Historically, neither food companies nor the plaintiffs’ bar have lost sleep over “recyclable” or “recycled content” claims. Over the past year, however, there has been increasing attention to and scrutiny of recyclable claims made by consumer packaged goods (CPG) companies. There also have been recent changes to the U.S. recycling system and the export market for certain plastic materials, resulting in reports that recycling facilities are accepting materials that may not in fact ultimately be recycled. As sustainable packaging continues to be a priority for many CPG companies, these companies should consider the evolving litigation landscape before using “recyclable,” “recycled content,” or other general environmental benefit claims on product labelling.
Background on Regulatory Guidance on Recyclable Claims
The Federal Trade Commission (FTC) “Green Guides” provide guidance on environmental marketing claims such as “recyclable.”1 The Green Guides are non-binding but illustrate how the FTC assesses whether these types of claims are false or misleading. With respect to recyclability claims, the Green Guides set out four basic principles:
Recyclability. “A product or package should not be marketed as recyclable unless it can be collected, separated, or otherwise recovered from the waste stream through an established recycling program for reuse or use in manufacturing or assembling another item.”2
Shape and Size. “If any component significantly limits the ability to recycle the item, any recyclable claim would be deceptive. An item that is made from recyclable material, but, because of its shape, size, or some other attribute, is not accepted in recycling programs, should not be marketed as recyclable.”3
Availability of Recycling Facilities. Recyclability claims should be qualified if recycling facilities are available to less than 60% of consumers or communities where the item is sold.4
Amount of Recyclable Content. Recyclability claims should be qualified if any part of the packaging, other than minor, incidental components (the FTC gives the example of a bottle cap) cannot be recycled.5
Recent Developments in U.S. Recycling System
Earlier this year the non-governmental organization (NGO) Greenpeace issued a report concluding in part that recyclable claims are misleading if a company cannot prove that the plastic bearing the claim was actually accepted and recycled by both the municipal collection and U.S. domestic recycling/reprocessing capacity.6 The report states that while certain plastics are collected and accepted by recycling facilities, these materials are often disposed of in a landfill or incinerated, rather than being recycled. The report explained the change is due in part to the lack of a market for these materials, with countries that previously imported these materials for recycling no longer accepting them.
Greenpeace has asked certain food companies to make changes to their labelling claims, and has suggested it may file formal FTC complaints if changes are not made.7
Class Action and Enforcement Environment
While class action has not focused on “recyclable” claims in the past, two recent cases brought against food companies manufacturing single-use packaging indicate that plaintiffs are increasingly active in this area. In the first case, which has survived a motion to dismiss and for which the court has granted class certification, plaintiffs allege that while the material bearing the “recyclable” claim is technically recyclable, municipal recovery facilities (MRFs) in the U.S. cannot effectively sort and separate the packaging at issue because it is too small. The second case, which was brought against a number of companies making beverages in single use plastic containers, cites heavily to the Greenpeace report and alleges that much of the plastic labeled as recyclable is not in fact recycled. The broad-ranging claims focus not only on recyclability claims, but also on the companies’ alleged contributions to plastic pollution and failure to switch to more sustainable packaging.
On the enforcement side, the FTC has not taken any recent action on recyclable claims. However, there have been several relevant challenges brought to the National Advertising Division (NAD), a self-regulatory arm of the Better Business Bureau National Programs. In the first case, the NAD concluded that an advertiser provided a reasonable basis for its claim “fully recyclable” on a single-use foodservice cup, based on the results of substantial testing conducted by (1) MRFs, which showed that the material is in fact correctly sorted into the recycling stream, and (2) the largest recycler of the specific type of plastic in North America that concluded the material could be converted into recycled resin for manufacture into another product.8
Although not specific to recyclability, in a separate challenge, NAD concluded that an advertiser’s claim of “100% compostable pods” was misleading because the advertiser did not clearly and prominently disclose that the pods are not suitable for home composting, because only some, but not all, of the advertisements clarified that the pods were compostable only in industrial facilities.9 NAD also concluded certain claims—such as “[n]ow you can enjoy the great taste and convenience of single-serve coffee without worrying about the environmental impact”—overstated the environmental benefits of the packaging.
We will continue to monitor developments related to recyclable, “recycled content,” as well as general environmental benefit claims.
1 See Federal Trade Commission, Guides for the Use of Environmental Marketing Claims, 16 CFR § 260 et seq.
2 16 CFR 260.12(a).
3 Id. 260.12(d).
4 Id. 260.12(b)(1).
5 Id. § 260.3(b) and Example 1.
6 See Greenpeace, “Circular Claims Fall Flat: Comprehensive U.S. Survey of Plastics Recyclability” (February 18, 2020).
7 Press Release, “U.S. companies use misleading “recyclable” labels on hundreds of plastic products” (February 18, 2020).
8 Berry Plastics Corporation/Versalite Polypropylene Cups, NAD Case #5835 (April 22, 2015).
9 Kauai Coffee Company, LLC/Certified 100% Compostable Pods, NAD Case #6078 (May 5, 2017).