In June 2021, a class action lawsuit was filed in California in which restaurant greenwashing was alleged due to sustainability claims made on Red Lobster menus. Now Red Lobster has filed pleadings with the court asking for the case to be dismissed, arguing that the plaintiffs have failed to establish a disguised claim on which they can prevail. While it remains to be seen what the court will do with the lawsuit, the essential conclusion of the litigation is that any industry, not just the consumer goods industry, needs to realize that marketing buzzwords such as “sustainable”, “environmentally friendly” and “responsibly sourced” are in the crosshairs. Now more than ever, global companies of all types that advertise, market, write ESG statements, or disclose information as required by regulators must pay close attention to the language used in all of these types. documents, or else run the risk of coercive action or legal action.
Continued greenwashing of restaurants
The 2020 Red Lobster lawsuit alleged that “Seafood With Standards” statements on Red Lobster’s menus regarding the sustainability, traceability and responsible sourcing of its lobster and shrimp were false. Instead, the lawsuit argues that the Maine lobster served by Red Lobster is not sustainably sourced and the farmed shrimp used by the restaurant chain is not responsibly sourced. The lawsuit alleges that Red Lobster’s suppliers instead use environmentally harmful and inhumane methods to catch or harvest seafood. other advertisements were false and misleading.
The allegations in the complaint range from allegations that fishing practices are harming whale populations, to allegations of inhumane treatment of female shrimp to stimulate reproduction, to allegations of the use of antibiotics and chemicals in shrimp farms to promote rapid growth. The relief sought in the lawsuit is an invoked injunction for the court to stop any practice found to be misleading and deceptive, as well as more than $5 million in damages (the exact amount of which is not yet specified).
Last week, Red Lobster hit back, arguing that the plaintiffs’ claims about the restaurant chain’s marketing slogan and menu information were too general. Instead, according to the company, the menu wording simply invites diners to visit Red Lobster’s website to learn more about the company’s commitment to sustainable initiatives, tracing and supply. The plaintiffs disagree and argue that an ordinary consumer would not view Red Lobster’s menus as a mere “redirect” to the company’s website, but rather as a statement about the products on the menu.
Business preparation is essential
In less than two months in 2022, the fashion industry, the cosmetics industry and the restaurant industry have seen increased litigation and activity from regulatory agencies regarding greenwashing issues. Restaurant greenwashing complaints provide a natural supply of potential plaintiffs for possible class action lawsuits given the number of consumers who would be subject to the reach of industry marketing. We anticipate that 2022 will see a slew of regulatory and legislative enforcement actions aimed at curbing zealous marketing language or statements that could be considered greenwashing, and the Red Lobster lawsuit is certainly one to watch to determine the future impact on the industry.
While there are many avenues to consider to ensure that ESG principles are adhered to and properly communicated to the public, the underlying compliance program to minimize the risks of greenwashing claims is absolutely essential for all actors who make ESG-related statements. These compliance checks should not just be one-time pre-grant programs; on the contrary, they must be continuous and constant to ensure that with ever-changing corporate practices, the interest of regulators in ESG and the increasing attention of the legal world to allegations of greenwashing, all statements issued are genuinely “ESG friendly” and in no way misleading.
©2022 CMBG3 Law, LLC. All rights reserved.National Law Review, Volume XII, Number 46