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In mid-2024, the New York Attorney General sued JBS USA Food Company and its affiliate for false advertising, alleging that the companies ("JBS") misled consumers about the environmental impact of the meat that they produce.
The Lawsuit
The NYAG alleged that JBS's claim that it will be "Net Zero by 2040" was false and misleading because the company failed to fully take into account its scope 3 emissions (which are, essentially, emissions from a company's vendors and suppliers). The NYAG also charged that JBS's "Net Zero by 2040" commitment was also false and misleading because of the company's current levels of production and its plans to dramatically increase production. The NYAG alleged that, notwithstanding the company's public commitments, it didn't have a feasible plan in place to reduce its emissions (or to offset them) based on both its current level of production or based on its plan to substantially increase its production as well. As the NYAG put it, "The JBS Group, however, has had no viable plan to meet its commitment to be "Net Zero by 2040."
The Dismissal
Earlier this year, a New York State court dismissed the case, with leave to replead. The court wasn't convinced that the NYAG had sufficiently alleged that JBS had made claims that were sufficiently specific which would lead consumers to believe that the company was actually committing to achieve net zero by 2040 – particularly after JBS had revised its advertising to remove language that it was "committing" to achieve that results. The court also expressed serious concerns that aspirational claims – that didn't promise specific results –- were actionable under New York law.
The Settlement
Last week, the NYAG announced that she had reached a settlement with JBS, bringing an end to the litigation. As part of the settlement, JBS agreed to make a $1.1 million payment – which the NYAG agreed is "not a civil penalty or fine" -- to Cornell University's College of Agriculture and Life Sciences' New York Soil Health and Resiliency Program for the purpose of supporting climate smart agriculture.
JBS also agreed to remove or revise its existing U.S. consumer-facing published statements on its website regarding its "Net Zero by 2040" claims. Specifically, JBS agreed to present its "Net Zero by 2040" commitment as a "goal" rather than as a "pledge" or a "commitment." And, to the extent that JBS makes statements about the steps or action that it is taking to achieve that goal, JBS agreed to include the specific steps or actions that it taking. JBS also agreed that, for the next three years, future "Net Zero by 2040" statements made by JBS would also comply with these standards.
Some Take-Aways
In light of the fact that the NYAG's lawsuit had been dismissed, it's not surprising that the relief that the NYAG obtained in its settlement with JBS is pretty limited. While there is a sizeable payment that is required, the injunctive provisions are quite narrow (and are only in effect for about three years). The settlement doesn't require JBS to comply with the law or to substantiate its advertising claims – and it basically expressly permits JBS to keep making its "Net Zero by 2040" claim, so long as it characterizes the statement as a "goal."
The limited relief that the NYAG obtained here reflects, I think, some real uncertainty that we are seeing in the courts about what type of proof, if any, is legally required when making aspirational environmental marketing claims, particularly when an advertiser isn't making explicit commitments to achieve the stated goals.
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