Lawsuits delay supercenters

Jim Wasserman

Monday, March 21, 2005 | 11:12 a.m.

SACRAMENTO -- As Wal-Mart Stores Inc. tries to plant dozens of new supercenters in California, lawyers aligned with a variety of opposition groups are using California's tough environmental laws to stall the nation's largest retailer.

A handful of lawyers have sued more than 30 cities that approved the 200,000-square-foot combination grocery and department stores, claiming local officials hungry for sales taxes have miscalculated their environmental consequences.

In many cases, the suits have been filed on behalf of obscure, often secretive community groups. Some have been backed by labor unions leading an anti-Wal-Mart fight in California, while others have few apparent sources of money.

They're delaying the opening of some stores by months or years and slowing Wal-Mart's plan to build up to 40 new supercenters in a state that's one of the company's few major U.S. growth opportunities. The suits also come at a time when the unions representing grocery store workers, primarily the United Food and Commercial Workers, and Wal-Mart's competitors are worried about the effects of the discounters in California.

The suits haven't stopped the company from opening any stores, said Peter Kanelos, a company spokesman. "All they've done is delay the stores."

At least seven attorneys throughout California have filed lawsuits that claim the new stores violate the California Environmental Quality Act, a strict 1970 law signed by former Gov. Ronald Reagan. The law, frequently used by development opponents in California to force delays, drive up costs and discourage developers, has tougher requirements for analyzing environmental impacts than most other states in which Wal-Mart operates.

While not all the lawsuits filed on behalf of groups such as Maintain Our Desert Environment, Communities Against Blight and Citizens for Sensible Traffic have prevailed, many other Wal-Marts approved by California cities are tied up in the lawsuits.

While Texas has more than 200 and Florida more than 100, California has only three of Wal-Mart's 1,700 supercenters nationwide. Another three are under construction in California.

Opponents' "whole purpose is to delay, delay, delay, cause turmoil and hope to get Wal-Mart go away," said Craig N. Beardsley, a Bakersfield lawyer who represents one of California's biggest developers.

His client, Castle & Cooke Inc., saw its local Wal-Mart supercenter halted last year during construction. Its four blank walls and roof now stand lifeless next to other thriving newly opened stores.

"Maybe two years from now we will build a store," Beardsley said.

The 5th District Court of Appeal in Bakersfield ruled Dec. 13 against Wal-Mart and the developers, saying Bakersfield failed to analyze potential physical decay citywide as two Wal-Mart supercenters caused other businesses to close and leave shopping centers vacant.

The court's first-of-its-kind ruling on physical decay has thrown up even higher environmental hurdles for California cities considering Wal-Mart supercenters. Cities that once considered effects on wildlife and air quality must now study a ripple of potential economic effects as well and determine if a new supercenter is worth vacant buildings elsewhere. The three appellate judges ruled that examples of urban decay from other cities and states are also valid considerations for a California city analyzing a supercenter project.

"It makes it tougher to go through the whole environmental review process" and get approval from cities, said Walnut Creek attorney Stephen Kostka, an environmental law specialist who called the ruling an "atomic bomb" for shopping center developers.

But it's also encouraged opponents of Wal-Mart supercenters in other states, said Stockton attorney Steve Herum, who challenged the two Bakersfield supercenters and eight others.

Beardsley and Wal-Mart say such lawsuits in California are being backed by the United Food and Commercial Workers union, which is fighting Wal-Mart's entry into the state's grocery market and fearing it will put downward pressure on wages and put stores where its members work out of business.

"No one will admit anything and I couldn't swear on a stack of bibles that that's the way it is," Beardsley said. "But we all believe that to be true."

Beardsley also cited other grocery chains as suspects, primarily Modesto, Calif.-based Save Mart. A company spokeswoman had no immediate comment to questions about whether the company had any role in the lawsuits.

Last year, rival supermarket chains locked out union workers in Southern California as they attempted to negotiate new contracts that would allow the companies to better compete against Wal-Mart's lower wages.