Company’s “ESG” Publicity Is Commercial Speech, Unprotected by California Anti-SLAPP Law

On this putative class motion, Plaintiff alleges that Defendant, a California agricultural company, misrepresented the environmental impression of its farming practices by its promoting and “Inaugural Report on Environmental, Social and Governance Actions” (“ESG Report”). Particularly, Plaintiff alleges that Defendant’s statements about “regenerative farming”; its Environmental, Social, and Governance (“ESG”) commitments; and “preserving pure sources” had been “false, misleading, and deceptive.” In response to Plaintiff, Defendant’s “methodology of rising its items is inflicting extreme hurt to the ecosystem, and to its neighbors and communities.” Plaintiff purports to characterize a category of shoppers who “wouldn’t have bought (or wouldn’t have paid a premium [for])” Defendant’s merchandise had they identified of Defendant’s allegedly deceptive statements. The FAC asserts three causes of motion: (1) false promoting …; (2) “illegal, unfair, or fraudulent” enterprise practices …; and (3) violation of the Shopper Authorized Treatments Act ….

Defendant argues that Plaintiff’s three causes of motion needs to be dismissed below California’s anti-SLAPP statute as a result of “(a) [they are] impermissibly predicated on Defendant Grimmway’s train of its free speech rights (specifically, political advocacy and statements of public curiosity), and (b) Plaintiff will fail to ascertain a chance of prevailing on the deserves.” Plaintiff counters that “the entire language at challenge is ‘business speech,’ ” which “doesn’t obtain [a]nti-SLAPP protections.” …

[Under] § 425.17(c), the “business speech exemption[]” …, causes of motion arising from business speech are exempt from the anti-SLAPP regulation when:

(1) the reason for motion is in opposition to an individual primarily engaged within the enterprise of promoting or leasing items or providers;

(2) the reason for motion arises from an announcement or conduct by that particular person consisting of representations of truth about that particular person’s or a enterprise competitor’s enterprise operations, items, or providers;

(3) the assertion or conduct was made both for the aim of acquiring approval for, selling, or securing gross sales or leases of, or business transactions in, the particular person’s items or providers or in the middle of delivering the particular person’s items or providers; and

(4) the meant viewers is an precise or potential purchaser or buyer, or an individual more likely to repeat the assertion to, or in any other case affect, an precise or potential purchaser or buyer.

First, it’s undisputed that Defendant is an entity primarily engaged within the enterprise of promoting or leasing items. See Mem. at 8 (“Defendant Grimmway is a grower and shipper of carrots and natural produce ….”).

Second, the ESG Report incorporates a number of representations of truth about Defendant’s enterprise operations and items. The ESG Report boasts of Defendant’s “Environmental Stewardship”; “Management in Organics”; low-emission farm gear; “Accountable Farming Practices”; and “High quality Assurance and Meals Security,” amongst different facets of its enterprise operations and items. One part of the ESG Report is pointedly titled “Operations” and describes Defendant’s efforts to “improve productiveness, meals security and high quality, and accountability.” …

Third, the Courtroom finds that the ESG Report was created, no less than partially, to advertise Defendant’s items or providers. The ESG Report repeatedly spotlights the security and high quality of Defendant’s items. “Customers should purchase our merchandise with confidence that they meet the business’s most rigorous security requirements,” reads the ESG Report.  “Meals security and high quality assurance aren’t merely verify bins,” the ESG Report continues. “They preface each side of our multi-state operations from seed to retailer, encompassing planting, rising, harvesting, processing, packaging, and transportation of our merchandise.” The ESG Report additionally highlights Defendant’s “responsiveness to prospects,” in addition to its certifications and finest practices,  Elsewhere, Defendant discusses steps it has taken to realize its “mission to supply the world with high-quality, wholesome produce.”  Taken in conjunction, the representations within the ESG Report promote Defendant’s produce as contemporary, protected, wholesome, sustainable, and grown by a dependable and ethically accountable enterprise group.

The Courtroom acknowledges that important sections of the ESG Report focus on subjects not strictly tied to Defendant’s items and providers. For instance, the ESG Report additionally options info pertaining to “Worker Well being and Wellness”; “Range, Fairness, and Inclusion”; and numerous philanthropic initiatives. The general message of the ESG Report, nonetheless, is that Defendant is an ethically accountable grower and vendor of high-quality meals merchandise. As such, the ESG Report promotes Defendant’s merchandise and its model extra usually….

Lastly, the ESG Report’s viewers consists of precise and potential prospects, in addition to organizations more likely to affect potential prospects. Defendant argues that the ESG Report was merely directed to “inside and exterior stakeholders like staff, policymakers, and advocacy teams.” The ESG Report itself, nonetheless, defines the time period “stakeholders” as together with not solely the teams that Defendant listed, but in addition “Customers” and “Prospects.” Furthermore, the ESG Report was distributed to “Chambers of Commerce,” “numerous commerce associations,” and “the media,” all of that are more likely to affect potential prospects.

The ESG Report was additionally printed on Defendant’s web site, the place direct prospects and end-consumers might entry it. In response to Dana Brennan, the Vice President for Exterior Affairs & Company Duty for Defendant, the ESG Report was solely printed on-line in order that Defendant may very well be eligible for a world company governance award and “was not put on-line for any sales-related goal and was not directed to end-consumers.” Plaintiff, nonetheless, has submitted proof that hyperlinks to the ESG Report had been extensively circulated on Defendant’s social media accounts. Whereas Defendant might have initially printed the ESG Report back to its web site with the worldwide company governance award in thoughts, the next promotion of the ESG Report back to Defendant’s social media followers helps the conclusion that the ESG Report was used to focus on Defendant’s precise and potential prospects.

Defendant argues that the business speech exemption doesn’t apply right here as a result of the “Challenged Statements … weren’t ‘made for the aim of acquiring approval for, selling, or securing gross sales’ of Grimmway’s merchandise.” … [But] when analyzing whether or not a given communication represents business speech, this Courtroom and different federal and state courts have regarded to the communication as a complete with the intention to give context to particularly challenged statements …. Defendant additionally emphasizes the truth that the ESG Report discusses numerous problems with public curiosity and was distributed to legislative officers. Communications might, nonetheless, “represent business speech however the truth that they include discussions of essential public points.” Furthermore, the distribution of the ESG Report back to legislative officers doesn’t negate the ESG Report’s business nature….