Preparation of EIR Not Required for Ordinance Banning Single-Use Plastic Bags and Establishing Fee for Paper and Noncompostable Bags

After the City and County of San Francisco (“San Francisco”) enacted an ordinance expanding existing restrictions on the use of plastic shopping bags by retail establishments, an industry group that has filed several lawsuits to challenge plastic bag ordinances sued.  The group asserted that the California Environmental Quality Act (“CEQA”) required San Francisco to prepare an environmental impact report (“EIR”) before adopting the ordinance, and that the ordinance was preempted by the state Retail Food Code.  The trial court decided against the industry group.  On appeal, the First District Court of Appeal affirmed the trial court judgment.  (Save The Plastic Bag Coalition v. City and County of San Francisco (December 10, 2013, A137056), --- Cal.Rptr.3d ----, [14 Cal. Daily Op. Serv. 115].

The appellate court rejected the industry group’s two arguments that San Francisco failed to proceed as required by law.  First, the industry group referred to a case it pursued up to the California Supreme Court in 2011, Save the Plastic Bag Coalition v. City of Manhattan Beach (2011) 52 Cal.4th 155.  The industry group contended that the Supreme Court in Manhattan Beach held that CEQA required “comprehensive environmental review” before any city larger than Manhattan Beach could adopt an ordinance restricting plastic bag use.

The appellate court noted that this argument twisted the meaning of an isolated phrase from a footnote in the case.  The court found the industry group’s reliance on Manhattan Beach “perplexing,” because that case did not involve the application of a categorical exemption case at all; instead that city had performed CEQA environmental review by conducting an initial study and filing a negative declaration.  Furthermore, in Manhattan Beach the Supreme Court observed that the city could have considered applying a categorical exemption.  The appellate court chastised the industry group for pressing a “strained interpretation” of Manhattan Beach that “stretches the bounds of reasonable advocacy.”

Next, the industry group asserted that San Francisco improperly relied on the categorical exemptions for regulatory actions that protect natural resources and the environment (CEQA Guidelines, §§ 15307 and 15308).  The industry group argued the exemption was not applicable because the enactment of the ordinance was a “legislative action.”  In rebutting this argument, the appellate court referred to a 2013 case involving the same industry group, Save the Plastic Bag Coalition v. County of Marin (2013) 218 Cal.App.4th 209, which found that while ordinances may be “‘legislative’ in character, they may also constitute regulations.”

The appellate court rejected the industry group’s contention that CEQA’s “unusual circumstances” exception to categorical exemptions applied.  The court explained that the function of the unusual circumstances exception is to preclude the application of a categorical exemption when there are atypical features of an “an otherwise typically exempt project” that indicate it may have a significant environmental impact.  The industry group claimed that the case Davidon Homes v. City of San Jose (1997) 54 Cal.App.4th 106, established that a government agency was required to refute any reasonable arguments that a project would cause a significant environmental impact “to a certainty” before applying a categorical exemption.  The court pointed out that the Davidon Homes portion cited by the industry group related to CEQA’s “common sense” exemption, not categorical exemptions, and that the case was “expressly focused on the substantive distinctions between the common sense exemption and other categorical exemptions.”  The court gravely noted, “In light of those distinctions, we are concerned by the Coalition's serious mischaracterization of Davidon Homes.”  Moreover, the court found that the industry group failed to carry its burden of proof to point to evidence in the record showing that the exemption did not apply to enactment of the ordinance.

The court also rejected the group’s argument that the unusual circumstances exception applied because life cycle studies of paper bags showed they had a worse impact on the environment than the life cycle of plastic bags.  The court pointed out that the industry group relied on very similar evidence in the Manhattan Beach case, in which the Supreme Court found the studies were not substantial evidence of a negative environmental impact because it was not clear that use of paper bags would increase significantly due to plastic bag restrictions.  The appellate court pointed out that San Francisco’s ordinance did not actually ban plastic bags; it instead banned single use, noncompostable plastic bags, instituted a 10-cent charge for single use paper or compostable plastic bags, and created a community outreach program to encourage reusable bag use.

The industry group characterized the 10-cent charge for single use paper or compostable plastic bags as a mitigation measure that San Francisco should not have considered when determining whether a categorical exemption applied to the ordinance.  The appellate court found instead that the “10-cent fee was always an integral part of” the ordinance and was a project design feature targeting the problem of single use bags, “not a ‘mitigation measure’ to try to alleviate some perceived difficulties in the original plan.”  The appellate court also dismissed the industry group’s arguments that the San Francisco ordinance was preempted by the state Retail Food Code, finding that the city ordinance did not overlap or conflict with state law.

This case demonstrates the potential benefit of early introduction of impact-reducing project modifications, allowing the changes to be considered as part of the project design, rather than as mitigation measures.