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May 28, 2023

Nike Deceptively Markets "Sustainable" Wares, Per New Lawsuit

Nike has been named in a new lawsuit, accusing it of deceiving consumers by

Nike has been named in a new lawsuit, accusing it of deceiving consumers by marketing its sportswear offerings as "sustainable," made with "sustainable materials," and environmentally friendly when its products "do not live up to these claims." In the proposed class action complaint that she filed in a Missouri federal court on May 10, Maria Guadalupe Ellis claims that "consumers seek, and will pay a premium for, products that are responsibly made, including products that will not negatively affect the environment," thereby, leading to a rise in demand for products that are sustainable and environmentally friendly among consumers and efforts by companies – like Nike – to engage in greenwashing by "deceptively claiming that their [products] are sustainable."

The problem here, Ellis asserts in the lawsuit, is that in "an effort to increase profits and to gain an advantage over its lawfully acting competitors," Nike designs and manufactures a variety of products that it deceptively markets as being environmentally friendly. Among other things, Ellis specifically highlights Nike "marketing materials, [which] are replete with statements that [its] products are ‘sustainable,’ made with ‘sustainable materials,’ ‘eco-friendly,’ and environmentally friendly." She also cites …

– Nike Product Labels: Ellis claims that Nike product labels use terms, such as "Sustainability," and make claims that the goods are "made with recycled fibers" which "reduces waste and our carbon footprint," [and] support a "Move to Zero" which "is Nike's journey toward zero carbon and zero waste to help protect the future of sport," among other claims;

– Green imagery: Nike's use of marketing, advertisements, and social media for its "Sustainability" collection products that "centers around ‘green’ imagery with models and cartoon characters surrounded by lots of flowers and plush green plants";

– "Sustainability" Logo: The Nike "Sunburst" logo, which consists of "a circular symbol that means that Nike products are made with ‘sustainable’ materials, and environmentally friendly" (You can find a dive into the rise of sustainability logos here);

– Broad "Sustainability" Language: The "Sustainability" section of Nike's website, which contains a slew of green statements/terms, including broad statements, such as: "Today, when you see [the Sunburst] logo, you see one small step in our journey to Move to Zero," "Circular Solutions," "Nike's Top Sustainable Shoe Styles," "Join Nike's journey to zero carbon and zero waste by choosing a shoe made with sustainable materials," "Nike is committed to offering footwear options and running shoes that are eco- friendly," "We all need to do our part to reduce our carbon footprint"; and

– Quantifiable Claims: Nike also makes more specific/quantifiable "Green" assertions, per Ellis, such as: "The new recycled nylon yarn reduces our carbon emissions by up to 50% compared to virgin nylon," "If you see a Nike sneaker or shoe style marked with ‘Sustainable Materials,’ that means the shoe is produced with at least 20 percent recycled material by weight," "Recycled poly lowers carbon emissions by up to 30% compared to virgin poly, and diverts an average of 1 billion plastic bottles annually from landfills and waterways," etc.

Contrary to its many "green" representations, Ellis alleges that Nike's products "plainly do not lead to ‘Sustainability,’ are not ‘made with recycled fibers’ which ‘reduce waste and our carbon footprint,’ do not support a ‘Move To Zero carbon and zero waste,’ and are not made with ‘sustainable’ and environmentally friendly materials." Citing the Federal Trade Commission's Green Guides, which warn against overstating a product's environmental attributes, and misrepresenting that a product, package, or service offers a general environmental benefit, Ellis takes issue with Nike's sustainability-centric marketing on a number of fronts, such as its use of plastic-based materials, including recycled polyester and recycled nylon, which are not "sustainable and/or environmentally responsible materials," and the "limited number" of products that "actually contain any recycled materials."

Beyond that, she claims that Nike's method of "green" marketing "does not address the fundamental issue of perpetuating disposable solutions and over-consumption of natural resources," noting that "these strategies encourage consumers to buy more clothes or throw away garments sooner, in the belief they can be recycled in some magic machine." (If this sounds familiar, it may be because a similar claim has been waged against H&M, with a separate plaintiff arguing that by way of its "Conscious" choice collection and corresponding marketing, the Swedish fast fashion giant is "actively incentiviz[ing] consumers to purchase more and more" of its products," which is not sustainable.)

TLDR: Ellis argues in the newly filed lawsuit that in furtherance of its aim to "take advantage of consumers’ desire for true sustainable and environmentally friendly clothing products," Nike labels and markets products in a way that "give[s] the false and misleading impression" that the products "are less harmful or more beneficial to the environment than they really are."

Pricing Premiums: In line with a growing number of other cases that have been filed on this front (including "eco" marketing cases waged against H&M, bottling company Niagara, supermarket chain ALDI, etc.), Ellis claims that she purchased an array of Nike products as a result of the company's marketing language that described the products as "sustainable," "made with recycled fibers" which "reduces waste and our carbon footprint," etc., which she understood to mean that the products were sustainable and/or less harmful to the environment. The harm at play, Ellis says, is that she "would not have purchased the products at all or would have been willing to pay a substantially reduced price for [them] if she had known that they were not sustainable and made from sustainable and environmentally friendly materials."

(It is worth noting: Price premium allegations – which are commonly put forth by plaintiffs to satisfy the injury requirement of various statutes – have proven effective from a standing POV in other "sustainable" marketing cases, with a U.S. District Court for the Southern District of New York judge previously finding that a consumer who alleged that bottling company Niagara made the "false and misleading" representation that its water bottles are "100% Recyclable" adequately pled standing for damages – but not injunctive relief – by alleging that she paid a price premium based on that misrepresentation. (That case was dismissed last year, with SDNY Judge Engelmayer finding that the plaintiff had conflated recycling access with whether a bottle will likely actually be recycled.)

Against this background, Ellis accuses Nike of violating the Missouri Merchandising Practices Act, which generally prohibits deceptive advertising practices; unjust enrichment; negligent misrepresentation; and fraud, and is seeking certification of her proposed class action (to include other individuals who purchased "sustainable" Nike products during the applicable statute of limitations period), as well as injunctive relief and monetary damages.

A rep for Nike did not immediately respond to a request for comment.

The case is Ellis v. Nike USA, Inc., 4:23-cv-00632 (E.D. Miss.)