Friday, September 23, 2022

recyclable doesn't mean likely to be recycled, court holds

Curtis v. 7-Eleven, Inc., No. 1:21-cv-06079 (N.D. Ill. Sept. 13, 2022)

Curtis sued over “recyclable” claims on 7-Eleven products; the court rejects theories based on the fact that most “recyclable” plastic isn’t recycled, but accepts theories based on claims that it wasn’t even recyclable for lack of appropriate marking of what kind of plastic it was (designations known as RIC labels that “give recycling facilities the necessary information to sort the products”).

"recyclable" bags

recyclable cups

"recyclable" foam plates

"recyclable" red cups

The court was broadly skeptical of the claims—though the “recyclable” label wasn’t “hard to spot,” the court wondered if 7-Eleven consumers “bothered to look at the packaging at all” when buying red party cups. But Curtis alleged that she read it and cared, which sufficed “for now.”

She allegedly “reasonably understood that the products would actually be recycled if she placed them for recycling with her municipal recycling service.” But they weren’t.

The court thought that the lack of actual recycling was “extrinsic” to the product—not the product’s fault (despite false advertising’s strict liability)—while the lack of RIC designations was “intrinsic.”

There’s also a label on the back of the package: “CHECK YOUR LOCAL MUNICIPALITY FOR RECYCLING GUIDELINES.” Curtis argued that this made things worse, by suggesting that this would work.

The court adopted the majority approach to class standing: “a plaintiff may have standing to assert claims on behalf of class members based on products he or she did not purchase as long as the products and alleged misrepresentations about a purchased product are substantially similar.” 1 McLaughlin on Class Actions § 4:28 (18th ed. 2021) (citations omitted). That factual, contextual inquiry could be carried out later.

She lacked standing to seek injunctive relief, though.

Since “recyclable” was literally true, the claims based on the absence of actual recycling/practical unrecyclability weren’t plausible. What about deceptiveness even absent literal falsity? “Recyclable” “is not a promise about the state of the recycling industry. It is not a prediction of what is likely to happen after a product hits the recycling bin.” “Recyclable” does not mean “destined for inevitable recycling.” And it does not mean “likely to be recycled.” How does the court know what consumers think? It doesn’t; the court just thinks it’s not reasonable for consumers to construe “recyclable” to mean “will be recycled if you put it in a recycling receptacle.” The court reasoned that, if you buy a bottle of water marked “recyclable” in Chicago, where there is recycling, and take it hundreds of miles away where there is not, nothing about the bottle changed, so it would be wrong to say that “recyclable” became untrue. “True, maybe consumers have unreasonable expectations about how often products are recycled. But that’s not on 7-Eleven.” Um. If these beliefs are widely held, why are they unreasonable? What is reasonable or ordinary about the hypothetical in which Chicago consumers travel hundreds of miles into recycling deserts?

The court was concerned that a different holding would have “sweeping” implications because so little plastic recycling is being done. But isn’t that kind of important for consumers who want to participate in recycling to know? The court: “[I]t is hard to see why a manufacturer should be on the hook for deception when the consumer brings misinformation or unrealistic expectations into the picture.” What is unrealistic about believing that a package that says “recyclable” means something meaningful by it?

The court’s other “-able” analogies include things like “drinkable” and “drivable”—terms used in fairly different contexts than advertising. If a package said its contents were “drinkable” I definitely wouldn’t think “well, it’s drinkable, but I’m unlikely to be able to drink it.” Other common “able” advertising words have no obvious gap between “it’s possible to do X” and “you will be able to do X”: returnable, refundable, redeemable, transferable. Where the consumer might not be able to return, get a refund, redeem, or transfer, we expect those limits to be disclosed in the ad!

In a footnote, the court asks: “If a consumer has an inaccurate understanding or an unrealistic expectation about the likelihood of recycling, is that person still a reasonable consumer?” This question should not be left to a footnote or left answered only implicitly; it is the central question. And neither the history of consumer protection law nor the meaning of “misleading” suggest that the answer is “if you don’t understand exactly how the world works in every detail, too bad for you.”

Ultimately, “[m]aybe the average consumer expects that ‘recyclable’ products will be recycled. But that’s not what that word means. Expectations are one thing; representations are another.” Note the absence of any discussion of misleadingness: only explicit falsity apparently counts as long as “7-Eleven did not create the unreasonable expectations through misrepresentations.”

After all this, the court insists that it’s applying the reasonable consumer standard, and says that consumers aren’t expected “to parse packaging like lawyers.” Even though “consumer-protection laws must meet consumers where they are,” “there are limits on the pliability of words.” But what are those limits? Apparently, they are not created by reasonable consumers’ beliefs. At some point, words can’t be stretched “so far.” [Puffery/falsifiability should do that work, though: does the claim communicate a specific message to reasonable consumers? Adding some extra element beyond that just makes the law unpredictable and leaves consumers exposed to deception.]

The complaint also relied on the FTC’s Green Guides, which do tell sellers to take into account whether recycling facilities are actually available, though they don’t purport to bar the sale of recyclable-labeled products in areas where they aren’t as long as facilities are available in most areas. They also suggest additional labeling where availability is patchy. But the court didn’t find the Green Guides very “useful” “when evaluating the views of a reasonable consumer at a convenience store. Your average consumer at 7-Eleven probably doesn’t have the FTC’s policy statements at his or her fingertips when picking up a bag of foam plates for the backyard BBQ.”

[But the FTC’s approach, unlike the court’s, is based on empirical research about what consumers actually think when they see “recyclable.”]

Claims based on the lack of RIC designations survived, though, because they were consistent with lack of recyclability: without the markings, the products can’t be recycled. Thus, Illinois Consumer Fraud Act, warranty, and unjust enrichment claims survived only as to the RIC-based allegations.

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