Last Beach Cleanup v. TerraCycle, Inc.

On November 15, 2021, The Last Beach Cleanup announced that it had reached a settlement with TerraCycle, Inc. and eight consumer product companies to resolve a lawsuit pending in the federal district court for the Northern District of California alleging that the companies’ recycling claims were unlawful and deceptive. Last Beach Cleanup alleged, among other things, that plastic pollution contributes to global climate change and that the defendants advertised and marketed their products with an “unqualified representation” that their difficult-to-recycle plastic products were recyclable with TerraCycle, which the complaint said “prides itself on working with companies to offer free programs for consumers to recycle products that established municipal recycling programs are not capable of recycling.” The complaint alleged that in practice “strict participation limits” prevented most consumers from participating in the free recycling programs, and also that it was “unclear” whether products accepted by the defendants were actually recycled. In the settlement agreement, Terracycle agreed to maintain records substantiating the validity of its recycling representations, including by developing and maintaining policies to ensure tracking of materials for recycling and by developing voluntary standards for third-party certifications and substantiations. TerraCycle also agreed not to license or permit its name to be used on labels or advertising of products without compliance with the substantiation requirements. In addition, TerraCycle may only license or permit its name to be used for products that are part of an “Unlimited” waste program for which no budget restrictions prevent TerraCycle from accepting all products. For products that are not part of an “Unlimited” program, TerraCycle must disclose the limits on the label or advertising.