Nat. Res. Def. Council, Inc. v. City of L.A.

317 Cal.Rptr.3d 497

NATURAL RESOURCES DEFENSE COUNCIL, INC. et al., Plaintiffs and Appellants,

v.CITY OF LOS ANGELES et al., Defendants and Respondents;

China Shipping (North America) Holding Co., Ltd. et al. Real Parties in Interest and Respondents.

D080902

Court of Appeal, Fourth District, Division 1.

Filed December 29, 2023

APPEALS from a judgment of the Superior Court of San Diego County, Timothy B. Taylor, Judge. Reversed; remanded for further proceedings. (Super. Ct. No. 37-2021-00023385-CU-TT-CTL)

Bayron T. Gilchrist, Barbara B. Baird, Kathryn Roberts, Fresno, and Josephine Soyun Lee, for Plaintiff and Appellant South Coast Air Quality Management District.

Jacklyn H. Prange, Margaret T. Hsieh, David Pettit and Melissa Lin Perrella, for Plaintiffs and Appellants Natural Resources Defense Council San Pedro and Peninsula Homeowners Coalition, San Pedro Peninsula Homeowners United, Inc., East Yard Communities for Environmental Justice, and Coalition for Clean Air, Inc.

Office of the City Attorney of Los Angeles, Hydee Feldstein Soto, Steven Y. Ot- era, San Pedro, Justin M. Houterman and John T. Driscoll, Placerville; Meyers Nave, Amrit S. Kulkarni, Los Angeles, Julia L. Bond, Los Angeles, and Shaye Diveley, Oakland, for Defendants and Respondents.

No appearances for Real Parties in Interest and Respondents China Shipping (North America) Holding Co., LTD et al.

O’ROURKE, J.

I. INTRODUCTION

On October 8, 2019, the Los Angeles Board of Harbor Commissioners (LABHC) certified a supplemental environmental impact report (the 2019 SEIR) regarding a project defined as "the continued operation of the China Shipping (CS) Container Terminal located in the Port of Los Angeles (Port), under new or revised mitigation measures" as complying with the California Environmental Quality Act (CEQA; Pub. Resources Code,¹ § 21000 et seq.). Appellants Community Petitioners² and South Coast Air Quality Management District (SCAQMD)³ sued defendants the City of Los Angeles (the City), the Los Angeles City Council (City Council), the City of Los Angeles Harbor Department (LAHD) and LABHC, alleging a broad variety of CEQA violations with respect to the 2019 SEIR.⁴ The trial court determined that the 2019 SEIR violated CEQA in multiple ways, including in its failure to ensure that the mitigation measures included in the SEIR were enforceable. The trial court also found that the SEIR failed to adequately analyze the emissions impacts of the project, and improperly modified or deleted mitigation measures that had been adopted in the original 2008 EIR regarding the use of alternative marine power and implementation of an electric yard tractor pilot project. The trial court rejected the other CEQA claims. Based on the CEQA violations the court did find, it issued a writ of mandate directing the Port to set aside the certification of the 2019 SEIR and to prepare a revised SEIR that complies with CEQA. Although the Community Petitioners and SCAQMD requested additional briefing on the issue of whether the court could impose any further or additional remedy, including the cessation of Port activities or the required implementation of mitigation measures that had been included in the original EIR and retained in the SEIR, the trial court disallowed further briefing and indicated that it had provided the only remedy available under CEQA.

The Community Petitioners and SCAQMD appealed, arguing that the trial court erred in concluding that certain other mitigation measures adopted in the 2019 SEIR constituted all feasible mitigation and erred in its determination that the only available remedy was to set aside the 2019 SEIR. We conclude that two of the other CEQA claims involving proposed mitigation asserted by appellants have merit, and we also agree with appellants that the trial court failed to comprehend the statutory authority granted to it under section 21168.9, the CEQA provision that authorizes court remedies for CEQA violations, and incorrectly believed that it was limited to ordering the Port to set aside its certification of the 2019 SEIR, only. We therefore reverse the judgment and remand to the court to allow it to consider its authority to fashion a remedy that it believes is appropriate considering the purposes of CEQA and the significance of the CEQA violations at issue in this case. We also direct the trial court to include further direction to the Port that any newly adopted SEIR address the failings that we have identified in the 2019 SEIR in this opinion, in addition to the failings that the trial court identified in its order.

II. BACKGROUND

A. Contextual background

The Port is the largest port in North America in terms of shipping container volume and cargo value. The Port and the adjacent Port of Long Beach together handle 64 percent of shipping on the west coast of the United States and approximately 35 percent of all shipping in the country. The Port’s "major trading partners … include China/Hong Kong, Japan, South Korea, Taiwan, and Vietnam."

The Port is managed by the LAHD, an agency of the City.⁵ The LAHD functions as a landlord by leasing out property at the Port to tenants, and it is the Port’s tenants who are responsible for the daily handling of the cargo that comes through the Port. The Port houses 23 cargo terminals along its 43 miles of waterfront.

One of these cargo terminals is a 142-acre marine container terminal operating at Berths 97-109 (the Terminal) pursuant to a lease agreement entered into between the LAHD and China Shipping (North America) Holding Co., Ltd. (China Shipping).

B. The development of the Terminal

In 2001, the LAHD issued Permit No. 999 (the Lease) to China Shipping, allowing it to construct and thereafter lease and operate the Terminal. The Lease provides for a term of 25 years, with three 5-year options to extend the Lease, exercisable by China Shipping.

Shortly after the Port and China Shipping entered into the Lease, multiple parties, including some of the parties who comprise the Community Petitioners in this matter, sued the Port for attempting to develop and operate the Terminal without having prepared a project-specific EIR for the planned three-phase development of the Terminal. (See NRDC ?. City of Los Angeles (2002) 103 Cal.App.4th 268,' 270, 126 Cal.Rptr.2d 615 (NRDC l).) On appeal in NRDC I, the appellate court agreed with the petitioners and directed the trial court (1) to order the Port to complete an EIR for all three phases of the project and (2) to issue an injunction staying the second and third phases of construction of the Terminal until further order of the court. (Id. at pp. 280-281, 285-286, 126 Cal. Rptr.2d 615.) The first phase of construction, which the NRDC I court permitted to continue while the EIR was prepared, was completed in 2003.

In 2004, the petitioners in NRDC I and the Port entered into a court-approved settlement, pursuant to which the Port could complete construction of the Terminal and begin the first phase of operations at the Terminal while it completed the EIR that had been court-ordered in exchange for incorporating multiple mitigation measures as part of the Terminal’s construction and operation.⁶ Importantly, the stipulated judgment required the Port to amend the Lease so that China Shipping, which was not a party to the stipulated judgment, would also be bound by the mitigation measures agreed to by the Port.

In 2005, the Port and China Shipping amended the Lease to incorporate the mitigation measures included in the stipulated judgment. As part of the amendment, the Port agreed to reimburse China Shipping for the costs associated with the settlement’s AMP requirements, as well as the costs of purchasing lower emission cargo handling equipment. The Port paid China Shipping $17.7 million in order to offset the increased operating costs associated with the mitigation measures, and agreed to pay an additional maximum of $3 million per year as reimbursement for the price difference between the increased cost of electricity associated with AMP over the cost of using "bunker fuel" while the ships are docked.

C. The certification of the EIR

As required by NRDC I, supra, 103 Cal.App.4th 268, 285-286, 126 Cal.Rptr.2d 615, and in conjunction with the terms of the stipulated judgment, in 2008 the Port certified an EIR for all three phases of the Terminal’s construction, as well as the Terminal’s continued operation under a 40-year lease with China Shipping (the 2008 EIR).

In the 2008 EIR, the Port determined that the Terminal’s operations would have significant environmental effects—particularly on air quality—and that it would disproportionately adversely impact minority and low-income populations. The EIR identified multiple feasible mitigation measures to be undertaken in order to reduce the negative effects of the Terminal’s operations. Among the mitigation measures to be implemented under the 2008 EIR were (1) the increased use of AMP from 2005 through 2011, with 100 percent use of AMP by January 1, 2011; (2) increasing compliance with an expanded vessel speed reduction program (VSRP) that limited ship speed to no more than 12 knots within 40 nautical miles of the Port; (3) the transition to cleaner and zero-emission cargo-handling equipment; and (4) a requirement that an increasing percentage of drayage tracks calling at the Terminal use liquified natural gas (LNG).

The 2008 EIR stated that the Port would ensure the implementation of the identified feasible mitigation measures through incorporation of those measures into the Lease with China Shipping.

D. The post-2008 EIR period

After certifying the 2008 EIR, the Port failed to modify the Lease with China Shipping to incorporate the environmental mitigation measures identified in it. According to the Port, "China Shipping took the position during … negotiations [to amend the Lease] that it was not required to agree to an amended lease because China Shipping was not a party to the ASJ [amended...