Earlier this month, 10 Republican state Attorneys General sent this form of letter to 80 companies regarding their participation in the U.S. Plastics Pact, the Consumer Goods Forum, and the Sustainable Packaging Coalition.
The letters assert that certain “targets,” coordinated initiatives, and compliance frameworks promoted by these organizations—including efforts to eliminate specified plastic packaging, advance recyclability goals, or otherwise redesign packaging systems—may constitute unlawful restraints of trade under Sherman Antitrust Act and analogous state antitrust laws. The letters further contend that coordinated action to reduce product output or alter product quality, even if motivated by environmental objectives, may expose participating companies to antitrust risk. In addition to antitrust concerns, the AGs raise potential state and federal consumer protection issues. The letters suggest that companies could face scrutiny if sustainability “targets” are unrealistic, if companies fail to meet them, or if consumers are allegedly misled about the benefits or effects of such initiatives.
The letters further cite a recent federal court decision (Texas v. BlackRock, Inc.) that denied a motion to dismiss antitrust and consumer protection claims relating to coordinated participation in climate initiatives, which may be instructive as pertains to the coordinated plastics initiatives.
The letter advises companies to preserve relevant documents and communications and requests they provide a written response explaining the legal basis for their continued participation in these initiatives. The AGs further indicate they may seek additional information through civil investigative demands or subpoenas.
According to Law360, the U.S. Plastics Pact stated that it was designed to operate within antitrust laws; that participation is voluntary; and that members retain independent decision-making authority over business operations.
Thank you to Cleary for notifying us of this development.