California Sues Oil Company for Plastics Recycling Claims
V&E ESG Update
V&E ESG Update
On September 23, 2024, the State of California filed a new greenwashing salvo against an oil major by filing a plastics-related lawsuit in the San Francisco County Superior Court. The lawsuit accuses the oil major of allegedly misleading consumers and the public about the adequacy and availability of plastic recycling and inappropriately hiding from the public the reality of plastics pollution. The state claims the company engaged in statements “designed to conceal and mislead consumers, including the State, its businesses, and its residents about the serious adverse consequences that would result from continued use of plastic products,” including virgin and recycled plastics materials and products containing those materials. The complaint seeks a number of different forms of relief including nuisance abatement, disgorgement and civil penalties, as well as with injunctive relief against both plastic pollution and further false or misleading statements about plastics recycling.
According to the lawsuit, the oil major “committed substantial acts to further its deceptive practices in California by making affirmative misrepresentations or omissions to California consumers about the existence, causes, and effects of plastic pollution and the efficacy of recycling; and by affirmatively promoting plastics products,” including plastics petrochemical products, as safe and environmentally friendly. A statement by the California attorney general alleges that the company deceived the public by promoting “advanced recycling” without disclosing important factors, such as that the vast majority of plastic waste never becomes circular and used again in products or packaging, that plastics made from “advanced recycling” contain so little recycled waste as to essentially be virgin plastics, and that the “advanced recycling” process cannot handle large amounts of post-consumer plastic waste without risking safety and performance.
Despite the novelty of this case, this is not California’s first foray into greenwashing lawsuits. In September 2023, California Attorney General Rob Bonta sued five of the largest oil majors for alleged greenwashing claims denying or downplaying the connection between oil and natural gas and climate change, going so far as to seek disgorgement of profits for committing violations of consumer protection laws.
Energy companies, and particularly oil and gas producers, have been at increasing risk of being the next target of plastics-related greenwashing allegations. As Vinson & Elkins previously discussed (Greenwashing and Plastics: Getting Ahead of the Upstream Risks), the risk of greenwashing claims being asserted against oil companies looked to be a likely next step in the aggression on sustainability matters by plaintiffs and regulators against energy companies.
To discuss the potential impacts of these developments on your business and how you should be preparing, please reach out to your Vinson & Elkins team.
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