Greenpeace ends Walmart plastic recycling labeling lawsuit

A high-profile Greenpeace lawsuit against Walmart Inc. over plastic packaging recyclability claims is over, at least for now, after a federal judge dismissed the environmental group's claims on procedural points.

The lawsuit, first filed in late 2020, has followed a complicated path but ended in early June when Greenpeace chose not to move forward, after an unfavorable ruling from U.S. District Court Judge Maxine Chesney.

Greenpeace had alleged in the complaint, first filed in state court in 2020, that Walmart was violating California consumer protection law by deceptively labeling some of its private-label plastic packaging as recyclable.

But the case has gone through several twists and turns, with Walmart successfully moving the case in early 2021 to federal court in San Francisco, where the judge made three separate rulings against Greenpeace but each time allowed the group to amend and refile.

In September, for example, Chesney ruled that Greenpeace lacked standing in the case and the environmental group refiled.

After the last dismissal, on May 10, Greenpeace chose to end the lawsuit and not file a fourth version of its complaint.

Walmart did not respond to a request for comment but previously has called the Greenpeace lawsuit "baseless" and said it follows federal and state laws in its recycling marketing. It said it relies on its supply chain and labeling programs for guidance.

The company argued in court that the Greenpeace lawsuit went well beyond what state and federal law requires retailers to do.

Greenpeace, however, said the case was ultimately decided mostly on technical points and said Chesney's ruling creates an opportunity for other legal actions.

"This case is not proceeding for largely procedural reasons, but it is important to note that the court did not address the substance and merits of Walmart's recycling claims," said Jay Meisel, general counsel for the environmental group's U.S. unit. "Greenpeace hopes to work with Walmart directly moving forward to ensure that its practices live up to its rhetoric on recycling and reuse."

Howard Hirsch, outside counsel for Greenpeace in the case, said in a statement that Chesney's ruling agrees with a point the environmental group was making, that violations of California environmental marketing laws are actionable under the state's Unfair Competition Law.

"In this way, this lawsuit opens the door for organizations in California to hold corporations accountable for their environmental claims," Hirsch said.

Greenpeace had alleged that the company was improperly labeling its store brand packaging and products made from plastics 3-7 in the resin identification code, including polypropylene, polystyrene and vinyl, as recyclable.

It argued that not enough consumers in California can effectively recycle those types of plastics, meaning that the recyclability claims violate both the Federal Trade Commission's Green Guides and state law.

Walmart, however, argued in court filings that it followed federal and state laws and relied on both its supply chain and programs like the How2Recycle label to correctly communicate to consumers.

Walmart said Greenpeace did not prove that it suffered financial or other losses because of Walmart's actions, and it said the environmental group's lawsuit failed to show that the company had done anything deceptive or illegal.

"While this litigation may fit within Greenpeace's stated goal to discourage the use of plastic, it goes well beyond what federal and California law require of retailers," the retailer said. "And ironically, since the challenged labels educate consumers about which items can be recycled, removing the labels could lead to more plastic ending up in landfills.

"Greenpeace is essentially asking the Court to rewrite the Green Guides to require marketers to ensure certain products are actually being placed into recycling bins by consumers and recycled by independent facilities at rates acceptable to Greenpeace" Walmart added.

Walmart said in court filings that federal and state law treat claims about recyclability differently than other environmental marketing claims, although it conceded that a new California plastics law that passed last year does toughen language around recycling marketing.

The law, called SB 343, significantly rewrites rules around recyclability labeling in the state. Walmart pointedly noted in its court filings that the new law is not retroactive.

Still, concerns are building. A plastics recycling group and environmental organizations have been pushing for the federal government to more aggressively police what they call a "Wild West" situation around recyclability labeling.

Greenpeace had argued earlier this year, in continuing its case at that time, that Walmart was never able to provide proof of its recyclability claims, as required by California environmental marketing laws.

"Walmart sells more products packaged in throwaway plastic than any other polluter in the world," said Kate Melges, Greenpeace's plastic project lead. "The vast majority of them end up in incinerators — and in our neighborhoods, our waterways, our oceans, and our landfills."