Keurig K-Cup Consumers Win Class Cert of False “Recyclable” Claims

In Smith v. Keurig, N.D. Cal. Sept.  21, 2020, the district court granted Plaintiff Kathleen Smith’s motion for certification of a class of purchasers of Keurig coffee pods (“K-Cups” or “Pods”) based on Keurig’s allegedly false representation that the Pods are “recyclable.” The decision (slip op. available here) touches on a number of familiar issues that have been brewing in food labeling cases for years.

The plaintiff’s theory of liability boils down to allegations that K-Cups are not recyclable because they fail to meet Federal Trade Commission (“FTC”) guidance for Use of Environmental Marketing Claims (“Green Guides”). Under the Green Guides, the district court had previously stated, “if a product is rendered non-recyclable because of its size or components—even if the product’s composite materials are recyclable—then labeling the product as recyclable would constitute deceptive marketing” (citing 16 C.F.R. § 260.12(d)). In addition, a marketer may make an unqualified recyclability claim only “[w]hen recycling facilities are available to a substantial majority of consumers or communities where the item is sold.” 16 C.F.R. § 260.12(b)(1).  According to the plaintiff, the K-Cups are not “recyclable” because (a) less than 60% (or a “substantial majority”) of facilities will accept the products, (b) the products’ size prevents them from being properly sorted by recycling programs, and (c) there is a lack of end markets to recycle the products.

The plaintiff’s theory provides the grounds for several causes of action, including claims under California’s Unfair Competition Law (“UCL”) and the California Consumers Legal Remedies Act (“CLRA”). The plaintiff also sought to certify her claims under Fed. R. Civ. P. 23(b)(2), in order to obtain injunctive relief.

On the UCL claim, Smith discusses whether Keurig’s advertising raises the presumption of classwide reliance available under Tobacco II in the context of internet sales. The plaintiff testified that she was aware of Keurig’s claims that its products were recyclable, believing that the recycling claims on Keurig’s website and the packaging of products she purchased on the website were true. Smith, slip op. at 9. Since the plaintiff provided evidence that she relied on those representations, and “all the class members were exposed to Keurig’s recyclability representations,” the district court found that Keurig’s “advertising campaign” warranted a presumption of classwide reliance. Id. citing Walker v. Life Ins. Co. of the Sw., 953 F.3d 624, 630 (9th Cir. 2020), In re Tobacco II Cases, 46 Cal.4th 298, 328, 207 P.3d 20, 28 (2009).

Unlike the UCL, the CLRA requires a plaintiff to establish classwide reliance on misrepresentations. Here, the plaintiff successfully argued that, under the California Environmental Marketing Claims Act (“EMCA”) recyclability is material to reasonable consumers, raising an inference of classwide reliance. The EMCA makes it unlawful to make deceptive environmental marketing claims, including “any claim contained in the [Green Guides] published by the [FTC].” Cal. Bus. & Prof. Code § 17580.5(a). As the district court observed, by “specifically outlawing” an allegedly deceptive representation, the Legislature “recognizes the materiality of [the] representation.” Kwikset Corp. v. Superior Court, 51 Cal.4th 310, 329 (2011).

Lastly, Smith applied Davidson v. Kimberly-Clark Corp., 889 F.3d 956, 969 (9th Cir. 2018), to determine that the plaintiff had Article III standing to pursue injunctive relief. Keurig deployed the standard “can’t be fooled again” argument, i.e. that under Davidson, the plaintiff lacked Article III standing to pursue injunctive relief because she is now fully informed that the K-Cups are not “recyclable,” and therefore cannot be harmed by the representation in the future. Smith, slip op. at 18-19. However, Smith presents a factual scenario in which, absent injunctive relief, the plaintiff cannot know whether the “recyclable” representation is true. As the district court observed, “MRF’s [Materials Recovery Facilities] could evolve to capture small plastics such as Pods.” Id. Thus, the court found the plaintiff had Article III standing to seek injunctive relief under Davidson.

Authored by:
Robert Friedl, Senior Counsel
CAPSTONE LAW APC