Is REAL Reform of the California Environmental Quality Act (CEQA) in the Works? Here’s the Test: Does the Reform Measure Discourage Union GREENMAIL?

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There is a sudden burst of talk out of California’s state capitol regarding the possibility of some sort of amendment to the California Environmental Quality Act, or CEQA (California Public Resources Code Section 21000 et seq.). Consider the news reports today.

Environmentalists, unions fear last-minute CEQA changes” according to the Los Angeles Times. Sacramento Bee columnist Dan Morain reports that Using CEQA as bait, [Assembly Speaker John] Pérez muscles tax bill. The San Diego Union-Tribune has just published an editorial on its web site for August 16, 2012 (“Finally, Momentum to Reform Regulations, Help Economy“) that expresses astonishment about the serious possibility of significant changes to CEQA:

Now there are reports that Assembly Speaker John Pérez is considering backing a reform that is beyond anything business groups ever thought could emerge out of Sacramento: exempting projects that adhere to local planning and zoning codes from CEQA review entirely. If this somehow made it into law – and if the three ex-governors were heeded and CEQA stopped being a tool for obstruction and legal extortion – this would be remarkable indeed.

All of these developments have triggered sharp expressions of concern from the Sierra Club, the Planning and Conservation League and other environmental groups. But they would have far more credibility if they’d spoken out against how CEQA has been used for “greenmail”: to extract money from developers.

It’s about as unsubtle as it gets: Warning of environmental disaster if a project proceeds, labor groups file a vast list of CEQA objections that would take many years to resolve. When they get the pay and benefits concessions they want, suddenly their environmental concerns vanish.

This editorial hits the same concerns about union “greenmail” using CEQA that the Fresno Bee addressed in its August 6 editorial “Governor Again Moves Toward Needed CEQA Reform Steps: Changes to the state law should be vetted and discussed by all parties and the Modesto Bee addressed in its August 11 editorial “Study CEQA in the Open.”

In my opinion, Californians will be able to test the seriousness of CEQA reform if the proposed changes hinder the ability of construction trade unions to exploit the law as a weapon to force private developers to sign Project Labor Agreements and make other economic concessions.

In January 2012, the Assembly Natural Resources Committee considered and rejected a dramatic proposed CEQA reform bill (Assembly Bill 598) introduced by Assemblywoman Shannon Grove (R-Bakersfield) that would have given the California Attorney General the sole and exclusive right to file lawsuits against governments for inadequate environmental review under CEQA. I believe this is the ultimate fate of CEQA if meaningful reforms do not occur soon.

Here are the opening and closing statements of Assemblywoman Grove when her Assembly Bill 598 was considered in committee on January 9, 2012.

Opening Statement

Thank you Mr. Chair and fellow Members.

Any private developer or public agency in California that considers building anything of significance knows that one of the chief obstacles is the California Environmental Quality Act, better known as CEQA. The problem is not so much complying with the requirements of CEQA, however. The problem is dealing with the many parties that exploit CEQA for ends unrelated to environmental protection.

CEQA was signed into law in 1970 by then-Gov. Ronald Reagan with the intent to “develop and maintain a high-quality environment now and in the future, and take all action necessary to protect, rehabilitate and enhance the environmental quality of the state.” Yet, like many noble efforts, CEQA has been repeatedly abused and is now hindering economic growth throughout California.

In an all-too-common scenario, labor union interests are often behind CEQA lawsuits filed against a construction project on the claim that they are merely looking out for the environment, only to drop the suit once the business owner agrees to employ unionized labor. This practice, properly known as “greenmail,” is rampant up and down the state. Allow me share some examples.

+ Last year, the Teamsters union filed a CEQA lawsuit against VWR International, a distributor of laboratory supplies. The union, in an attempt to intimidate VWR International into signing a union labor agreement at a proposed new facility in Visalia, is using CEQA to allege that trucks entering and exiting the facility will harm the environment. This large facility is likely to employ more than 100 people in a county that has an unemployment rate over 15% and desperately needs jobs, yet there are truckers trying to stop the use of trucks! And this is after an EIR has already been approved for the process.

+ In 2009, the California Nurses Association sued Alameda County under the pretense that the county did not comply with CEQA in approving a project to demolish the deficient Eden Medical Center Hospital and other buildings and replace them with a new state of the art hospital and medical office complex. The nurses’ union did not want Sutter Health to close the San Leandro Hospital and reduce the number of beds at the Eden Medical Center. Here we see nurses protesting against a state-of-the-art new hospital.

+ The Service Employees International Union filed a CEQA lawsuit in 2007 to stop construction of Providence Holy Cross Medical Center in Mission Hills and a CEQA lawsuit in 2006 to stop construction of Sutter Medical Center in Sacramento. Both of these lawsuits occurred in the context of SEIU organizing campaigns.

+ The United Food and Commercial Workers Union has been behind numerous CEQA lawsuits filed by a Davis lawyer against proposed Wal-Mart projects in Northern California. These lawsuits are related to unions concerns over non-signatory competition for grocery sales.

As you can see, unions are abusing our environmental laws in order to extract the project labor agreements that they seek. However, it is not only unions abusing CEQA. Businesses have been known to sue on the grounds of environmental protection simply as a way to fight off competition. All the more reason that Californians should be appalled at how the legitimacy of the state’s environmental protection laws is undermined and trivialized by special interest groups with ulterior motives.

This is a slap in the face to any Californian who is truly looking out for the environment, and it is crushing business development and job creation. Something drastic needs to be done. AB 598 would establish a policy that a lead agency’s decision to approve a project, certify an environmental impact report or adopt a mitigated negative declaration based on an initial study for a project is not subject to review by a court, except for reviews initiated by the Attorney General.

It is the constitutional duty of the California Attorney General to see that the laws of the State are uniformly and adequately enforced. The repeated abuse of CEQA to hold up projects while labor unions and others pursue non-environmental goals has proven to be bad public policy. This bill will provide businesses protection from frivolous attacks by organizations alleging environmental concerns, yet still ensures citizens, through the Attorney General, the people’s attorney, the recourse against legitimate environmental concerns.

Thank you very much.

Closing Statement

Colleagues, I am not asking for CEQA to be eliminated.  We do need to protect the environment.

I am asking that after a lead agency makes a judgment on its environmental impact, that the proposed project not be subject to a frivolous lawsuit.

I am asking to eliminate the abuse and allow the people’s attorney of the state of California to be the one to uniformly enforce our environmental laws. The Attorney General’s office may not believe they have enough time or resources for this, but that is simply not a valid excuse to just sit by and watch this abuse occur.

This abuse of CEQA is mocking the legitimate attempts at using CEQA to protect our environment, and is CRUSHING job creation and the entrepreneurial spirit that has built California. California consistently ranks as one of the least business-friendly states in America. Instead of promoting job creation by encouraging businesses to build and expand, we discourage them with costly regulations and lawsuits. California needs jobs. We cannot afford to continue treating businesses like adversaries. Eliminating the misuse of our environmental law will send at least one clear signal that the Legislature is serious about addressing the structural changes necessary to improve California’s economy.

I ask for your ‘Aye’ vote.  Thank you.


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