A state appellate court has halted a project at the Port of Los Angeles because the city never studied the development's environmental impacts. The court rejected the city's arguments that the project was covered by a 1997 environmental impact report and a 2000 subsequent EIR because the project had not been contemplated in 1997, and there was no evidence the 2000 study considered the project.

Furthermore, even if the earlier studies covered the first phase of the project, as the city argued, the city had improperly segmented the project by not also studying the second and third phases at the same time, the court ruled.

The case involved construction of a new terminal — including two wharves designed to handle large cargo ships and two four-lane bridges to the mainland — for China Shipping Holding Company. In May 2001, the Los Angeles City Council approved the project and determined no additional environmental study was necessary under the California Environmental Quality Act because of the 1997 EIR for major improvements to the port and the 2000 document addressing channel deepening. The City Council's decision came one day after the city finalized a contract with China Shipping for the project. Two months later, the City Council approved a "side letter" agreement addressing concerns related to air pollution, truck congestion and harbor congestion.

Two environmental groups and two San Pedro homeowners associations filed suit, arguing the city should prepare an EIR addressing all three phases of the China Shipping project. Los Angeles Superior Court Judge Dzintra Janavs ruled for the city, finding the first phase was covered by the 1997 EIR and noting that the city had acknowledged a need for an EIR regarding the second and third phases.

The environmentalists and homeowners, with support from the state Attorney General's office, appealed the ruling. A three-judge panel of the Second District, Division Four, overturned the decision.

In his opinion, Justice Gary Hastings cited the attorney general's amicus brief: "Here, the Port and the City have reduced CEQA to a process whose result will be largely to generate paper, to produce an EIR that describes a journey whose destination is already predetermined and contractually committed to before the public has any chance to see either the road map or the full price tag. … They have signed this legally binding agreement for the entire project before completing the CEQA process for two of its three phases."

According to the appellate court, the city tried two different defenses, but both failed. "If we accept the City's argument made to the trial court that Phase I of the project falls within the 1997 EIR, and its concession that a new EIR is being prepared with regard to Phases II and III, this is improper segmentation," Hastings wrote. "If we accept the argument made before us that Phase I is covered under the 1997 EIR and Phases II and III are covered under the 2000 SEIS/SEIR, this is also improper segmentation."

Instead, the court ruled, the city should use the 1997 document as a program EIR and prepare a tiered EIR for all three phases of the China Shipping project.

The court made permanent the injunction it issued one week earlier halting the project until an EIR is completed.

The Case:
Natural Resources Defense Council, Inc. v. City of Los Angeles, No. B159157, 02 C.D.O.S. 10773, 2002 DJDAR 12503. Filed October 30, 2002.

The Lawyers:
For NRDC: Gail Ruderman Feuer, (323) 934-6900.
For the city: Richard Helgeson, city attorney's office, (310) 732-3750.