Friday, September 17, 2021

"recyclable" could be deceptive where local recycling isn't widespread

Downing v. Keurig Green Mountain, Inc., 2021 WL 2403811, No. 1:20-cv-11673-IT (D. Mass. Jun. 11, 2021)

Keurig allegedly deceptively advertised its plastic single-serving pods as recyclable when those pods were not recyclable according to federal regulations. Keurig allegedly released pods that were manufactured from #5 plastic (which is recyclable) instead of #7 plastic (which is not) in order to address backlash to the use of nonrecyclable plastic. The new pods featured a three-arrow recycling symbol and the catch phrase “Peel, Empty, Recycle,” although the word “Recycle” was followed by an asterisk that advised buyers to “Check Locally.” The box also informed customers that they could “Have your cup and recycle it, too,” although again it stated that customers should “Check locally to recycle empty cup.”

During the period from the release to the present, however, many recycling centers could not accept the Pods as a recyclable product. In a pre-release investigation, Keurig allegedly discovered that even at recycling centers which will accept the Pods only 30% of the Pods were successfully recycled, because of their size, their tendency to become crushed by the recycling machines, and residue from the foil tops, filters or other contaminants.

Keurig argued that Downing lacked Article III standing because he didn’t include the specific ad he saw that induced him to buy the pods, didn’t say whether he was a prior pod purchaser before the change, didn’t allege whether the pods he bought were recyclable in his community, and didn’t allege what the difference in value between a recyclable and a non-recyclable pod would be. That’s not required (and very little of that is about standing). He attached photos of the ads and stated that the ads had been substantially and materially the same since the “recyclable” pods were released, which was sufficient. He further alleged that he relied on the ads and paid more than he would have paid for the truth.

Keurig then argued that any harm was traceable to the recycling centers, not to Keurig. Also no. “Keurig’s advertisement may be understood as making representations regarding the recycling process,” and causation exists “where the deceptive act or practice ‘could reasonably be found to have caused a person to act differently from the way he [or she] otherwise would have acted.’ ”

He also had standing to seek injunctive relief so that he could rely on future statements from the company. It was plausible that he’d buy pods from Keurig again if he had confidence that they were recyclable, so his alleged present inability to rely on the product’s labeling satisfies the requirement of an “actual and imminent, not conjectural or hypothetical” threat of future harm sufficient to establish his “ ‘personal stake in the outcome of the controversy’ as to warrant his invocation of federal-court jurisdiction.”

Massachusetts Chapter 93A: Massachusetts law is “guided by the interpretations given by the Federal Trade Commission.” The FTC has provided such guidance: “When recycling facilities are available to less than a substantial majority of consumers or communities where the item is sold, marketers should qualify all recyclable claims.” The guidance also states: “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.”

It offers an example:

[a] paperboard package is marketed nationally and labeled either ‘Recyclable where facilities exist’ or ‘Recyclable B Check to see if recycling facilities exist in your area.’ Recycling programs for these packages are available to some consumers, but not available to a substantial majority of consumers nationwide. Both claims are deceptive because they do not adequately disclose the limited availability of recycling programs.

Given the allegations that most recycling centers do not accept Pods and only 30% of Keurig’s Pods were recyclable at the facilities that accepted them, Keurig’s statement to “check locally” might not be sufficient to avoid deceptive marketing under the FTC guidance.

A reasonable consumer could have relied on the claim: “reasonable customers viewing the Keurig’s claims that the Pods were recyclable were not expected to do research to see if the Pods were actually recyclable, either in their own communities or across the United States. The warning ‘check locally’ did not make those customers unreasonable in assuming the Pods were recyclable.”

However, Downing could not represent a putative nationwide class, even if the relevant decisions were made in Massachusetts.

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