Vizio has sued the head of the Connecticut Department of Energy and Environmental Protection over an e-scrap law it says unfairly burdens the TV manufacturer.
In a lawsuit filed on June 17 against the commissioner of Connecticut DEEP, Robert Klee, Vizio alleges the state’s e-scrap law “is so deeply flawed and unfair that it threatens Vizio’s ability to innovate and competitively price its products for consumers.”
According to the Irvine, Calif.-based electronics manufacturer, the “foundational problem” facing Connecticut’s program is its use of nationwide television sales to determine manufacturer collection and recycling targets each year. That method, Vizio claims in the suit, has required the company to collect as much as 17 percent of all televisions entering Connecticut’s e-scrap stream despite a “negligible” sales presence within the state.
The suit states Vizio “does not sell to any distribution centers in Connecticut” and sold just 190 TV sets between 2012 and 2014. Its state-mandated e-scrap efforts, meanwhile, have cost the company “over $1.8 million.”
In a statement sent to E-Scrap News, Vizio said it expects costs to “reach well over $2 million by 2016.”
“Using the national market share approach as a proxy for the number of discarded televisions in Connecticut does not result in a fair or proportional distribution of recycling costs,” the company stated.
The official court docket for the case, which is being heard in the U.S. District Court for the District of Connecticut in New Haven, indicates parties are awaiting Klee’s official response to the claims set forth by Vizio. Klee is being represented by two assistant attorneys general, Sharon Seligman and Michael Skold.
A spokesperson for the Office of the Attorney General told E-Scrap News, “We are currently reviewing the lawsuit in consultation with our client agency, the Department of Energy and Environmental Protection, and will respond at the appropriate time in court.”
Jason Linnell, who directs the National Center for Electronics Recycling, which works with 14 state e-scrap programs, says it’s common for a state to calculate a manufacturer’s share of collection responsibilities by national sales data.
“If you’re looking at it on an individual state basis, maybe the manufacturer has data that says sales were lower than what national sales data would estimate, but they could be in another state where it’s higher than what the national sales data would suggest, and they aren’t going to complain in that state,” Linnell stated. “It evens out in the end and national sales data has been the best available data and the most consistent.”
The suit also complains that the company, which was founded in 2002 as a flat-panel display TV manufacturer, is routinely responsible for recycling CRT televisions that were made before Vizio entered the market. CRT televisions account for the bulk of the volume of end-of-life TVs entering the U.S. waste stream.
Walter Alcorn, the vice president of environmental affairs and industry sustainability for the Consumer Electronics Association, told E-Scrap News Vizio is “exercising its constitutional rights against the state program that is the least popular state mandate for most consumer electronics manufacturers.”
The Vizio suit indicates the company is supportive of “a law requiring television brand-owned sellers to pay for the recycling of televisions,” but it adds recycling obligations should be based on the composition of the waste stream itself. This model, known as a return share model and used to determine manufacturer responsibilities for all other e-scrap covered under Connecticut’s law, calls for electronics made by a particular manufacturer to be collected and recycled by that manufacturer.
A recent study, the suit suggests, found 23,000 pounds of televisions collected under Connecticut’s program contained no Vizio products.
As a result of the program and its associated costs for Vizio, the company says it’s been forced to adjust out-of-state prices, a situation that has led to “lost profits, opportunity costs, transactional costs, administrative costs and/or market share loss.”