Costco, San Francisco Bay Gourmet Coffee to pay $500K in ‘biodegradable' pod settlement

Costco Wholesale and a San Francisco coffee producer will pay $500,000 in penalties and costs to settle a case brought by 25 district attorneys who alleged the companies marketed coffee using misleading claims.

Sonoma County's District Attorney's Office was among those who filed the complaint against the Washington-based warehouse retail giant and JBR, Inc. which sells coffee under the names San Francisco Bay Gourmet Coffee and the Rogers Family Company.

The suit focused on the single serving sized 'pods' manufactured by the company and sold through Costco. The suit stated the advertising for the pod violated state law.

'California Law imposes an outright ban on the sale of plastics labeled 'biodegradable' (or labeled with similar language) and prohibits the sale of plastic products labeled 'compostable' — unless the product passes a specified scientific test that to ensure the plastic will break down in a commercial composting facility,' according to a statement from Sonoma County District Attorney Jill Ravitch.

San Francisco Bay Gourmet Coffee's plastic coffee pods and the plastic bags containing the pods were labeled as '97% biodegradable' and 'biodegradable,' the statement noted, 'despite the legal ban regarding the sale of such products.'

It also stated that the firm's pods were marketed as compostable 'when the pod had not met compostability standards.' Some materials used in the pods was also made of plastic, even though the firm marketed it as containing no plastic. It noted the plastic was 'plant based.'

The judgment prohibits Costco and JBR from selling the plastic coffee pods labeled 'biodegradable.' The companies are also prohibited from selling them labeled 'compostable' unless a scientific certification supports the claim. The companies agreed to jointly pay a total of $500,000 in civil penalties and costs. The amount will be spread among all counties who participated in the action.

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