Competition is not a negative environmental impact

November 09, 2012 | By JONATHAN WOOD

PLF regularly highlights how law is abused for anti-competitive purposes or how  environmental laws can be stretched beyond reason and without proper respect for property rights.  While we normally discuss these issues separately, they can cross paths.  Recently, these problems met at the intersection of 33rd and McKee in San Jose, CA.

Moe’s Neighbor
Could there be some ulterior motive here?

The Oroville Mercury-Register recounts the difficulty that a San Jose property owner, Moe’s Stop Gas and Service Station, faced in its attempt to add three additional pumps to an existing station.  A lawsuit was filed under the California Environmental Quality Act (CEQA) by a neighboring property owner.  Moe’s neighbor (pictured) expressed “concern” about the “environmental impacts” of adding gasoline pumps across the street.

CEQA requires public agencies to consider the “environmental impacts” of their decisions, including the decision to grant permits for activities such as adding a pump to an existing gas station or erecting a commercial building.  From the story:

“I asked San Jose Mayor Chuck Reed, a former environmental lawyer, why  this particular corner had become the poster child for CEQA abuse.  He was typically blunt in response.  “I just think it’s obviously ridiculous,” he said.

“When you have a gas station that wants to add a pump, its’ already a gas station,” he explained.  “You think, how could that possibly be a big deal?  It’s blatantly an anti-competitive action.” (emphasis added)

The story also notes the difficulty of eliminating CEQA abuse:

“There is, of course, a bigger story here.  In Sacramento, there have been attempts to change CEQA so it can be used less often for anti-competitive purposes.  It is a tricky business: You don’t want to remove all environmental protections for the public.”

CEQA abuse is not the unavoidable by-product of protecting the environment.  Much of the abuse could be avoided if the statute were implemented reasonably.  Instead, the law has been interpreted to encourage abuse.  As CEQA is applied, competition among businesses is a negative “environmental impact.”  A pair of California cases (both involving the construction of a Wal-Mart), Bakersfield Citizens for Local Control v. City of Bakersfield and Anderson First Coalition v. City of Anderson, have interpreted “environmental impact” to include so called “urban decay.”  As ominous as “urban decay” sounds, all the courts mean is that the new business will compete against existing ones, the worst of which may close down.

California is not alone in defining economic growth and competition as per se environmental harms.  In New York, the courts have determined that “environmental impacts” in SEQR (NY’s equivalent to CEQA) include the displacement of current residents that could result from rent increases if new construction creates economic growth or makes the neighborhood more attractive.

Development and economic growth are not necessarily in conflict with environmental protection.  But as long as state laws irrationally define development as antithetical to the environment this result can’t be a surprise.  Further, existing businesses can abuse these statutes to keep competitors at bay.  They can claim p.r. from championing the environment while eliminating competition from entrepreneurs.  Businesses like Wal-Mart may be able to overcome the hurdles of CEQA abuse, but the small business owner that comes up with the next Wal-Mart cannot.  Hopefully the person with the next groundbreaking idea lives elsewhere, lest she be too discouraged to bother.