Greenpeace, Inc. v. Walmart, Inc.

Background

Greenpeace alleged that Walmart sold products and packaging made from certain plastics under its private-label brands and labeled them “recyclable.” Greenpeace claimed the labels were false and misleading because consumers lacked access to recycling programs that accepted the products, the products could not be properly separated and recovered from the waste stream, and there were no end markets for reusing or converting them.

Greenpeace asserted three claims under section 17200 of the California Business and Professions Code: fraudulent business practices, unlawful business practices, and unfair business practices. Walmart moved to dismiss the First Amended Complaint, arguing that Greenpeace had not shown it had standing to bring those claims.

Court’s analysis

The court explained that section 17204 requires a plaintiff to have suffered an injury in fact and lost money or property as a result of the alleged unfair competition. When a section 17200 claim is based on alleged misrepresentations to consumers, the plaintiff must plead actual reliance on the challenged statements to establish the required causal connection. The court stated that this requirement applies whether the claim is brought under the statute’s fraudulent, unlawful, or unfair-practices theories.

Greenpeace alleged that Walmart’s statements frustrated its environmental mission and caused it to spend staff time and other organizational resources investigating and opposing Walmart’s labeling practices. The court held that resource diversion could sometimes support standing when a section 17200 claim is not based on consumer misrepresentations. Here, however, the claims were based solely on alleged misrepresentations, so Greenpeace had to plead reliance.

The court rejected Greenpeace’s argument that its investigation was reliance on Walmart’s misrepresentation. Under the court’s description of California law, reliance means acting or refraining from acting because the statement was believed to be true or false, rather than merely responding to the fact that the statement was made. The First Amended Complaint indicated that Greenpeace acted because it believed Walmart’s statements were false. The court therefore concluded that Greenpeace was never misled and had not pleaded reliance on the truth of Walmart’s representations.

Disposition

The court granted Walmart’s motion to dismiss and dismissed the First Amended Complaint. The court stated that Greenpeace could file a Second Amended Complaint no later than October 15, 2021. It also continued the case-management conference from September 24, 2021, to December 17, 2021, and required a joint case-management statement by December 10, 2021.