Low Threshold For 'Fair Argument' Reaffirmed

A coalition of plastic bag producers avoided, at least for the moment, a major blow to business by using the California Environmental Quality Act (CEQA) to delay implementation of an ordinance banning the distribution of plastic bags in the City of Manhattan Beach.

In a 2-1 decision, the Court of Appeal for the Second Appellate District demonstrated that substantial evidence of a fair argument includes any evidence in the record, even a report from the Scottish government evaluating a plastic bag tax. In Save the Plastic Bag Coalition v. City of Manhattan Beach, the appellate court found that substantial evidence supported a fair argument that an ordinance prohibiting the use of plastic bags in the city may require the preparation of an environmental impact report (EIR).

The coastal city of Manhattan Beach in July 2008 adopted Ordinance No. 2115, which prohibited certain retailers and establishments from using plastic bags in order 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 for the ordinance. Based on the initial study, the city determined the ordinance was not a project involving any significant impacts upon the environment and prepared a negative declaration. The city acknowledged the ordinance may result in greater paper bag use, which could have negative environmental effects, including increased power plant, paper mill and recycling plant emissions; increased traffic involved in shipping the paper bags to retail establishments; and increased emissions from trucks carrying the heavier, bulkier paper bags. The initial statement 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 brought suit, arguing 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 assess the life cycle of three types of grocery bags; a 2008 "Use Less Stuff" report; a 1990 report prepared by Franklin Associates, Ltd.; and a 2007 Los Angeles County report.

The trial court found that the association presented substantial evidence of a fair argument that the ordinance may have a significant environmental impact and therefore the city had to prepare an EIR. The city appealed.

The appellate court first addressed the association's standing to assert the claim (the ability to seek relief in court). The court found the association had standing under the public right/duty exception, which provides that a citizen interested in having the laws executed and the duty in question enforced need not show that he has any legal or special interest in the result. The court stated, "This is not a case in which the plaintiff's interest is purely commercial and competitive."

The court proceeded to determine whether the evidence in the record met the low threshold requiring the preparation of an EIR. The court explained that it is the plaintiff who has the burden of demonstrating the existence of substantial evidence of a fair argument that a project may have a significant effect on the environment.

The court found that four of the five reports cited by the association all except the Los Angeles County study of paper and plastic bag consumption supported the conclusions that prohibiting plastic bags is 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 increased nonrenewable energy and water consumption, greenhouse gas emissions, solid waste production, and acid rain. This constituted substantial evidence of a fair argument that the plastic bag distribution ordinance may have a significant environmental effect, meeting the low threshold for the preparation of an environmental impact report, the court concluded.

Justice Richard Mosk's dissent presented tempting logic. He wrote, "Requiring the small city of Manhattan Beach to expend public resources to prepare an environmental impact report (EIR) for enacting what the city believes is an environmentally friendly ordinance phasing out the retail distribution (not use) of plastic carryout bags within the city and promoting the use of reusable bags (not paper bags) stretches the California Environmental Quality Act and the requirement for an EIR to an absurdity. This action to require an EIR was generated by the plastic bag industry for its economic interest."

Whether or not economic interests spurred the litigation, this case shows us just how low the bar actually is for CEQA's fair argument standard.

The case:
Save the Plastic Bag Coalition v. City of Manhattan Beach, No. B215788, 2010 DJDAR 1485. Filed January 27, 2010.
The Lawyers:
For the association: Stephen Joseph, (415) 577-6660.
For the city: Robert Wadden, Jr., city attorney, (310) 545-5621.