Can You Promote a Product as "Compostable" When There Are Significant Limitations on How it Can be Composted?

Dog products company Earth Rated sells "Earth Rated Poop Bags" that were promoted as "certified compostable."  

The idea here is that you pick up your dog's poop in one of these bags and then you can compost both the bag and the poop.  Although dog poop is, in fact, compostable, the resulting compost should not be used in places where food is grown. Because of this, you wouldn't want to throw dog poop in your home compost pile (if you're planning on using the compost in your garden). Many municipal composting facilities won't accept dog poop as well, since, presumably, it would limit how its compost can safely be used.

Consumers sued the company, alleging false advertising and other claims under New York law, on the grounds that it was misleading to promote the poop bags as being "certified compostable" when there were significant limits on how the bags can properly be composted.  Specifically, the consumers alleged that not only should the poop bags not be composted at home, but that there are no municipal facilities in the United States that will accept them for recycling.  Earth Rated moved to dismiss, arguing, among other things, that its "certified compostable" claim was not misleading because it had properly qualified the claim by including disclosures on the packaging that explained those limitations.  

In evaluating the plaintiffs' claims, the court relied heavily on the FTC's Guides for the Use of Environmental Marketing Claims.  In the Guides, the FTC says that it is deceptive to misrepresent that a product is "compostable" if it cannot be composted "in a safe and timely manner . . . in an appropriate composting facility, or in a home compost pile or device."  The Guides also say that, if the product can't be composted safely, or if there are limitations about where the product can be composted, those limitations should be "clearly and prominently" disclosed.  There's also an example in the Guides that is particularly relevant as well:  "A garden center sells grass clipping bags labeled as 'Compostable in California Municipal Yard Trimmings Composting Facilities.' When the bags break down, however, they release toxins into the compost. The claim is deceptive if the presence of these toxins prevents the compost from being usable." 

So, did Earth Rated properly qualify its "certified compostable" claim?  Earth Rated explained that, on the back of its 60-count product, it disclosed that the product is "compostable in industrial facilities," but that consumers should "check locally; as these do not exist in many communities."  Earth Rated also pointed to an additional disclaimer that said, "Not suitable for backyard composting."  Other packaging had similar disclaimers.  

The court denied Earth Rated's motion to dismiss the false advertising claims, holding that that the plaintiffs had sufficiently alleged their claims.  First, the court expressed concerns that Earth Rated's disclosure that industrial composting facilities "do not exist in many communities" is not a sufficient disclosure if there aren't actually any facilities that will accept the poop bags in the United States.  Second, the court questioned whether a "certified compostable" claim should be made at all, in light of the fact that "in reality, the Product cannot be composted by American consumers."  Third, the court wasn't at all convinced -- at least for purposes of the motion to dismiss -- that disclaimers that are in a small font on the side or the back of the packaging would satisfy the FTC's "clearly and prominently" standard. 

Although this case is still at its very early stages, there are some important take-aways for marketers making "compostable" and other environmental marketing claims.  

When promoting an environmental benefit, you need to be sure that consumers will actually obtain that benefit.  Here, while the product was technically compostable (since it apparently satisfied recognized testing standards about breaking down into compost), it's still going to be misleading to promote it as "compostable" if there's no practical way for consumers to actually compost the product.  And, realistically, it's unlikely that any disclaimer -- no matter how prominent -- is going to solve that problem.

And speaking of disclaimers, if you want to make sure that your disclaimers are effective, the FTC likes to say that those disclaimers should be "difficult to miss."  Although there may be some situations where an ambiguous claim on the front of packaging can be qualified by disclaimers that appear on the back, when you've got a straightforward claim on the front of a package that communicates a clear product benefit, it's highly unlikely that any disclaimer that appears elsewhere on the packaging is going to sufficiently qualify that claim, particularly when the limitations are significant.

Natale v. Earth Rated

, 2023 WL 4850531 (E.D.N.Y. 2023).