Los Angeles County Paper Bag Charge Tested in Appeals Court
Posted by Ted Duboise
Plastic Bag Company Claims Prop 26 Applies | Plastic Bag Ban Report
LOS ANGELES, California, April 19, 2012 (ENS) – A lawsuit challenging Los Angeles County’s plastic bag ban and 10-cent paper bag charge has gone to the California Court of Appeal.
In July 2011, Los Angeles County passed the Plastic and Paper Carryout Bag Ordinance, which provides for a 10-cent charge for carry-out paper bags.
The case, Lee Schmeer v. Los Angeles County, tests whether and to what extent California’s Proposition 26 regulates the paper bag charge included in such single-use bag ordinances.
On April 16, the plaintiffs, four California residents and plastic bag manufacturer Hilex Poly Co., filed an appeal to overturn the Los Angeles Superior Court ruling last month that upheld the constitutionality of Proposition 26.
Proposition 26, a law passed by California voters in 2010, requires that local taxes, defined as “any levy, charge or exaction of any kind,” be approved by a vote of the electorate, unless it qualifies as an exception as defined by the law.
“We respectfully disagree with the lower court’s ruling and are filing an appeal. Proposition 26 protects Californians from hidden taxes levied by local governments without a vote of the people, regardless of who collects the tax,” said James Parrinello, senior litigation partner at Nielsen Merksamer Parrinello Gross & Leoni LLP, who represents the plaintiffs.
“L.A. County’s 10-cent bag ‘charge’ clearly violates the voters’ will,” Parrinello said. “We are confident in our case as it moves to the appellate court and believe the courts ultimately will strike down the illegal bag tax imposed by L.A. County.”
California resident Lee Schmeer is vice president of sales and marketing with Hilex Poly, a company based in Hartsville, South Carolina with nine U.S. manufacturing facilities and a closed-loop plastic bag recycling plant.
Schmeer, another Hilex Poly employee, and two others brought the lawsuit in November 2011, stating that they object to the 10-cent charge for paper bags in grocery stores.
LA Superior Court Ruling
On March 23, Judge James Chalfant of the Los Angeles Superior Court ruled that the 10-cent charge on paper bags is not a tax under the California Constitution because the retailers keep all of the money collected pursuant to the ordinance.
Judge Chalfant ruled that Proposition 26 was intended to apply only to measures which specifically generated revenue.
The county’s Plastic and Paper Carryout Bag Ordinance did not generate revenue for the county since the retailers collect the money, the judge ruled, nor did it meet the “special tax” definition since no portion of the ten-cent charge per paper bag is collected and spent by Los Angeles County to pay for any public program.
Even if the paper bag charge was a tax, the judge decided, it would fall within the first exception to Proposition 26. This exception states, “A charge imposed for a specific benefit or privilege that specifically improves the payer’s well-being or provides assistance to the payer,” does not violate the law.
“It can be difficult to have ordinances declared unconstitutional in the Superior Court,” Parrinello said in response to Judge Chalfant’s ruling. “We always expected this case to be decided at the appellate level, and are confident the appellate courts will uphold the will of the people as expressed in Proposition 26, which protects Californians from hidden taxes levied by local governments without a vote of the people. We anticipate the appellate courts will ultimately strike down the illegal bag tax imposed by L.A. County.”
Paper Bag Charge Illegal?
“Los Angeles County’s bag ‘charge’ circumvents the law and violates the intent of Proposition 26,” said Mark Daniels, vice president of sustainability and environmental policy for Hilex Poly.
“Plastic bag bans and taxes destroy a preexisting and growing recycling infrastructure and are the wrong approach to addressing litter,” said Daniels. “We welcome an open debate about bag bans, but in this case, they were implemented against the will of the voters.”
The case is closely watched by other California jurisdictions that have passed plastic bag bans with charges for paper bags such as Long Beach, San Jose, Santa Monica, and Palo Alto.
Judge Chalfant’s decision upholding the constitutionality of the Los Angeles County ordinance is viewed as support for the efforts of other cities to ban single-use carry-out plastic bags to curb environmental waste.
Teresa Casazza, president of the nonprofit California Taxpayers Association, commented, “When a shopper pays for the bag, the payment covers more than the actual cost of the bag, and the revenue benefits others who don’t pay.”
“This is a clear example of an illegal tax from which California voters sought protection by passing Proposition 26,” said Casazza, “and we fully support this appeal.”
Copyright Environment News Service (ENS) 2012. All rights reserved.
Cover photo: Small paper bags. Author: Risheehan. Credit: Wikipedia