Tuesday, January 19, 2016

How the NFL Ducked CEQA

Last week, Los Angeles celebrated the return of professional football.  Overlooked in the celebration, however, was the fact that the NFL just slipped through one of environmental law’s biggest loopholes. The Rams’ new Inglewood stadium will not be subject to the California Environmental Quality Act (CEQA) – the state’s major environmental protection law – because the stadium plan was approved through the ballot initiative process.

Under California law, proposals enacted through the initiative process are exempt from CEQA, even though the exact same proposal would be subject to extensive environmental review and mitigation requirements under CEQA if passed legislatively.  So regardless of the environmental impacts of the project – and whatever the benefits, the 200-plus acre, 80,000 seat, 10,000 parking spot stadium will clearly have enormous environmental impacts – since the Rams’ stadium proposal was enacted by ballot initiative, CEQA is simply inapplicable. 

Before explaining how the NFL achieved this coup, some background on CEQA for those unfamiliar with it:  CEQA was the first state environmental law to be enacted after NEPA and is one of the most rigorous environmental laws in the nation.  Like NEPA, CEQA requires the preparation of an environmental assessment (an environmental impact report, or EIR, in CEQA terminology) to identify adverse environmental impacts of proposed projects.  CEQA requires an EIR not only for administrative actions by the state, but also for legislative actions by local governments, as well for private activities, to the extent that a government approval is required to conduct those activities.  And unlike NEPA, CEQA imposes both a procedural and a substantive mandate.  Projects cannot be approved “if there are feasible alternatives or feasible mitigation measures available which would substantially lessen the significant environmental effects of such projects.”  If an EIR identifies significant adverse environmental impacts of a project, CEQA generally requires that those impacts be addressed through mitigation measures, or the project can be denied.

CEQA is thus a powerful tool for government transparency, citizen involvement, and environmental protection.  By requiring analysis of environmental impacts and consideration of mitigation measures and alternatives, CEQA creates a process by which a developer is brought to the table to address the most problematic parts of a project.  From a developer’s perspective, however, CEQA can feel less like an opportunity for negotiation and more like an obstacle to overcome.  CEQA lawsuits can stop – or significantly slow – a project in its tracks. In San Francisco, for example, opponents of a proposed NBA stadium for the Warriors have hired David Boies and other high profile litigators to launch a CEQA lawsuit against the project, saying they are prepared “to litigate until the cows come home.”  And earlier NFL stadium proposals in Los Angeles failed in part because of the threat of CEQA litigation (eventually, the state legislature passed one-time exemptions from CEQA for those stadium proposals, but the proposals never took off). 

Using the initiative process to avoid CEQA altogether, then, is understandably tempting to developers.  If the ballot box loophole ended here – with proposals submitted to voters exempt from CEQA, even if the exact same proposal, passed legislatively, would be subject to CEQA – it would be troubling enough.  Voters may not intend to pass initiatives that are harmful to the environment, but depriving voters of information about environmental impacts means that they are more likely to unintentionally do so.  CEQA was enacted precisely because legislators were failing to consider the environmental impacts of their decisions in the absence of a legal mechanism to force them to do so; there is little reason to expect voters as lawmakers would behave differently.

But the ballot box loophole is even bigger.  Initiative sponsors can actually avoid an election altogether, and still take advantage of the CEQA exemption for initiatives if the city council approves the ballot measure directly – which is exactly what happened with the stadium initiatives in both Inglewood and Carson.  Before voters in those cities even had a chance to vote on the stadium proposals, the city councils in both cities opted to approve the initiative proposals without any election at all, while still avoiding CEQA compliance.   

So by funding a $1.7 million ballot initiative, Rams owner Stan Kroenke essentially paid his way out of having to comply with California environmental law.  CEQA admittedly is in need of reform to make it a less time-consuming, expensive, and overly bureaucratic process.  But the fact that current law allows the NFL and other deep-pocketed developers, like Wal-Mart and oil companies, who have also utilized the ballot box loophole to avoid complying with CEQA, is deeply troubling.  Not only does it undermine the environmental protection and public disclosure goals at the heart of CEQA, it exacerbates the capture of the initiative process by special interests.  Furthermore, because larger developers are more likely to be able to afford the cost of sponsoring initiatives, the ballot box loophole means that smaller developers will likely continue to be subject to CEQA, while the largest developments – those most likely to have the most significant environmental impacts – can evade CEQA by utilizing the initiative process.

In a recent decision affirming that CEQA review is not required before direct adoption of an initiative by a city council, the California Supreme Court made clear it is not its responsibility to remedy the ballot box loophole.  Thus, eliminating the ballot box loophole will require legislative action to amend both CEQA and the state Election Code (for a detailed discussion of suggested statutory changes, see 40 Ecology Law Quarterly 833, 871-75). Whether Sacramento lawmakers are up to the task is unclear, but until CEQA’s ballot box loophole is eliminated, California’s signature environmental protection law looks more and more like a paper tiger – or rather, a paper ram. 

Kellen Zale is an assistant professor at the University of Houston Law Center, where she teaches and writes in the areas of property, local government, real estate, and land use law.  Her article on CEQA and the ballot box loophole, Changing the Plan: The Challenge of Applying Environmental Review to Land Use Initiatives, 40 Ecology Law Quarterly 833 (2013), is available here.

Disclosure: The author was formerly an associate at Gibson, Dunn & Crutcher, which represents a party involved in the Inglewood stadium development project.

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