EIR for Prohibiting Plastic Bags?

On Jan. 27, 2010, in Save the Plastic Bag Coalition v. City of Manhattan Beach, (2010) 181 Cal.App.4th 521, the 2nd District Court of Appeal held that the petitioners had raised a "fair argument" that a city of Manhattan Beach prohibition against the use of plastic bags at point of sale might lead to a significant environmental impact, and that therefore the city should have prepared an environmental impact report(EIR) before it adopted the ordinance containing the prohibition. Even though the clear purpose of the ordinance was to avoid negative effects on the marine environment caused by plastic refuse, this did not excuse the city's failure to first prepare an EIR before adopting the plastic bag prohibition.

When the city adopted the ordinance in July 2008, it relied on an initial study under California Environmental Quality Act to determine that the plastic bag prohibition would not have a significant effect on the environment. Save the Plastic Bag Coalition, an association of plastic bag manufacturers and distributors, filed suit, claiming that there was no evidence that plastic bags were a continuing significant problem to the marine environment, and claiming that the ordinance would increase the use of paper bags, which would have greater adverse environmental impacts.

The Coalition provided numerous reports in support, which concluded: a plastic bag ban would likely lead to increased use of paper as well as reusable bags; paper bags have greater negative environmental effects as compared to plastic bags; and the negative environmental effects include greater nonrenewable energy and water consumption, greenhouse gas emissions, solid waste production, and acid rain. The trial court found substantial evidence supporting the Coalition's argument, and vacated the ordinance pending the city's preparation of an EIR.

Affirming the trial court's decision, the court of appeal disavowed making any judgment regarding the merits of the plastic bag ban. Instead, it demonstrated how the "fair argument" test under CEQA sets a low threshold for requiring preparation of an EIR and reflects a preference for resolving doubts in favor of more thorough environmental review.

The 2nd District began its analysis by providing an extended discussion of standing in CEQA cases. Although a writ petitioner must ordinarily satisfy the "beneficial interest test," the court applied the "public right/duty" exception because it determined that the Coalition's asserted interest in this case was "not a commercial one," but was instead brought to enforce the city's public duty to comply with CEQA and to prepare an EIR when required. The court determined that the Coalition's "immediate goal is to require
public agencies to consider the impact of plastic bag usage on the environment as compared to other
alternatives. That some of its members might benefit commercially if the city, after preparing an environmental impact report, chose not to impose a plastic bag distribution ban does not deny plaintiff standing." This case underscores the relative ease with which a petitioner may establish standing in a CEQA case.

Even though the parties did not raise the issue, the appellate court next examined whether the city's adoption of the plastic ban ordinance was a "project" under CEQA, and found that the ordinance adoption may cause a direct or reasonably foreseeable indirect physical change in the environment due to the potential increased use of paper bags. The court noted that the city agreed during oral argument that the adoption of the ordinance was a "project."

The 2nd District then engaged in a detailed analysis of the "fair argument" test before concluding that the Coalition met its burden of demonstrating the existence of substantial evidence supporting a fair argument that the ordinance may have a significant environmental impact. California courts have long held that because preparation of an EIR is "the key to environmental protection" under CEQA, an EIR must be prepared whenever it can be "fairly argued" on the basis of substantial evidence that the project may have a significant environmental impact. This threshold requirement for preparation of an EIR is low and it reflects the preference of the legislature and the courts for resolving doubts in favor of environmental review. Examining the record, the 2nd District found that the four reports cited by the parties constituted the requisite substantial evidence that the plastic bag distribution ban may have a significant effect on the environment.

The majority also noted that other jurisdictions have prepared EIRs with regard to plastic bag distribution bans, including the city of Palo Alto (per a July 2009 settlement agreement with the Coalition), and the city of San Jose. In addition, Green Cities California is currently preparing a master environmental impact assessment for use by local governments seeking to restrict single-use plastic shopping bags.

This decision is notable for Justice Richard M. Mosk's dissent, wherein he claims that the decision "stretches [CEQA] and the requirements for an EIR to an absurdity" and that in "this day of limits, we must interpret statutes reasonably so as not to require the unnecessary expenditure of public monies for no corresponding benefit." Justice Mosk also took issue with: the Coalition's standing due to its business interests; whether the ordinance was a "project" under CEQA, and whether the Coalition's reports constituted substantial evidence.

This decision also underscores the relative ease upon which one may challenge a city or county's adoption of a negative declaration under CEQA. Not only does the "fair argument" standard under CEQA establish a low threshold for requiring preparation of an EIR, this decision further demonstrates how courts will allow a CEQA lawsuit to proceed even when filed by a petitioner driven by seemingly obvious commercial (instead of environmental) interests.

As concern spreads that CEQA is being used increasingly as a weapon regardless of a project's adverse environmental impacts, legislative responses are possible. For example, as part of an overall jobs package, Gov. Arnold Schwarzenegger recently proposed exempting 25 projects per year (from 2011 through 2014) from CEQA review, similar to AB 81 3X signed last year, which exempted construction of a new NFL stadium in the city of Industry from CEQA. Under the proposal, now set forth in SB 1010 (introduced Feb. 10, 2010), the Governor's secretary of Business, Transportation & Housing would be empowered to exempt projects, ranging from roads to housing, from CEQA. Although the projects have not been publicly identified, the proposal outlines references 10 in southern California, five in Sacramento and the Central Valley, five in the Bay Area, and five to be determined. At a recent infrastructure conference, the Governor stated that environmental laws may be "misused" and thereby slow California's economic recovery, thereby prompting his proposal. The Governor may add this decision as further justification for his proposal. The Save the Plastic Bag decision may be cited as further justification for the proposed legislation.

Finally, this decision serves as a reminder that even though a project may have a laudable "proenvironment" purpose, this does not excuse preparation of an EIR if the project may also cause significant diverse environmental impacts. Green motives or a "politically correct" principle does not necessarily Make a project CEQA-compliant.

David H. Blackwell is a partner in Allen Matkins' Walnut Creek office where he practices real estate law with an emphasis on land use entitlements and litigation. He can be reached at dblackwell@allenmatkins.com. Michael P. Durkee is Co-Chair of Allen Matkins' California Land Use Practice. He is a resident in the firm's Walnut Creek office, where he focuses his practice on land use, elections, and local government law in both administrative and judicial proceedings. He can be reached at mdurkee@allenmatkins.com.