California Recyclability Labeling Scrutiny Poised to Increase Retailers’ Liability Risk

At the end of 2021, the California Statewide Commission on Recycling Markets and Curbside Recycling (the “Commission”) sent a letter to The California Department of Resources Recycling and Recovery, also known as CalRecycle, and California Attorney General Rob Bonta, asking them to investigate illegal labeling of plastic bags as recyclable by retailers. The Commission is alleging that businesses in the state are falsely implying that their bags are capable of being recycled through curbside collection with the “chasing arrows” logo and words such as “recyclable” and “recycle.” The Commission believes this labeling is impeding the curbside recycling process.

California’s 2016 Proposition 67 created a prohibition against single-use shopping bags. Since then, an exception in the law has allowed businesses to sell reusable plastic bags for at least 10 cents apiece, as long as these bags are capable of being recycled in the state. However, the Commission is arguing that the bags being used by certain retailers are not capable of being recycled through existing recycling programs in California. Instead, the Commission believes that recycling labels on plastic bags are causing consumers to place these bags in curbside recycling for collection. This mistake is creating difficulty for curbside collection programs that in reality do not accept plastic bags, due to the high cost of turning them into a new product. Employees of these collection programs must then spend additional time separating plastic bags from other materials and fixing equipment the bags have damaged.

The Commission is requesting enforcement so that businesses are no longer able to put purportedly misleading recyclability labeling on plastic bags. The Commission has also alleged that some sellers are deceptively stating that shopping bags and other plastics may be returned to participating locations in order to be recycled. According to the Commission, there is no evidence stores are actually recycling plastic bags. The Commission has also noted as part of the problem the presence of non-recyclable trash in the stores’ on-site recycling bins. On the other hand, the plastics industry believes disallowing this labeling will cause increased environmental harm because it will result in more plastic ending up in landfills.

Retailers should be prepared for the Commission’s letter to increase their risk of litigation as well as to potentially trigger a state attorney general investigation, either in connection with or independent of other state regulators. For example, businesses may be required to provide regulators with competent evidence supporting that their bags are truly acceptable by a state recycling program or that the recycling services they promote actually recycle the bags received. Otherwise, they may be mandated to stop selling these bags and other plastics or change the manufacturing so that they are truly recyclable. Notably, the California Attorney General has a very robust enforcement history tied directly to improper disposal of environmentally sensitive waste products.

Retailers’ liability risk is compounded by the fact that California Governor Newsom recently signed into law a new piece of environmental legislation, which requires truthful labeling on all packaging and products sold in the state. Once the legislation becomes effective beginning as early as January 2024, labeling a bag (or any other product) as “recyclable” that is not in reality possible to recycle in California would be expressly prohibited. 

Crowell & Moring LLP’s State Attorney General Practice has extensive experience working with regulators to expeditiously and favorably resolve investigations. We will continue to monitor developments in this area.