Environmental Law | Consumer Protection | Product Liability

Introduction: Not Recyclable Enough

In a significant move signaling increased regulatory scrutiny of environmental claims in product marketing, the California Department of Justice (DOJ), led by Attorney General Rob Bonta, announced on October 17 2025 that it had filed a lawsuit against three major plastic‑bag manufacturers for falsely claiming their products were recyclable in California. At the same time, the state reached settlement agreements with an additional four manufacturers, who agreed to halt sales of their plastic bags in the state and collectively pay about $1.8 million in penalties and legal costs. (Reuters)

This enforcement action underscores how environmental marketing claims, especially around “recyclable” or “reusable” labels, are increasingly becoming matters of legal risk—not just regulatory oversight. The case raises major issues about consumer protection, greenwashing, legislative loopholes in packaging regulation, and corporate liability under state environmental marketing and unfair‑competition laws.

Factual & Legal Background

The Statutory Framework

California law, notably through Senate Bill 270 (SB 270) and other statutes, restricts the sale of single‑use plastic grocery bags and requires any plastic carry‑out bags sold in the state to be reusable and recyclable in the state. (California Attorney General)
In parallel, companies making environmental marketing claims must comply with the Environmental Marketing Claims Act (EMCA), the False Advertising Law (FAL), and the Unfair Competition Law (UCL). The California DOJ’s announcement emphasizes that the manufacturers in question allegedly violated all of these regimes. (California Attorney General)

The Investigation & Findings

Beginning in November 2022, the DOJ launched a comprehensive investigation into makers of plastic carry‑out bags sold in California, demanding proof of recyclability, including documentation of bag collection, processing and actual recycling in California facilities. (Courthouse News)
The investigation found that out of 69 recycling and materials‑recovery facilities surveyed, only two claimed they accepted plastic bags — and neither could confirm those bags were actually recycled. The manufacturers under investigation allegedly failed to provide reliable evidence that their bag products were recycled in California. (California Attorney General)
The DOJ’s press release states:

“These plastic bags do not, in fact, appear to generally be recyclable, let alone ‘recyclable in the state,’ as SB 270 requires.” (California Attorney General)

The Enforcement Actions

Lawsuit

The DOJ filed suit against:

• Novolex Holdings LLC
• Inteplast Group Corp.
• Mettler Packaging LLC

These manufacturers are alleged to have labelled their plastic bags as recyclable despite lacking proof the bags were actually recyclable in California. The lawsuit seeks civil penalties, disgorgement of profits, and injunctive relief. (California Attorney General)

Settlements

Four other companies — Revolution Sustainable Solutions LLC, Metro Poly Corp., PreZero US Packaging LLC and Advance Polybag, Inc. — reached settlement agreements with the state. These agreements require the companies to:

• Immediately cease selling plastic carry‑out bags in California (after exhaustion of existing stock)
• Pay approximately $1,753,000 in total (comprising about $1,115,750 in civil penalties + $636,250 in attorneys’ fees and costs) (California Insider)
• These settlements are subject to court approval. (The Business Journal)

Market & Regulatory Context

Critics say the 2017 rollout of the bag‑ban regime (which banned thin single‑use plastic bags but permitted thicker reusable plastic bags if labelled “recyclable” and sold for at least 10 cents) created a loophole that inflated the use of heavy “reusable” plastic bags, which nonetheless rarely entered recycling streams. (Investing.com) The DOJ noted this enforcement action is part of a broader strategy to close that gap and push for greater actual recyclability and transparency.

Legal & Practical Implications

For Manufacturers and Marketers

This case sends a clear message: manufacturing or marketing a product labelled “recyclable” triggers significant legal risk if the underlying proof is lacking or misleading. Key take‑aways include:

• Labels such as the “chasing arrows” symbol or claims like “recyclable in California” should be backed by verifiable data showing actual recycling in the designated jurisdiction.
• Companies should maintain documentation showing the collection, processing and recycling of their branded product in the jurisdictions claimed.
• A lack of such proof may expose the company to enforcement actions under environmental marketing laws, false advertising statutes and unfair competition regulations.

For Retailers & Supply Chains

Retailers selling products bearing “recyclable” claims may face downstream liability or risk of regulatory scrutiny. They should ensure that suppliers provide substantiation for recyclability claims or consider delisting products with questionable claims.

For Regulators & Policymakers

The case demonstrates a regulatory shift from whether a product can be labelled “recyclable” to whether the claim is substantiated and meaningful in the real world. It may motivate:

• Stronger enforcement of recyclability substantiation demands
• Tightening of definitions of “reusable” and “recyclable” in state law
• Expanded oversight of supply‑chain reporting and certification of recyclability claims

For Environmental & Consumer Advocacy

Consumer trust in recycling is at stake when so‑called “recyclable” products persistently fail to be recycled. The enforcement action bolsters advocacy positions demanding:

• True circularity of packaging material (not just recyclability labels)
• Transparency around product end‑of‑life processing
• Elimination of “greenwashing” through superficial claims that lack real impact

Conclusion

California’s recent legal action against plastic bag manufacturers underscores a growing regulatory intolerance for environmental marketing claims that fail to meet empirical scrutiny. While the $1.8 million settlement and lawsuit may represent a modest monetary figure for large packaging corporations, the symbolic and structural implications are notable. Products marketed as recyclable must live up to that claim—not just in label, but in practice.

For industry participants, the event is a clarion call: bolster substantiation of recyclability claims, improve transparency of end‑of‑life processing, and reassess marketing language that may invite legal accountability. For regulators and advocates, it signals that enforcement of environmental marketing laws is entering a more rigorous era.

As the lawsuit proceeds and new legislative measures take effect (including a statewide ban on plastic checkout bags in California beginning in 2026), market actors should expect increased scrutiny on packaging claims, supply‑chain evidence and the real world fate of products labelled “recyclable.”