Hughes Hubbard Forces Dismissal of Consumer Fraud Class Action for Compostic

Highlights

Plaintiff’s counsel voluntarily dismisses major consumer fraud class action in California federal court.
The Hughes Hubbard team leveraged scientific and technical evidence to support their position.
Leveraged California statutory safe harbor for “home compostable” claims and recent federal legal authorities highlighting fatal pleading deficiencies.

Hughes Hubbard achieved a significant victory for Compostic Limited, a New Zealand-based consumer packaging company, securing the voluntary dismissal of a major putative consumer fraud class action challenging the company’s “100% home compostable” product labeling.

The six-count complaint alleged that Compostic’s cling wrap products were deceptively marketed as “100% home compostable” in purported violation of California consumer protection laws, including California’s Legal Remedies Act, False Advertising Law, and Unfair Competition Act. The complaint relied on assertions that Compostic’s products contain polybutylene adipate terephthalate (PBAT) and polylactic acid (PLA), and scientific studies supposedly showing that chemical degradants from PBAT and PLA inhibit plant growth. In response, the Hughes Hubbard team developed an aggressive pre motion strategy demonstrating conclusively that the claims lacked legal and factual merit and must be immediately withdrawn.

The team’s analysis focused on California’s statutory framework governing compostability claims, which provides a safe harbor for products that meet recognized certification standards. Hughes Hubbard showed that Compostic’s products hold AS 5810 certification – a standard aligned with certification programs specifically recognized under California law – placing the company squarely within the statutory safe harbor and thus precluding all counts in the complaint – including not only the statutory consumer protection claims but also common law counts for fraud, unjust enrichment, and breach of express warranty.

Hughes Hubbard reinforced its legal position with compelling scientific and technical evidence, including independent laboratory testing confirming that Compostic’s products meet rigorous biodegradation, disintegration and chemical safety requirements under multiple internationally recognized compostability standards.

Plaintiff’s counsel ultimately filed a notice of voluntary dismissal, ending the case before any motion to dismiss was required.

This case showcased Hughes Hubbard’s innovative approach to defending companies facing significant consumer fraud class action lawsuits, fulfilling the client’s objectives completely, with maximum efficiency.

Partner Jeremy W. Schulman represented Compostic, with contributions from partners Koushik Bhattacharya and Jeffrey Gavenman.