In an opinion filed December 29, 2023, the Fourth District Court of Appeal ruled that the San Diego County Superior Court too narrowly interpreted CEQA’s remedy statute (Public Resources Code section 21168.9). Although the trial court had found that a supplemental EIR (SEIR) certified by the Los Angeles Board Harbor Commissioners violated CEQA in multiple ways, the trial court ordered LABHC only to prepare a revised SEIR, finding that it had no authority under CEQA to issue a broader remedy. The Court of Appeal concluded that the trial court misunderstood the full scope of remedial authority available to the trial court and remanded the case back to the trial court to reconsider the remedy. The Court of Appeal also held that the Port of Los Angeles (Port) lacked substantial evidence to modify certain air quality mitigation measures that had been adopted in connection with a prior EIR prepared for continued operation of the China Shipping Container Terminal at the Port.
The Port of Los Angeles is North America’s largest port, both in terms of container volume and the value of goods handled. Together with the Port of Long Beach, it oversees 64 percent of the West Coast’s maritime trade and 3 percent of the shipping activities across the United States. Spanning 23 cargo terminals, the Port stretches over 43 miles of waterfront. The Los Angeles Harbor Department functions as the Port’s landlord, renting out spaces to tenants who manage cargo operations.
One terminal within the Port is managed by China Shipping, under a lease agreement with Los Angeles Harbor Department. The lease agreement, signed in 2001, grants China Shipping the rights to build and manage the 142-acre terminal over a period of 25 years, with options for renewal. In the case of National Resources Defense Fund v. City of Los Angeles (2002) 103 Cal.App.4th 286 (NRDC I), the Court of Appeal held that the Port was required to prepare an EIR for three planned development phases of the China Shipping terminal.
In 2004, the plaintiffs in NRDC I and the Port reached a court-approved settlement that allowed the Port to finish building the China Shipping terminal and initiate its first operational phase while preparing the court-ordered EIR. In exchange, the Port agreed to incorporate multiple mitigation measures into the project. The settlement also stipulated that the Port must modify its leasing contract with China Shipping to ensure that China Shipping adhered to these mitigation measures, despite not being a party to the settlement.
In 2008, the Port completed an EIR (2008 EIR) for all three construction phases of the terminal and its ongoing operations under a new 40-year lease agreement with China Shipping. The EIR revealed that the operations at the terminal would have significant environmental impacts, particularly on air quality. To address these impacts, the EIR proposed several mitigation measures, including: (1) using 100 percent alternative maritime power by 2011; (2) limiting ship speeds consistent with an expanded vessel speed reduction program; (3) shifting towards the use of cleaner and zero-emission equipment for handling cargo; and (4) increasing the use of liquified natural gas for a larger share of drayage trucks.
Following the 2008 EIR’s certification, the Port failed to amend its leasing agreement with China Shipping to incorporate the recommended mitigation measures. Discussions between the Port and China Shipping reached an impasse, and public documents exposed that the Port had no intention of forcing China Shipping to implement the mitigation measures. Facing public criticism, the Port thereafter announced plans to prepare a SEIR.
In 2019, the Port released a SEIR, detailing revised mitigation measures and asserting that the mitigation measures would be included in the new lease agreement. Despite this, the document did not establish a legal mechanism to enforce the identified mitigation measures, although it did assume that the mitigation measures would be implemented.
Following the SEIR’s certification, environmental organizations and the South Coast Air Quality Management District (SCAQMD) filed separate petitions for writ of mandate, which were later consolidated. The California Air Resources Board and the California Attorney General intervened and the case was transferred to San Diego Superior Court.
The San Diego Superior Court held that the SEIR violated CEQA because none of the proposed mitigation measures was enforceable. Additionally, the trial court concluded that the Port did not have substantial evidence to justify the claim that two mitigation strategies outlined in the 2008 EIR were infeasible. With respect to the remedy, the court held that, in the absence of a consent decree, it could only declare the EIR invalid and order it set aside. In the trial court’s view, it could not order any other remedy because it must not direct the Port as to how to exercise its discretion.
The Court of Appeal’s Opinion
The Court of Appeal first considered the petitioners’ various challenges to the Port’s rejection of suggested mitigation measures as well as the Port’s decision to modify certain mitigation measures adopted in connection with the 2008 EIR. The court held that although substantial evidence supported some of the Port’s mitigation determinations, others lacked sufficient evidentiary support and reasoned explanation.
Aero-Emission Technology for Cargo-Moving Equipment
The petitioners contended that the Port prematurely rejected a potential a pilot program and a subsequent requirement for zero-emission equipment in cargo operations. The Court of Appeal found, however, that substantial evidence supported the Port’s decision to reject this suggested mitigation measure. The Port’s examination of the available technology indicated that zero-emission solutions for cargo-moving equipment do not yet meet the commercial viability or technical standards required for operations at marine terminals. This position was supported by a 2018 Feasibility Study for Cargo-Handling Equipment, which was part of the 2017 Clean Air Action Plan jointly developed by the Ports of Long Beach and Los Angeles. The SEIR concluded that, although promising, zero-emission technologies require further development in terms of technical validation, reliability in operations, and broader industry support from equipment manufacturers. Therefore, at this stage, zero-emission options are not feasible for the existing cargo handling machinery at the terminal. The Court of Appeal found this rationale to be adequate and supported by substantial evidence.
The petitioners also argued that, even if zero-emission equipment is not currently available, the Port should have considered implementing a pilot program for zero or near-zero emission cargo handling machinery. The court rejected this argument, explaining that such a pilot program, being experimental, would not qualify as a mitigation measure because it would not guarantee a reduction in impacts.
Decision to Make a Greenhouse Gas Emissions Fund a Lease Measure (Rather Than a Mitigation Measure)
The 2019 SEIR reported that terminal operations would generate over 10,000 metric tons of carbon dioxide equivalent annually, resulting in a significant environmental impact. To minimize this impact, the 2019 SEIR proposed two initiatives: Mitigation Measure GHG-1, which called for upgrades to LED lighting, and “Lease Measure” (LM) GHG-1, which would establish a Greenhouse Gas (GHG) Emissions Fund under which China Shipping would contribute $250,000 annually for eight years to support Port-sanctioned emissions reduction projects or to buy CARB-approved credits. This $2 million total from China Shipping was intended to offset the anticipated excess GHG emissions by 2030, valued according to the carbon credit market rates of 2019.
Petitioner National Resources Defense Council criticized LM GHG-1 for not sufficiently addressing the long-term GHG emissions from the terminal and for the lack of constraints on purchasing offsets. The Port defended LM GHG-1 as a lease-specific initiative, arguing it was not designed as a mitigation measure for the terminal’s significant environmental impacts, and was thus not subject to CEQA’s rigorous standards for mitigation.
The Court of Appeal held that, despite the Port’s claim, LM GHG-1 is a mitigation measure. Indeed, the SEIR’s wording implied that the Port itself views LM GHG-1 as a form of mitigation, with the SEIR repeatedly mentioning that LM GHG-1 would “mitigate” GHG impacts.
More fundamentally, the 2019 SEIR failed to sufficiently inform the public and decisionmakers about why LM GHG-1 is a lease measure rather than a mitigation measure. In defense of this position, the SEIR stated only that LM GHG-1 could not be a mitigation measure because it was not possible to quantify the measure’s effectiveness. The court found that such an assertion, without a reasoned explanation, is insufficient under CEQA.
The court was also skeptical of the Port’s claim that it quantifying the GHG Fund’s effectiveness was not possible. The court emphasized that the CEQA Guidelines expressly allow for carbon offsets as a form of GHG mitigation when they adhere to specific criteria, including proper evidence and monitoring for fee-based, off-site mitigation efforts. Further, the SEIR included details on China Shipping’s payments to the GHG Fund based on projected excess GHG emissions and the prevailing market value of carbon, suggesting that quantification is possible.
Responses to Comments Suggesting a Third-Party Mitigation Compliance Monitor
Comments on the Draft SEIR requested that the Port appoint an independent third-party monitor to oversee compliance with the SEIR’s mitigation measures. In response, the Final SEIR explained that such a requirement would be beyond the scope of the SEIR and was not required by CEQA. The Court of Appeal upheld this response.
The court explained that the CEQA Guidelines provide that agencies must address significant environmental issues raised in comments, especially when an agency’s position varies from the comments. Here, the Port’s response to the comments requesting an independent mitigation monitor provided a legal rationale for rejecting that proposal, consistent with CEQA. The Port’s response was legally correct in that Port-wide independent oversight would be beyond the SEIR’s purview. CEQA did not require further response on this topic.
The court also observed that although the petitioners framed their argument as challenging the legal sufficiency of the response, their primary concern seemed to be the Port’s choice to monitor its own mitigation compliance. The court noted that, although the Port had historically failed to adequately enforce mitigation at the terminal, the Port’s decision to retain control over mitigation monitoring is allowed under CEQA.
Removal of Mitigation Measure MM AQ-20, Requiring Exclusive Use of Liquefied Natural Gas in Drayage Trucks
The 2008 EIR included mitigation measure MM AQ-20, which mandated a gradual shift away from diesel-powered drayage trucks to liquefied natural gas-powered trucks at the terminal, eventually requiring all trucks to use liquefied natural gas.
The Port retained an environmental consulting firm, Ramboll Environ, to study the feasibility of requiring the use of alternative-technology drayage trucks at container terminals. Ramboll prepared a report that evaluated the viability of imposing an alternative-fuel-only policy at a singular terminal. The report considered various strategies: engaging with trucking companies to exclusively use liquefied natural gas/zero-emission trucks; establishing a terminal-operated drayage service; or denying entry to trucks not powered by liquefied natural gas or zero-emission technologies at the terminal gates. The report concluded that none of these strategies was viable, citing the drayage industry’s structure, the technical challenges associated with liquefied natural gas-powered trucks, and the competitive disadvantage this would impose on a single terminal.
Petitioner SCAQMD argued that the Ramboll report failed to evaluate the economic feasibility of the Port purchasing new liquefied natural gas-powered trucks or promoting their use through subsidies or other financial incentives. The court found this argument mischaracterized the Ramboll report, which had concluded that a terminal-specific mandate for liquefied natural gas-powered trucks was not viable without broader industry-wide changes. The Ramboll report demonstrated that a requirement that one terminal use liquefied natural gas-powered trucks was infeasible, regardless of who would be responsible for purchasing the trucks.
Replacement Measure for Mitigation Measures MM AQ-20.
SCAQMD also argued that the Port violated CEQA by failing to adopt an alternative mitigation measure to Mitigation Measure MM AQ-20 (discussed above). SCAQMD contended that even if liquefied natural gas technology had not advanced since the 2008 EIR, other zero or near-zero emission truck technologies have progressed and have been successfully piloted at the Port. The court found substantial evidence supported the Port’s determination that there are no feasible replacement measures for MM AQ-20.
Firstly, the Ramboll report, which constitutes substantial evidence, concluded that implementing a drayage truck mitigation measure specific to one terminal, rather than an industry-wide approach, was infeasible. Secondly, the SEIR reviewed ongoing trials of zero and near-zero emission trucks and found significant operational and infrastructural hurdles existed. Finally, the 2017 Clean Air Action Plan developed by the Ports of Los Angeles and Long Beach found that the majority of zero and near-zero emission technologies required further development to achieve commercial viability. These reports and findings constituted substantial evidence in support of the Port’s conclusion that no feasible replacement measures for MM AQ-20 exist.
SCAQMD criticized the Port for only considering technologies that are already extensively deployed, accusing it of interpreting “feasible” as something achievable immediately rather than within a reasonable future timeframe. The court disagreed, finding that the SEIR did not impose an “immediacy” criterion for feasible mitigation measures. Instead, the SEIR evaluated the current and future states of the drayage truck industry, including technological progress, operational realities, and economic considerations, particularly the implications of enforcing a truck-type requirement at a single terminal. The Port’s decision, informed by these factors, did not constitute an abuse of discretion.
The Port’s Decision to Reduce Vessel Speed Compliance Target in Mitigation Measure MM AQ-10
Mitigation Measure MM AQ-10 from the 2008 EIR required that, by 2009, 100 percent of ships visiting the China Shipping terminal adhere to the Port’s Vessel Speed Reduction Program (VSRP). Introduced in 2001, the VSRP is a voluntary program to reduce emissions by decreasing ship speeds near the Port. Financial rewards were introduced to the program in 2005 to boost adherence within specific nautical mile zones. The 2019 SEIR concluded that achieving 100 percent compliance with the VRSP was infeasible, mandating instead a compliance target of 95 percent.
The Court of Appeal agreed with SCAQMD that the Port lacked substantial evidence and sufficient reason for modifying the compliance target. The court explained that the SEIR cited operational challenges as the rationale for the change, but failed to support that claim with specific evidence or data. Instead, the SEIR’s claim of infeasibility appeared to be largely based on statements from China Shipping, without substantiation.
In defense of its determination that a 100 percent compliance target is infeasible, the Port cited the 2017 Clean Air Action Plan which aimed for a 95 percent compliance level based on the achievements of the voluntary program. This reasoning, however, failed to consider the voluntary nature of the VSRP and that existing data did not necessarily indicate the outcomes of a mandatory scheme. The court also observed that the China Shipping terminal had surpassed the 95 percent compliance rate, further undermining the Port’s position.
The court also rejected the Port’s argument that lowering the compliance target from 100 percent to 95 percent would result in minimal environmental benefits. The court observed that the Port’s own figures demonstrated a considerable difference in emissions, especially nitrogen oxides, between the two compliance levels. For this same reason, the court rejected the Port’s argument that the difference between 95 percent compliance and 100 percent compliance would not affect potential health impacts.
The court next considered the petitioners’ claim that the trial court had misapplied CEQA’s remedy provisions. The trial court had held that none of the mitigation measures in the 2019 SEIR was enforceable, a CEQA violation the trial court deemed “profound.” Nonetheless, the trial court only ordered the Port to rescind the SEIR, without ordering the Port to stop terminal operations or set a deadline to redress the CEQA violations.
The Court of Appeal agreed with the petitioners that the trial court misunderstood its remedial authority under Public Resources Code, section 21168.9 (“Section 21168.9”). The court reasoned that subdivision (c) of Section 21168.9 clarifies that courts retain equitable powers to remedy legal violations, albeit without prescribing how agencies should exercise their discretions. Moreover, subdivision (a) of that statute empowers the trial court to mandate measures that ensure compliance with CEQA, such as halting environmentally harmful project activities until regulatory compliance is secured. The trial court misinterpreted Section 21168.9 by not considering these broader corrective options.
The Court of Appeal stressed that the trial court in this case has a variety of interventions at its disposal, such as imposing a strict schedule for a revised SEIR or halting terminal operations until certain mitigation steps are taken. Additionally, the court observed, China Shipping is bound by the lease agreement to adhere to mitigation measures detailed in any officially approved environmental documentation.
The court remanded the case back to the trial court to exercise its discretion to remedy the CEQA violations based on the full remedial authority vested in the trial court under Section 21168.9.
Conclusions and Implications
This case affirms the principle that public agencies are permitted to revise previously adopted mitigation measures if there is substantial evidence demonstrating that the original measures are infeasible. Notably, however, the court rejected the perceived attempt by the Port to circumvent CEQA’s requirements for effective mitigation by categorizing a measure as a “lease measure” rather than a true mitigation measure. Emphasizing substance over labels, the court observed that the SEIR essentially treated the lease measure as a mitigation measures, as evidenced by its repeated assertions that the measure would help reduce and mitigate GHG impacts. The court also stressed the Port’s lack of a convincing rationale for not designating the lease measure as a mitigation measure.
This case also highlights the broad and flexible authority granted to trial courts in deciding on an appropriate remedy for CEQA violations. The court’s decision to send the case back to the trial court for reconsideration of a wider array of remedies underscores the critical role of judicial oversight in CEQA, especially in cases involving substantial environmental impacts from major operations like the Port of Los Angeles.