Greenmail Madness

Critics Say California Law Hurts Effort to Add Jobs

By IAN LOVETT

Environmentalists in this greenest of places, call the California Environmental Quality Act the state’s most powerful environmental protection, a model for the nation credited with preserving lush wetlands and keeping condominiums off the slopes of the Sierra Nevada.

But the landmark law passed in 1970 has also been increasingly abused, opening the door to lawsuits — sometimes brought by business competitors or for reasons unrelated to the environment — that, regardless of their merit, can delay even green development projects for years or sometimes kill them completely.

With California still mired in what many consider its worst economic crisis since the Great Depression, the law, once a source of pride to many Californians and environmentalists across the country, has turned into an agonizing test in the struggle to balance environmental concerns against the need for jobs and economic growth.

“Something is broken,” said Leron Gubler, the president of the Hollywood Chamber of Commerce. “A lot of jobs could have been saved if not for these lawsuits, as well as new jobs once these projects were completed.”

Mr. Gubler said lawsuits and the threat of litigation had delayed at least seven recent projects in Hollywood, costing the area more than 6,000 jobs.

In one of those Hollywood projects, the developers of a mixed-use retail and residential project won a lawsuit over its building plans, but the owners declared bankruptcy and sold before the ruling. Work has finally begun under new ownership, but another lawsuit has been filed.

In San Francisco, the city’s plan to paint bicycle lanes, one of the main goals of environmentalists, was delayed for four years by a lawsuit filed by a local resident who claimed that the lanes could cause pollution.

And it is not only big projects that are litigation targets. In San Jose, a gas station has been indefinitely prevented from adding another pump because of a lawsuit filed by the owner of a competing gas station across the street.

Republicans and business advocates have sought for years to weaken the law, describing it as one of the most egregious examples of an overregulated economic climate that has driven so much business from the state.

But in the 42 years since Gov. Ronald Reagan signed the Environmental Quality Act into law, attacks against the measure have largely failed, a testament to the power of the environmental lobby and to the importance of environmental issues to voters here.

Still, with unemployment in the state still above 10 percent, sentiment may be turning against the law, with Democrats increasingly joining Republicans in trying to change it.

Gov. Jerry Brown declared that overhauling the law was “the Lord’s work,” and in just the last several weeks, some of the state’s highest-ranking Democrats have lined up in support of fundamental changes to the act, including the leaders of both houses of the State Legislature.

Last month, Michael J. Rubio, a Democrat in the State Senate, introduced a bill that would have overhauled the enforcement of the law. Though the bill was killed within 24 hours, he said he would try again next year.

“This is a very important law that we have to protect, but we have to strip away the possibility” of the law “being abused,” Mr. Rubio said. “These kinds are lawsuits are not living up to the intent of the law.”

This shift in attitude is pitting California Democrats, who have often been at the forefront of environmental policy, against the environmental lobby, one of their usual allies.

Currently, the Environmental Quality Act requires developers to go through a public process in which potential impacts on the environment are studied and plans to mitigate them detailed. Almost anyone can challenge those plans in court.

Mr. Rubio’s bill would have limited these suits in some circumstances, if the project met all other environmental standards. But environmental groups asserted that this kind of amendment would have effectively curtailed the law’s enforcement mechanism.

“It wasn’t reform: it was gutting the law,” said David Pettit, a lawyer with the Natural Resources Defense Council. “The California Environmental Quality Act as we’ve known it for many years protecting the environment would go away in favor of a checklist approach.”

Mr. Pettit acknowledged that the law has led to some abusive litigation, but he insisted that those cases were rare. Less than 1 percent of all projects in the state face lawsuits under the environmental act, according to a 2005 study by the Public Policy Institute of California.

“But this issue is going to come back,” Mr. Pettit said. “The development community has never liked it, and they’re playing the jobs card now.”

Developers have said they spend millions of dollars to strengthen their projects’ defenses against potential lawsuits. That drives up cost, they said, even when they do not get sued.

The Environmental Quality Act, they complain, has given rise to a cottage industry of people who make money suing or threatening to sue, a practice known as greenmailing, over projects in their neighborhoods. It is usually cheaper, developers said, to settle out of court and pay “go-away money,” rather than risk a protracted legal battle.

Raphael Bostic, a professor at the University of Southern California’s Sol Price School of Public Policy, said the Environmental Quality Act had achieved its original purpose. But its overall effects have become more complicated over time.

“There is now consideration of environmental issues before development rather than after, which was one of the overarching goals,” he said. “But now, it’s used much more regularly as a tool to stop development and make development more costly.”

Editorial pages up and down the state have endorsed overhauling the law. And in July, three former governors — George Deukmejian and Pete Wilson, both Republicans, and Gray Davis, a Democrat — wrote an op-ed for U-T San Diego advocating for “modernization” of the law.

In an interview, Mr. Davis said that while the original intent of the law should remain intact, the high unemployment rate made some kind of overhaul imperative.

“There are a lot of very worthwhile projects that are being stalled indefinitely for reasons largely unrelated to the environment,” Mr. Davis said. “Maybe if they could have gotten started, people could have gotten to work a lot sooner.”

Lawmakers have managed only relatively minor changes to the law so far. Last year, Mr. Brown signed legislation to fast track a proposed football stadium in downtown Los Angeles. Another bill, which would exempt striping bicycle lanes from the Environmental Quality Act, now awaits his signature.

Yet despite significant bipartisan support, any major changes to the law remain a tall order in Sacramento.

Brian Nestande, a Republican assemblyman, was part of the bipartisan coalition that supported Mr. Rubio’s short-lived bill.

“There is no doubt that was a missed opportunity — it’s going to be tough to do it next session,” Mr. Nestande said. “Striping bike lanes on a road can’t even be done without an environmental analysis. That’s the level of insanity this has gotten to.”