April 22, 2015

Paper or Plastic? California Referendum Would Bag It

Seller Beware: Consumer Protection Insights for Industry

For years the more conscientious among us have faced a dilemma every time we check out: "Paper or plastic?" Which is better for the environment? Do I even need a bag? And ironically, now that more of us are shopping online and receiving daily shipments of cardboard and Styrofoam instead of carrying things home in a bag, local governments have started making the checkout decision for us.

Long the bane of environmentalists, plastic bags are banned or restricted in hundreds of localities across 37 states. Twenty-two state legislatures have considered similar legislation, with California (no surprise) being the first to enact a plastic bag ban. That law -- plus the state's referendum process -- has made California ground zero for the battle between plastic bag manufacturers and environmentalists.

Caught in the middle are the retailers who have to comply with all of these laws. Some laws allow a retailer to charge a nickel for a paper bag. Others set the minimum at a dime. Some require charging for any type of bag. Some set requirements for sale of reusable bags, which must meet certain strength requirements. Some require that paper bags be made of recycled paper. Some require the funds collected to be segregated for certain purposes. Some impose a tax on plastic bags. Some require in-store recycling stations for plastic bags.

In California, this bewildering diversity of regulation across 126 (and counting) localities prompted the California Retailers Association and the California Grocers Association to join with environmental advocates and support a statewide law with uniform requirements. That law was scheduled to be phased in starting July 2015 but is now suspended pending a statewide referendum on the November 2016 ballot.

The American Progressive Bag Alliance, funded primarily by manufacturers of plastic bags, obtained enough signatures on a petition to overturn the law. Under California's referendum process, that suspends the law until the voters have their say. So until then, California retailers must comply with all the various local laws. And Californians can now look forward to another round of entertaining and annoying political ads and dinner party discussions over a rather different right to choose.

The situation is reminiscent of menu labeling laws, where a similar dynamic of local, then state, regulation played out. National restaurant chains, facing an array of differing city and county rules for displaying calorie counts on their menus, supported uniform state legislation in California and then a federal law (which is just being implemented) that preempts differing state and local laws. It remains to be seen whether compliance with varying state and local requirements becomes such a headache that businesses -- who would prefer no regulation -- settle for uniform regulation.

Of course, the preemption battle can also play out in the other direction, as a recent New York Times article noted. The Governor of Texas -- who is concerned that his state is being "California-ized" -- has supported legislation preempting localities from regulating plastic bags in any way, prompting an outcry by local officials.

But for now, at least, fewer Texans and Californians will face this momentous choice at checkout. And store managers around the country will need to stay on top of hundreds of local requirements.

© Arnold & Porter Kaye Scholer LLP 2015 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

Subscribe Link

Email Disclaimer