An association of plastic bag manufacturers challenged the city’s negative declaration, claiming the city’s ordinance prohibiting the distribution of plastic bags would have significant environmental impacts resulting from an increased use of paper bags, and thus alleged an environmental impact report (EIR) was required.  The California Supreme Court issued a decision addressing two issues.  First, the court addressed whether a corporation has standing to bring a challenge pursuant to CEQA. Finding in the affirmative, the Court explained that corporations should not be held to a higher standard than individuals in qualifying for public interest standing.  Second, the Court considered whether evidence in the administrative record established a “fair argument” that the ordinance may result in one or more potentially significant environmental impacts.  The Court explained that alleged global impacts of the use of paper bags as an alternative to plastic bags are indirect and difficult to predict, and as a result require a less detailed analysis.  The Court also emphasized that the scope of the industry association’s global impacts argument did not reflect the actual scale of the ban adopted by this one municipality. Therefore, the Court ruled in favor of the City and upheld the negative declaration. In reaching its holding on the merits, the Court emphasized that it is important to use common sense in all levels of CEQA review.

Key Point:  Courts will be reluctant to find a “fair argument” demonstrates that a project may have potentially significant environmental impacts where the evidence upon which the petitioner relies solely relates to indirect cumulative impacts alleged to occur outside of the geographic boundaries of a project.