NYC’s Oil Deception Case Hinges on Reading of Ad Law (Correct)

A Manhattan court could pave the way for broader enforcement of New York City’s consumer protection law if it revives the city’s lawsuit accusing several oil giants of deceptive advertising.

The city claims BP, ExxonMobil, and Shell engaged in product and corporate greenwashing, purporting that their products are more environmentally friendly than they are and overstating company-wide efforts to address climate change. But the trial court dismissed the city’s case last January, applying what New York City described in its brief as a “rigid standard” that doesn’t adhere to the “broad protective goals” of the city’s consumer protection law.

If the New York Supreme Court First Appellate Department judges don’t revive the case and lean on the same interpretation as the lower court, it could end up being “really, really hard to bring corporate-level greenwashing claims under New York City law,” said Sarah Light, legal studies and business ethics professor at the University of Pennsylvania’s Wharton School.

But if the panel agrees with the city that a wide swath of consumers can be deceived by product advertising, the city’s law “becomes a much broader and more powerful enforcement mechanism that will give New York City even more power than the state attorney general to regulate commercial advertising in all sorts of contexts,” said Alex Simkin, a partner at Ropes & Gray LLP.

The case will also tackle the merits of the city’s deception claims, rather than whether they are preempted by federal climate change laws, something that hasn’t occurred in other greenwashing cases brought by cities and states, said Michael Gerrard, founder and faculty director of Columbia University’s Sabin Center for Climate Change Law.

Reasonable Consumer

What kind of consumer does the city’s law protect? That’s the legal question that’ll carry the day, Simkin said.

The trial court said the city was trying to “have it both ways” by arguing that consumers are aware of and concerned about the environmental impact of fossil fuels but are also being duped by the companies’ failure to disclose their products cause climate change.

“How much of a nexus does there need to be between claims that climate change is or isn’t happening, on one hand, and whether people will really buy gasoline?” Gerrard said.

If the court believes that people are going to drive regardless, and that disclosures from the company won’t affect whether they buy a gas-powered or electric car, “would deception about climate change make any difference to consumer behavior?” he asked.

A typical greenwashing case would focus on whether the company knew about and failed to disclose pertinent information to consumers. But the city’s allegation is that the companies didn’t disclose the negative impact of fossil fuels, which “isn’t a secret,” Simkin said. The question, he added, is whether or not including that disclaimer in advertisements is the “equivalent of telling a half truth.”

Judges will have to decide whether the law protects a reasonable, knowledgeable consumer or all consumers, regardless of their level of knowledge, Light said.

Whether it’s “possible to both care about an issue and be misled about it” is most likely an empirical question requiring studies of New York City consumers, and thus legal discovery, Light said.

The court also will have to decide whether the companies’ general statements highlighting their investments in alternative energy sources were made “in connection with” sales of their products; that phrase has generally been read more broadly than the trial court read it, Light said.

If the appellate applies the same narrow reading, the city might “need to decide whether it wants to amend its consumer protection statute to include broader language,” she said.

Supreme Court Impact

Even if the case is revived, it could get tossed later if the US Supreme Court sides with Exxon and Suncor Energy Inc. in their appeal of a Colorado Supreme Court ruling that said the city and county of Boulder could use state law to press a suit against the two companies. The question in that case is whether federal law preempts state law claims seeking relief for injuries caused by greenhouse gas emissions.

That decision “has the ability to render all of this academic,” Simkin said.

Preemption isn’t mentioned in briefs filed by New York City and the oil companies, nor was it mentioned by the trial court judge. That could be because oil companies have already been successful with preemption arguments in other cases, and now want a decision solely focused on the consumer deception claims, Gerrard said.

While some of the other state and city cases focused more on public nuisance theories “might go away,” New York City’s might be shielded from that since it’s focused more on deception, he said.

“If they win at the appellate division in New York, that could be useful to them in these other deception cases,” he added.

The case is City of New York v. Exxon Mobil Corp., N.Y. App. Div., 1st Dep’t, No. 2025-01687, oral argument scheduled 4/15/26.