Jeffrey A. Greenbaum
Frankfurt Kurnit Klein & Selz
When you advertise that a product is “recyclable,” does that mean that all of components of the product are recyclable? And, does it mean that when you drop the product in a recycling bin, it will actually get recycled? These were the issues in a recent lawsuit brought against Niagra Bottling.
Niagra Bottling sells bottled water that it promotes as “100% recyclable.” In a lawsuit against the company alleging a variety of claims, the plaintiff alleged that the “recyclable” claim is false and misleading (under New York law) because the plastic labels on the bottle, and some of the caps used on the bottle, are not recyclable. The plaintiff also alleged that the “recyclable” claim is misleading because a substantial number of bottles that are sent for recycling don’t actually get recycled, due to limitations of the recycling system.
In New York, in order to prevail in a false advertising case, the plaintiff is required to demonstrate that the marketer’s advertising claims are materially misleading. In order for an advertising claim to be materially misleading, it must be “likely to mislead a reasonable consumer acting reasonably under the circumstances.” It’s a complete defense to liability, however, if the marketer can show that that the advertising is “subject to and complies with the rules and regulations of, and the statutes administered by, the Federal Trade Commission or any official department, division, commission or agency of the United States.”
Niagra moved to dismiss, arguing that its “recyclable” claim complies with the FTC’s Guides for the Use of Environmental Marketing Claims (the “Green Guides”). Interestingly, as the basis for its decision, the court appears to mistakenly assume that the Green Guides are “regulations,” which they are not. The Green Guides only represent the FTC’s non-binding views about what is deceptive under Section 5 of the FTC Act, and they’re not independently enforceable.
Does it matter that some bottles don’t get recycled?
Citing the Green Guides, the court explains that the FTC authorizes unqualified recyclability claims when “recycling facilities are available to a substantial majority of consumers or communities where the item is sold” (emphasis added by the court).
Focusing on the use of the term “available,” the court held that it was only relevant whether recycling facilities were available — not whether those facilities actually recycled the bottles when it received them. The court wrote, “Inasmuch as the Green Guides’ focus is explicitly on the availability and existence of recycling programs and collection sites, whether a recyclability claim is misleading turns not on the incidence of recycling, but whether a substantial majority of consumers can place such products into the recycling stream.”
The court’s conclusion here is that, in order to make an unqualified “recyclable” claim, advertisers only have to ensure that their product will be accepted by recycling facilities — not that the facilities will actually recycle them. This is good news for advertisers, but it will be interesting to see whether the FTC adopts a similar review when it announces its upcoming revisions to the Green Guides.
What about the non-recyclable caps and labels?
Again citing the Green Guides, the court explains that the FTC also authorizes unqualified recyclability claims where “the entire product or package, excluding minor incidental components, is recyclable.” Niagra argued that it was proper for the company to advertise its bottles as “recyclable,” then, since both the cap and the label are “minor incidental components.”
The court agreed that it was clear, under the Green Guides, that the cap was a minor, incidental component, since an example in the Green Guides specifically provides that, “Because the bottle cap is a minor, incidental component of the package, the claim is not deceptive.”
The court said, however, that it was “less certain” whether a label is also a minor, incidental component, since the Green Guides don’t give any specific guidance on labels. After considering dictionary definitions of what it means to be “minor,” the court concluded that the label was also a minor, incidental component. The court explained, “The label does not contribute to a bottle’s functionality, is thin to the point of being two-dimensional, and is completely removable. Relative to the bottle, the label is patently inferior in size, degree and importance.”
One question that the decision doesn’t address, however, is whether having the label on the bottle impacts the recyclability of the bottle. In other words, does the consumer need to remove the label before putting the bottle in the recycling bin in order for the bottle to get recycled? If so, that may be something that needs to be made clear to consumers in conjunction with the “recyclability” claim.
Duchimaza v. Niagra Bottling, 2022 WL 3139898 (S.D.N.Y. 2022).
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Originally Published At The Mondaq Platform