THE LAW OF IDENTITY HARM.

• Author: Dadush, Sarah

Abstract

Identity harm refers to the anguish experienced by consumers who learn that their efforts to consume in line with their personal values have been undermined by a company's false or exaggerated promises about its wares. When broken, other-regarding "virtuous promises" about products (e.g., eco-friendly, responsible, fair-trade, cruelty free, conflict free) give rise to identity harm by making consumers unwittingly complied in hurting others. A leading example is the Volkswagen emissions scandal: when environmentally-conscious purchasers of Volkswagen's "clean diesel" cars learned that the vehicles were in fact hyper-polluting, they experienced identity harm because of their complicity in a scheme that hurt the planet and the health of their communities.

As more people become sensitized to environmental and social (labor and human rights) sustainability challenges, they are also becoming increasingly concerned about their role in aggravating these challenges through their individual consumption. Identity harm surfaces against the backdrop of an under-regulated market for virtuous goods that is expanding to meet the demands of conscious consumers. Troublingly, those who experience identity harm currently have little recourse in private law, which reveals a serious deficit in our legal regime. This Article, one in a series, recommends correcting this protective deficit by operationalizing identity harm under tort, contract, and state consumer law, with a particular focus on the latter.

TABLE OF CONTENTS INTRODUCTION I. WHY IDENTITY HARM MATTERS A. Consumer Identity(ies) B. Over-Protection Versus Under-Protection II. The Psychic Safety Defect of Identity-Harming Products A. "Virtuous Dupery" and the Problem of Psychic Safety B. Expanding Dangerosity C. Identity Harm as Modern Day Defamation III. VIRTUOUS PROMISES AS CONTRACTUAL PROMISES A. Sustainability Noise B. The Challenge of Enforcing Virtuous Promises IV. OPERATIONALIZING IDENTITY HARM IN STATE CONSUMER LAW A. Dangerosity Omissions and Virtuous Misrepresentations V. REIMAGINING REMEDIES A. Market Value Is Not the Only Value That Counts B. Some Inspiration CONCLUSION INTRODUCTION

What happens when a consumer is sold halal meat that is not halal? Or when someone buys a "clean diesel" car that is actually hyper-polluting? Or a bar of chocolate that, unbeknownst to the consumer, was made using forced child labor? Does this give rise to any legally cognizable harm? Does the law provide any relief? This Article provides a name for the harm suffered in these kinds of cases, identity harm, and outlines legal mechanisms for addressing it.

Identity harm is the anguish experienced by a consumer who learns that her efforts to consume in line with her personal values have been undermined by a company's exaggerated or false promises about its wares. More specifically, identity harm arises when a consumer discovers that a company failed to honor the "virtuous promises" it had made concerning its wares (e.g., green, eco-friendly, fair-trade, cruelty free, conflict free, Made In America, and Kosher). Virtuous promises are currently under-policed by government regulators and, as a result, consumers are often over-exposed to "virtuous duperies" that can make them act contrary to their own values. Furthermore, consumers who try to bring legal claims against promise-breaking companies are ill-equipped to do so, revealing serious shortcomings in private law, whether under tort, contract, or state consumer law. This Article, one in a series, seeks to address these shortcomings by operationalizing identity harm as a new consumer protection tool. (1)

I describe virtuous promises as those that are designed to resonate with consumers' moral values, their standards for what constitutes acceptable or unacceptable behavior in the world. Because they possess a moral quality, virtuous promises are sensitive in a way that more technical promises--e.g., price, ingredients, and performance--are not. A particularly sensitive category of virtuous promises are those that are other-regarding, meaning that they contain an altruistic element or have implications for the well-being of others, besides the consumer. For example, virtuous promises about a product's social sustainability (labor and human rights) are other-regarding in that they have implications for the well-being of the people involved in the production process.

The other-regarding quality of some types of virtuous promises makes them particularly sensitive for a few reasons. First, as should be immediately apparent, the sense of personal responsibility involved with questions such as "Who do I want to be vis-a-vis other humans and the planet?" is an order of magnitude more profound than that involved with questions like "What image of myself do I want to project today?" or "Do I feel like savory or sweet?" or even "What brand of butter is best, given my cholesterol problems?" Second, when an other-regarding virtuous promise is broken, there is a real possibility that someone else, besides the consumer, suffers. For example, as a result of Volkswagen's (VW) deception concerning its "clean diesels" that were actually illegally dirty, car owners were harmed, but so was the planet and the health of the communities where the cars were being driven. Third, the psychic effects of a broken other-regarding virtuous promise can be quite severe, especially for "conscious consumers" who actively seek out sustainable products. (2) It is this combined distress that identity harm seeks to capture and address.

Today, a growing number of people are making big and small purchases that do some good or, more accurately, less harm in the world. (3) Consumers increasingly consider the effects of their purchases on the health of the planet and the well-being of the humans who participate in (or are otherwise affected by) the production process. And the market is responding. More and more goods, from coffee to cleaning products to cosmetics to cars, are being promoted as "better for the world" through direct advertising and labeling, but also less directly, for example on company websites, in annual corporate social responsibility (CSR) reports, supplier agreements, and industry codes of conduct. (4)

In theory, having access to more sustainability information should help consumers make better choices based on a product's mix of price, functionality, and virtuous attributes. In practice, however, the quantity and quality of information that consumers are exposed to is often inadequate or overwhelming (or both), which leads to consumer confusion. (5) With more companies entering what David Vogel calls the "market for virtue," (6) it is becoming increasingly difficult to compare virtuous promises across products and to tell apart truly sustainable products from those that only claim to be. This state of affairs creates too much room for virtuous duperies that exploit consumers' expectations and give rise to identity harm.

Although different kinds of broken virtuous promises can elicit identity harm, this Article focuses on promises pertaining to sustainability for two reasons. First, by definition, sustainability-related virtuous promises are other-regarding as they pertain to the planet and the people involved in a good's production; as such, if they are broken, these promises implicate the consumer in causing injury to others. This dynamic produces some of the more egregious instances of identity harm. Second, with respect to sustainability, transnational corporations (TNCs) operate within something akin to a regulatory vacuum, a reality that undermines the protection of labor and human rights globally and threatens the survival of our planet. (7) Here, consumers have significant--if untapped--authority as "civil regulators" who can vote with their dollars to express support for, or objection to, certain types of corporate conduct and so wield their purchasing power to influence TNCs' sustainability performance. (8) Of course, consumers are not the only protagonists acting on the sustainability stage, nor should they be. Nevertheless, conceiving of consumers as (co)regulators and better outfitting them to serve this function is important for achieving sustainability objectives. Operationalizing identity harm would equip consumers to serve more effectively as civil regulators and supply them with the means for safeguarding their own personal values. Put differently, identity harm can be a tool for acting locally--geographically, but also at an individual level--in order to effect change globally.

In an earlier article, I discussed several cases dealing with broken sustainability-related promises that perfectly described identity harm, even if the actual term was not used. (9) The leading case is the VW emissions scandal known as "Dieselgate" where the automaker's line of aggressively advertised clean diesel vehicles turned out to be anything but environmentally friendly, emitting up to forty times the legal limit of polluting nitrogen oxides. (10) The complaints filed in the multi-district litigation repeatedly reference the distress experienced by car owners who learned that their vehicles were in fact hyper-polluting. (11) I explained that, had the cars not been illegal as a result of being equipped with software designed to cheat emissions testing equipment in violation of the Clean Air Act and because they produced emissions in excess of national standards, the identity harm experienced by the Dieselgate victims, no matter how profound, would not have been adequately addressed. (12) This troubling conclusion can be explained as follows: First, the revelation of the cars' illegality effectively drove their market value down to zero dollars, resulting in a huge economic loss for car owners and, consequently, the largest settlement in automotive history. (13) Absent the illegality, however, the drop in the cars' market value would...