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Lawsuits Stymie Wal-Mart's Plans for Conquest in California

>From Grist Magazine <>

Environmental lawsuits stymie Wal-Mart's attempts to colonize California

Retail Brobdingnagian and perpetual defendant Wal-Mart, having
carpeted much of the U.S. in Supercenters, has its sights set on one
of its last potential growth markets in the country: California. But
the Golden State has proved a stormy climate for the hungry giant;
dozens of lawsuits have been filed against cities across the state,
charging that Supercenters violate the comparatively strict
California Environmental Quality Act, signed in 1970 by then-Gov.
Ronald Reagan. The suits claim that the cities, in approving the
ginormous stores, underestimate traffic congestion, air pollution,
and -- in a novel accusation recently backed by a state appeals court
-- decay caused by the closing of other, smaller stores. Many of the
suits are filed by citizen groups whose membership and sources of
funding are secret. Wal-Mart says the groups are fronts for unions
like the United Food and Commercial Workers, who fear that the
company's entry into the market will push down wages and labor
standards and drive other employers out of business.

straight to the source: North County Times, Associated Press, Jim
Wasserman, 19 Mar 2005

Saturday, March 19, 2005

Wal-Mart's California Supercenters delayed by environmental suits

By: JIM WASSERMAN - Associated Press

SACRAMENTO -- As Wal-Mart Stores, Inc., tries to plant dozens of new
Supercenters in California, lawyers aligned with opposition groups the
company calls fronts for labor unions and competitors are using California's
tough environmental laws to stall the nation's largest retailer.

>From rural Northern California to the crowded south, a handful of lawyers
have sued more than 30 cities that approved the 200,000-square-foot
combination grocery and department stores, claiming that local officials
hungry for sales taxes have miscalculated their environmental consequences.

In many cases, these suits have been filed on behalf of obscure,
often-secretive, community groups that have few known members. Some of them
have been backed by the 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, primary the United
Food and Commercial Workers, and Wal-Mart's competitors are worried about
the effects of the low-price behemoths in California.

Last year, rival grocery store chains locked out their 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. That
prompted a 4 1/2-month strike that caused losses of at least $300 million
for the rival chains.

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, which is
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

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, Wal-Mart has so far opened only three Supercenters
in California. Many other stores 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.

Craig N. Beardsley, a Bakersfield lawyer who has dueled with the
anti-Wal-Mart forces, said, "Their whole purpose is to delay, delay, delay,
cause turmoil and hope to get Wal-Mart to go away."

Beardsley represents one of California's biggest developers,
Bakersfield-based Castle & Cooke Inc., which saw its local Wal-Mart
Supercenter halted last year during construction. Its four blank walls and
roof now stand next to other thriving newly opened stores.

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

A judge in Bakersfield sided with a law firm that has filed nine lawsuits
against Wal-Mart's Supercenter proposals in the Central Valley. The firm's
attorneys argued that the city underestimated traffic and air pollution
impacts of two Supercenters, as well as potential physical decay citywide as
Wal-Mart caused other businesses to close and leave shopping centers vacant.

The first-of-its-kind ruling on physical decay -- backed by a state appeals
court -- has thrown up even higher environmental hurdles for California
cities considering Wal-Mart Supercenters.

It's also encouraged opponents of Wal-Mart Supercenters in other states,
said Stockton attorney Steve Herum, who challenged the two Bakersfield
Supercenters and nine 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."

The UFCW, a 1.4 million-member union of grocery store workers, is one of
Wal-Mart's biggest foes nationally, claiming that nonunion Supercenters with
prices estimated at 17 to 20 percent lower than other stores threaten their
jobs. The union's Web sites are filled with anti-Wal-Mart sentiment and the
union's members show up at California's city halls to oppose Supercenter

Union spokeswoman Jill Cashen acknowledged the union backed "four or five
lawsuits in California" but said there are another 25 or 30 suits in which
UFCW isn't involved. "The fact is there are many people in every community
who are concerned about their expansion. We're certainly not alone. We're
part of a broader movement of people from lots of different walks of life
and motivations."

Typically, California's anti-Supercenter lawsuits are filed on behalf of a
local community group that often doesn't disclose who belongs or where it
gets its funding for the court challenge.

"Right now some of the people in this group want to remain anonymous," said
Brad Morgan, a businessman in Selma who heads the anti-Wal-Mart group, Save
Our Selma.

Morgan, who said a Supercenter could cause business failures through his
city, also declined to say how much money that group has raised.

"We've had other CEQA battles and we've dealt with other citizens groups,"
Beardsley said. "They're proud to stand up and say what they are, like the
Sierra Club. You can negotiate with them. With Bakersfield Citizens for
Local Control, you haven't a clue who they are."

Under the CEQA law, one person who testified against the project during a
city planning commission or city council meeting, can be a community group
for purposes of a legal challenge.

Herum declined to say who pays for the suits and that he's never represented
a union in 25 years of practicing law.

But "if my interests happen to align with the labor union, so what?" Herum
said, adding that Supercenters have potential to "destroy the economic
future of the Central Valley."

Wal-Mart, Herum said, is just attacking its opponents because it can't win
in court.

Company spokesman Kanelos disagreed, saying the company respects California
law and its legitimate use.

"Our concern is that there is no one watching the abuse of CEQA by interest
groups whose interest in environmental protection is limited to their own
political agenda," Kanelos said.

On the Net:

United Food and Commercial Workers Union:


Herum, Crabtree, Brown:

Jones and Beardsley, P.C.: