Lawsuit Filed Challenging L.A. County's Ban on Plastic Bags

A South Carolina-based plastic bag manufacturer has sued Los Angeles County over its ban on plastic bags in unincorporated areas, claiming the 10-cent fee charged for paper bags amounts to an illegal tax under recently passed Proposition 26.

Hilex Poly, the world's largest manufacturer of plastic bags, claims the county plastic bag ban that was approved in November 2010 violates the provisions in Proposition 26 that require a two-thirds majority vote for new fees and taxes.

The plastic bag ban went into effect July 1 at large stores in unincorporated parts of the county, including Marina del Rey, while smaller stores will have to get rid of the plastic bag alternative Jan. 1, 2012. Retailers can charge shoppers 10 cents for a paper bag and that charge is at the center of the Hilex Poly lawsuit.

“Los Angeles County’s bag ‘charge’ on consumers violates Proposition 26, which clearly requires local taxes be approved by a two-thirds vote. The ten-cent tax imposed on bags was never approved by voters much less by a two-thirds vote,” said James Parrinello, senior litigation partner at Nielsen Merksamer Parrinello Gross & Leoni in a statement. “Proposition 26 was implemented to counter situations exactly like this one where taxes are labeled by the local government as ‘fees’ in order to circumvent the electoral process.”

Proposition 26, which was approved by voters in November 2010, was taken into consideration when the plastic bag ban ordinance was drafted, said Deputy County Counsel Truc Moore on Friday.

"We did not consider it to violate Proposition 26 because that applies to taxes that generate revenue for the local agency or governing body and the county ordinance doesn't generate any revenue for the county," Moore said. "It goes to the stores and the stores get to use it to recoup their costs for paper bags."

The lawsuit was filed Monday on behalf of four residents and Hilex Poly and the case has been assigned to Los Angeles Superior Court Judge Richard Rico. The lawsuit asked the court to rule the paper carryout bag fee is an unconstitutional tax and also asked that the county ordinance creating the fee no longer be enforced.

California Taxpayers Association President Teresa Casazza in a statement released earlier this week called the fee a hidden tax that was taking money out of consumers' pockets at the worst time.

“This government-imposed 10-cent charge on paper bags is a tax, because 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. Since the revenue is earmarked for a specific purpose, this is a special tax that cannot legally be imposed without the approval of two-thirds of the voters," Casazza said.

Moore said the lawsuit does raise an interesting point.

"It's the first question under Proposition 26 that asks the court to decide if something that is charged and doesn't go to the government is a tax," she said. "I think that's the key issue here. If it doesn't generate revenue for the government, can it be a tax?"

Plastic bag bans recently have been implemented in unincorporated Los Angeles County, which is home to about 1.1 million, and in Long Beach, Santa Monica and Calabasas. Similar ordinances in Malibu and Manhattan Beach do not require a fee to be charged for paper bags.

The Los Angeles City Board of Public Works on Wednesday is scheduled to recommend to the city council and mayor that a plastic bag ban be implemented in the nation's second-largest city. It was not immediately known if the ban would include a charge for paper bags.

The Del Rey Neighborhood Council in February approved a motion endorsing a city-wide ban on plastic bags identical to the county's ordinance. City Councilman Bill Rosendahl, whose 11th District includes Playa del Rey and Del Rey, also has stated his support for a plastic bag ban.