Court of Appeal Win for the SCIG Rail Yard Project at the Port of L.A.

Last Friday the Court of Appeal of the State of California (First Appellate District – Division Three) released its judgment in a case brought by a coalition of environmental and community groups and Long Beach officials to halt the construction of BNSF Railway’s decade old proposal to invest $500 million in a new Southern California International Gateway (SCIG) rail yard project at the Port of L.A.

The ruling, which was in favor of the Port of L.A. and BNSF, is significant to L.A.’s economy and an affirmation of the role the L.A. Coalition plays in it. In the spring of 2017 L.A. Coalition was asked to file an amicus curiae brief, for the first time in its history, to reaffirm its longstanding support of SCIG.

Though the ruling was not a complete reversal of the trial court’s ruling against the Port and BNSF, it does remove a sizable number of obstacles to the project. It is now up to the Port to adequately address the remaining air quality issue on remand, and then the project can go forward at last.  Although it’s possible that someone will file a petition for review, it seems unlikely that the California Supreme Court would grant review in a case that turns on so many factual determinations and technicalities.  

As a refresher, the SCIG project is a proposed facility that would be adjacent to the Intermodal Container Transfer Facility ICTF), established in 1986, in a largely industrial area containing refineries, warehouses, trucking facilities, railroads and major highways. The ICTF has greatly enhanced transcontinental train service, as well as the relay of marine cargo containers between the two Southern California container ports and major rail yards near downtown Los Angeles.

SCIG, when completed, will provide more efficient cargo-handling service to customers at the Ports of L.A. and Long Beach, create approximately 2,600 jobs, and ultimately yielding tremendous benefits to the environment by replacing trucks on some of California’s most congested freeways with cleaner and more efficient railway transportation. BNSF will invest up to $3 million toward the development of zero emission container movement systems and SCIG will eliminate more than 1.5 million truck trips from the 710 freeway each year.

The Port’s initial solicitation of interest started back in 2003 and the L.A. Harbor Commission and L.A. City Council approved the Project in 2013. The Port of L.A., BNSF, and the City of L.A. were always fully committed to the core principles of CEQA. The Port 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, the Port of L.A. 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.

Even after all of this, a number of community groups in the neighborhoods that surround the ports and the City of Long Beach sued, leveraging their arguments through the California Environmental Quality Act. A trial judge ruled in March 2017 that an environmental review of the SCIG project wasn’t properly done. BNSF called the ruling “incorrect,” adding, “The lower court applied an inappropriate evidentiary standard and disregarded a comprehensive eight-year environmental review in making its ruling.”  

If the ​trial court’s ruling on the SCIG project ​had been allowed to stand, the Court’s new expansive interpretation of CEQA, which was used to block the project, would have set a new precedent ​and possibly have affected scores of other critically needed major infrastructure projects throughout California. In other words, the laws designed ​and/or interpreted ​to protect the environment would have ended up making it much more difficult to achieve the​ necessary ​ends to mitigate the effects of ​people and their actions on ​climate change, as well as how many banks or government bond issuers proceed with financing a project.

Below are a few key takeaways:

  1. The CEQA review process for the planning and approval of the SCIG Project worked exactly the way it was supposed to work, and CEQA remains the appropriate framework for taking account of, and mitigating, the environmental consequences of development and redevelopment projects in the State.
  2. For the CEQA 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. In the case of SCIG, the trial court distorted CEQA review and changed it into a fundamentally unfair process full of sandbagging, second-guessing, and moving targets.
  3. CEQA reform is needed and should be a top priority of the current governor, our soon to be elected governor (January 2019), and the State Legislature in 2018. Though conceived as a limited set of rules requiring state and local agencies to identify and study the environmental impacts of their actions and to put in place measures — if feasible — to reduce those impacts, CEQA today is widely used and abused to stall and ultimately thwart public infrastructure projects and private-sector developments, often for entirely non-environmental reasons.

This is a great win for the Economy and Jobs! I would like to thank Coalition member Andy Clare for taking a leadership role in this effort and the Coalition board for their counsel during the amicus proposal discussions and development.