2023 ended with a bang that few have yet heard: An appeals court decision that could shut down the China Shipping terminal for its flouting of California’s premier environmental law (the California Environmental Quality Act, or CEQA) — which the Port of LA has engaged in as well since 2008. It’s a highly unlikely outcome, but the threat alone could bring long-overdue change.
“The ability to shut down a terminal, costing both the port and its terminal tenant great financial loss, will serve as the ‘great motivator’ in complying with the laws they have been so willing to ignore,” said Janet Gunter, one of three San Pedro activists who initiated the first China Shipping lawsuit in 2001. “The port’s lackadaisical attitude about the protection of the health of our workers and residents needs a serious infusion of energy,” she said. “The leverage of terminal closure provides that ‘jump start’!”
In June 2022, Judge Timothy Taylor found that “The port violated CEQA in several ways” with its plan to remedy earlier violations dating back to 2008. The key problem was lack of enforceability, relying on a lease amendment — to which China Shipping has never agreed — to implement mitigation measures. But Taylor’s remedy — giving the port a do-over to try again — allowed CEQA violations to continue. “The court may not direct the Port to carry out its obligations under CEQA in any particular way,” he wrote. On Dec. 29, the appeals court reversed that decision, saying, “The trial court failed to comprehend the statutory authority granted to it.” That authority could be staggering.
“The opinion said, basically, ‘Look, if you guys don’t get your act together one of the potential remedies is we’ll close down the terminal, which is a very drastic remedy,” said David Pettit, a senior attorney with the Natural Resources Defense Council who worked on the case. “If anything gets the port’s attention, that should,” he added.
NRDC represented two local groups who were plaintiffs in 2001 — San Pedro and Peninsula Homeowners Coalition and San Pedro Peninsula Homeowners United, — along with the Coalition for Clean Air and East Yard Communities for Environmental Justice. The South Coast Air Quality Management District (AQMD) also sued and appealed on its own grounds, while also making its own case for vigorous CEQA enforcement.
“The South Coast AQMD welcomes the court of appeal’s ruling, and believes it is an important and necessary step to ensuring that environmental mitigation is put into effect and made enforceable without delay,” said AQMD spokesperson Nahal Mogharabi.
The court also ruled that the port violated CEQA on two other counts: first by making a greenhouse gas emission fund a mitigation measure, rather than a lease measure, and second by weakening a vessel speed reduction measure, reducing the compliance requirement to 95% from 100%. But it found in favor of the port eliminating two measures — one for drayage trucks and the other for top-handlers and forklifts — as well as rejecting an independent oversight committee.
The ruling on the extent of the court’s power and responsibility under CEQA was so important that four frequent CEQA litigants joined NRDC and AQMD in requesting that decision be published — meaning it could be cited as precedent. In response, a publication order was issued on Jan. 19.
How We Got Here
Litigation over the China Shipping terminal began in 2001, when POLA tried to build the terminal without a project-specific environmental impact report. In 2003, another appeals court struck that down as illegal. “Most importantly, the Court of Appeal stopped work on the project,” Pettit said, “Which is pretty rare.” An agreement the next year allowed work to resume, on condition of preparing an EIR, which was finalized in 2008.
But in 2015, following an inquiry from Random Lengths, it was revealed that 11 out of 52 mitigation measures in the 2008 EIR had never been implemented. “While the broader environmental and public health community was shocked by the news,” Random Lengths reported at the time, “local community activists viewed it as virtually inevitable.” As a result, there was widespread support for an independent third-party oversight committee, in addition to renewed or updated mitigation measures in the supplemental EIR that the port began drafting in response.
But when the SEIR was finished in 2019, there was no such committee, several mitigation measures were dropped or weakened and there was no mechanism ensuring that the measures would be enforced. So another suit was brought, along with the AQMD, the California Air Resources Board and state Attorney General — a historically unprecedented array of official plaintiffs in a CEQA lawsuit. In June 2022, Taylor found that some mitigation measures had been improperly dealt with, even as he ruled that he couldn’t force compliance. NRDC and AQMD appealed Taylor’s opinion, which the appeals court has now reversed, ruling that CEQA has to be enforced, and returning it to the trial court.
What Now?
“The trial court has available to it a range of remedial options,” the appeals court wrote, and provided two examples. First was “the setting of a strict timeline for the Port’s adoption of a new SEIR and the enforcement of the Lease to ensure compliance.”
“In this approach, the trial court could order that the mitigation measures that the court decided are required under CEQA be implemented and made enforceable immediately,” Mogharabi said. “This mitigation could be put into effect — and reduce emissions — even before the port goes back and completes the new CEQA process that they will need to do.” That process “could take a year or longer” but “the trial court could require the port and China Shipping to start the mitigation prior to when the port completes the new CEQA process.”
However, it’s not clear how the court would enforce this.
But, while timeline enforcement should speed up the CEQA process, Pettit saw problems with implementing the mitigation measures in this approach. “At its heart, the court is asking the port to hold China shipping in violation of its lease,” he said. “That would be I think something it would be very hard for the port to get his mind around because they don’t want to lose the business.”
The appeals court’s second example gets around this: “The court may order that shipping activities at the terminal be suspended in the interim, unless specific mitigation measures … are implemented.” This alternative would probably involve a timeline as well, Pettit said. A court order might give “six months to impose meaningful mitigation measures” after which there’d be a hearing. If the measures weren’t in place, then the terminal would be shut down. “You think that would put the fear of God into them,” he said.
Mitigation Rulings
The appeals court also split on the matter of mitigations — finding that port acted properly in three instances, but not in two others.
The court sided with NRDC’s argument that the port’s greenhouse gas measure — a $2 million mitigation fund — should be a mitigation measure, rather than a lease measure. “In an EIR, if you don’t make something either a project condition or mitigation measure, it’s not enforceable, it’s just talk. So that’s what the basis of our objection was.” Pettit explained. “The court said ‘You’ve got to make it real.’”
NRDC also argued “the amount is woefully insufficient,” based solely on emissions for 2030. “The Port does not explain why China Shipping should pay for only a single year’s worth of climate effects, rather than for all years’ worth,” they argued in their initial brief. They also argued it wasn’t properly designed according to CEQA. By requiring it to be a mitigation measure, the decision means that all the issues NRDC raised will have to be addressed, Pettit confirmed.
But the court ruled in favor of POLA on another measure NRDC contested: a zero-emission demonstration project for zero-emission top handlers and large forklifts. “We are not convinced,” the court wrote. “Mitigation measures are, by their nature, modifications incorporated into a project that will — in actuality — reduce a project’s adverse environmental effects. … A demonstration program, by its nature, is a test project, aiming to determine whether a particular program can achieve a successful outcome,” and thus doesn’t qualify as a mitigation measure.
The court also ruled against NRDC’s argument that the port improperly ignored requests to appoint an independent third party to monitor compliance with mitigation measures. The 2001 suit ended with a settlement agreement that included a monitoring role for the Port Community Advisory Committee, created by Mayor James Hahn around the time the suit was first filed. “The port hated that, I think is fair to say, and they didn’t want it to ever come back,” Pettit said. “So I think the port looked at the request for a monitor as the rebirth of that old process and they didn’t want it anymore — and we did want it, because, as you might imagine, our clients don’t trust the port at all, and they wanted fairly close oversight.” But regardless of the port’s record, “The court found, ‘No, that’s not a legit mitigation measure under CEQA. And we’re not going to order it.’”
As a result, “I guess what we’ll have to do, we and the clients, is just calendar periodic public record requests and get every piece of paper we can, showing what the port’s doing,” Pettit said. “And if we think they’re violating one of the mitigation measures then we’ll have to take that back to court.
“We can do it the hard way or we can do it the easy way,” he reflected. “The court rejected what we thought was the easy way. OK. We’ll do it the hard way.”
“The ruling out of 3rd party oversight is particularly disappointing,” Gunter said. “As witnessed in our previous lawsuit, our legal settlement agreement resulted in only a ‘partial’ win, since the port simply decided to violate it by not fulfilling its commitments.
“The question of such a thing happening was presented to our attorneys in 2003. Our lawyers were confident that a government agency would never violate a court’s legal settlement agreement. Wrong.
“So, it is clear that an unbiased source of oversight could guarantee that promised public benefits are not simply set aside. Truth be known, had RL not investigated our legally agreed-upon mitigations, those violations would likely never have been revealed.”
Court Splits On AQMD’s Mitigation Measures, Too
The court also split on measures contested by the AQMD. First, AQMD argued that the port’s decision to weaken the 2008 requirement for 100% compliance in the vessel speed reduction program to 95% was not supported by substantial evidence, as required by CEQA, and the court agreed, stating, “We find merit in SCAQMD’s contentions.”
The port tried to argue that 100% compliance was infeasible, because the terminal had never achieved it in a previous year. But the program was voluntary during that period, and it still exceeded 95% multiple times. What’s more, “the sole basis for the Port’s assertion that sometimes vessel noncompliance with the VSRP is ‘unavoidable’ appears to be a claim asserted by China Shipping.” In short, “there is no reference to actual evidence to support the assertion that 100 percent compliance is infeasible,” the court wrote, “mere assertions, without substantiation, are insufficient to constitute substantial evidence under CEQA.”
But the court sided with the port on eliminating its drayage truck fleet mitigation measure and not replacing it with a new alternative one. AQMD argued that the port “employed an unlawfully narrow interpretation of the statutory term ‘feasible,’ and failed to support its feasibility determination with substantial evidence.”
But the court only half-agreed. “The court held that the legal standard advocated by the South Coast AQMD was the correct one,” Mogharabi said, “but that the Port supplied sufficient evidence supporting deletion of this measure.”
The evidence here was a 2017 report from Ramboll Environ. “The Ramboll Report analyzed the feasibility of imposing a terminal-specific mitigation measure requiring the use of various possible alternative zero- and/or near zero-emission technology and concluded that such a measure would be infeasible,” the court wrote.
But, while that may qualify as “sufficient evidence” under CEQA, it may not actually be true, as Random Lengths noted in its coverage of the oral arguments. AQMD lawyer Josephine Lee noted that “The port also found that terminal specific truck mitigation is feasible when it adopted AQ-19, it required phasing of cleaner trucks at the terminal and this mitigation measure was found feasible and it was successfully implemented,” but she didn’t dwell on it at any length. However, Random Lengths pointed out that “AQ-19 — in the original 2008 China Shipping EIR — was strikingly similar to AQ-20, the original measure whose elimination or updating was the issue at hand”:
AQ-19 required heavy-duty trucks entering the terminal to meet U.S. Environmental Protection Agency 2007 emission standards in increasing percentages: “50% in 2009, 70% in 2010, 90% in 2011, 100% in 2012 and thereafter.”
AQ-20 required heavy-duty trucks entering the terminal to be LNG-fueled in increasing percentages: “50% in 2012 and 2013, 70% in 2014 through 2017, and 100% in 2018 and thereafter.”
Thus the “must be port-wide” argument doesn’t hold up in general, it can only be made in specific circumstances, and a 2017 report does not necessarily reflect reality in 2023/24.
What’s Next?
NRDC has no plans to appeal, but AQMD declined to comment “because of pending litigation.” POLA said almost nothing for similar reasons.
“The Port is committed to reaching full resolution of this matter,” spokesman Phillip Sanfield said, via email. “We continue to evaluate the appellate court decision and we are encouraged the court upheld the Port’s handling of key mitigation measures. As this remains an item of pending litigation, we will reserve further comment.”
If there’s no appeal, the case will go back to the trial court, but no further proceedings have yet been scheduled.