Court Upholds Validity of Agreements Tolling the California Environmental Quality Act’s Statute of Limitations

Parties commonly enter into agreements tolling the statute of limitations for claims arising under the California Environmental Quality Act (CEQA).  However, the validity of such agreements, which some argue have thwarted the public’s interest in prompt resolution of CEQA disputes, has not been certain.  In Salmon Protection & Watershed Network v. County of Marin, the California Court of Appeal made clear that such agreements are valid and enforceable, at least in certain circumstances.

At issue in the case was the Environmental Impact Report (EIR) that Marin County had prepared for its countywide general plan update.  The Salmon Protection and Watershed Network (SPAWN) claimed the EIR was invalid.  The county entered into a series of tolling agreements with SPAWN.  After settlement discussions proved unsuccessful, SPAWN sued to challenge the EIR.  Owners of property that would be affected by some portions of the updated general plan intervened, claiming that SPAWN’s claims should be dismissed as untimely because the tolling agreements were ineffective.  The court disagreed and upheld the tolling agreements.  The court based its decision on a variety of factors:

• There is a strong public policy favoring prompt disposition of CEQA challenges.  But there is an equally strong public policy favoring settlement in preference to litigation.  CEQA itself references settlement meetings.
  
  
• Chances of successful settlement negotiations are increased if the parties have the opportunity to pursue their discussions without being compelled to comply with CEQA’s short litigation deadlines.
  
  
• Prompt resolution of a CEQA dispute, which could occur in settlement discussions, would minimize the inevitable costs of delaying a project while the validity of the project approval is litigated.   
  
  

• The tolling agreements did not require the consent of the property owners, as there was no site-specific project at issue. The property owners therefore were not indispensable parties to litigation concerning a countywide general plan.