Vizio Takes Aim at Connecticut E-Waste Law

BRIDGEPORT, Conn. (CN) - Connecticut's e-waste law poses an unconstitutional threat to technological innovation, tech company Vizio told a federal judge.

Despite generally supporting laws that make manufacturers foot the bill for the cost of recycling their products, Irvine, Calif.-based Vizio says Connecticut's version "so deeply flawed and unfair that it threatens Vizio's ability to innovate and competitively price its products for consumers."

As enacted in 2007, the program compels television manufactures to pay for the cost of recycling their electronics, but Vizio says the legislation unfairly ties the amount each manufacturer pays into the program to its share of national television sales.

Rather than reflecting the number of its televisions being recycled, the law considers the number of televisions sold across the country, according to the June 17 complaint.

Vizio says it thus pays for 17 percent of the recycling program's costs, despite a recent study that found no Vizio products in a sample of 23,000 pounds of televisions dropped off for recycling in the state.

A spokeswoman for Vizio noted that the company "has cumulatively paid over $1.8 million in direct costs to comply with the Connecticut law," as of May 2015, and "anticipates that this figure will reach well over $2 million by 2016."

These costs include both administration fees to the state and recycling fees to state-approved recyclers, "regardless of the fact that virtually none of the televisions being processed for recycling are Vizio-branded products," the spokeswoman added.

Vizio says the law is furthermore unfair for requiring manufacturers to pay a share of the total weight of televisions the state recycles, without accounting for the actual weight of each manufacturers' products.

This is an important distinction for new companies like Vizio, which never sold the "bulky" cathode-ray rube televisions, or rear-projection models that dominated the market decades ago.

Vizio says it has only ever distributed flat-panel products, which weigh 10 times less than the older TVs.

The heavy products of foreign conglomerates "almost exclusively comprise the waste stream," Vizio's spokeswoman said in an email.

VIZIO says the law doesn't just disproportionately cut into VIZIO's earnings, but that it is unconstitutional because it has "extraterritorial reach that regulates sales in other states and controls manufacturers' conduct beyond state borders."

Though its direct sales into Connecticut are "negligible," Vizio says the Nutmeg State's law affects its interstate pricing decisions, "leading to additional transactional costs, lost profits, lost market share, and consumer price impacts."

Vizio says a bias for in-state commercial activities meanwhile is apparent in the cost allocation that Connecticut proportionately ties to businesses' Connecticut sales.

"The burdens of the E-Waste Law on interstate commerce, which include inefficient state control over the state-licensed recyclers as further described herein, substantially outweigh any local benefits to Connecticut, and there are certainly less burdensome means for Connecticut to accomplish the same end," the complaint says.

Vizio says Connecticut knows what a less burdensome law looks like because the state's return-share allocation method already regulates every covered electronic device other than televisions, and its advanced recovery-fee method regulates the recycling of mattresses in the state.

"There is no supportable basis to treat television manufacturers differently than other electronic device manufacturers and to require television manufacturers to pay to recycle their competitors' products," the complaint says.

VIZIO seeks judgment against Robert Klee, commissioner of the Connecticut Department of Energy and Environmental Protection, declaring several sections of the state's e-waste law unconstitutional.

The company is represented by Patrick Fahey of Shipman Goodwin in Connecticut.

A representative for the Connecticut Department of Energy and Environmental Protection did not respond to request for comment in time for publication.

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