id. at p. 504), unless the advertising is specifically targeted to such a consumer. (Id. at p. 507.) Nor do we test the impact on the unwary consumer (id. at p. 508), although a reasonable consumer “need not be ‘exceptionally aсute and sophisticated’ ” and might not “necessarily be wary or suspicious of advertising claims.” (Id. at pp. 509-510.) “Rather, California courts consistently have looked to the ordinary consumer within the larger population” (id. at p. 510), and the reasonable consumer standard is also established for the CLRA. (Consumer Advocates v. Echostar Satellite Corp. (2003)
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 context of the symbol is vitally important (16 C.F.R. § 260.7(a) (2011)), but we start with the drop itself. It bears no name or recognized logo of any group, much less a third party organization, no trademark symbol, and no other indication that it is anything but a symbol of Fiji water. The example in the FTC guides does include, as likеly to mislead, a “globe icon” with or without the words “Earth Smart” around it (id., example 5); but a symbol of the Earth is more suggestive of a seal of an environmental organization and, as Hill’s page of other images shows, could suggest the established Green Seal logo, with a stylized checkmark and the words “Green Seal” contoured around a globe. Fiji water has just a green drop, the drop being the most logical icon for its particular product—water. We assume, for demurrer purposes, that reasonable consumers would view the drop, together with its green color, as
And for context, a green drop on the back of every bottle appears right next to the Web site name, “fijigreen.com,” further confirming to a reasonable cоnsumer that the green drop symbol is by Fiji water, not an independent third party organization—and, of course, inviting consumers to visit the Web site for product information, which includes Fiji Water’s explanation of its environmental efforts. The images in the complaint also belie the allegation that defendants have “called their product FijiGreen.” In truth, it is simply a Web site name. Hill raises no allegations whatsoever that any information in the Web site is misleading.
It is difficult from her briefing to discern what Hill means to gain from the “Every drop is grеen” slogan allegedly used at some point in store displays and other advertising. It is not clear that reasonable consumers would know of the slogan, for it does not appear anywhere on the bottled water, as far as the photographic images reveal. In any event, we do not see how the slogan, even if seen by consumers, alters the overall impression conveyed by the green drop and Web site address.
C. The Koh Ruling
The discussion in the trial court included a then recent, unpublished ruling by a federal district court in a similar class action suit: Koh v. S.C. Johnson & Son, Inc. (N.D.Cal., Jan. 6, 2010, No. C-09-00927 RMW) 2010 U.S.Dist. Lexis 654 {Koh). Being unpublished, the ruling of course had, and has, no precedential value, but we examine it as we would a hypothetical further example. The suit, brought against S.C. Johnson & Son, Inc., the manufacturer of the multipurpose cleaner Windex and the stain remover Shout, had essentially the same claims raised here, including reliance on the FTC guides,
The suit involved a label with a green background that stated on the front side, “Greenlist™ Ingredients” under a stylized drawing of two leaves and a stem. The back side, readable through the bottle, added: “Greenlist™ is a rating system that promotes the use of environmentally responsible ingredients. For additional information, visit www.scjohnson.com.” The district court judge denied the defendant’s motion to dismiss, writing that “it is plausible that a reasonable consumer would interpret the Greenlist label as being from a third party.” (Koh, supra, 2010 U.S.Dist. Lexis 654 at p. *6.)
Without passing on the correctness of the Koh ruling, we simply point out that the labеl there was very different from the plain green drop symbol here. It made express representations of environmental superiority, used the trademarked name “Greenlist,” a name not immediately apt to be associated with the product or its manufacturers, and identified the name as a rating system, which further suggested an independent source that rated other manufacturers’ products as well.
D. The Kwikset Ruling
Kwikset Corp. v. Superior Court (2011)
The deception in Kwikset was the defendants’ labeling of its locksets as “Made in U.S.A.,” when in fact more than two dozen of the defendants’ products “either contained screws or pins made in Taiwan or involved latch subassеmbly performed in Mexico.” (Kwikset, supra, 51 Cal.4th at pp. 317-318.) Ruling for the plaintiffs, the Supreme Court said this, as quoted in Hill’s letter: “Simply stated: labels matter. The marketing industry is based on the premise that labels matter, that consumers will choose one product over another similar product based on its label and various tangible and intangible qualities they may come to associate with a particular source. [Citation.] An entire body of law . . . exists to protect commercial and consumer interests in accurate label representations as to source, because consumers rely on the accuracy of those representations in making their
We agree wholeheartedly that “labels matter,” all labels, including that here. Defendants obviously put the green drop on the label for a purpose, as their counsel had to necessarily concede at oral argument: the green drop was for a “markеting” purpose, to signify “something to do with the environment.” Such concession notwithstanding, we hold—and it is all we hold— that no reasonable consumer would be misled to think that the green drop represents a third party organization’s endorsement or that Fiji water is environmentally superior to that of the competition.
E. Common Law Claims
Hill claims common law fraud. Unlike “fraud” as used in the statutory sense for consumer protection (Committee on Children’s Television, Inc. v. General Foods Corp. (1983)
Hill’s claim for unjust enrichment fails as well. Unjust enrichment is not a cause of action, just a restitution claim. (McKell v. Washington Mutual, Inc., supra,
F. Leave to Amend
Hill asks that, in the event we affirm the order sustaining the demurrer, “the trial court’s denial of leave to amend, which was an abuse of discretion, be overruled. Any defects in the [complaint] can be cured by amendment.” Hill’s saying so does not make it so, however, and it is her burden to show how she might amend to cure the deficiencies. (Campbell v. Regents of University of California (2005)
The judgment is affirmed.
Kline, R J., and Haerle, J., concurred.
Notes
All undesignated section references are to the Business and Professions Code.
As noted, Hill’s complaint names as dеfendants both Roll and Fiji Water. Concerning this, defendants represent that “Fiji Water is 100% owned by Fiji Water Company Holdings LLC, which in turn is 100% owned by the Stewart & Lynda Resnick Revocable Trust. Roll is a holding corporation for various other businesses owned by the Resnicks, but Roll does not own Fiji Water, and was improperly sued by [Hill].” This issue was not presented below, and Hill does not concede the matter here. The only evident relevance of the issue on appeal goes to a pleading question we do not reach: the sрecificity of Hill pleading her common law fraud
We have no need to recite the allegations of why Fiji water production is no less harmful than that of competitors, but we note that defendants evidently dispute much of it, such as a claim that their bottles are manufactured in China. For demurrer purposes, we disregard the potential difficulty of Hill proving her alleged facts. (McKenney v. Purepac Pharmaceutical Co. (2008)
Section 17580 provides as follows: “(a) Any person who represents in advertising or on the label or container of a consumеr good that the consumer good that it manufactures or distributes is not harmful to, or is beneficial to, the natural environment, through the use of such terms as ‘environmental choice,’ ‘ecologically friendly,’ ‘earth friendly,’ ‘environmentally friendly,’ ‘ecologically sound,’ ‘environmentally sound,’ ‘environmentally safe,’ ‘ecologically
“(1) The reasons why the person believes the representation to be true.
“(2) Any significant adverse environmental impacts directly associated with the production, distribution, use, and disposal of the consumer good.
“(3) Any measures that are taken by the person to reduce the environmental impacts directly associated with the production, distribution, and disposal of the consumer good.
“(4) Violations of any federal, state, or local permits directly associated with the productiоn or distribution of the consumer good.
“(5) Whether or not, if applicable, the consumer good conforms with the uniform standards contained in the Federal Trade Commission Guidelines for Environmental Marketing Claims for the use of the terms ‘recycled,’ ‘recyclable,’ ‘biodegradable,’ ‘photodegradable,’ or ‘ozone friendly.’
“(b) Information and documentation maintained pursuant to this section shall be furnished to any member of the public upon request.
“(c) For the purposes of this section, a wholesaler оr retailer who does not initiate a representation by advertising or by placing the representation on a package shall not be deemed to have made the representation.
“(d) It is the intent of the Legislature that the information and documentation supporting the validity of the representation maintained under this section shall be fully disclosed to the public, within the limits of all applicable laws.”
Section 17580.5: “(a) It is unlawful for any person to make any untruthful, deceptive, or misleading envirоnmental marketing claim, whether explicit or implied. For the purpose of this section, ‘environmental marketing claim’ shall include any claim contained in the ‘Guides for the Use of Environmental Marketing Claims’ published by the Federal Trade Commission.
“(b) It shall be a defense to any suit or complaint brought under this section that the person’s environmental marketing claims conform to the standards or are consistent with the examples contained in the ‘Guides for the Use of Environmental Marketing Claims’ published by the Federal Trade Commission.”
We have nevertheless examined the Web site to confirm what the combined green drop and Web site name do convey: that the Web site includes information about the company’s environmental efforts, goals, activities, and initiatives. Again, this is permitted—indeed, encouraged—by the FTC guides, as well as the EMCA that incorporates the guides. The EMCA in fact requires that advertisers maintain, and make available to the public, records explaining and substantiating their environmental claims (§ 17580; see fn. 4, ante), and it seems obvious that the Web site helps defendants comply with the mandate. (<http://www.fijiwater.com/giving-back/> [as of May 26, 2011].)
