Old Challenges, New Arguments: Lessons from the Industry Lawsuit Against New York State’s Plastic Bag Ban

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New York State’s single-use plastic bag ban implemented pursuant to the Bag Reduction Act (the “BRA” or the “Act”), took effect on March 1st of this year, just before the start of the COVID-19 crisis. The ban seeks to address “the overwhelming amount of plastic waste” in New York State where it is estimated that residents use 23 billion plastic bags every year. The State, however, delayed the enforcement of the ban due to a lawsuit filed by a plastics manufacturer and various retailers challenging the ban. It also paused the ban given the onset of the COVID-19 crisis. 

Although bans or charges on single-use plastic items are frequently challenged in court by industry and other groups, this lawsuit levelled unique arguments against New York’s ban. In particular, it highlighted the importance of drafting laws that are consistent in the use of definitions with their regulations and with other laws in the jurisdiction affecting single-use items. 

The decision is also interesting in that it suggests that, going forward, governments considering bans or charges on single-use plastic items should seek expert evidence and undergo public consultation on the health implications of bans or charges given COVID-19. The consultation should consider the health consequences of using alternative materials either proposed by the law or that would reasonably take the place of the items sought to be reduced. 

Legislative Background 

In 2019, New York State enacted the BRA, an act that prohibits retailers from distributing any plastic carryout bags to customers unless the bag is exempt under the BRA. Importantly, the Act does not exempt the distribution of paper or reusable bags at checkout. 

The Act, however, allows cities or counties in New York State to adopt local laws imposing a $0.05 fee on each paper carryout bag provided to customers. It also seeks to address equity concerns that can arise from the ban or fees on low- or fixed-income communities by allowing cities or counties to use up to 40% of collected fees to purchase and distribute reusable bags—with priority given to these communities. The Act defines reusable bags as “a bag: (a) made of cloth or other machine washable fabric that has handles; or (b) a durable bag with handles that is specifically designed and manufactured for multiple reuse.” 

Later, New York implemented the Bag Regulation under the Act. Unlike the BRA, however, the regulation defined exempt bags to include “reusable bags”, and specifically “reusable plastic bags that are at least 10 mils thick.” 

In 2008, prior to implementing these acts, New York also enacted the Bag Recycling Act, which requires certain large retailers to establish in-store recycling programs for used plastic carryout bags. It also requires these retailers to make reusable bags available for purchase and defines “reusable bags” as including “durable plastic bag[s] with handles that [are] specifically designed and manufactured for multiple reuse.”

In Poly-Pak Industries v New York State, the lawsuit against New York State for implementing the plastic bag ban under the BRA, the petitioners took issue with the various conflicts between the requirements and definitions under each of these acts. In particular, they made five separate arguments against the plastic bag ban. 

The New York Supreme Court Decision 

  1. Conflicting Laws 

First, the petitioners argued that the BRA should not be implemented or enforced because it prohibits retailers from distributing reusable plastic bags, while the Bag Recycling Act requires retailers to make reusable bags available for customers. This, they argued, placed retailers between conflicting laws. 

The Court upheld the prohibition on the distribution of reusable bags under the BRA. While it agreed that there was a conflict between the requirements of the acts on retailers, it found that the legislative intent of the BRA is to restrict the provisions of the Bag Recycling Act relating to at-store recycling making them subject to and inferior to the provisions of the BRA

  1. Internal Inconsistencies

The petitioners then argued that the BRA is unconstitutionally vague and internally inconsistent because it both forbids and permits the distribution of durable, reusable plastic bags with handles. This, they argued, renders the law void. 

The Court disagreed that the BRA is unconstitutionally vague as it related to retailers. The BRA does not permit retailers to distribute reusable bags as exempt bags. It only permits municipalities to distribute reusable bags to low- and fixed-income communities. 

  1. Anti-gifting Violations 

The petitioners argued that the BRA violates anti-gift clauses in the New York State Constitution that prohibit the State or municipalities from giving or loaning money or credit to any private corporation. The petitioner Poly-Pak, a plastics manufacturer, asserted that the BRA violates these provisions by “granting a boon to manufacturers of cloth, fabric and paper bags, while denying similar treatment to makers of reusable plastic bags”.

Although the Court did not have to address this argument given that none of the parties, including Poly-Pak, had standing to assert it, it chose to address it anyway and rejected the claim. It found no evidence of a payment by the State or municipalities to a private entity. Additionally, the Court noted that any “special benefit” created by the statute to these other manufacturers did not constitute such a payment, as the BRA provides for the purchase of bags for distribution. 

Moreover, the Court noted that the Act has the manifestly predominant public purpose of reducing the use of polluting plastic bags. Provisions authorizing cities to charge a $0.05 fee on paper carryout bags and to use a portion of that money to purchase and distribute reusable bags to low- and fixed-income communities seek to fulfill the purpose of the Act.

  1. Inconsistencies with the Bag Regulation 

Fourthly, the petitioners argued that the provisions of the Bag Regulation were inconsistent with the BRA’s provisions because they permitted the use and distribution of reusable plastic bags at least 10 mils thick, which the BRA forbids. 

The Court agreed with the petitioners on this point. It found that the regulation’s expansion of the list of exempt bags to include these plastic bags was inconsistent with the statutory language of the BRA and its intent to limit exempt bags to only those stated in the Act.

  1. COVID-19, Health and Reusable Plastic Bags

Finally, the petitioners argued that the Bag Regulation was “arbitrary and capricious” in allowing an exemption for the use and distribution of reusable plastic bags at least 10 mils thick. They argued that this requirement was imposed without a sound basis or public comments. Furthermore, they argued that the COVID-19 crisis provides grounds to invalidate the BRA because this requirement fails to consider the health implications of reusable bags in a pandemic.  

The Court did not need to address this argument as it already held that this exemption in the Bag Regulation was invalid. However, the Court’s response to the petitioners appeared to indicate that the COVID-19 pandemic, which struck a year after the law was passed, would not in itself invalidate a law passed before the pandemic. The Court’s reasoning thus appears to suggest that any new laws imposing bans or charges on single-use items would have to consider expert evidence and public submissions on the health implications of a ban or fee on these items. 

Conclusion 

The recent decision in Poly-Pak Industries highlights some new arguments that can be levelled against governments attempting to impose bans or charges in order to encourage a reduction in the public’s use of single-use plastics. Particularly, in the context of this pandemic, it suggests that governments would need to solicit expert evidence and public comments on the health and safety of a proposed ban or charge on single-use items. 

Innovative policies such as distributing reusable bags to low- or fixed-income communities to combat some of the equity consequences of such charges or bans would also need to be evaluated for possible violation of restrictions on governments directly or indirectly assisting private entities (in Ontario, this is referred to as “bonusing”). 

As well, drafters of laws or by-laws banning or imposing charges on single-use items should be mindful of the need to harmonize definitions in these laws with other local or provincial/state laws that may also affect such items, including extended producer responsibility (EPR) laws. In Canada, British Columbia has, for example, approved the inclusion of single-use items in its EPR law for printed paper and packaging. It is important that governments consider the entities that have obligations under these laws and whether the laws are imposing conflicting requirements on them.  

For any questions on this decision or with respect to single-use plastic bans or fees, please contact Denisa Mertiri at denisa@greenearthstrategy.ca . The author would like to thank Alexandra Potamianos for her assistance with this blog.