BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                AB 837
                                                                       

                      SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                        Senator S. Joseph Simitian, Chairman
                              2011-2012 Regular Session
                                           
           BILL NO:    AB 837
           AUTHOR:     Nestande
           AMENDED:    June 20, 2011
           FISCAL:     Yes               HEARING DATE:     June 27, 2011
           URGENCY:    No                CONSULTANT:       Randy Pestor
            
           SUBJECT  :    FOOD CONTAINER ADVERTISING

            SUMMARY  :    
           
            Existing law  :

           1) Authorizes any person who engages, has engaged, or proposes 
              to engage in unfair competition to be enjoined in any court 
              of competent jurisdiction (Business and Professions Code 
              §17203).  Actions for any relief may be by a person who has 
              "suffered injury in fact and has lost money or property as 
              a result of the unfair competition" (§17204).

           2) Under provisions relating to Environmental Representations 
              Law (§17580 et seq.):

              a)    Requires any person who represents in advertising or 
                 on a label that the consumer good it manufactures or 
                 distributes is not harmful to, or is beneficial to, the 
                 natural environment through the use of certain terms 
                 (e.g., "ecologically friendly," "earth friendly," "green 
                 product,") or any like term, to maintain in written form 
                 certain information and documentation supporting the 
                 validity of the representation.  This information and 
                 documentation must be furnished to the public upon 
                 request.

              b)    Prohibits any person from making any untruthful, 
                 deceptive, or misleading environmental marketing claim.  
                 For purposes of this provision, "environmental marketing 
                 claim" must include any claim contained in the "Guides 
                 for the Use of Environmental Marketing Claims" published 
                 by the Federal Trade Commission.









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              c)    Provides that any violation of the above requirements 
                 is a misdemeanor punishable by imprisonment in the 
                 county jail not to exceed 6 months, or by a fine of no 
                 more than $2,500, or both.

           3) Prohibits a food or beverage container from being sold that 
              is labeled "compostable" or "marine biodegradable" unless 
              the food or beverage container meets certain ASTM 
              standards, and prohibits a food or beverage container from 
              being sold that is labeled with the term "biodegradable," 
              "degradable," or "decomposable," or any form of those 
              terms.  Certain related provisions, including definitions 
              and penalties, are specified.  (§42359 et seq.).

            This bill  enacts the Food Container Recycled Content Law that:

           1) Prohibits a manufacturer or supplier from selling a plastic 
              food container in California that is advertised with a 
              specific recycled content amount unless the manufacturer or 
              supplier is able to provide certification of that claim in 
              a format that is easy to understand and accurate.

           2) Requires a manufacturer or supplier to submit information 
              and documentation demonstrating compliance with the above 
              requirement within 90 days of the request.  A manufacturer 
              or supplier is in compliance with the Law if a link to a 
              document on its Internet Web site contains the required 
              certification and documentation.

           3) Sets penalties that may only be imposed by the state with 
              penalties paid to the Attorney General.

           4) Provides related definitions and legislative intent.

            COMMENTS  :

            1) Purpose of Bill  .  According to the author, "Existing law 
              establishes certain requirements for plastic products that 
              are labeled as compostable or marine degradable.  Those 
              products must meet the specifications established by ASTM 
              Standards.  There are no similar requirements for recycled 










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              content claims for plastic packaging.  This bill is not 
              intended to establish certification requirements for 
              recycled content claims, but merely requires those 
              manufacturers or suppliers to be able to back up their 
              claims upon request from a member of the public or state 
              agency.

           The author further notes that "Misleading claims are already 
              actionable under B&P section 17200 and the Federal Trade 
              Commission has established green guides regarding recycled 
              content claims.  This bill fills the gap by requiring 
              demonstration/validation of the claim and establishes 
              penalties for failure to comply.  While much more prolific 
              in Europe, there are several entities in the U.S. who have 
              processes to certify or verify recycled content claims, 
              like UL Environment and Scientific Certification Systems."

           According to the author, "AB 837 simply promotes truth in 
              advertising, i.e. stops the practice of 'greenwashing.'  
              Consumers value products with an environmental benefit and 
              many environmental claims go unchallenged.  This measure 
              ensures a product marketed with a certain recycled content 
              claim is accurate by holding manufacturers and suppliers 
              accountable for the claim."

            2) Current law addresses false or unsubstantiated 
              environmental claims  .  Under federal law, unfair methods of 
              competition in or affecting commerce, and unfair or 
              deceptive acts or practices in or affecting commerce, are 
              unlawful.  (15 U.S.C. §45).  The Federal Trade Commission 
              issues "Guides for the Use of Environmental Marketing 
              Claims" (also referred to as the "Green Guides").  These 
              Guides outline general principles that apply to all 
              environmental marketing claims and provide guidance on 
              specific green claims, including provisions relating to 
              "recycled content" (16 CFR 260.7(d)).  According to the 
              FTC, "The Commission has brought law enforcement actions 
              targeting allegedly false or unsubstantiated environmental 
              claims.  Because the Green Guides are administrative 
              interpretations of the law, they do not have the force and 
              effect of law and they are not independently enforceable.  
              However, if a marketer makes claims that are inconsistent 










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              with the Guides, the FTC can take action under Section 5 of 
              the FTC Act, which prohibits unfair or deceptive 
              practices."

           Current law authorizes any person who engages, has engaged, or 
              proposes to engage in unfair competition to be enjoined in 
              any court of competent jurisdiction (Business and 
              Professions Code §17203).  Also, under Environmental 
              Representations Law, any person is prohibited from making 
              any untruthful, deceptive, or misleading environmental 
              marketing claim (Business and Professions Code §17580.5).  
              For purposes of this provision, "environmental marketing 
              claim" must include any claim contained in the "Guides for 
              the Use of Environmental Marketing Claims" published by the 
              FTC.  As noted above, the Guide contains provisions 
              relating to recycled content.  Also, any person who 
              represents in advertising or on a label that the consumer 
              good it manufactures or distributes is not harmful to, or 
              is beneficial to, the natural environment through the use 
              of certain terms (e.g., "ecologically friendly," "earth 
              friendly," "green product,") or any like term, must 
              maintain in written form certain information and 
              documentation supporting the validity of the 
              representation.  This information and documentation must be 
              furnished to the public upon request.  (§17580).

           Since federal and state law already address untruthful, 
              deceptive, or misleading environmental marketing claims for 
              consumer goods, the AB 837 food container provisions 
              conflict with those laws.  However, it may be appropriate 
              to simply require any person making an environmental claim 
              regarding recycled content under the state's Environmental 
              Representations Law to maintain information supporting the 
              claim that:  a) the recycled content has been diverted from 
              the solid waste stream, and b) the claim conforms with the 
              uniform standards for recycled content from FTC's "Guides 
              for the Use of Environmental Marketing Claims."  This 
              should not be construed as a limitation on other 
              requirements, and this information should be furnished to 
              any member of the public upon request or provided by a link 
              on an Internet Web site.











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            3) Support and opposition concerns  .  According to supporters, 
              "AB 837 promotes truth in advertising by preventing 
              'greenwashing' of products with claims of recycled content. 
               Currently there are no standards for recycled content of 
              plastic packaging.  Consumers value products with an 
              environmental benefit and expect product claims to be 
              substantiated.  AB 837 provides the assurance consumers 
              need by requiring manufacturers or suppliers to be able to 
              back up their claims upon request from a member of the 
              public or state agency."

           According to opponents, "We support efforts to ensure that 
              advertised environmental claims can be properly justified 
              and that producers are not misrepresenting the 
              environmental virtues of their product in order to obtain 
              market advantage.  However, we believe this is a solution 
              in search of a problem because there has been no factual 
              demonstration that manufacturers or suppliers have been 
              advertising inappropriate recycled content claims for their 
              packages."  Opponents also note that existing federal and 
              state "enforcement tools work."

            SOURCE  :        Assemblymember Nestande  

           SUPPORT  :       Environment California  

           OPPOSITION  :    American Chemistry Council, California Bottled 
                          Water Association, California Chamber of 
                          Commerce, California Grocers Association, 
                          California League of Food Processors, 
                          California Manufacturers and Technology 
                          Association, California Nevada Soft Drink 
                          Association, California Retailers Association, 
                          Grocery Manufacturers Association, 
                          International Bottled Water Association