By Leslie Walker
The Supreme Court reviewed a decision by the Court of Appeal for the Second District granting an industry association’s petition for writ of mandate challenging the city of Manhattan Beach’s ban on point-of-sale plastic bag use. In Save the Plastic Bag Coalition v. City of Manhattan Beach (July 14, 2011, S180720) __Cal.4th__, the Supreme Court (“Court”) overturned the rule that corporations must make a heightened showing to demonstrate public interest standing, urged the use of common sense at all stages in the CEQA process, and held that an EIR was not required to adopt a plastic bag ordinance.
Plastic Bag Ordinance
The coastal city of Manhattan Beach adopted Ordinance No. 2115 which prohibited certain retailers and establishments from distributing plastic bags. The ordinance proposed to preserve the marine environment by reducing the number of plastic bags making their way into and polluting the ocean.
The city prepared an initial study (“IS”) for the ordinance. Based on the IS, the city determined the ordinance was not a project involving any significant impacts upon the environment and prepared a negative declaration despite acknowledging that the ordinance may result in greater paper bag use, which could have negative environmental effects. These environmental effects include increased power plant, paper mill and recycling plant emissions; increased traffic involved in shipping the pager bags to retail establishments; and increased emissions from trucks carrying the heavier, bulkier paper bags. The IS found that reducing the use of plastic bags in the city would have a modest positive impact on the migration of plastic refuse into the ocean, and that the impacts of the ordinance with respect to air quality, traffic and landfill capacity due to the increased use of paper bags would be less than significant. The city determined there was no substantial evidence the project may have a significant effect on the environment, and therefore, adopted a negative declaration.
An association of plastic bag manufacturers (“Association”) brought suit claiming the ordinance may result in the increased use of paper bags, which in turn would result in significant environmental impacts. The Association challenged the use of a negative declaration, pointing to five reports in the record as substantial evidence that the project may have a significant effect on the environment: a 2005 report commissioned by the Scottish Government in response to a bill in Scottish Parliament to impose a levy on lightweight plastic carrier bags; a 2007 study commissioned by the Progressive Bag Alliance to conduct a life cycle assessment of three types of grocery bags; a 2008 Use Less Stuff Report; a 1990 Report prepared by Franklin Associates, Ltd.; a 2007 Los Angeles County Report.
The trial court found the Association had standing to bring the suit and also found the Association presented substantial evidence of a fair argument that the ordinance may have a significant environmental impact and therefore an EIR had to be prepared. The appellate court affirmed, finding the Association had standing because the plaintiff was not asserting a commercial or purely competitive interest and should be allowed to enforce the city’s public duty to prepare an EIR and also finding a fair argument of environmental impact existed. The Court granted the city’s petition for review to consider 1) the standing requirements for a corporate entity to challenge a determination on the preparation of an EIR and 2) whether the city was required to prepare an EIR on the effects of the ordinance.
Public Interest Exception
In general, a party must be beneficially interested to seek a writ of mandate. (Code Civ. Proc., § 1086.) The public interest exception to the beneficial interest requirement exists when the litigation involves the enforcement of a public duty. In 2000, appellate court stated that corporations did not have the requisite beneficial interest, unless the corporation demonstrates that it “should be accorded attributes of a citizen litigant.” (Waste Management of Alameda County , Inc. v. County of Alameda (2000) 79 Cal.App.4th 1223, 1238 “Waste Management.”) Without making the specific finding articulated in Waste Management, the appellate court found public interest standing was available to seek enforcement of the city’s duty to prepare an EIR. The Court affirmed the decision that the Association had standing, but disapproved the Waste Management rule holding corporations to a higher standard in qualifying for public interest standing. The Court noted that the problem Waste Management sought to address — the attempt to use CEQA to impose regulatory burdens on a business competitor with no demonstrable concern for protecting the environment — would be equally improper if launched by an individual. The Court implicitly sanctioned the use of a CEQA lawsuit for business purposes, stating it has never limited the scope of CEQA lawsuits to plaintiffs who are affected by adverse environmental impacts.
The Court reviewed the city’s decision to issue a negative declaration rather than prepare an EIR. The appellate court had concluded that four of the five reports cited by the Association supported the conclusions that prohibiting plastic bags was likely to lead to increased use of paper and reusable bags; paper bags have a greater negative environmental effect as compared to plastic bags; and these negative environmental effects include greater nonrenewable energy and water consumption, greenhouse gas emissions, solid waste production, and acid rain. The appellate court found these effects constituted substantial evidence of a fair argument that the plastic bag distribution may have a significant environmental effect, meeting the low threshold for the preparation of an EIR.
The Supreme Court disagreed. It found that when considering the “actual scale of the environmental impacts that might follow from increased paper bag use in Manhattan Beach, instead of comparing the global impacts of paper and plastic bags, it is plain the city acted within its discretion when it determined that its ban on plastic bags would have no significant effect on the environment.” In other words, evidence of global impacts of the use of paper bags did not necessarily translate into evidence of local impacts of paper bag use. The Court found that the impacts of this project outside of Manhattan Beach are indirect and difficult to predict and the city could therefore evaluate the broader environmental impacts of the ordinance. The Court noted the outcome may have been different if the ordinance were proposed for a larger city. Finally, the Court noted that common sense was an important consideration at all levels of CEQA review.
The case will be useful to CEQA practitioners looking for a definition of what constitutes substantial evidence of a fair argument that a project may have a significant effect on the environment. It may also be useful to corporations seeking to challenge competing projects without taking the step of forming a citizen group.
Leslie Z. Walker is an associate at Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.
The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.