Can a corporation challenge a business competitor’s or other entity’s project under CEQA when its real interests are commercial rather than environmental? In its recent decision upholding the City of Manhattan Beach’s “plastic bag ban” ordinance and related negative declaration, the California Supreme Court said “yes,” effectively eliminating a potential standing defense to CEQA actions motivated by economic concerns. (Save the Plastic Bag Coalition v. City of Manhattan Beach (2011) 52 Cal.4th 155.)

The standing ruling is significant because such cases never fail to touch a nerve with project proponents who perceive themselves as targets of abusive (or even extortionate) CEQA lawsuits. At least some Courts of Appeal over the past decade have provided some succor, opining that “corporate competitor” plaintiffs lack CEQA standing when they assert purely economic injuries not within the “zone of interests” protected by CEQA. (Waste Management of Alameda County, Inc. v. County of Alameda (2000) 79 Cal.App.4th 1223, 1238; see Burrtec Waste Industries, Inc. v. City of Colton (2002) 97 Cal.App.4th 1133, 1139.) But the “zone of interests” standing test proved difficult to apply in practice, and thus provided an unreliable defense, especially in light of CEQA’s extremely broad grant of standing under Public Resources Code § 21177 to anyone who objects to a project on environmental grounds either during the CEQA public comment period or before the close of the public hearing on the project.