New York Court Dismisses City's Greenwashing Claims Against Oil Giants

The Appellate Division of the Supreme Court of the State of New York has upheld a lower court's decision to dismiss claims made by the City of New York against major oil companies, including ExxonMobil, Shell, and BP. The City accused these companies of deceptive trade practices, particularly related to their advertising of fossil fuel products. The court's ruling, issued on October 8, 2026, emphasizes the legal standards for what constitutes misleading advertising under the city's Consumer Protection Law.

This ruling affects consumers and environmental advocates who have been concerned about the marketing practices of fossil fuel companies. The outcome of this case is significant as it addresses how companies can promote their products in relation to environmental impacts and consumer perceptions, particularly in an era where climate change and sustainability are at the forefront of public discourse.

Background

The City of New York filed the lawsuit against ExxonMobil, Shell, and BP after previously attempting to hold these companies accountable for climate change-related damages in a federal court case that was dismissed in 2021. In that earlier case, the Second Circuit Court ruled that municipalities could not use state tort law to impose liability on oil companies for global greenhouse gas emissions. Following this setback, the City filed the current lawsuit in state court on April 22, 2021, claiming that the companies engaged in deceptive advertising practices under the City’s Consumer Protection Law.

The complaint specifically alleged two forms of greenwashing: “product greenwashing,” where the companies misrepresented the environmental benefits of their fossil fuel products, and “corporate greenwashing,” where they exaggerated their investments in renewable energy sources. The City argued that these misleading advertisements could deceive consumers, who are increasingly concerned about the environmental impact of fossil fuels.

The Ruling

The Appellate Division, led by Judge David Friedman, affirmed the lower court's dismissal of both claims against ExxonMobil, Shell, and BP. The court found that the statements made by the companies did not have the capacity to mislead consumers as required by the Consumer Protection Law. The court stated, “The City cannot have it both ways by, on one hand, asserting that consumers are aware of and commercially sensitive to the fact that fossil fuels cause climate change, and, on the other hand, that the same consumers are being duped by Defendants' failure to disclose that their fossil fuel products emit greenhouse gases that contribute to climate change.”

In dismissing the product greenwashing claim, the court noted that the City’s allegations did not demonstrate that the companies’ advertisements were false or misleading in a way that would deceive a reasonable consumer. The court emphasized that the public is generally aware of the connection between fossil fuels and climate change, thus undermining the City's argument that consumers are being misled.

Regarding the corporate greenwashing claim, the court found that the statements made by the companies about their investments in renewable energy were not made in connection with the sale of consumer goods or services, which is a requirement under the Consumer Protection Law. The court concluded that the claims did not meet the necessary legal standards to proceed.

Impact

This ruling has significant implications for future cases involving advertising practices in the energy sector. It sets a precedent regarding the legal definitions of misleading advertising and the standards that must be met for claims of deceptive trade practices to be actionable. The court’s decision reinforces the idea that consumers are presumed to have a certain level of awareness about the environmental impacts of fossil fuels, which may limit the ability of municipalities and advocacy groups to pursue similar claims in the future.

Additionally, the ruling may influence how energy companies approach their marketing strategies, as they continue to navigate the complex landscape of consumer expectations related to sustainability and environmental responsibility. While the court's ruling does not prevent consumers from seeking accountability, it does clarify the legal thresholds that must be crossed for claims of greenwashing to succeed.

What's Next

The City of New York could potentially appeal the decision to a higher court, but details were not available in the court filing regarding any plans for further legal action. There are no related cases pending that have been mentioned in the opinion, but the outcome of this case may inspire similar lawsuits across other jurisdictions.