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In response to urgent requests by the retail industry, including the California Retailers Association and California Grocers Association, Executive Order N-54-20[1] was signed by California Governor Gavin Newsom on April 22, 2020, suspending for 60 days the state laws requiring in-store bottle redemption and prohibiting single-use bags. Citing the critical public health and safety need to minimize COVID-19 exposure and recognizing that many retail and recycling transactions may lead to contact exposure, the Executive Order acknowledges that “strict compliance” with various statutes may thwart efforts designed to combat the virus’ spread. The Executive Order provides much-needed relief to essential retail businesses, such as grocery stores, pharmacies, and big-box stores, where regulatory flexibility will help ensure the safety of employees and customers.
The Executive Order also eliminates, for 60-days, the conflict between CRV redemption and single-use bag laws on the one hand and the litany of restrictions found in COVID-19 health orders and shelter-in-place orders on the other.[2] As we discussed here, retailers qualifying as essential businesses and allowed to remain open during shelter-in-place orders, to provide necessary food and beverage supplies to the public, faced a difficult choice: follow the restrictions set forth in COVID-19 shelter-in-place orders (that seek to limit employee-customer interactions) or face possible enforcement action for refusing to accept CRV bottle redemptions or for providing single-use bags. While the Executive Order is an appropriate and much-needed respite from the conflict between COVID-19 health orders and the Public Resources Code, it also affirms that essential businesses coping with COVID-19 issues will continue to need regulatory relief until such time as the shelter-in-place orders are lifted and the economy reopens in a way to safely effectuate CRV bottle returns and reusable bags.
The Executive Order suspends Public Resources Code § 14571.6, subdivisions (a) and (b) for 60 days. This suspends the requirement that a retailer selling a beverage in a recyclable container must accept and pay redemption value at the cash register or pay an in-lieu fee of $100 a day to the state, in addition to suspending related reporting requirements.
The Executive Order also suspends limitations on single-use bags:
Public Resources Code section 42283 is suspended for a period of 60 days to the extent that it prohibits retail establishments from (a) providing without charge reusable grocery bags or recycled paper bags to customers at point of sale, or (b) where it is not possible to provide reusable grocery bags or recycled paper bags, providing single-use carryout bags to customers at point of sale.
Retailers may now provide a reusable or recycled paper bag at checkout without charging the customer a fee of 10 cents per bag. And where a reusable or recycled bag is not available, a retailer may now provide a single-use bag at checkout.
The Executive Order’s 60-day suspension does not apply to single-use bag bans enacted by local municipalities in effect prior to January 1, 2015. The Executive Order defers to the local government as to whether the local single-use bag ban may be suspended due to COVID-19 concerns. Because over 150 jurisdictions within the state have enacted some form of single-use or plastic bag ban, retailers are correct to ask if any real relief is afforded to them statewide. To this end, industry associations are urging local jurisdictions, exempt from the Executive Order, to follow the state’s suspension on the single-use bag law for the safety of all employees and customers as well as consistency of policy.[3]
Fortunately, in many cases, retailers need only look to the local shelter-in-place order in the cities and counties in which they operate. For example, four of the ten largest cities in California (Los Angeles, San Jose, San Francisco, and Long Beach) each have a single-use bag ordinance. Shelter-in-place orders for three of them (San Francisco, San Jose, and Long Beach) include recommendations that customers not be allowed to bring their own bags or other reusable items from home. These orders may reasonably be understood to allow retailers the flexibility they need to operate in jurisdictions with single-use bag ordinances.
Retailers are best advised to review the operative shelter-in-place order in their local jurisdictions to determine if there is any conflict between the directive to thwart COVID-19 exposure and existing single-use bag bans. In the event of potential conflict or confusion, a review of guidance from the local health department is a prudent course of action.
Even the California Environmental Protection Agency (“CalEPA”), which has taken a relatively rigid approach to regulatory compliance in the face of COVID-19, acknowledges that the COVID-19 pandemic may result in certain entities requiring additional compliance assistance and “specific time-delimited” remedies may be warranted under “clearly articulated circumstances.”[4] CalEPA advises that affected businesses may obtain COVID-19 related relief after the regulated entity contacts the “appropriate CalEPA board, department or office before falling out of compliance.” This is sound advice for any COVID-19 issue that interferes with regulatory compliance and certainly applies at the local government level as well.
By most accounts, California has been successful in “flattening the curve,” and ensuring that COVID-19 cases do not outpace available medical resources. Retailers deemed essential businesses have played an important part in this success by quickly adapting to new rules under the shelter-in-place orders. Retailers must not only conform their own business practices but are also tasked with policing the myriad state and local health directives that apply to their customers. Essential businesses such as grocery stores and pharmacies are on the front lines of efforts designed to combat the spread of the COVID-19 virus. Retailers complying with shelter-in-place orders should not be penalized for doing their part in the collective effort to reduce transmission of the virus. Executive Order N-54-20 is a good first step.
Rogers Joseph O’Donnell specializes in working with its corporate clients on compliance with regulatory and environmental laws that impact their business and has formed a taskforce dedicated to steering businesses during this unprecedented time. For compliance advice or defense of claims, attorneys Renee D. Wasserman, Alexis J. Morris, Suhani Kamdar, and Jon-Erik Magnus are available to assist.
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[1] A copy of Executive Order N-54-20 can be found here (last viewed April 24, 2020).
[2] April 29, 2020 CalRecycle guidance may be found here: “Beverage dealers in unserved convenience zones that are currently required to either redeem empty beverage containers (“Option A”) or pay $100 per day to CalRecycle (“Option B”) are relieved of this obligation until June 21, 2020.”
[3] For example, on April 24, the California Grocers Association issued a press release urging over 150 local jurisdictions to follow the lead of the Governor and temporarily suspend local single-use bags ordinances exempted from the Executive Order. A copy of the California Grocers Association press release may be found here.
[4] A copy of the CalEPA guidance and press release may be found here (last viewed April 24, 2020).
