Two class action lawsuits were filed against Allbirds — a consumer case over its sustainability and animal welfare marketing, and a securities case over its 2021 IPO — and federal courts dismissed both. The consumer suit was thrown out in April 2022 and never refiled. The securities suit was dismissed three times, with the final dismissal in February 2026 ending the case for good. No settlement was reached in either action, and no money was paid out to consumers or shareholders.1Westlaw. Allbirds Securities Fraud Class Action Dismissed With Prejudice
The Greenwashing Case: Dwyer v. Allbirds
Patricia Dwyer sued Allbirds in June 2021 in the Southern District of New York, alleging its green marketing was deceptive under New York General Business Law §§ 349 and 350, along with breach of express warranty, fraud, and unjust enrichment claims.2ClassAction.org. Dwyer v. Allbirds, Inc., No. 7:21-cv-052383Linklaters Sustainable Futures. US Recent SDNY Decision Examines Greenwashing Claims
She targeted slogans like “Low Carbon Footprint,” “Environmentally Friendly,” “Made with Sustainable Wool,” and “Reversing Climate Change.” The complaint argued that Allbirds’ carbon calculations, based on a life cycle assessment tool and the Higg Material Sustainability Index, only captured product-level emissions and left out broader harms from wool farming — methane, water pollution, land degradation. Factor those in, the argument went, and the real carbon numbers would be “significantly higher.”4Proskauer Rose LLP. Sheeps Clothing: Court Dismisses Lawsuit Over Allbirds Carbon Footprint and Animal Welfare Claims
The suit also challenged Allbirds’ pastoral sheep imagery and its “Live The Good Life” and “humanely” treated claims. Citing PETA, Dwyer alleged that Allbirds’ wool supplier ZQ Merino excluded slaughter and transportation from its standards, permitted sheep to be deprived of food and water for up to 48 hours, and audited farms only once every three years.5ClassAction.org. Class Action: Wool Shoe Manufacturer Allbirds Misled Consumers With Sustainability, Animal Welfare Claims
On April 18, 2022, Judge Cathy Seibel dismissed the case in full. On the carbon claims, she found that Dwyer had raised “criticisms of the tool’s methodology” rather than shown false statements, and that Allbirds disclosed on its website exactly what its carbon footprint calculations included. The company, the court wrote, “does not mislead the reasonable consumer because it makes clear what is included in the carbon footprint calculation, and does not suggest that any factors are included that really are not.”3Linklaters Sustainable Futures. US Recent SDNY Decision Examines Greenwashing Claims
On the animal welfare side, the court found the complaint relied on generalized industry criticism instead of anything specific to Allbirds’ own farms or suppliers. It distinguished a prior Canada Goose case where the plaintiff had tied sourcing to specific regions known for inhumane practices. The “Our Sheep Live The Good Life” slogan and the happy-sheep imagery, the court held, were “classic puffery” that was “obviously intended to be humorous.”4Proskauer Rose LLP. Sheeps Clothing: Court Dismisses Lawsuit Over Allbirds Carbon Footprint and Animal Welfare Claims No appeal was filed and the case was not refiled.6Climate Case Chart. Dwyer v. Allbirds, Inc.
The Investor Case: Shnayder v. Allbirds
Allbirds priced its IPO at $15 a share on November 3, 2021, and closed its first trading day at $28.64, valuing the company at roughly $4 billion.7CNBC. Allbirds IPO: BIRD to Start Trading on the Nasdaq The stock collapsed from there: down about 84% by late 2022, another 49% in 2023, and under $1 in 2024, forcing a 1-for-20 reverse stock split that September to keep the Nasdaq listing.8Investopedia. Allbirds Just Completed a 1-for-20 Reverse Stock Split
Shareholders filed the consolidated action, Shnayder v. Allbirds, Inc., in the Northern District of California, covering purchases from November 4, 2021 through March 9, 2023.9Rosen Legal. Allbirds, Inc. Class Action They alleged the IPO registration statement was materially misleading because it hid that Allbirds was overemphasizing non-core products with “narrower appeal than expected” and underinvesting in the core footwear customers actually wanted.10Stanford Law School Securities Class Action Clearinghouse. Shnayder v. Allbirds, Inc. Securities Class Action The theory drew on co-CEO Joseph Zwillinger’s March 2023 earnings-call admission that the brand had “overemphasized products that extended beyond our core DNA.”11Retail Dive. Shareholder Files Class Action Against Allbirds
Judge Araceli Martínez-Olguín dismissed the case three times. The first dismissal came on May 10, 2024, with leave to amend.12Cooley LLP. Allbirds Secures Motion to Dismiss Win in Securities Fraud Class Action The second, on June 23, 2025, turned on two problems: plaintiffs couldn’t show their shares were traceable to the IPO registration statement, and they hadn’t adequately alleged executives intended to deceive. The traceability issue arose because Allbirds’ IPO structure allowed non-executive employees to sell up to 25% of their preexisting shares during the first seven trading days, so registered and unregistered shares mixed in the open market. Applying the Supreme Court’s 2023 Slack Technologies, LLC v. Pirani decision, the court held that “by definition not all of the company’s shares will be directly traceable” to the registration statement in that scenario.13Paul Weiss. District Court Dismisses Section 11 Suit on Traceability Grounds
Plaintiffs tried again in July 2025 with a Third Amended Complaint. They argued it was “mathematically negligible” that they hadn’t bought at least one registered share, and they added a confidential-witness allegation that co-CEOs Zwillinger and Brown were getting monthly reports showing retail stores were missing profitability targets while still greenlighting new openings.14GovInfo. Shnayder v. Allbirds, Inc., 2025 WL 174559615Justia. Shnayder v. Allbirds, Inc., No. 23-cv-01811-AMO, Order Granting Motion to Dismiss16Law360. Allbirds Investors’ Kitchen-Sink Strategy Dooms IPO Suit As of March 2026, no appeal had been filed.17CourtListener. Shnayder v. Allbirds, Inc., No. 3:23-cv-01811
Is There Any Money to Claim?
No. Because both cases were dismissed at the pleading stage without any settlement, no class was ever certified, no claims process opened, and no payments went to consumers or shareholders.1Westlaw. Allbirds Securities Fraud Class Action Dismissed With Prejudice Any website or notice claiming an Allbirds class action settlement is available to file for should be treated with skepticism.
What Happened to Allbirds After the Cases Ended
The company’s decline continued past the litigation. Allbirds closed all its U.S. full-price retail stores in February 2026.18CNBC. Allbirds BIRD Stock Shoes AI By early April 2026, its valuation had sunk to about $21 million, more than 99% below the IPO-day peak.19Forbes. Allbirds 99% Stock Wipeout Reveals Hard Lessons for Leaders On March 29, 2026, Allbirds agreed to sell its brand, intellectual property, and footwear assets to American Exchange Group for $39 million, a deal shareholders approved on June 3, 2026 with over 26.8 million shares in favor and fewer than 29,000 against.20Stock Titan. Allbirds Inc. 8-K: Special Meeting of Stockholders American Exchange Group is continuing the Allbirds shoe brand.
The public company itself did not dissolve. In April 2026 it announced a pivot to AI compute infrastructure under the name NewBird AI, backed by a $50 million convertible financing facility, though only $5.25 million was committed upfront and the rest sits at the investor’s option. Its own SEC filings describe the new venture as having “no operating history,” being “highly speculative,” and warn that it “may never generate meaningful revenue, profitability or positive cash flow.”21Stock Titan. Allbirds Inc. 8-K: NewBird AI Convertible Note Facility The stock jumped 582% on the day of the AI announcement before easing back. The company still trades on the Nasdaq under the ticker BIRD.18CNBC. Allbirds BIRD Stock Shoes AI