On September 13, 2011, The ChicoBag Company ("ChicoBag"), a reusable bag manufacturer, and Hilex Poly Company ("Hilex Poly"), the nation's largest one-use plastic bag manufacturer, settled an unfair competition suit brought by Hilex Poly against ChicoBag.
Earlier this year, Hilex Poly filed a complaint in U.S. District Court of the District of South Carolina alleging that ChicoBag used false and misleading statements about plastic retail bags on its website and other written materials. For example, Hilex Poly took issue with ChicoBag's claim that only 1% of single-use plastic retail bags are recycled. The statistic, it turns out, is from outdated 2005 EPA data. Hilex Poly also took issue with many other claims made by ChicoBag on the company's "Learn the Facts" webpage.
Hilex Poly alleged that ChicoBag's claims violated the Lanham Act and the Unfair Trade Practice Act by making unsubstantiated and deceptive statements about the negative environmental impact of single-use plastic bags in order to boost sales of its reusable bags. ChicoBag paid Hilex Poly an undisclosed sum to settle the case; however, both parties agreed to covenants that will guide their conduct in future marketing communication.
Both parties agreed to provide citations and dates for all facts and statistics on any webpage or advertising. ChicoBag has updated its "Learn the Facts" webpage to now claim that 5% of single-use plastic retail bags are recycled. Hilex Poly, in turn, will not include plastic wrap and film in its recyclying statistics on plastic bags, so as to not inflate numbers. Hilex Poly has also agreed to address the problem of windblown litter from plastic bags by including a statement on its bags directing consumers to "tie bag in knot before disposal."
ChicoBag's president has lauded the settlement as a victory for environmental advocates. The company is pleased that Hilex Poly has agreed to address windblown litter. HilexPoly has also lauded the settlement as a victory for consumers, and believes the settlement will ensure that facts concerning plastic bags are accurate.