Several years ago, New York City sued Exxon, Shell, BP, and the American Petroleum Institute, alleging that they violated New York City's Consumer Protection Law by misleading consumers about the impact that their products have on the environment.  Last year, a lower court in New York dismissed the case, and New York City appealed.  In a case that is being closely watched by governments around the country who are asserting similar claims against fossil fuel companies, the Appellate Division in the First Department just affirmed the dismissal.  

New York City's Consumer Protection Law

New York City alleged that the fossil fuel companies violated Section 20-700 of the City's consumer protection law, which provides that, “No person shall engage in any deceptive . . . trade practice in the sale, lease, rental or loan or in the offering for sale, lease, rental or loan of any consumer goods or services . . . .”

The law defines a “deceptive trade practice” as “Any false or misleading . . . statement, visual description or other representation or omission of any kind made in connection with the sale . . . or in connection with the offering for sale . . . of consumer goods or services . . . which has the capacity, tendency or effect of directly or indirectly deceiving or misleading consumers.”  

Interestingly, before getting into the merits of the case, the court acknowledged that the parties disagreed on what standard should be applied in order to determine whether consumers were misled.  The defendants argued that the advertising should be judged from the perspective of the “reasonable consumer" (which is the familiar standard that the FTC applies), while the City said that the court should instead consider the effect the advertising would have on a consumer who falls within the ranks of “the ignorant, the unthinking and the credulous who, in making purchases, do not stop to analyze but are governed by appearances and general impressions.”  The court declined to decide which standard applies here, holding that the case would be dismissed using either standard.

Product Greenwashing

New York City alleged that the fossil fuel companies engaged in so-called “product greenwashing” by “misrepresenting the purported environmental benefits of using their fossil fuel products.”  The City argued here that BP's advertising of its “Invigorate” additive, Shell's advertising of its “Shell Nitrogen Enriched Cleaning System,” and ExxonMobil's advertising of “Synergy” additive was misleading because it failed to disclose that the use of these products will generate large amounts of greenhouse gas emissions that contribute significantly to climate change.  

The defendants' advertising included statements such as:

• BP's Invigorate is better than “ordinary fuels” that have problems like “increased emissions”; 
• Shell's fuels “produce few emissions” and that not using them can lead to “higher emissions”; and
• ExxonMobil advertises that its Synergy product “was created to let you drive cleaner, smarter and longer.”  

Noting that New York City didn't allege that the fossil fuel companies had made any expressly false statements, the First Department just didn't buy that their advertising was misleading, since consumers understand that the use of fossil fuels causes harm to the environment.  The court explained, “This claim of deceptiveness conflicts, however, with the premise of the entire action, namely, that the general public, regardless of level of sophistication, is now well aware of the fact that the use of fossil fuels results in greenhouse-gas emissions and is the primary driver of climate change.”  In other words, the advertisers have no obligation to disclose the harm, if consumers are already aware of it.  The court explained further, “Because the statements at issue disclose that the improved products are gasoline, even unsophisticated consumers – given the City's foundational assumption of near-universal understanding of the link between gasoline use and climate change – would necessarily understand that use of the improved products contributes to climate change.”  

The court also thought that the fossil fuel companies' claims were obviously comparative claims that compared the impact of their new products against other gasoline products.  The court wrote, “Nothing in the statements could lead even an incautious consumer to understand defendants to be representing that the environmental impact of use of the new products to power private vehicles would be comparable to the impact of taking public transportation, bicycling, walking, or using electric or hybrid cars.” 

Corporate Greenwashing

The City also alleged that the fossil fuel companies engaged in “corporate greenwashing” by “creating a misleading impression of the role of renewables [i.e., renewable energy] in their business.”  New York City pointed to claims such as:

• BP – “working to make all forms of energy cleaner and better”; 
• Shell - "powering progress together with more and cleaner energy solutions; and 
• ExxonMobil - “working to decrease our overall carbon footprint.” 

The First Department dismissed New York City's claims based on the fossil fuel companies' alleged “corporate greenwashing" statements, because those statements were not made in connection with the sale or offering for sale of consumer goods or services.  Recognizing that New York City's Consumer Protection Law is narrower than many other consumer protection laws, the court wrote, “The City does not allege that defendants sell to consumers any products or services based on the alternative technologies referenced in the challenged corporate greenwashing statements.”  

City of New York v. Exxon Mobil, 2026 WL 3023932 (1st Dept. 2026).