CAUSE NO. ____________
HILEX POLY CO.,
SUPERBAG OPERATING, LTD.,
THE INTEPLAST GROUP, LTD.,
AND ADVANCE POLYBAG, INC.,
Plaintiffs,
vs.
CITY OF DALLAS, TEXAS,
Defendant.

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IN THE DISTRICT COURT OF

DALLAS COUNTY, TEXAS

____ JUDICIAL DISTRICT

PLAINTIFFS’ ORIGINAL PETITION FOR
DECLARATORY AND INJUNCTIVE RELIEF
Hilex Poly Co. (“Hilex”), Superbag Operating, Ltd. (“Superbag”), the Inteplast Group,
Ltd. (“Inteplast”), and Advance Polybag, Inc. (“API”) file this Original Petition against the City
of Dallas (“Dallas” or “the City”) and in support show the Court as follows:
INTRODUCTION
Hilex, Superbag, Inteplast, and API are industry leaders in recycling and sustainability,
and they support several of the City’s environmental initiatives and private-public partnerships
that keep Dallas green. But while the City’s goals are laudable, the City’s ordinances
implementing those goals must comport with Texas Statutes and the Texas Constitution.
Unfortunately, the City’s ordinance regulating shopping bags—Dallas Ordinance 29307 (“the
Ordinance”)—does not. Although the City was aware before the Ordinance was enacted that the
Ordinance violated the Texas Health and Safety Code, the City nevertheless pressed on
undeterred and enacted the Ordinance. Similarly, although the City was notified prior to the
effective date of the Ordinance that the Ordinance also constituted an impermissible tax, the City

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 pressed forward with enforcing the Ordinance. Because the City’s Ordinance conflicts with
Texas law, it is preempted, invalid, and of no force or effect. Accordingly, by this Original
Petition, Hilex, Superbag, Inteplast, and API seek a Declaratory Judgment invalidating the
Ordinance and a permanent injunction prohibiting enforcement of the Ordinance.
DISCOVERY CONTROL PLAN
1.

Discovery in this case should be conducted under Texas Rule of Civil Procedure

190.2 as a Level 2 case.
PARTIES
2.

Plaintiff Hilex is a for-profit manufacturer of plastic retail bags organized and

existing under the laws of the state of Delaware and with a place of business at 101 E. Carolina
Ave., Hartsville, South Carolina, 29500. Hilex operates three manufacturing facilities in and
around Dallas, employing hundreds of area residents in high-paying manufacturing jobs. Hilex
sells plastic bags used by retailers in Dallas.
3.

Plaintiff Superbag is a for-profit manufacturer of plastic retail bags organized and

existing under the laws of the State of Texas and has a place of business at 9291 Baythorne
Drive, Houston, Texas 77041. Superbag sells plastic bags used by retailers in Dallas
4.

Plaintiff Inteplast is a for-profit manufacturer of plastic retail bags organized and

existing under the laws of Texas and has a place of business at 9 Peach Tree Hill Road,
Livingston, New Jersey 07039. Inteplast operates a 575-acre world class manufacturing facility
in Lolita, Texas. Inteplast sells plastic bags used by retailers in Dallas.
5.

Plaintiff API is a for-profit manufacturer of plastic retail bags organized and

existing under the laws of the State of Texas and has a place of business at 12682 Cardinal
Meadow Drive, Sugarland Texas, 77478. API sells plastic bags used by retailers in Dallas.

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 6.

Defendant, the City of Dallas, is a home rule city located in Collin County, Dallas

County, Denton County, Kaufman County, and Rockwall County, Texas. The City of Dallas may
be served pursuant to Section 17.024(b) of the Texas Civil Practice and Remedies Code by
serving the City’s secretary, Rosa A. Rios, at the City’s offices at 1500 Marilla Street, Dallas,
Texas 75201.
JURISDICTION AND VENUE
7.

This Court has jurisdiction over the City under Texas Civil Practice and Remedies

Code § 37.004(a), which provides that “[a] person . . . whose rights, status, or other legal
relations are affected by a statute, municipal ordinance, contract, or franchise may have
determined any question of construction or validity arising under the instrument, statute,
ordinance, contract, or franchise and obtain a declaration of rights, status, or other legal relations
thereunder” and Texas Civil Practice and Remedies Code § 37.006(b), which requires a
municipality be made a party to a proceeding under Texas Civil Practice and Remedies Code
§ 37.004(a). Together these provisions represent a waiver of sovereign immunity for cities in
Texas where the construction or validity of an ordinance is in issue, as it is here. Plaintiffs seek
monetary relief in excess of $200,000 and non-monetary relief. The relief sought is within the
jurisdictional limits of the court.
8.

In accordance with §37.006(b) of the Texas Civil Practice and Remedies Code,

the Attorney General has been served with a copy of this petition.
9.

Venue is appropriate in Dallas County pursuant to Section 15.002(a) of the Texas

Civil Practice and Remedies Code because all or a substantial part of the events giving rise to the
claim occurred in Dallas County.

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 FACTUAL AND LEGAL BACKGROUND
10.

The Ordinance, which is attached hereto as Exhibit A, was first distributed for

review by the City’s Council in May 2013, and was enacted nearly a year later on March 26,
2014. The Ordinance requires, among other things, that
a. Single-use carryout bags “must have a thickness of at least 0.70 mil and be
printed with the name of the business establishment and the thickness of the
bag in mil.,” Ordinance No. 29307, Dallas City Code § 9C-3(c);
b. Each businesses wishing to provide its customers with carryout bags to
separately register each of their locations annually with the City, id. § 9C-4(a);
c. A business must charge its customers $0.05 for each bag provided and must
remit to the City 90% of the amount collected, id. § 9C-4(b);
d. Any reusable bags sold or provided by a business must display the business’
name and describe the bag’s ability to be reused or recycled, must be of a
certain size, must have a handle, must be of a certain strength, must be
constructed of certain materials, and, if made of paper, must be printed with
the percentage of recycled material contained in the bag, id. § 9C-5; and
e. Businesses erect multi-lingual signs of a specified size, both inside their stores
and in the parking lots, stating whether the business is registered to sell
carryout bags, what options are available for carrying items purchased from
that business, encouraging customers to bring their own bags, and stating the
environmental benefits of recycling, id. § 9C-6.
11.

The Ordinance’s requirements are punishable by monetary penalties. Id. § 9C-7.

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 12.

The Ordinance injures Hilex, Superbag, Inteplast, and API in a specific and

particularized way by
a. Reducing sales of single-use carryout bags in the City of Dallas market;
b. Depriving them of the value of their stock of single-use carryout bags;
c. Requiring them to perform multiple “short” manufacturing runs (each of which
imposes inefficiencies and adds considerable expense) to produce bags that
comply with the Ordinance’s requirement that specific information (including the
name of the retailer to whom the bags are destined) be printed on the bags;
d. Imposing the additional expense to make printing plates to print the gauge of the
bag and the name of the establishment, which are requirements unique to Dallas;
e. Imposing on some or all of them the cost of additional employee training to
comply with the heavy gauge extrusion (.70 mil) requirement;
f. Requiring costly warehouse space to accommodate multiple SKUs (product
identification codes) for bags specifically and only intended to be introduced into
the Dallas market; and,
g. Imposing on some or all of them the additional cost of independent testing of bags
to comply with the ordinance.
13.

In addition, although Dallas’ citizens and retailers are not parties to this suit, the

citizens will be harmed by increased prices resulting from being charged for bags that were free
of charge before the Ordinance was adopted and increased costs to retailers to comply with the
Ordinance. Retailers are being harmed due to the loss of customers who choose to shop at stores
outside Dallas (where they need not pay for carryout bags).

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 14.

Section 361.0961 of the Texas Health and Safety Code states: “A local

government or other political subdivision may not adopt an ordinance, rule, or regulation to:
(1) prohibit or restrict, for solid waste management purposes, the sale or use of a container or
package in a manner not authorized by state law . . . or (3) assess a fee or deposit on the sale or
use of a container or package.” Tex. Health & Safety Code § 361.0961.
15.

The Ordinance provides, in part, “If single-use carryout bags are provided to a

customer, a business establishment shall charge the customer an environmental fee of $0.05 per
bag.” Ordinance No. 29307, Dallas City Code § 9C-4(b)(1). This provision of the Ordinance is in
direct conflict with § 361.0961 of the Texas Health & Safety Code.
16.

The Ordinance is subject to and is in conflict with §361.0961 in the following

ways:
a. Dallas is “local government or other political subdivision.”
b. The Ordinance is “an ordinance, rule, or regulation.”
c. Single use bags are a type of “container or package.”
d. The Ordinance “assess[es] a fee or deposit on the sale or use” of bags contrary to
§ 361.0961.
e. The Ordinance “restrict[s], for solid waste management purposes, the sale or use
of” bags contrary to §361.0961. The Ordinance manages solid waste. Section 9C1(1) of the Ordinance states that one of its purposes is the reduction of “litter.” In
turn, section 7A-2 of the Dallas City Code defines “litter” as “refuse and rubbish,”
which are defined as “solid wastes.”

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 f. The Texas Attorney General agrees with Plaintiffs, having concluded that
municipal ordinances regulating plastic bags in the manner the Ordinance does
violates § 361.0961. Tex. Att’y Gen. Op. No. GA-1078 (2014).
17.

Under Texas law, home rule municipalities are authorized to impose only certain

taxes in specified amounts or percentages. Tex. Const., Art. XI, § 5; Tex. Tax Code §§ 321.101,
321.103, 327.003-004, 351.002-003, 351.0025, 334.252, 334.254; Tex. Local Gov. Code
§§ 34.102-103, 334.081, 334.083, 334.151-152, 334.302-303, 334.201-202; Tex. Transp. Code
§ 453.401; Tex. Occupations Code § 2153.451.
18.

The $0.05-per-bag “fee” imposed by the Ordinance, despite being labeled a “fee,”

is in fact an impermissible tax. It raises more revenue than is reasonably necessary to subsidize
the City’s efforts to insure compliance with the Ordinance.
19.

The tax imposed by the Ordinance is not authorized by the Texas Constitution or

Texas Statutes. It is not a property tax, a hotel occupancy tax, or one of the miscellaneous other
taxes a city may impose. Nor is it a permissible sales tax. A city may impose a sales and use tax
only if approved by a majority of voters in an election. See Tex. Tax Code § 321.101(a); id.
§ 327.003(a); Tex. Local Gov. Code § 334.081(c); Tex. Transp. Code § 453.401(a). Here, the
question of whether to impose a plastic bag sales tax was never submitted to the voters in an
election and has never been approved by a majority of qualified voters. Moreover, the City has
already imposed the maximum amount of sales tax allowed by law.
CAUSES OF ACTION
Count I—Declaratory Judgment
20.

Hilex, Superbag, Inteplast, and API seek a declaratory judgment pursuant to

Chapter 37 of the Texas Civil Practice and Remedies Code, generally, and Section 37.004

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 thereof, in particular, which provides: “A person . . . whose rights, status, or other legal relations
are affected by a statute, municipal ordinance, contract, or franchise may have determined any
question of construction or validity arising under the instrument, statute, ordinance, contract, or
franchise and obtain a declaration of rights, status, or other legal relations thereunder.” Tex.. Civ.
Prac. & Rem. Code § 37.004.
21.

Specifically, Hilex, Superbag, Inteplast, and API seek a declaration that the

Ordinance, codified at Dallas City Code §§ 9C-1 through 9C-7, violates Tex. Const. Art. XI, § 5
because it conflicts with § 361.0961 of the Texas Health and Safety Code and seeks to regulate
in a field occupied by general legislative enactments. Additionally, the Ordinance violates Tex.
Const., Art. XI, § 5 by imposing a tax not authorized by statute. The Plaintiffs request that the
court declare the Ordinance is illegal, invalid, and unenforceable.
Count II—Request for Injunctive Relief
22.

The Plaintiffs have no adequate remedy at law and will suffer irreparable harm,

including being injured by an illegal and invalid ordinance if enforcement of the Ordinance is not
enjoined.
23.

The equities in this matter weigh heavily in favor of the Plaintiffs. Further, the

injury they are suffering due to the Ordinance heavily outweighs whatever hardship the City
could allege or prove from being restrained and the granting of injunctive relief would not
adversely affect public policy or public interest.
24.

The City will not be harmed by issuance of an injunction.
Count III—Request for Attorneys’ Fees

25.

Hilex, Superbag, Inteplast, and API seek recovery of their attorneys’ fees pursuant

to Chapter 37 of the Texas Civil Practice and Remedies Code, in general, and Section 37.009

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 thereof, in particular. Section 37.009 provides: “In any proceeding under this chapter, the court
may award costs and reasonable and necessary attorney’s fees as are equitable and just.” Tex.
Civ. Prac. & Rem. Code §37.009.
JURY DEMAND
26.

Hilex, Superbag, Inteplast, and API request a trial by jury.
REQUEST FOR DISCLOSURE

27.

Pursuant to Texas Rule of Civil Procedure 194, Hilex, Superbag, Inteplast, and

API request that the City disclose within 50 days of service of this request, the information or
material described in Rule 194.2(a)-(l).
PRAYER FOR RELIEF
WHEREFORE, PREMISES CONSIDERED, Plaintiffs Hilex, Superbag, Inteplast, and
API respectfully request the following relief:
(1)

That the defendant be cited to appear and answer;

(2)

That this matter be set for a jury trial;

(3)

That the Court enter a Declaratory Judgment that the Ordinance is preempted by
state law and is illegal, invalid and unenforceable in its entirely because it
conflicts with Texas Health & Safety Code § 361.0961;

(4)

That the Court enter a Declaratory Judgment that the Ordinance imposes an
impermissible tax and is illegal, invalid and unenforceable.

(5)

That the Court enter a permanent injunction prohibiting the City from enforcing
Dallas Ordinance.

(6)

That the Court award Hilex, Superbag, Inteplast, and API their reasonable
attorneys’ fees as permitted by law, including reasonable fees for the cost of
successfully making or responding to an appeal to the court of appeals and the
Texas Supreme Court; and

(7)

That the Court award Hilex, Superbag, Inteplast, and API their costs of court; and

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 (8)

For all such other relief, at law or equity, to which Hilex, Superbag, Inteplast, and
API may show themselves entitled.

Respectfully submitted,
THOMPSON & KNIGHT LLP
By: /s/ James B. Harris
James B. Harris
State Bar No. 09065400
James.Harris@tklaw.com
Stephen F. Fink
State Bar No. 07013500
Stephen.Fink@tklaw.com
Reed Randel
State Bar No. 24075780
Reed.Randel@tklaw.com
1722 Routh Street, Suite 1500
Dallas, Texas 75201
Telephone: 214.969.1700
Fax: 214.969.1751
ATTORNEYS FOR PLAINTIFFS HILEX POLY CO.,
SUPERBAG OPERATING, LTD., THE INTEPLAST
GROUP, LTD., AND ADVANCED POLYBAG, INC.

OF COUNSEL:
James K. Lehman
Miles E. Coleman
NELSON MULLINS RILEY
& SCARBOROUGH LLP
1320 Main Street, 17th Floor
Columbia, SC 29201
Telephone: 803.799.2000

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