The manufacturers may win by arguing that "is recycleable" in the law doesn't mean "is recycled" which is what the state wants to enforce. And they'd be right. If you read "is recycleable" as "made from material that can be recycled", which is the right reading at the manufacturing level, then the label is accurate: the containers are made of recycleable material. The counter-argument is that the law isn't requiring truth about what the material itself is but requiring truth about the container as finally delivered to the consumer. Yogurt containers, for example, may be made of recycleable materials but, as delivered to the consumer, are not recycleable because they're contaminated with food product and will not be accepted by recycling programs. Most consumers assumed that if the container is marked with the "chasing arrows" symbol, that means they can put it in the recycling bin and it'll be recycled. The manufacturers, the plaintiffs here, deliberately contribute to that misunderstanding by their advertising and promotional material about recycleables, and they know what their products are going to be used for so they know it's going to result in the containers not being recycleable.
It's going to come down to how the CA lawyers argue the case. As usual, if they let the plaintiffs frame the case they're going to lose.