Supporting the $500M SCIG Railway Project at the Port of L.A. is Critical to L.A.’s and CA’s Future Economic &Jobs Growth
Port of Los Angeles
The L.A. Coalition and its predecessor entity, the Los Angeles Economy & Jobs Committee (the “L.A. Committee”), were early supporters of the Southern California Gateway Project (the “SCIG Project”). The SCIG Project is exactly the type of private sector investment that Southern California needs to facilitate the growing demand for global trade, maintain the competitiveness of Southern California businesses, and improve the quality of life for Southern California’s communities and residents.
The L.A. City Council and Board of Harbor Commissioners agreed and approved SCIG four years ago. Following the project’s approval a number of litigants from the surrounding communities that abut the ports of Los Angeles and Long Beach sued, leveraging their arguments through the California Environmental Quality Act. A trial court judge ruled in the litigant’s favor, concluding that an environmental review of SCIG wasn’t properly done, placing BNSF’s decade long proposal further into environmental and legal review purgatory.
BNSF is appealing the ruling and in support of the L.A. Coalition’s mission and commitment to Southern California’s businesses and workers, the L.A. Coalition has decided to file an amicus curiae brief for the first time in its history. This brief is intended to reaffirm the L.A. Coalition’s longstanding position in support of the SCIG Project at POLA.
An overview of our brief, which was submitted to the court on Friday June 23, 2017, is below and the entire 41 page brief is attached.
The Court must rule within about three months of hearing oral argument on the appeal, but it has discretion when to set that argument. Our legal team would guess (but it’s just a guess) that argument is about 3 months away. So although it’s imprecise, they would expect to see a decision late this year or very early next year.
I would like to thank L.A. Coalition member Andy Clare for taking a leadership role in this effort and our outside counsel Joseph S. Klapach who took the lead on shaping the main legal arguments.
IDENTITY AND INTERESTS OF AMICUS CURIAE
Amicus curiae The Los Angeles Coalition for the Economy & Jobs (the “L.A. Coalition”) is a 501(c)(3) nonprofit organization created by a bipartisan alliance of leaders from business, labor, academia, and nonprofits to advance sound policies and develop innovative public-private partnerships that will lead to responsible economic growth and the creation of quality jobs throughout the Los Angeles region. The L.A. Coalition’s membership consists of some of Southern California’s most highly respected civic leaders.1 As a group, the L.A. Coalition’s membership represents organizations that employ hundreds of thousands of workers throughout the State of California.
Since its inception, the L.A. Coalition has worked closely with elected officials, public policy leaders, and public administrators to develop and implement initiatives to strengthen some of Southern California’s most important economic assets, such as the Port of Los Angeles (“POLA”).
The L.A. Coalition and its predecessor entity, the Los Angeles Economy & Jobs Committee (the “L.A. Committee”), were early supporters of the Southern California Gateway Project (the “SCIG Project”). The L.A. Coalition has found that in today’s rapidly changing and highly competitive global economy, anchor tenants such as POLA act as pivotal facilitators of commerce for the entire region. POLA provides millions of small, medium, and large businesses and entrepreneurs in Southern California with access to the global marketplace.
Between 1997 and 2012, U.S. international trade expanded from $2.0 trillion to $3.8 trillion – a rate faster than nominal GDP growth over the same period. The vast majority of U.S. international trade flows through U.S. ports and airports. Ocean vessels and airplanes move over 70 percent of all internationally traded goods in and out of the United States, with trucks, railroads, and pipelines accounting for the rest.3 The efficient movement of international goods through Southern California’s ports and airports is critical to the region’s economic vitality.
Since POLA’s creation in 1899, it has become an essential part of the region’s DNA and a key infrastructure for the national economy. POLA is the leading container port in the United States in terms of cargo volume, supporting 517,000 jobs in the Los Angeles region’s five-county area and more than 1.6 million jobs nationwide.
Last year, $272 billion worth of cargo, consisting of nearly 183 million metric revenue tons of goods, passed through POLA.5 POLA generates more than $39 billion in annual wages and tax revenues and was responsible for more than $5.8 billion in local and state tax revenues last year alone.
One out of every 17 jobs in Southern California is tied directly or indirectly to POLA.7 Most of these are middle-class jobs with the promise of a life-long career. POLA also offers numerous private investment opportunities, public recreation facilities, and public access to the waterfront. Although much of what POLA does takes place out of the public eye, POLA has a daily impact on California’s businesses, communities, residents, and labor force.
Maximizing POLA’s economic benefits requires an efficient and reliable freight infrastructure network. Ports, along with airports, railroads, and roads, represent the primary physical conduits between the domestic economy and the international marketplace. At the same time, transportation itself has a significant impact on the cost of traded goods.
The marginal cost of moving goods internationally can determine whether foreign and domestic firms conduct trade at all. This means that having a high-functioning and efficient infrastructure for the movement of international goods in Southern California is more than just a luxury. It is a requirement in today’s global economy if Southern California is to maintain competitively priced exports and enjoy low cost imports.
For these reasons, and in support of its mission and commitment to Southern California’s businesses and workers, the L.A. Coalition has decided to file an amicus curiae brief for the first time in its history. This brief is intended to reaffirm the L.A. Coalition’s longstanding position in support of the SCIG Project at POLA. The SCIG Project is exactly the type of private sector investment that Southern California needs to facilitate the growing demand for global trade, maintain the competitiveness of Southern California businesses, and improve the quality of life for Southern California’s communities and residents.
By erecting needless barriers to the approval of critical infrastructure projects such as the SCIG Project, the trial court’s decision will have a devastating impact on Southern California’s ability to compete in the global economy. The L.A. Coalition thus respectfully urges this Court to reverse the trial court’s decision preventing the BNSF Railway Company (“BNSF”) and POLA from proceeding with the planned SCIG Project until further environmental review is completed.
SUMMARY OF ARGUMENT
In their briefs, Appellants have done an excellent job explaining the many legal deficiencies in the trial court’s ruling. Rather than repeat Appellants’ cogent legal analysis, the L.A. Coalition wishes to focus this Court’s attention on the disastrous practical consequences of the trial court’s decision, both with respect to the SCIG Project and with respect to any future projects subject to the California Environmental Quality Act, Public Resources Code § 21000 et seq. (“CEQA”). The trial court’s decision scuttles a $500 million railway project planned and approved by POLA and the City of Los Angeles after a ten-year process and the preparation of a 5,000-page Environmental Impact Statement (“EIR”).
In doing so, the trial court relied on unexhausted issues that POLA and BNSF never had an opportunity to address during the administrative process; it substituted its personal opinions for the expert scientific determinations of the agency charged with implementing the project; and it punished POLA and BNSF’s good-faith efforts to exceed CEQA’s requirements by imposing heightened standards of review found nowhere in the statute.
The trial court’s decision invalidates the very type of major infrastructure project that Southern California desperately needs to retain its global competitiveness. The SCIG Project is an integral part of the City of Los Angeles’ long-range plans for the City’s economic development. It reflects strong leadership by POLA and the City and represents a concerted and well-thought out effort to ensure that POLA remains competitive globally without sacrificing its commitment to “green growth.”
SCIG will provide more efficient cargo-handling service to POLA’s customers, create nearly 2,600 jobs for Southern California residents, and yield tremendous benefits to the environment by replacing trucks on some of California’s most congested freeways with cleaner and more efficient railway transportation. As the L.A. Coalition’s support attests, the SCIG Project enjoys broad, bipartisan backing from civic leaders in Southern California’s business, labor, academic, and nonprofit communities.
Moreover, the CEQA review process for the planning and approval of the SCIG Project worked exactly the way it was supposed to work.
From POLA’s initial solicitation of interest in 2003 through the City Council’s approval of the SCIG Project in 2013, POLA, BNSF, and the City of Los Angeles were fully committed to the core principles of CEQA. POLA and BNSF crafted a proposal that included more than $100 million in green features, pollution controls, emission reduction measures, and innovative technologies.
They conducted more than 130 meetings with stakeholders and considered nearly 1,500 written and oral comments. The Final EIR contained more than 5,000 pages of analysis and carefully crafted mitigation measures. Throughout the entire process, POLA and BNSF engaged with interested parties, made significant changes to the SCIG Project in response to public comments, and informed the public of the likely consequences of the proposed SCIG Project.
The L.A. Coalition recognizes that responsible growth demands that projects be developed with environmental consequences firmly in mind. CEQA can be an appropriate framework for taking account of, and mitigating, those environmental consequences. But for this process to be workable in practice, and for it to serve the needs of the region and the State, CEQA review must be fair to all participants – governments, project developers, the commenting public, and other stakeholders.
Fairness in this case demands that the participants be able to understand their obligations from the outset, execute their responsibilities, and make informed development choices. Under the guise of judicial review, the trial court distorted CEQA review and changed it into a fundamentally unfair process full of sandbagging, second-guessing, and moving targets.
If the trial court’s decision is affirmed, it will bring private investment in Southern California’s vital infrastructure to a standstill. No business in its right mind would spend ten years and tens of millions of dollars to develop an infrastructure project given the tremendous uncertainty created by the trial court’s ruling. By overturning a 5,000-page EIR based on unexhausted issues, the trial court encourages parties who wish to derail a project to “sandbag” the agency by withholding their critiques until it is too late for the agency to address or respond to them. By substituting its opinions for the considered judgments of the agency’s experts, the trial court converts the CEQA process into a meaningless “exhibition” or “preseason game.”
The agency’s considered judgments are of little ultimate relevance if all that really matters is what a trial judge thinks years later. Finally, by adding new, judicially imposed requirements to the CEQA process after the fact, the trial court creates a perpetually moving target, depriving businesses and agencies of any certainty that the tremendous investment of time and money required to create an EIR will actually lead to judicial approval.
The trial court’s decision also works a fundamental transfer of power from the municipalities and agencies charged with implementing infrastructure projects to the courts and the State. CEQA vests local agencies with the primary responsibility for making technical judgments and balancing competing interests with respect to projects within the scope of their jurisdiction. After all, the local communities served by these agencies are the ones most likely to feel the effects of such projects. Yet the trial court’s decision shifts this responsibility away from the local agencies and grants it to the courts and the State of California.
By substituting its personal opinions for the considered judgments of POLA’s experts, the trial court arrogated to itself powers that CEQA intended for POLA. Similarly, by granting the State of California the power not only to intervene but also to invalidate an EIR based on unexhausted issues, the trial court extended to the State a veritable veto power over every municipal infrastructure project.
The trial court’s hostility to POLA’s considered judgments conflicts with the fundamental purpose of CEQA, which is to require local agencies to consider the environmental effects of their actions, not to wrest control over such decisions away from such agencies. Insufficient deference to the outcome of the agency process undermines the ability of local officials to make judgments on the issues with which they are charged. It also discourages other stakeholders from engaging in the agency process. After all, why should stakeholders bother engaging with a local agency if the only person whose opinion really matters is a judge or state official?
Before a business is willing to invest ten years and tens of millions of dollars in a major infrastructure project in the State of California, it must know the rules of the game. Only then can the business make a considered, economic judgment about the project’s realistic chances of success. This is the fundamental problem with the trial court’s decision.
The trial court’s decision introduces crippling uncertainty into the CEQA-review process. Under the trial court’s approach to CEQA review, a business (or agency) has no way of knowing in advance whether a comprehensive EIR prepared in good faith will be invalidated after the fact based on unexhausted issues that were never raised during the administrative proceedings. Under the trial court’s approach, a business (or agency) has no way of knowing in advance if a contested EIR based upon complex scientific determinations will pass judicial muster.
The EIR’s validity will rise or fall based solely on a judge’s own personal views of the “correct” methodology or standards of significance. Under the trial court’s approach, a business (or agency) has no guarantee in advance that a judge will not subsequently decide to invalidate an EIR based upon heightened standards of review imposed after the fact by judicial fiat.
In short, the trial court’s decision is not simply hostile to “green growth”; it renders “green growth” impossible. No sensible business will invest in a major infrastructure project like the SCIG Project if a judge can invalidate an EIR, after the fact, based on unexhausted issues, a disagreement with the agency’s expert determinations, or judicially-created standards lacking any basis in the CEQA statute.
For these reasons, as well as the reasons advanced by Appellants in their briefs, this Court should reverse the trial court and enter an order directing it to deny Respondents’ petitions.
The full brief is below: