Should This Genie Be Let Out Of The Bottle?

Should electronic signatures be allowed to count to place initiatives on the statwide ballot?

By John Douglas Moore, co-chair NCRA Zero Waste Advocacy Committee

Feedback invited:

California has a citizen form of government. Its citizens may pass laws (initiatives), strike down laws that have been passed (referenda), and remove from office those lawmakers passing offensive laws. (recall). California also has a recycling-friendly electorate- witness the defeat of the plastic bag business on the two referenda against bag bans in 2016. Closer to home, Alameda County Measure D with its 75% diversion mandate, landfill surcharge, and agency creation (Stopwaste) passed with over 60 % of the vote in 1990.

There is big catch to the idea of placing a statewide initiative on the ballot: To place a statewide initiative on the ballot one must collect 365,880 (5% of the total votes cast in the last gubernatorial election) signatures “personally affixed” by registered voters and witnessed by a “circulator” of the petition collecting the signatures.

Big business can place initiatives and referenda on the ballot because they can pay signature gatherers the market rate per signature, a cost in millions of dollars. Plastic bag makers, waste haulers and landfill owners, and beverage manufacturers and distributors all have the resources to put laws before the voters. In many situations it is all the opponents can do to fight against initiative and referenda, leaving those opponents so tapped of energy and resources that they cannot fight to pass laws they support. Last year’s Proposition 67 battle is a good example. Outspent by many millions of dollars, the recycling community including NCRA and CAW mounted an effective campaign to keep California’s plastic bag ban. But proposing a statewide law itself- say banning disposal of organic material at landfill, or constructing a new bottle bill that works- is too much to contemplate, mainly the required 365,880 signatures. (585,045 signatures to pass a Constitutional amendment).

But what if the signature gathering process was made easier? In the Twitter age is it too arcane to require “wet” signatures witnessed by a circulator. Can’t the internet be used to equalize the strength of opponents as it does it many ways already?

In 2011 a California Court of Appeals held in Ni v. Slocum that an e-signature drawn on a smartphone could not be counted towards the requisite number of votes in a county-wide (San Mateo County) initiative campaign to legalize marijuana. No California appellate court has taken up the issue since. One Utah court decision before Ni and one West Virginia court decision following Ni have held electronic signatures to be adequate for electoral purposes. Each Court examined the Uniform Electronic Transaction Act that was adopted by both states and California that gives e-signatures the same binding effect as wet signatures.

The Court in Ni found that the UETA did not supplant a more specific provision of the state Elections Code that does not provide for e-signatures. The Court also held that the state statutory requirement of a circulator to witness the signature of the registered voter negated the validity of e-signatures obtained on the internet and not through circulators. The Court further pointed out that a law to permit e-signatures to be used on electoral documents was passed by the state Legislature in 1997-98 only to be vetoed by then Governor Pete Wilson. Perhaps it will be technically possible in the future to satisfy the need for a “circulator” of petitions collecting signatures. Since the Ni decision is hostile to the very idea of sanctioning judicially the collection of signatures on the internet, it seems doubtful that a technology change rather than a law change would change the result in Ni. A non-profit, Electronic Signature Records Association and a for-profit technology vendor, Verafirma, are active in this field.

So Zero Waste advocates frustrated with the mills of the Legislature grinding slowly (if ever they grind at all)[1] could focus on legalizing the use of e-signatures to place statewide initiatives. The Legislature could again be convinced to pass such a law with the idea that Governor Brown would not veto it. The issue of permitting e-signatures itself could be made the subject of a statewide initiative. These pathways would require massive energy and time.

Which leads to the question- would this even be a good idea? Making the process to pass new laws easier for positions that one likes also makes it easier for positions one does not like. Look how many votes our current President received. Would letting this genie out of the bottle make for not a citizen government but for a CocaCola Government or a Waste Management government?

The political commentator, Kathleen Moore, says that “Our technology is moving faster than our morality”

I solicit your views.

[1] Henry Wadsworth Longfellow

A Cautionary Tale for California

As I Walked The Streets of Laredo… [1]

By John D. Moore, NCRA Vice President and Legal Counsel, Henn, Etzel & Moore, Inc.

… I saw more plastic bags. That is, after a Texas appellate Court ruled recently that the City of Laredo, Texas, had no power to adopt a local ordinance banning “commercial establishments” from providing customers with single-use plastic bags. Unlike California, the Laredo ordinance did not provide for a ten cent payment to the commercial establishment. Maybe that is why the merchant groups sued. But the reasoning of the Texas court yields a cautionary tale for California.

Laredo, Texas is a home-rule city. In California this is called a “charter” city. Home rule cities are allowed extra latitude in using their police powers and may be limited by the state legislature only when the state intends to preempt local legislation with “unmistakable clarity”. A merchant group[2] sued the City to block enforcement of the bag ban. The City won judgment in its favor at the trial court. The Court of Appeal not only reversed the trial court judgment for the City, it also declared the merchants group to be the winner of the case. The appellate court remanded the case for the trial court only to award attorney fees to the merchants group.

The appellate court focused on whether the state law of solid waste disposal prevented the City from adopting a plastic bag ban. In Texas, a Texas Commission on Environmental Quality promotes regulation much like (in concept if not in practice) CalRecycle in California. The Texas state law has a very specific provision that local government may not adopt an ordinance that “prohibits or restricts” (for solid waste management purposes) the “sale or use of a container or package in a manner not authorized by state law.” There is no indication in the opinion that the state of Texas or its regulator/enforcers actually restricted the sale or use of single use plastic bags.

The appellate court found “unmistakable clarity” that the state law blocked all local ordinances concerning containers or packages. The appellate court reasoned that single use plastic bags were containers or packages with “unmistakable clarity.” This is the opposite of the trial court’s view.

The sponsor of the state law said that the local government preemption provision was intended to be limited to local laws concerning “wasteful packaging, Styrofoam cups, and bottle caps.” The appellate court did not care what the sponsor said. That is partly why legislators should say what they mean. The appellate court’s opinion is entirely based on its reading of the “plain meaning” of the preemption statute.

The Texas preemption statute forbids local regulation of the sale or use of certain materials in a mannernot authorized by state law” i.e. the use is not authorized by the state. It seems to me that if the Laredo law governed the sale or use of the single use plastic bags (used) in a manner authorized by state law, then the strict letter of the preemption statute is not applicable. Or maybe it is open to grammatical debate what was intended.[3] No Texas statute cited detailed how its citizens are to use plastic bags, except presumably not littering them.  From the opinion it seems that this argument was not made.


California’s statewide plastic bag ban being challenged by referendum presently, SB 270, also contains a preemption provision, prohibiting local governments from enacting more restrictive plastic bag laws. If SB 270 were in force, then cities, including charter cities, in CA, like Laredo, would be barred from adopting more restrictive bans. It is my experience that regulated industry groups will often trade more regulation in exchange for state preemption. I understand that this dynamic cleared the way for SB 270- plus the ten cents/bag provision that helped the grocers which the bag makers are trying to take away in Proposition 65.

[1] If you don’t know the song Streets of Laredo, check out the Johnny Cash version on YouTube. For the musically inclined, think key of G

[2] If funding for the case came from plastic bag makers, the opinion does not reveal this

[3] Like the Second Amendment

An Abbreviated Guide To Antitrust Law

A semi-monthly feature, exclusive to NCRA News, from NCRA general counsel and board member John Moore, concerning recent legal decisions relating in some manner to Zero Waste.

By John D. Moore, NCRA Vice President and Legal Counsel, Henn, Etzel & Moore, Inc.

At the April meeting of the NCRA Board, member Gary Liss reported via phone about the G7 Alliance On Resource Efficiency Workshop he attended in Washington DC in March, partially through aid from NCRA. Mr. Liss reported that representatives of competing Japanese auto parts manufacturers expressed concern about being accused of violating antitrust laws if they worked together towards Zero Waste goals like standardization of the design, measurement, and packaging of auto parts. At the conclusion of his report, several NCRA members including some Board members expressed surprise and concern that US antitrust law could be an impediment to US Zero Waste goals. This article is meant to explain the antitrust law concerns.

I have defended businesses accused of violating antitrust law. I do not pretend to be an expert but I know the general parameters of antitrust law. One thing I know for certain is that it is expensive to defend an antitrust law claim. Besides proving that the claimed conduct violates antitrust law, the plaintiff must prove its effect on the market and that it has suffered “antitrust injury” under laws that protect competition but not competitors. The litigated fight often is about the scope of the market of the product involved and the defendants’ conduct to suppress competition in that market. The defendant wants the court to define the market broadly to dilute any claimed impact on that market. The plaintiff has the opposite vantage. One antitrust specialist advised me that the fees of the expert economist hired to answer questions about the market and impact on that market often run “into seven figures.” That is a big pill for many businesses to swallow.

The primary antitrust law is the federal Sherman Antitrust Act, named for Senator John Sherman (brother of Gen. William T. Sherman) who is said to have never read the law that bears his name. When the law was passed in 1890, business cartels were referred to and organized as “trusts”. The basic command of the Sherman Act is that any combination or conspiracy (agreement) that restrains trade violates the law. The Sherman Act also prohibits monopolies. The application of this prohibition to the many anti-competitive actions a business may take has spawned additional federal statutes such as the Clayton Act and Robinson-Patman Act, and California’s Cartwright Act and Unfair Practices Act, and scores of federal and state case law precedents. The Supreme Court held that “The purpose of the Sherman Act is not to protect businesses from the working of the market; it is to protect the public from the failure of the market. The law directs itself not against conduct which is competitive, even severely so, but against conduct which unfairly tends to destroy competition itself.”

The result of all this shaping of antitrust law starting with the Sherman Act is a pretty clear and seldom changing way to examine anti-competition claims. First, there are a species of claimed violation called “per se” violations. Per se violations are anticompetitive actions that are so evil that they can never be justified consistently with fair competition. A plaintiff need only prove that the per se conduct occurred to prove its case. The traditional per se violations are monopolization, price fixing, horizontal (all conspirators in the same channel such as wholesale, retail etc) agreements to divide customers or to boycott certain customers, and tying agreements (conditioning the purchase of one product upon the purchase of a different product or service). But even within each of these categories, Courts have carved out exceptions. For 98 years agreements to maintain resale pricing were judged on the per se rule. In 2007 the US Supreme Court changed that rule. Courts have held states to be immune from antitrust liability and courts have extended this protection to local governments that are carrying out a “clearly articulated” state policy. This is the source of antitrust immunity enjoyed by exclusive franchise agreements.

The second category of antitrust law violations is a residual category. Any anticompetitive practice that is not a per se violation is judged by how reasonable and/or pro-competitive it is for the business to use the practice. This is called a “rule of reason.” So antitrust laws fall into either the per se or rule of reason categories. A good example in applying the rule of reason is a vertical (parties in different channels) restraint for a manufacturer to set wholesale prices and conditions on a different basis between internet vendors and brick and mortar retailers. The manufacturer usually relies on the retailer to promote the products and educate customers in the target market about the product. This promotion has a cost to the retailer. Internet sellers, in contrast, do little for product promotion and instead compete on price. A person buying a television might browse and get product advice from a brick and mortar store or chain and then order the desired product from an online seller that undercuts the brick and mortar store on price. The vertical price restraint favoring brick and mortar sellers is judged by this so-called rule of reason. The manufacturer will argue that since it reaches its market through brick and mortar stores and the more that is known about a product the more competition there is for customers, applying the rule of reason to discriminatory pricing to internet vendors, results in a finding of no antitrust liability. The rule of reason also requires the plaintiff to prove that the anticompetitive conduct affect a significant percentage of the defined market. But all this happens after the defendant business pays millions of dollars to defend itself, the cost of which is, of course, passed on to product buyers via increased pricing.

One truism of antitrust law is there is seldom direct evidence of a conspiracy. It is rare to have evidence of two or more people agreeing to anticompetitive conduct. The discussion in a restaurant between co-conspirators that results in an action that violates antitrust law is not usually heard except by the co-conspirators themselves and there is unlikely to be a later confirming written record of the conversation that took place. So, unless one of the conspirators snitches on the others, courts rely upon circumstantial evidence (actions from which the existence of a fact may be inferred) to prove antitrust law violation. (Thoreau observed that “Some circumstantial evidence is very strong, as when you find a trout in the milk.”)In antitrust law courts are willing to allow circumstantial evidence that parties “acted” like there was an illegal agreement even though there was no other evidence of an agreement to violate antitrust law. This is called “conscious parallelism”.

So, circling back to the auto parts makers: If you attend a trade group meeting attended by competitors, it is common for the moderator to remind the audience that “we are not here to fix prices or violate antitrust laws.” Regardless of the caution given, any discussion between competitors could be viewed in hindsight as an agreement to restrain trade if there is later market impact. So no matter how “progressive toward a Zero Waste goal” if two competing businesses reach consensus that has a market impact they might find themselves defending an antitrust lawsuit. So I did not find it unreasonable for the competitors attending the Zero Waste Business Council to be reluctant to cooperate towards Zero Waste goals.

The opinions expressed are only of the author. This article contains general information about legal matters.  The information is not advice, and should not be treated as such.

Donate Food Without Fear of Being Sued

A semi-monthly feature, exclusive to NCRA News, from NCRA general counsel and board member John Moore, concerning recent legal decisions relating in some manner to Zero Waste.

By John D. Moore, NCRA Vice President and Legal Counsel, Henn, Etzel & Moore, Inc.

Sometimes the fruit gets rotten
And falls on to the ground
There’s a hungry mouth for every peach
As I go ramblin’ ’round boys
As I go ramblin’ ’round — Woody Guthrie

Among the many reasons Woody Guthrie would have heard in the 1930s to justify not providing blemished peaches to the hungry – fear of getting sued was not likely among them, but he would not be surprised to learn that it is an excuse today. The purpose of this article is to present, unambiguously and emphatically, federal law which immunizes from suit everyone who donates food in good faith without actual knowledge that it is harmful. Please clip this article and show it to any prospective donor of food – grocery, caterer, restaurant, farmers market, who expresses reluctance to donate out of fear of being sued:

UNDER FEDERAL LAW (42 U.S.C. Section 1791(c)(1)), THE DONOR (person, entity, gleaner, nonprofit) OF FOOD IN GOOD FAITH IS NOT LIABLE FOR CLAIMS THAT THE FOOD CAUSED HARM.

This law is known as the Good Samaritan Law or more specifically the Bill Emerson Good Samaritan Food Donation Act. The story of the Good Samaritan is of course a nice story from the Bible. Jesus was being quizzed by a lawyer about what Jesus meant by “love thy neighbor”. Jesus described a man who had been attacked by bandits and left for dead on the road. Two priests passed him by without giving aid. A third, from Samaria, stopped, bound the man’s wounds, put him on his own donkey, took him to an inn and paid the innkeeper to look after him. The lawyer, shrewdly catching the drift of the story, said, “He that shewed mercy on him.” Then Jesus said, “Go, and do thou likewise.

The drafters of the federal Good Samaritan law did not possess the simplicity of the biblical expression and so it has the ifs, ands and buts, common to statutes. In the interest of legal scholarship, I present the operative statutes. The primary statute, 42 U.S.C. Section 1791 (c)(1), says:

“A person or gleaner shall not be subject to civil or criminal liability arising from the nature, age, packaging, or condition of apparently wholesome food or an apparently fit grocery product that the person or gleaner donates in good faith to a nonprofit organization for ultimate distribution to needy individuals.”

Section 1791(c) (2) applies the same protection to nonprofits that receive donated food. Section 1791(b) defines all the terms used in the broadest fashion. For example, Section 1791(b)(4) defines “food” to mean, “ any raw, cooked, processed, or prepared edible substance, ice, beverage, or ingredient used or intended for use in whole or in part for human consumption.” Section 1791(b)(10) defines “person” broadly to include all types of business organizations, thereby covering grocery and produce stores, restaurants, farmers markets, and caterers.

While the statute does not define “good faith”, Section 1791(c)(3) states that the liability shield does not apply only where the donor is guilty of “ gross negligence or intentional misconduct.” Those two terms are defined by Section 1791(b) (7) and (8) to mean:

The term “gross negligence” means voluntary and conscious conduct (including a failure to act) by a person who, at the time of the conduct, knew that the conduct was likely to be harmful to the health or well-being of another person.

The term “intentional misconduct” means conduct by a person with knowledge (at the time of the conduct) that the conduct is harmful to the health or well-being of another person.

Finally, Section 1971(d) applies the same protections to the landowners where gleaning takes place, that is, the persons “who allow(s) the collection or gleaning of donations on (their property)”

California does not have an analogous statute. Since Congress has not stated an intent to be the pre-eminent legislative authority in this area, the state of California, or any local jurisdiction, is free to enact its own legislation expanding, but not reducing, the protections of the federal law.

After all that, if you are confused, please allow me to say it again in a declarative certain fashion:

UNDER FEDERAL LAW (42 U.S.C. Section 1791(c)(1)), THE DONOR (person, entity, gleaner, nonprofit) OF FOOD IN GOOD FAITH IS NOT LIABLE FOR CLAIMS THAT THE FOOD CAUSED HARM.

Regulating Unstaffed Collection Bins

A semi-monthly feature, exclusive to NCRA News, from NCRA general counsel and board member John Moore, concerning recent legal decisions relating in some manner to Zero Waste.


Another regulatory action designed to block recycling
By John D. Moore, NCRA Vice President and Legal Counsel, Henn, Etzel & Moore, Inc.
Oakland has now joined an ever-growing list of cities requiring a clothing bin collection company to obtain the written consent of the property owner, not the occupant, to place the box. I would bet not one staff member or elected of any jurisdiction imposing this law has ever tried to obtain consent of a property owner. These regulators don’t understand how difficult this process is. The result of this kind of ordinance is that there will be fewer clothes collection bins and less textile recycling, all directly in conflict with Zero Waste ordinances, County Measure D, and AB 939.

In my law practice I have negotiated well more than 50 commercial leases, usually representing the tenant/business owner. For a company desiring to place a clothes collection bin on a commercial premises, this is what they would need to overcome to obtain the property owner’s written consent. Please put yourself in the shoes of the clothes bin business and consider:

1. First you have to know who the owner is. The tenant may not know (especially if there is a property manager between the landlord and the tenant) or may not want to tell the box provider, leaving a search of the County assessor’s records as the only option left;

2. Even when you know the name and address of the owner, you don’t necessarily know who the contact person and/or decision maker is in that organization. It can take a lot of phone time to find the right person when you are cold-calling a business. The assessor’s records won’t tell you who to contact. The tenant in possession of where the box is to be placed may or may not know this information and may or may not be willing to provide it. Most commercial tenants want as little to do with their landlord as possible. Once a landlord knows that a tenant wants something (signed consent), it changes the landlord/tenant dynamic, and not for the good of the tenant.

3. Even if the clothes bin company ascertains the contact person for the owner, getting a signed consent is a formidable task. Landlords do not sign consents at will or whimsy. Landlords first wonder about possible liability, whether the tenant has insurance, whether this tenant is following the lease, and a host of other concerns, which often result in consent conditions being negotiated with the tenant, who has no vested interest in the outcome.

4. Even if the bin company finds a contact person willing to have the consent signed, many organizations have decision-making hierarchies that must be followed. Publicly traded REITs (real estate investment trust) own lots of commercial realty. As a publicly traded entity it has internal governance and regulatory rules it must follow before executing a consent.

Let me give one example: On my way to work each morning I pass a Chevron station on Grand Avenue in Oakland that has a box owned by US Again. Let’s say I need to get the owner consent to place that bin. In trying to get the property owner address, I can fairly assume three things right away: 1) the occupant is a franchisee of Chevron; 2) the occupant likely has no relationship with the property owner- leases are typically negotiated directly by the franchisor; and 3) the person on duty operating the Chevron during the day is unlikely to be the franchisee. So, I have to find out the contact information for the franchise holder and ask them to ask their franchisor for the property owner contact information. Why would the franchisee want to help? There is no real benefit to the franchisee in asking for something from the franchisor. Even if I got the franchisor contact information, why would the franchisor want to give me the contact information for the property owner? They wouldn’t. They have no stake in placing a collection box.

It used to be that one could find out the name of the property owner online via the Alameda County Tax Assessor. No longer. You must go to the office in person to do so. I spent 30 or so minutes trying to find ownership information through a private service, giving out my contact information in the process so I could get spammed later, but was unsuccessful and gave up. I could pay a service to find the information or I could go in person to the Tax Collector office to search for ownership but in either case I would not be much closer to satisfying the regulator.

Even if I were to get the owner’s name and billing address for the tax collection (what a private service is likely to find), I would have a long struggle from there to find the business office for the owner and talk my way to a person who could tell me who needs to sign a consent for the placement of the bin. Now the hardest part yet is to convince that person to give a signed consent.

Needless to say, this process of collecting a property owner signature requires a huge time commitment and amount of diligence for a bin company just to place one box. The result will be the placement of fewer boxes. That result means less textiles are recycled and more textiles are landfilled, an outcome that conflicts with established state policy.

I have no quarrel with wanting these collection boxes and commercial premises to be kept clean and clear of blight. I also have no quarrel with regulation of financial responsibility of both the bin company and the tenant in possession. Regulation of these aspects of clothes collection does not require onerous and recycling-diminishing laws that require a paper signature from a property owner as a condition of placement of the bin. Requiring a signed consent from the occupant of the property and permit conditions about blight and insurance should be satisfactory protection for the city.

All the owner-signature requirement does is create a huge barrier to entry of the market, reduces recycling, and grants economic protectionism to the advocates of this law, Goodwill and Salvation Army. This should be off limits to regulators.