Keurig Dr Pepper Inc. will pay $10 million and tighten recyclability claims on its popular K-Cup coffee pods under a tentative settlement of a class action federal lawsuit against the company.

The Feb. 24 agreement between the company and plaintiffs would require Keurig to say its polypropylene pods are "not recycled in many communities" and to tighten marketing language suggesting they could be commonly recycled with other PP packaging.

If approved by a federal judge in U.S. District Court in the Northern District of California, it would be the second such labeling settlement in two months for the Burlington, Mass.-based coffee maker.

The Canadian government in early January announced that the company had agreed to pay a C$3 million (US$2.4 million) fine and make labeling changes over "false and misleading" recyclability claims.

Canada's Competition Bureau said that outside of Quebec and British Columbia, the K-Cup pods were not widely recycled in municipal programs.

In the United States, the settlement would require Keurig to make similar changes it had to make in Canada, including requiring its labels to say prominently that consumers should "check locally — not recycled in many communities."

Previously, the agreement said Keurig has been making claims that consumers could "have your cup and recycle it, too," and included only qualifying language such as "check locally to recycle empty cup."

The settlement would require the company to set aside $10 million to pay consumers between $6 and $36 per household.

Any leftover funds would be distributed to the environmental group Ocean Conservancy and the magazine Consumer Reports. A court hearing is set for March 22 to review the agreement.

"The settlement sends a strong message that companies need to clearly communicate with their customers about the true recyclability of their products and packaging," said Howard Hirsch, an attorney with the Lexington Law Group in San Francisco, which helped negotiate the settlement.

He said the agreement "addresses the underlying labeling issues while providing a substantial monetary recovery for consumers."

The agreement said lawyers for the class action suit could receive up to $3 million for their work on the case since it was first filed in 2018.

Keurig did not respond to a request for comment but told the legal journal Law360 that its current U.S. packaging complies with federal and state law and includes the third-party How2Recycle labeling that "clearly communicates recycling instructions to consumers."

"To avoid a protracted litigation process, we have agreed to a negotiated settlement that includes a modified recyclability disclaimer," Keurig said.

The settlement said it would also require Keurig to change recyclability claims on its "website (and other forms of advertising) to ensure that consumers are not misled into believing the [products] are more widely recyclable than they are."

That includes language stating that not all communities which accept PP in their recycling programs also accept "coffee pods or other small format items," the tentative agreement said.

The settlement said that Keurig has already made some changes to its labels and packaging, such as adding more easily peeled tops on the pods, but the agreement requires larger and more standardized labeling.

One environmental group active in labeling issues called the agreement positive but said it shows limits in U.S. laws.

"The settlement is a win and should be a warning to other product companies, but I still find it disappointing," said Jan Dell, founder of The Last Beach Cleanup. "Lawsuits can only achieve what the law requires. Existing national recycling label laws are very weak."

Dell, who serves on a California state recycling commission, was active in that body's recent push for stronger enforcement of recyclability marketing laws.

She said a recent survey of 373 materials recovery facilities by her group found that only one MRF explicitly accepted K-Cup pods for recycling. She said most did not accept PP.

Dell predicted, however, that over time it could become harder for Keurig to make recyclability claims in California because of a new law, Senate Bill 343, passed last year.

That law does not fully come into effect for several years but Dell said "there is no way that [K-Cups] will meet the requirement" to be labeled as recyclable under SB343.

"By 2024 or 2025, Keurig will have to stop claiming any recyclability in California," she said. "Since products are labeled nationally, that should help improve truth in labeling across the country."

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