California Supreme Court Clarifies Corporate Standing Requirements for CEQA Lawsuits in Upholding Environmental Review of Plastic Bag Ban

In Save the Plastic Bag Coalition v. City of Manhattan Beach, the California Supreme Court clarified and, potentially, expanded the rights of corporations to bring CEQA lawsuits and sought to inject “common sense” into the CEQA process.

The Coalition had sought review under CEQA of the City’s adoption of a plastic bag ban ordinance.  The City challenged the standing of petitioners, a coalition of plastic bag manufactures and distributors, to bring the lawsuit under CEQA, arguing that the corporate interests of the Coalition were insufficient to qualify the group for “public interest standing.”  The Court rejected the heightened scrutiny test for corporate plaintiffs previously established in Waste Management of Alameda County, Inc. v. County of Alameda (2000) 79 Cal.App.4th 1223, 1238 (Waste Management).  Instead, the Court held that corporate plaintiffs seeking to establish public interest standing need only meet the same requirements as any other litigant.  The Court went a step further, however, and said that the Coalition did not need to rely on the public interest standing, holding that the Coalition need only show that it was “beneficially interested” in the City’s decision.  Further, the Court ruled that the “beneficial interest” for purposes of a CEQA lawsuit did not need to be an environmental interest.  Instead, potential litigants need only show that the government decision directly impacts their operations. 

In the second half of the decision, the Court ruled that certain studies submitted by the Coalition, which showed that over their respective “life cycles” paper bags had greater environmental impacts than plastic bags, were not substantial evidence that the City’s decision to ban plastic bags in the City limits would result in significant environmental impacts requiring the preparation of an EIR.  Stating that common sense “is an important consideration at all levels of CEQA review,” the Court held that City properly concluded that a ban on plastic bags in Manhattan Beach would have only a “minuscule contributive effect” on the broader environmental impacts detailed in the “life cycle” studies relied on by the Coalition given the City’s small population and retail sector.