Garbology: Our Dirty Love Affair With Trash (24 page)

The ordinance garnered extensive international press, energized environmental groups who saw this as the first chink in the plastic industry’s long record of victories over such measures, and helped propel San Francisco to the top of innumerable lists of green cities.

But in the years that passed, it’s become clear that the ban, while on the surface more final and far-reaching than an Ireland-style bag tax, has proven to be the less effective method of the two approaches—at least if the goal is to do the most possible to curtail waste, save energy and cut plastic bag consumption and pollution. The tax approach also provides the most freedom of choice to consumers. In Ireland, you can always just pony up the 22 euro cents if you really have to have that plastic bag. By contrast, the San Francisco ban was fragmented and compromised by design. For one thing, it applied only to stores with $2 million or more in annual sales—basically the city’s large supermarkets, retailers and drugstores. Hundreds of smaller shops continued to hand out free plastic shopping bags. So while the city reported a 50 percent reduction in plastic bag litter on the streets, The Pit at Recology is still awash with the things. Unlike Ireland, which forbade retailers from substituting free paper bags for taxed plastics, San Francisco supermarkets and drugstores could give away all the free paper bags that customers wanted. All told, the San Francisco ban did not usher in the same sort of sweeping changes in consumer behavior that Ireland pulled off with its bag tax, which had made the most environmentally sound choice—reusable bags—king of the checkout line.

Nevertheless, San Francisco’s success at imposing any sort of plastic bag regulation despite heavy opposition from the plastic industry set off a wave of copycat proposals in communities throughout the state, as well as elsewhere in the nation, that has continued to this day.

The plastic industry began a campaign of lawsuits to stem this tide. San Francisco’s ordinance held up, but across the bay, financially strapped Oakland had to abandon its ban when plastic manufacturers sued to force the city to conduct an expensive environmental impact report on the ban to determine what
negative
ecological effects banning plastic bags would have. What would it mean for the environment, the plastic bag makers asked, if people turn to paper bags instead? What about the forests? What about climate change? It was a brilliant strategy, as the makers of a major source of litter and pollution made from fossil fuels turned environmental laws against the environmentalists. The plastic makers chalked up a series of victories against other proposed bans, including one proposed in Seattle.

But a dozen other communities, from the small Southern California coastal town of Manhattan Beach to the entire sprawling county of Los Angeles to Aspen, Colorado, to the Hamptons in New York and Westport, Connecticut, imposed plastic bag bans and fees. Los Angeles County, which was sued by plastic makers in 2011 over its ordinance, tried to address the shortcomings of the San Francisco law by both banning plastic bags and imposing a 10-cent fee on paper grocery bags (to be collected and kept by retailers so it couldn’t be branded a tax). In a significant setback for plastic bag makers, the California Supreme Court then ruled in 2011 to reject the tactics used against Oakland—requiring a costly environmental impact report for every community seeking a bag ban—as a violation of “common sense.” The decision came in the case of little Manhattan Beach, but the ruling provided a lawsuit-resistant template for any other community in the state to pursue a plastic bag ban.

Three thousand miles away, New York City contemplated a bag tax in 2010 but backed off in the face of industry opposition. That same year, Washington, D.C., imposed a nickel fee on both paper and plastic bags, with revenues going to clean up the litter-choked Anacostia River. Plastic bag consumption immediately dropped from 22.5 million bags a month to 3 million. Retailers agreed to give out hundreds of thousands of free reusable bags, which helped city council members resist a heavy lobbying effort against the measure.

Plastics lobbyists spent even more in Sacramento—more than $2 million—desperate to fight a statewide ban of single-use plastic bags in the nation’s most populous and plastic-consuming state.
⁷
This was the bill that Andy Keller and his Bag Monster army had championed as the best way to deal with plastic bag pollution—with one consistent state law, rather than a host of communities duking it out in court with plastic bag manufacturers and imposing different conditions on retailers from town to town. Keller campaigned for the bill by decrying the wastefulness and environmental harm of plastic bags as well as the tactics of “Big Plastic,” which he contrasted with the green jobs and sustainable products that could be created in California if reusable grocery bags became the mainstay of shoppers in the state.

“Groups like the American Chemistry Council are spending millions of dollars to stop this movement,” he said at a Sacramento press conference, with then-governor Arnold Schwarzenegger at his side. “I think they would be elated if we all ran around as bag monsters.”

But the plastic makers prevailed. Though it passed the state assembly, the bag ban died on a 14-21 vote in the state senate; each of the no voters had received campaign donations from the plastic industry. California’s disposable economy remained intact.

The battle lines shifted then back to individual cities, where the disposable plastic bag was very slowly losing ground. Three leading plastic bag companies decided it was time to expand the industry’s legal strategy and stretch those battle lines beyond activist city councils to ensnare a certain reusable shopping bag company, and a CEO with a penchant for mocking “Big Plastic” by wearing five hundred disposable grocery bags.

C
HICO
B
AG ISN’T
the only green enterprise to build advocacy into its business model and then take heat for it. TerraCycle, a New Jersey company that has become a leader in “upcycling,” faced a similar, potentially fatal attack from a larger, richer, established rival just as it was getting traction in the marketplace. Its experience would provide a model for Keller as he struggled to survive what he now calls “The Plastic Bag Wars.”

TerraCycle had started out in 2001 as a business contest entry by two Princeton University freshmen—Tom Szaky (future chief executive officer) and cofounder Jon Beyer (future chief information officer). They made a deal with the university dining hall to take food waste for a worm farm that would turn Ivy League table scraps, plate scrapings, banana peels and coffee grounds into rich fertilizer. They would package the resulting “worm castings” in used soda bottles, making it the ultimate eco-product—fertilizer made from waste, packaged in waste. The students would even ship it in old, used cartons scrounged wherever they could be found, reasoning that reusing was infinitely preferable to recycling for any footprint you could think of: energy, carbon, water, forests, resources. The TerraCycle label informed potential customers that the key ingredient was “liquefied worm poop.” The words “worm” and “poop” were in very large and colorful capital letters—truth in advertising, along with a whiff of potty humor. Szaky was, after all, still a teenager. The proposal placed fourth in the contest.

Convinced his idea was better than that outcome suggested (and, indeed, TerraCycle ended up winning several other contests that helped finance the start-up), Szaky borrowed, charged and emptied his college savings account to bring his worm poop to market. With a staff of mostly unpaid college students living in an old house in a dodgy Trenton neighborhood (Princeton being too pricey), TerraCycle made its first shipments of bottled worm poop to small nurseries and garden shops, and struggled to stay afloat. When Home Depot decided to carry TerraCycle’s product in 2004 and later promoted it as an eco-friendly choice, the red ink started turning black. Walmart and other big boxes followed, and TerraCycle began expanding its product line into more varieties of wormy plant foods and fertilizers, which it promoted as completely organic and superior to the more commercial, chemical-based products that had long dominated the marketplace. Then TerraCycle started a “Bottle Brigade” program in which fundraising groups nationwide could fill TerraCycle-provided mailing boxes with twenty-ounce soda bottles, which were then shipped back to the company and used to bottle worm poop. Brigades earned donations to the schools of their choice for every bottle collected. The varying sizes and shapes of the bottles became part of the TerraCycle look, and the brigades concept would become a key part of their business strategy.

By 2006, the company had reached a million dollars in annual sales and Szaky was smiling from the cover of
Inc.
magazine, next to a headline reading: “The Coolest Little Start-up in America. Meet TerraCycle, the ultimate growth company. Built on garbage. Run by a kid. Loved by investors.”

The federal lawsuit hit the next year, in March 2007. The established leader in the plant food business, The Scotts Company, makers of the Miracle-Gro line of products, alleged in its 177-page complaint that TerraCycle was copying the bigger company’s distinctive yellow-and-green boxes—what’s known as a “trade dress” violation—as well as breaking the World War II–era Lanham Act, which bans false advertising claims that harm another brand’s business. The Lanham Act is the go-to law for big companies upset with the marketing claims of upstarts, as they are complex and expensive cases to litigate—which gives the Goliaths of the business world the advantage. TerraCycle that year was on track to crack $2 million in sales. Miracle-Gro was a global business with $2.7
billion
in annual sales, by far the largest brand of lawn and garden products for consumers and professionals in the world, not only for its own products, but also with an exclusive contract to sell the Monsanto Company’s popular home weed-killer, Roundup.

The company had long been in the crosshairs of environmentalists who decry its promotion of toxic herbicides, pesticides and fertilizers—a category of chemicals that can disrupt soil ecosystems and leach into waterways, harming wildlife. Miracle-Gro’s trademarked “four-step program” for beautiful lawns is really a recipe for converting grass to a toxic “chemical dependency,” according to a coalition of twenty-eight environmental and health organizations.
⁸

By contrast, TerraCycle’s claims about the relative virtues of organic versus synthetic plant food seemed mild. But the Miracle-Gro makers took exception to TerraCycle’s claims that scientific research showed that its organic product was superior to the leading “synthetic” product. The bigger company also complained about TerraCycle’s use of the term “goof-proof”—a phrase that Scotts claimed as a trademark—and for asserting that its organic product will not “burn” plants if over-applied, as chemical fertilizers may do. The lawsuit demanded that TerraCycle destroy its allegedly copycat labels and signs, stop comparing itself to Miracle-Gro and hand over all income it earned from the alleged imitation and denigration of Miracle-Gro products. In other words, it was time for the kiddies to close up shop and go home. The start-up could never survive if the behemoth prevailed on these demands.

TerraCycle hired a lawyer it couldn’t afford to file the requisite briefs denying all the allegations. But the company’s real weapon had nothing to do with the courts. Szaky fought back on the Internet with a website dedicated to the case,
SuedByScotts.com
. The site pioneered the now common tactic of launching litigation websites as a line of defense that—with a little Web savvy, cleverness and social media skills—can put even a houseful of college students on a more even footing with a well-funded corporate power.

On its pages, TerraCycle argued that the makers of Miracle-Gro were going after a business created by college students because it wanted to keep its near-monopoly powers in a market where it already controlled at least 60 percent of the business. In addition to posting copies of the legal documents in the case for all to see, Terra Cycle put up a photographic comparison of eighty different plant food and fertilizer products from other manufacturers that also used the yellow-and-green color scheme Miracle-Gro claimed was so distinctive. The montage seemed to suggest that, first of all, the green and yellow colors were a virtual industry standard, and second, that of all the products in the lineup, TerraCycle’s worm poop soda bottles were the least likely to be confused with the staid, rectangular Miracle-Gro items.

A collection of unflattering media statements from Jim Hagedorn, the CEO of Scotts, was tucked into the website, too: “What I like about this company is we kind of said ten years ago that we’re going to take over the world. And we did … I kind of want to be at war all the time, and people aren’t always comfortable with that.”

The website shamelessly played up the David vs. Goliath aspect of the case, comparing photos of TerraCycle’s modest Trenton headquarters (featuring a view through a torn chain-link fence) with the massively landscaped Scotts headquarters, with its pillared entrance and sparkling fountain. The site also contrasted the executive benefits each company CEO enjoyed (“unlimited free worm poop” for Szaky, “personal use of company-owned aircraft” for the Miracle-Gro leader). Under chief executive background, Szaky was identified as a “25-year-old Hungarian-born refugee college dropout,” while Scotts’s CEO was described as a “51-year-old former jet pilot, son of multi-millionaire Miracle-Gro Founder.” A chart put Miracle-Gro’s annual profits at $132.7 million; the profits column for TerraCycle simply said: “Not yet.”

As a fundraising tool for TerraCycle’s legal defense fund, the website proved to be a dud, pulling in a mere $515 after three months. But as public relations, it put TerraCycle on the map as never before; Szaky had correctly guessed the suit would provide the company’s best marketing opportunity since its founding. Major articles on the company and the case appeared in the
Wall Street Journal
, the
New York Times
and hundreds of blogs and websites. Even in the
Journal
, the bible of big business, Miracle-Gro came off as a bully. Traffic to TerraCycle’s website jumped from one thousand visitors a day to thirteen thousand, while sales revenues increased 122 percent in the weeks following the launch of the
SuedByScotts.com
website.