New California law adds significant restrictions for recycling claims on products and packaging: action steps

A new California law with far-reaching impacts prohibits the use of symbols or other claims suggesting recyclability, including the familiar “chasing arrows symbol,” on any product or packaging that fails to meet a California regulator’s strict recyclability criteria. On October 5, 2021, Governor Gavin Newsom signed Senate Bill 343, which will bar such environmental claims as early as 2024 and is intended “to reduce single-use trash pollution and support recycling goals.”

SB 343 empowers the California Department of Resources Recycling and Recovery (CalRecycle) to enforce its provisions and make determinations necessary for the law’s implementation.

SB 343 MAKES SIGNIFICANT CHANGES TO EXISTING LAW

California’s previous public policy required environmental marketing claims on products to be standardized to prevent consumer deception and to be substantiated by evidence. Cal. Pub. Res. Code § 42355.5(a). Under existing law, anyone making untruthful, deceptive, or misleading environmental marketing claims is technically guilty of a misdemeanor. Anyone whose products feature environmental claims, such as “environmentally friendly,” must maintain documentation supporting these claims.

Importantly, the law in effect before SB 343 also required all rigid plastic bottles and containers sold in the state to be labeled with a code identifying the plastic resin used to produce the bottles or containers, and violators can face a fine of up to one thousand dollars. The former legal framework, however, did not prescribe specific recyclability requirements, and plaintiffs in a growing number of consumer class actions allege that recycling claims are untrue or misleading because some areas lack adequate recycling infrastructure, and such products are sometimes not recycled. SB 343 amends existing environmental marketing laws specifically to regulate recycling claims.

Under SB 343, statements indicating recyclability such as the chasing arrows symbol are considered deceptive or misleading unless the product or packaging is routinely recycled into new products or packaging and is “recyclable” under the new law.

A product or packaging is “recyclable” only if it is made from a material type and form that is (1) collected by recycling programs in jurisdictions encompassing at least 60 percent of the state’s population and (2) sorted into defined streams for recycling processes by at least 60 percent of the state’s recycling programs.

Products and packaging considered recyclable must also meet the following criteria:

1. No components, inks, additives, or labels that prevent them from being recycled
   
   
2. “Designed to ensure recyclability”
   
   
3. May not contain certain chemicals identified by California regulations
   
   
4. Not made from plastic or fiber that contains PFAS meeting certain criteria.

Even if a product or packaging does not meet these requirements, it can still be considered recyclable under certain circumstances:

1. If at least 75 percent of the product or packaging sorted or aggregated in California is actually recycled – meaning reprocessed into new products or packaging – it will be considered recyclable.
   
   
2. Before January 1, 2030, a product or packaging not collected through curbside collection is recyclable if the collection program recovers at least 60 percent of it and can market it for recycling and send it to a transfer, processing, or recycling facility. After January 2030, the non-curbside collection program will have to recover at least 75 percent of the product or packaging for this exception to apply.
   
   
3. Products or packaging that comply with a relevant state or federal program established on or after January 1, 2022, will also be considered recyclable if it will not increase contamination of curbside recycling or deceive consumers.

These new requirements apply to any product or packaging manufactured after the later of (1) January 1, 2024, or (2) 18 months after Cal. Recycle publishes its first material characterization study (more below).

Although every rigid plastic bottle or container sold in the state will continue to bear a resin code, SB 343 now also prohibits placing the resin code within a chasing arrows symbol unless the product qualifies as recyclable under the new law, which became effective January 1, 2022.

NEW RECORDKEEPING AND PUBLIC ACCESS REQUIREMENTS FOR MANUFACTURERS

The new law also requires any persons who advertise or label their products using the chasing arrows symbol, or who “otherwise [direct] a consumer to recycle the consumer good,” to maintain records “supporting the validity of the representation,” including, for example:

1. why the person believes the representation to be true and
   
   
2. measures taken to mitigate environmental impacts associated with the product.

This information must be provided to any member of the public who requests it. As with the amendment to California’s resin code requirement, this change took effect when the new law did, on January 1, 2022.

MONITORING CALRECYCLE’S NEXT STEPS

CalRecycle also has new obligations under SB 343. It must aid in determining whether a product or packaging is (1) recyclable and (2) of a material type and form that routinely becomes feedstock for new products or packaging. By January 1, 2024, CalRecycle must:

1. Update its regulations to require disposal-facility operators to provide information regarding how materials are processed and collected and what material types and forms are actively recovered and not considered contaminants.
   
   
2. Conduct a characterization study of materials collected, sorted, transferred, or sold by solid waste facilities. This study will be published on the Department’s website and updated every 5 years. Publication of the first study will trigger the 18-month countdown for several of the new provisions to take effect.

PENALTIES, LITIGATION, AND COMPLIANCE

SB 343 imposes various penalties for violating its provisions:

1. Recyclability symbols or statements that do not meet its requirements are “deceptive or misleading” claims under Section 17580.5 of the California Business and Professions Code. Making such a claim is a misdemeanor punishable by up to 6 months of imprisonment, a fine of up to $2,500, or both.
   
   
2. Recordkeeping violations are also misdemeanors, with the same penalties.
   
   
3. Improperly placing a product’s resin code within the chasing arrows symbol is punishable by a fine.

The new law may also invite an uptick in consumer litigation. Multiple California statutes – such as the Consumer Legal Remedies Act, the False Advertising Law, and the Unfair Competition Law – provide a private right of action for consumers claiming to be misled by marketing claims and labels. Plaintiffs may seek to use violations of SB 343 as a basis for claims that recyclability statements are false or misleading under one or more of these laws.  At least one recent lawsuit has alleged that California’s previous recordkeeping requirements regarding environmental marketing claims apply to recycling claims specifically. Greenpeace Inc. v. Walmart Inc., Case No. 3:21-cv-00754, Dkt. No. 41 (N.D. Cal. Oct. 15, 2021). SB 343 has made this a requirement going forward.

Showing compliance with the new requirements will thus be key to defending against these suits. Indeed, the defensive benefits of compliance with SB 343 may be an incentive to comply with the law even before it goes into effect.

YOUR PRODUCTS AND PACKAGING: ACTION STEPS

In sum, those who advertise recyclable products or packaging should not take Senate Bill 343 lightly. Compliance is crucial.

We advise those affected by the law to take stock of their products and packaging bearing any claims related to recyclability and ascertain whether they meet the new law’s stricter definitions. Close attention should also be paid to any information posted by CalRecycle until the agency publishes its first material characterization study. When it does, the study should be used to assess compliance. Those whose products or packaging bear recycling claims should take immediate steps to ensure that current recordkeeping practices meet the new requirements. The law will likely require updating – or developing – internal compliance policies to mitigate relevant risks.

DLA Piper continues to monitor this and other regulatory developments in the plastics industry and the circular economy, and our lawyers are well versed in identifying related risks and developing cutting edge compliance programs. To understand how SB 343 might affect your business, contact your usual DLA Piper attorney or any of the authors.