* * * *
As we discussed in an April Washington Legal Foundation paper, the past few years have seen an increase in lawsuits based on allegations that material labeled as “recyclable” is either not recyclable in commonly accessible facilities or, regardless of accessibility, is simply not frequently recycled. 7-Eleven, however, won a significant victory in such a suit last month.
Companies such as Walmart, Niagara Bottling, Bluetriton Brands, Coca-Cola, and Keurig Green Mountain have faced suits of this sort. While some plaintiffs, especially activists groups, file suit only to enjoin labeling they view as objectionable, others seeking damages can be quite costly: Keurig Green Mountain paid $10 million to settle allegations that its “recyclable” claims for K-Cups were misleading.
Prior to these lawsuits, some companies believed that they avoided liability by contracting with private recyclers specifically to provide recycling facilities for their products. Unfortunately, such arrangements have not provided a safe haven. Plaintiffs have challenged these arrangements, alleging that private recycling programs often have quotas for the quantity of material they will accept. Once those quotas are met, material sent to the program for recycling is discarded, according to these complaints. Terracycle and several corporate clients agreed to certain auditing and labelling requirements to settle claims brought against them in 2021.
The FTC’s Green Guides offer support for these plaintiffs’ claims on the availability of recycling facilities. The Green Guides state that an unqualified “recyclable” claim is misleading unless recycling facilities are available to at least 60% of consumers or communities where an item is sold. 16 C.F.R. § 260.12(b)(2). California’s Cal. Pub. Res. Code § 42355.51(d)(i)(B)(v)(2)(A) (enacted in 2021 as SB 343) reaches a similar conclusion. While the Green Guides do provide for the possibility of qualifying a “recyclable” claim to state, for instance, that recycling facilities may not exist in all communities, the California law provides no such middle ground.
It is against this backdrop that 7-Eleven won a significant victory in the putative class action brought against it in the Northern District of Illinois based on such allegations. Devon Curtis filed the lawsuit in Illinois state court in October 2021. 7-Eleven removed the lawsuit to federal court and moved to dismiss for lack of standing and failure to state a claim. Last month, the court dismissed many of Curtis’s principal claims.
The products at issue are 7-Eleven’s “24/7 Life” branded foam cups, foam plates, party cups, and freezer bags. 7-Eleven made “recyclable” claims for each of these products on their packaging. Curtis alleged that some of the products lacked resin identification codes, making it impossible for a recycling facility to identify the type of plastic used. Without the possibility of identifying the type of plastic used, Curtis alleged, these products could not be recycled.
She also alleged that some of the products were properly marked with RIC codes but were made of types of plastics for which no recycling facilities existed in the Chicago area. Curtis alleged that the plates and cups included No. 5 and No. 6 plastic, neither of which are accepted for recycling by municipal facilities.
The court parsed these allegations as essentially relating to two separate things: on the one hand, how the products fit into the system of recycling facilities, and on the other hand, how the products themselves are made. The court held that it could not hold 7-Eleven responsible for the state of recycling facilities—at least so long as 7-Eleven did not make any claims “about the likelihood that the products would be recycled, or about the ease of recycling the products, or about the prevalence of nearby recycling facilities.”
As the court acknowledged, Curtis did cite the Green Guides in her complaint, and Illinois state law directs courts to give “consideration” to the FTC’s interpretation of Section 5(a) of the FTC Act in construing the state’s deceptive advertising statute. The court, however, rejected the interpretation that a “recyclable” claim—even an unqualified one—is a claim about the availability of recycling facilities.
Instead, the court concluded, a “recyclable” claim is a claim about the product itself. As such, it cannot be the basis for holding 7-Eleven accountable for the lack of recycling facilities, or the fact that many perfectly recyclable items deposited in municipal recycling facilities are, in fact, not recycled.
On the other hand, because a “recyclable” claim is a claim about the product itself, 7-Eleven can be held responsible for failing to stamp products with a resin identification code and then marketing those products as “recyclable.” While the court was certainly correct that it is within 7-Eleven’s power to ensure that products include RIC codes, it does stretch credence somewhat to say that the alleged policy of recycling facilities to refuse to recycle products lacking such codes is within 7-Eleven’s control.
The court dismissed Curtis’s claims to the extent that they depended on the availability of recycling facilities but allowed them to continue to the extent that they depend on the absence of resin identification codes. Beyond the logical tension in the court’s distinction between the two issues, companies may not be able to take full advantage of this ruling because the forthcoming requirements of California’s SB 343—Cal. Bus. & Prof. Code § 17580(a)(6) and Pub. Res. Code § 42355.51(b)(1)—provide that use of a “chasing arrows” symbol, including when surrounding a resin identification code, constitutes a “recyclable” claim.
ASTM International’s current standard practice for coding items for resin identification calls for the code to be placed inside a solid triangle rather than inside the chasing arrows symbol. That said, the use of the chasing arrows symbol in conjunction with the resin identification code continues to be common practice. Where it is likely that only RIC 1 and 2 plastics will be deemed to be “recyclable” under the forthcoming California regime, the California law will likely essentially outlaw the use of chasing arrows symbols in conjunction with RICs 3–7. The upshot is that companies will have to pay careful attention to how their products and packaging are labeled, to ensure compliance with all applicable laws.