New York Appeals Court Rejects City Lawsuit Alleging Fossil Fuel Companies Deceived Consumers

A New York state appeals court has rejected New York City’s consumer protection lawsuit against ExxonMobil, Shell, and BP, affirming a lower court order that dismissed the case. The five-judge panel determined that promotional claims describing certain gasoline products as cleaner or emissions-reducing did not unlawfully mislead consumers under local consumer protection laws.

The decision resolves the city’s latest effort to hold fossil fuel corporations financially responsible for the costs of climate change. City officials alleged that promotional campaigns amounted to deceptive greenwashing, but state judges found the marketing did not breach municipal standards.

The City’s Deception Claims Against Energy Companies

In its complaint, New York City stated that the extraction, refinement, and combustion of fossil fuels serve as the primary driver of climate change, leading many drivers to seek cleaner energy options. The city argued that the defendant companies misled motorists by describing gasoline products as cleaner and emissions-reducing without disclosing their broader environmental harm.

As examples of deceptive marketing, the lawsuit cited ExxonMobil advertising a fuel as twice as clean for improved gas mileage. The complaint also highlighted BP describing its efforts to make all energy cleaner and Shell promoting its involvement in developing a cleaner transportation future. The city maintained that these representations misled consumers into purchasing petroleum products under false impressions.

Why the Appellate Court Dismissed the Lawsuit

The First Appellate Division affirmed the lower court’s finding that the promotional materials did not violate city consumer protection laws. Associate Justice David Friedman, writing the 17-page opinion for the panel, stated that the ads plainly identified the products as gasoline and merely claimed they created fewer emissions than other gasoline products.

The court reasoned that climate-aware consumers seeking lower-emission options would understand that fossil fuels still generate substantial emissions. Justice Friedman explained that the ads presented a relative benefit rather than an absolute claim of zero emissions. The panel compared the dispute to a federal case involving Diet Coke, where courts held that marketing a beverage as diet indicated fewer calories than non-diet soda rather than a promise that the drink would produce weight loss. The judges also determined that the marketing campaigns fell outside the scope of city consumer protection law because they were not directly tied to specific sales of goods or services.

What the Ruling Means for Consumers and Future Cases

For ordinary consumers and motorists, the decision clarifies that general corporate advertisements highlighting reduced emissions relative to other petroleum products are not treated under New York City law as promises of zero environmental impact. The ruling also limits the use of municipal consumer protection ordinances against corporate advertising campaigns that lack a direct connection to a retail transaction.

A spokesperson for New York City stated that municipal officials are currently evaluating the court’s ruling and considering their next steps. The lawsuit was originally filed in April 2021, shortly after the Second Circuit upheld the dismissal of the city’s federal climate litigation. In that federal ruling, U.S. Circuit Judge Richard Sullivan explained that global warming “presents a uniquely international problem of national concern. It is therefore not well-suited to the application of state law.” Meanwhile, the nationwide future of similar local government suits may depend on the U.S. Supreme Court, which recently heard arguments in a climate deception case brought by the city and county of Boulder, Colorado against ExxonMobil and Suncor Energy.

Individuals or business owners facing potential deceptive advertising or consumer protection issues may want to speak with an attorney. A lawyer can evaluate whether specific commercial promotions meet the legal standards necessary to support a deception claim under local or state statutes.

This article is general information based on Courthouse News Service and court or agency records available at publication time. It is not legal advice; laws and deadlines differ by state and by case. Published October 9, 2026.