A Summary of Published Appellate Opinions Relating to CEQA
By Marc Bruner, Julie Jones, Steve Kostka, Geoff Robinson and Barbara Schussman
INTRODUCTION AND OVERVIEW
While CEQA reform became a hot topic for a few days near the end of the 2012 legislative session — but then foundered — the appellate courts continued to issue CEQA decisions at a rapid clip. As is common in a challenging economy, the courts were generally less receptive to CEQA claims than they are in boom times.
Eleven decisions on environmental impact reports were issued during the year. The opinions in most of these cases showed little patience with arguments that would require the court to second-guess the adequacy of an EIR's technical analysis, and no willingness to entertain challenges to an EIR based on minor flaws. Among other topics, the EIR cases addressed issues relating to the accuracy of the project description, impacts of greenhouse gas emissions, mitigation for biological impacts, conversion of agricultural land, availability of water supplies, the range of alternatives considered, and the scope of the cumulative impacts analysis. The challenges were rejected unless the court found an obvious gap in the analysis or a major inconsistency in the data and further concluded that the EIR did not adequately explain why its discussion of the issue should be relied on despite the apparent defect.
Taken together, the appellate cases published in 2012 reflect an increasing appreciation of the principle that what is required is not perfection, but rather a reasonable effort to provide environmental information that will actually be useful to agency decision-makers.
The California Supreme Court also continues to weigh in. In 2012 the court issued an important decision holding that a petitioner must exhaust administrative remedies before filing a CEQA suit whenever the agency gives the public an opportunity to voice objections to the agency's determinations under CEQA. The court also accepted four cases for review during the year: a case in which the court of appeal overturned a categorical exemption for a single-family residence and required that an EIR be prepared; a challenge to the EIR for expansion of the Los Angeles metro system in which the key issue is whether an agency may use a future baseline to determine the impacts of a project that will not start operating for a number of years; and two other cases involving the scope of a public agency's duty to fund mitigation for impacts of its own projects on facilities and services provided by another agency. All four cases have stirred a great deal of controversy and are being closely watched by public agencies and others who are interested in seeing the CEQA process simplified and the ever-increasing volume of CEQA litigation reduced.
Measures put on the ballot by a city council are not automatically exempt from CEQA, even though they must be approved or disapproved by the voters. As shown in a 2012 appellate court decision, however, CEQA review is not required for a ballot measure that does not commit the city to a “project,” as that term is defined by CEQA.
The City of Monterey Park's ballot measure was designed to require competitive bidding for the city’s solid waste franchise contracts and to allow more than one waste service provider to be selected. The city council sponsored the measure and put it on the ballot without considering whether CEQA might apply. That drew a lawsuit from the measure’s opponents claiming that the city should have examined the environmental impacts that might result if the city replaced its sole service provider with multiple providers.
The court had little difficulty in concluding the measure was not a project under CEQA: The measure was covered by the CEQA Guideline which provides that CEQA does not apply to government fiscal activities that do not commit the agency to a specific project that will have a significant effect on the environment.
The court first found the competitive bidding process is a fiscal activity which, by promoting competition, and eliminating favoritism, fraud and corruption in public contract awards, conserves scarce revenues. It also found the measure did not commit the city to a specific course of action. There was no way to know what companies might bid on future contracts or what the results of the bidding process might be. As a result, any attempt to analyze the environmental impacts that might result once decisions on service providers were made would have been meaningless.
Court Rules City Council Can’t Skip CEQA by Adopting Voter-Proposed Legislation
Project proponents often ask whether there is a way to shortcut the CEQA timeline or head off CEQA litigation. In Tuolumne Jobs & Small Business Alliance, the court of appeal squelched what had looked like a potential path around CEQA: use of the procedure that allows voter-initiated legislation to be adopted by a city council or board of supervisors without placing the legislation on the ballot.
The Tuolumne court emphatically rejected the claim this would exempt the approval from CEQA, stating: Environmental review can be avoided when the voters choose to bypass it, not when the lead agency chooses to bypass the voters.
Supporters of expansion of a Wal-Mart store had presented the Sonora City Council with a qualified voter-sponsored initiative measure. The council chose to enact it, rather than place it on the ballot. It did not certify an EIR or take any other steps to comply with CEQA, relying on a case in which an appellate court held that such an action is not subject to CEQA.
Voter-sponsored ballot measures are not subject to CEQA both because requiring compliance with CEQA would impair the power of the electorate to legislate by initiative and because a city council's decision to place a qualified voter-sponsored measure on the ballot is a ministerial act. The case the city relied on expanded on this rule: It held that a qualified voter-sponsored measure is also exempt from CEQA when the council elects to adopt the measure itself (as allowed by the Elections Code) rather than put it on the ballot.
The Fifth District Court of Appeal disagreed with that court’s decision, ruling that a city council’s choice to enact legislation rather than place it on the ballot is a discretionary act. No fixed criteria dictate whether the city must adopt the legislation or not. Rather, doing so is a policy choice based on the council’s judgment about the pros and cons of the measure and the costs of an election.
A petition for review of the court of appeal decision was filed with the California Supreme Court on December 7, 2012. Given the direct conflict between appellate court decisions, the odds are good that the court will decide to hear the case.
CEQA Doesn't Apply to Declaration of Water Emergency Authorized by Judgment Governing Groundwater Basin
A water replenishment district’s declaration of a water emergency was found not subject to CEQA because the declaration itself had no environmental impact. The declaration of water emergency was authorized under the terms of a judgment imposing a physical solution on the groundwater basin, and the district had no discretion to alter the terms of the judgment that specified the consequences of a water emergency.
The Central Basin is subject to a judgment imposing a physical solution over groundwater use — an equitable remedy designed to avoid depletion of water resources and maximize the beneficial use of water. The judgment empowers various entities, including the Water Replenishment District of Southern California, to declare a water emergency. Under the terms of the judgment, such a declaration changes the portion of allocated water a pumper can carry over to another year, and also extends the period of time a pumper has to replace any overextraction of groundwater.
After the water replenishment district declared a water emergency, Central Basin Municipal Water District challenged the declaration, claiming the water replenishment district was required to complete a review under CEQA before declaring the water emergency.
The appellate court rejected the challenge, finding no basis for the claim that review under CEQA was required. The declaration of a water emergency by itself, the court reasoned, had no environmental impact and therefore was not a project subject to CEQA. Further, the district had no discretion to alter the terms of the judgment, so even if the effects of the declaration — alteration of carryover rights or delayed replenishment — would have impacts on the environment, the district could not change those impacts, making preparation of an EIR a futile act. The court also explained that conducting the CEQA review demanded by the water district to study the environmental consequences of the declaration of water emergency would conflict with the judgment.
Categorical Exemption for Casino Water Supply Agreement Overturned
In a case packed with hot-button issues — CEQA exemptions, water supply impacts, climate change, LAFCO regulation of land uses, and preemption of state law on tribal lands — a court of appeal ruled that the El Dorado Irrigation District erred in approving an agreement to supply water to a tribal casino.
Background. In 1987, the irrigation district agreed to supply water to residents of the Shingle Springs Rancheria. The Local Agency Formation Commission approved annexation of the Rancheria into the district, but imposed conditions authorizing the district to provide the water only for residential uses on no more than 40 lots. No one challenged these conditions at the time.
Years later, the tribe sought an increase in water service to supply a planned casino and hotel on the property. The irrigation district initially declined the request, citing the LAFCO conditions. After the Department of Interior issued an opinion stating the LAFCO conditions were likely preempted as in conflict with the federally-prescribed use of the land, the district agreed to the tribe’s request for more water. Focusing on the only physical improvement needed — relocation of the water meter — the district relied on CEQA’s categorical exemption for construction or conversion of small structures.
Voices for Rural Living sued and won in the superior court. The irrigation district then dropped out of the case, leaving the tribe to defend the water supply agreement on appeal.
No exemption from CEQA. The petitioner claimed the categorical exemption was inapplicable because there was a reasonable possibility the project would have a significant effect on the environment due to unusual circumstances. The appellate court found the circumstances were clearly unusual. The large amount of water that would be supplied for the casino and hotel — a five-fold increase in the Rancheria’s water use — was dramatically different from the amount of water that would typically be supplied to a project involving construction or conversion of small structures.
The court then considered whether there was evidence in the record showing a possibility that this unusual circumstance would result in significant environmental impacts.
First, the court examined the irrigation district’s Drought Preparedness Plan. The plan’s scientific analysis concluded that, in the absence of climate change, the plan would allow the district “to deliver the reduced amounts of water it says it can deliver during periods of drought with 100% reliability.” The court concluded, however, that this was not good enough: The plan also concluded that if climate change occurs, there may be times during the life of the plan when the district will be forced to choose between supplying its customers with the water they expect or meeting instream flow requirements, and that, the court found, showed significant environmental impacts might result.
Second, the court ruled that nothing in the record showed the irrigation district had considered the effect new in stream flow requirements would have on the its supplies, so it was unclear how much water the irrigation district would actually have available to serve the casino and hotel project.
A unique approach on climate change issues? The decision is particularly notable because the argument that water supplies could be inadequate was based largely on the potential effects of global climate change. The irrigation district failed to grapple with the drought plan’s conclusion that future climate change might intensify risks to its water supplies. The court’s decision reflects increasing judicial attention to the interplay between climate change issues and CEQA and the need to adequately address questions raised about the effects of climate change.
Ordinance Allowing Sequential Lot Line Adjustments Is Exempt From CEQA
Sierra Club v Napa County Bd. of Supervisors
(1st District 2012) 205 CA4th 162
Lot line adjustments offer a streamlined alternative to the complex process of subdividing land. In Sierra Club, the court agreed with Napa County that an ordinance allowing sequential lot line adjustments was exempt from CEQA because future approvals under the ordinance would involve ministerial rather than discretionary decision-making.
The Subdivision Map Act excludes from its requirements lot line adjustments "between four or fewer existing adjoining parcels" if there is no resulting increase in the number of parcels. Napa County adopted an ordinance allowing sequential lot line adjustments, so long as each was for no more than four parcels and each lot line adjustment was recorded before submission of the next application. The ordinance also provided that the county's approval of a lot line adjustment was a ministerial act.
The Sierra Club challenged the ordinance under CEQA and the Subdivision Map Act, but both claims failed. In rejecting the CEQA challenge, the court started with the deferential principle that a local agency adopting such an ordinance "is the most appropriate entity to determine what is ministerial, based on analysis of its own laws and regulations." The court then explained that the procedure for approving lot line adjustments under the ordinance was based on "fixed approval standards" and "objective criteria:" The approval process "is one of determining conformity with applicable ordinances and regulations, and the official has no ability to exercise discretion to mitigate environmental impacts." Looking beyond Napa County’s ordinance, the court further opined that the Subdivision Map Act, which limits local agency review of lot line adjustments to determining whether the resulting lots will conform to applicable local requirements, "describes a prototypical ministerial approval process."
No Exception to Exemption — Categorical Exemption Upheld for Installation of Telecom Equipment on Existing Utility Poles
The City of San Francisco issued a permit to T-Mobile for installation of wireless equipment on an existing utility pole in a residential neighborhood, as part of a larger project to install such equipment on utility poles scattered throughout the city. Nearby residents challenged the permit, claiming the cumulative impact of all of the telecommunications equipment T-Mobile and others were proposing to install in the city precluded reliance on a categorical exemption from CEQA. In a ground-breaking decision interpreting the cumulative impacts exception to the categorical exemptions, the court rejected the claim.
Categorical exemption from CEQA. The appellate court upheld the city’s determination that the T-Mobile project fell squarely within the categorical exemption from CEQA, which applies to construction, installation, or conversion of a limited number of small facilities, structures or equipment. In rejecting the claim it was improper for the city to make its exemption determination after issuing the permit, rather than before issuing it, the court found that the timing doesn’t matter: When a project is exempt, no environmental review is necessary and the project may proceed without any CEQA analysis or compliance whatsoever.
Cumulative impact exception does not apply. The residents claimed the exemption was barred because the aesthetic and noise impacts of existing and potential future installations throughout the city would be cumulatively significant. The court acknowledged that an exemption must be denied if a “fair argument” can be made that the cumulative impact of successive installations “of the same type in the same place” will result in a significant adverse cumulative environmental impact. It held that the term “in the same place” means the area where the environmental impact will occur, and therefore the relevant area for analysis will vary depending on the nature of the environmental impact. Applying this test, the court found no cumulative impact because the residents had not shown that multiple devices would be installed within visual or auditory range of each other; in fact, the record showed that the existing and proposed T-Mobile installations would be placed separately at different locations. The residents’ argument thus amounted to nothing more than “speculation” that future installations may occur within the “sensory range” of the T-Mobile project. As a result, the categorical exemption was not trumped by the cumulative impact exception.
Supreme Court to Decide Whether Categorical Exemption or EIR Should be Required for Single Family Residence
In what is perhaps the most controversial CEQA decision this year, the court of appeal in Berkeley Hillside Preservation invalidated permits for construction of a single-family home, ruling that the project did not qualify under CEQA’s categorical exemption for construction of a single-family residence or its categorical exemption for infill development. Unsurprisingly, the California Supreme Court decided in May 2012 to review the court of appeal decision.
The city had decided that none of the exceptions to the categorical exemptions applied, including the exception for significant effects on the environment due to unusual circumstances. The trial court agreed, ruling that while there was evidence significant impacts might occur, it hadn’t been shown they were due to unusual circumstances.
The court of appeal rejected this interpretation of the exception, ruling that the circumstances that might result in significant environmental impacts do not matter. According to the court, the possibility a project will have a significant effect on the environment “is itself an unusual circumstance” which bars an exemption. The court concluded an EIR was required.
The court’s decision is difficult to square with either other court decisions that have addressed the issue, or the language of the exception itself. The decision effectively erases the reference to usual circumstances from the exception and then applies the "fair argument" test to use of categorical exemptions.
An untold number of activities are found exempt under one or more of the categorical exemptions every year. Because the court’s decision could severely limit the situations in which categorical exemptions can be used, it has attracted an unusual amount of attention, particularly from public agencies.
It is expected that the California Supreme Court will schedule the hearing in the case during the first quarter of the year.
Court Upholds EIR's Approach for Evaluating Uncertain Cumulative Impacts, but Invalidates Biological Mitigation and Water Supply Analysis
In Preserve Wild Santee, an appellate court closely examined an EIR’s evaluation of the impacts of a residential development that would build 1,395 homes and preserve 1,400 acres of open space. The court upheld the analysis of cumulative impacts to biological resources despite the uncertainty regarding the extent of those impacts, but struck down project-level mitigation and an analysis of water supply impacts as too uncertain.
Cumulative impacts analysis. The EIR acknowledged that because proposed development in the surrounding area was in the early planning stages, potential cumulative biological impacts in the area could not be predicted. But it explained that the area is covered by a multijurisdictional Multiple Species Conservation Program that is designed to protect natural habitats. Neighboring jurisdictions had adopted subarea plans to implement the conservation program, and Santee had completed a draft subarea plan. The EIR assumed that projects in nearby jurisdictions would be consistent with the applicable subarea plans and that projects within Santee would be governed either by Santee’s own subarea plan (if completed in time) or the overarching standards of the Multiple Species Conservation Program. The EIR concluded the project would not make a cumulatively considerable contribution to biological impacts (except concerning one species that was not covered by the conservation program, which the EIR addressed separately).
In upholding this conclusion, the court explained that each development project would be required to do its part to meet the goals of the conservation program, thus implementing its share of mitigation designed to alleviate the cumulative impact. Further, the EIR was not required to address each species individually, as there was insufficient information to do so. The EIR’s discussion was accordingly found adequate "under a practicable and reasonable standard."
Mitigation for biological impacts. The court reached a different conclusion regarding the mitigation the EIR identified to address the project's impact to the Quino checkerspot butterfly. The mitigation measure called for an open space preserve that would be governed by a habitat plan that was to be approved by the city and the wildlife agencies. The court focused on the measure’s lack of standards for actively managing the butterfly within the preserve. The EIR failed to explain why it could not specify performance standards or guidelines and “the fact that the City and wildlife agencies must ultimately approve the plan does not cure these informational defects.” In addition, because the timing and details for implementing the plan were left to the discretion of the preserve manager based on prevailing environmental conditions, there was no guarantee that any of the measures would occur "at any particular time or in any particular manner."
Water supply analysis. The court also struck down the EIR's water supply analysis, in part because the analysis failed to consider the uncertainty of obtaining supplies from the State Water Project. The project proponent proposed to obtain water from a local water district, which would obtain water from other agencies that ultimately relied on the State Water Project. The local water district prepared a water supply assessment for the project that concluded that if the agencies implemented their planned water development, delivery and conservation projects, adequate supplies would be available to serve the project. The EIR relied on that conclusion in finding water supply impacts less than significant.
The court found three problems with this analysis. First, the EIR projected a demand of approximately 1,446 acre feet per year, while the assessment projected 881 acre feet per year. The EIR did not explain this discrepancy, and the court rejected the parties' attempts to explain it in their briefs. "The question is . . . not whether the project's significant environmental effects can be clearly explained, but whether they were."
Second, the EIR failed to address the uncertainty arising from the federal court decision that ordered severe cutbacks in the amount of water the State Water Project could pump from the delta in order to protect the delta smelt. The district acknowledged in an addendum to the assessment that it could not predict whether the ruling would result in cutbacks, but this was not enough; the EIR failed to discuss the impacts associated with reasonably foreseeable alternative water sources because it could not confidently identify the project's future water sources.
Finally, the EIR did not adequately address the water supply for a proposed 10-acre lake on the project site. The EIR had acknowledged a potential problem with using groundwater, requiring an alternative water source if monitoring showed that groundwater levels dropped below a certain point. But the EIR failed to identify or study any alternative supply source.
Differences of Opinion and Nonprejudicial Errors Do Not Invalidate an EIR
Siskiyou County certified an EIR for a project to expand an existing wood veneer manufacturing facility to accommodate a biomass-fueled cogeneration power plant. The plant would generate heat from bark and trim removed from the logs used to produce the wood veneer. The heat generated by the plant would then be used both in the manufacturing process and for resale. The project objectives included providing a sustainable source of green energy to help meet California's renewable energy needs and reduce the need to use fossil fuels. Environmental groups claimed the EIR violated CEQA by failing to include an adequate analysis of alternatives and a full discussion of the project’s air quality, noise, and water impacts. The court rejected all of these challenges and upheld the EIR.
Project alternatives. With respect to the alternatives claim, the EIR evaluated in depth only the proposed project and the mandatory no project alternative. The EIR identified three additional project alternatives that initially were considered but were rejected without further study. First, the county found that a "reduced capacity" alternative would not be economically viable and would not meet the project objective of putting green power into the California energy grid. Second, the county rejected an alternative onsite location for the proposed power plant, finding this alternative posed "no economic, operational or environmental benefits." Third, the county found the alternative of building the power plant at a different wood veneer manufacturing location in Oregon would lead to increased environmental impacts and significant logistical problems in coordinating power delivery to California.
In upholding the alternatives analysis, the court explained that while an EIR must evaluate those alternatives found to be potentially feasible during the scoping phase, this does not mean an EIR is inadequate if all of the alternatives considered during the scoping phase are determined to be infeasible. Put another way, "there is no rule specifying a particular number of alternatives that must be included" in an EIR.
The court also made clear it is the project opponent's burden to show that the alternatives analysis is inadequate, rather than the public agency's burden to prove the analysis is sufficient, noting that a project opponent "may not simply claim the agency failed to present an adequate range of alternatives and then sit back and force the agency to prove it wrong." Here, the project opponents did not identify any alternatives that were potentially feasible in light of the project objectives. The court also dismissed as "nothing more than a difference of opinion" the project opponents' criticisms of the county's findings on the three alternatives that were rejected.
Air quality impacts. The project opponents argued the EIR improperly used the facility's permitted emissions, rather than its actual emissions, as the "baseline" to measure the project's air quality impacts. In rejecting this claim, the court upheld the county's refusal to consider a detailed comment letter on this issue from the project opponents' air quality expert. The letter was submitted to the Board of Supervisors the day before the hearing on the appeal of the Planning Commission's approval of the project. The court cited the county's hearing rules, which require all documentary evidence to be submitted at least five days before the hearing. The court also rejected the project opponents' claim that comments submitted "before the approval of the project" are part of the administrative record in a CEQA case; the court emphasized that the comment letter was submitted after the Planning Commission's approval.
In addressing the merits of the claim, the court acknowledged the county approximated baseline emissions of oxides of nitrogen at a rate of 120,000 pounds per hour, while evidence in the record indicated an average rate of 112,000 pounds per hour. But the court found this was merely a "small discrepancy" that did not prejudice the environmental review process by precluding informed decision-making or public participation.
Noise impacts. In rejecting the various attacks on the EIR's noise analysis, the court determined that substantial evidence supported the county's noise analysis and the mitigation measures imposed on the project. It also found that the final EIR's inclusion of two noise studies, which were summarized but not included in the draft EIR, did not require recirculation for additional public review and comment, since the studies merely amplified information that already had been presented, rather than presenting new information significant to the environmental analysis.
Water supply and water quality. The project opponents were similarly unsuccessful in challenging the EIR's discussion of water supply and water quality impacts. There was evidence in the record that the project would use nearly twice the amount of water projected in the EIR. But according to the court, the project opponents cited nothing to indicate there would be a significant environmental impact even at the higher level of use. The court explained: "It is not enough simply that the EIR misstated an aspect of a proposed project. Non-compliance with CEQA's information disclosure requirements is not per se reversible; prejudice must be shown." The court found there was no showing of prejudice.
The decision reinforces the important principle of judicial deference to an agency's findings and decision under CEQA. It also stands for the proposition that minor deficiencies, discrepancies and inaccuracies in an EIR do not necessarily mean it is legally inadequate.
A petition seeking review of the court of appeal decision was filed with the California Supreme Court on November 28, 2012, and is currently pending.
Court Defers to Public Agency in Rejecting Challenges to EIR for Wal-Mart Supercenter, Including Challenge to Analysis of Greenhouse Gas Impacts
The City of Rialto certified an EIR for a 230,000-square-foot commercial retail center anchored by a 24-hour Wal-Mart "Supercenter." The project opponents unsuccessfully asserted a broad variety of CEQA claims.
Project description. The court first determined the EIR's project description was incomplete because it did not include a proposed development agreement in its list of the permits and approvals required for the project. But the court determined this error was not prejudicial, as the city's approval of the development agreement was duly noticed and considered at the public hearings on the project. "Thus, the omission of the development agreement from the project description did not undermine informed public participation or decision-making concerning the approval of the development agreement or the project as a whole."
Cumulative traffic impacts. The court next determined the EIR adequately evaluated the project's contribution to cumulative traffic impacts. As the court explained, a cumulative impact analysis may be based on either (1) a list of past, present, and probable future projects producing related or cumulative impacts, or (2) a summary of projections contained in a prior environmental document that has been adopted or certified and that evaluates regional or areawide conditions contributing to the cumulative impact. Here, the city chose the second approach by preparing a traffic study for the project that used the same database and computer modeling system utilized by the San Bernardino County Associated Governments in developing the county's previously adopted Congestion Management Plan.
Cumulative air quality impacts. The court also found the EIR adequately evaluated the project's contribution to cumulative air quality impacts. Pursuant to the recommendation of the local air district, the EIR assessed cumulative impacts – not by evaluating the project's emissions in relation to the emissions from other nearby projects – but simply by calculating whether the project alone would exceed the air district's daily emissions thresholds. The court accepted the air district's recommended approach, noting that a cumulative impact analysis should be guided by standards of practicality and reasonableness.
Greenhouse gas impacts. In what is perhaps the most important ruling in the Rialto Citizens case, the court upheld the EIR's finding that the project's impacts on global climate change were too speculative to evaluate. The EIR acknowledged the serious problem of climate change and the project's potential to result in greenhouse gas emissions. But the EIR also explained the substantial uncertainty involved in making predictions about the significance of any individual development project in contributing to global climate change impacts.
In rejecting the claim that this approach violated CEQA, the court emphasized "the absence of established legal or regulatory guidelines, or accepted methodologies, to gauge the cumulative impact" at the time the EIR was certified in July 2008. As the court explained, the provisions of the CEQA Guidelines addressing greenhouse gas emissions were not adopted until 2010 and were therefore not available to those who prepared and approved the EIR.
Qualifying its ruling, the court made clear that the lack of a "single, universally accepted methodology" is not sufficient to support a finding that an impact is too speculative to evaluate. Here, however, the EIR discussed a number of climate change studies, each with its own conclusions and predictions.
Biological mitigation. Upholding the EIR’s mitigation for impacts to biological resources, the court found the mitigation measures appropriately used "specific performance criteria" to ensure significant impacts would not occur. These measures mandated compliance with the consultation requirements of the federal Endangered Species Act, adherence to protocols approved by the U.S. Fish and Wildlife Service and the California Department of Fish and Game, and specified salvage and relocation procedures for protected plants. Even though the EIR did not state exactly what actions would be taken for each affected species, the court found the mitigation was sufficiently specific to ensure that significant impacts would be avoided.
Reduced density alternative. Ruling on the final CEQA claim, the court upheld the city's decision to reject a reduced density alternative as infeasible. According to the court, substantial evidence supported the city's finding that the alternative would not meet the project objective of providing a mix of retail and restaurant tenants to provide residents with additional shopping and eating options. The court also noted the alternative's lack of environmental benefits as compared with the revised version of the project that was ultimately approved, which was substantially smaller than the project as originally proposed.
EIR That Didn’t Consider the “Environmental Impacts” of Jaywalking Overturned, but Upheld Against All Other Challenges
Decisions by school districts and colleges to build new schools or expand existing campuses frequently lead to CEQA challenges brought by affected cities. In the most recent of these conflicts to reach the court of appeal, the City of Maywood saw all but one of its CEQA claims rejected, but won confirmation that it was eligible to recover attorneys’ fees from the school district.
The court examined five claimed inadequacies in the district’s EIR for the high school:
Pedestrian safety. A busy street bisects the school site. The district concluded that constructing a pedestrian bridge from one side of the school to the other would avoid any significant pedestrian safety impact. The court examined the administrative record and concluded it did not support the EIR’s conclusion because there was no evidence that pedestrians would be obligated to use the bridge, and pedestrians might cross from one side to the other in the middle of the street.
Cumulative projects. The court rejected the city’s claim the EIR’s cumulative impacts analysis should have encompassed an off-ramp that might be included in a proposed freeway expansion project. Endorsing a fact-specific approach, the court ruled that even though a notice of preparation of an EIR for the freeway project had been issued, and the potential ramp was being discussed in the scoping process, the ramp was not sufficiently certain to allow for a meaningful cumulative impacts analysis and therefore was properly omitted.
Hazardous materials mitigation. The school site comprised 47 existing parcels, some of which were contaminated and some of which the district could not test until after the district approved the project, and acquired them from private owners. The EIR’s mitigation relied on future testing, cleanup, and issuance of Department of Toxic Substances Control “no further action” letters, in compliance with a specific statutory scheme for school siting. The court ruled that this mitigation was not unduly deferred, noting the requirement for DTSC no action letters, the evidence that it would be impractical to conduct a full investigation and remediation of the school site at the EIR stage, and evidence of the feasibility of a cleanup.
Project alternatives. The court ruled the EIR analyzed a reasonable range of project alternatives. The EIR’s responses to comments explained that a reduced size alternative, providing the same number of classrooms as the proposed project, but on a smaller footprint, would be inconsistent with Department of Education policies on maximum density. The record also showed an “extensive preliminary investigation” of a suggested alternative site advocated by the city, but that the Department of Education recommended the site not be pursued due to heavy truck traffic and heavy industrial use in the surrounding area.
With respect to two additional off-site alternatives suggested by the city, the court observed: “CEQA does not require that an agency consider specific alternatives that are proposed by members of the public or other outside agencies” if the EIR already examines a reasonable range of alternatives. Nevertheless, the court reviewed the evidence and found that one of the suggested alternative sites had been approved for a different school and that the city presented no evidence of the feasibility or environmental superiority of the other site.
Railroad crossing hazard. Finally, the court ruled that the district properly relied on an expert report that concluded students were unlikely to use a railroad crossing as a path to the school and, therefore, no significant rail hazard would result from the project.
Attorneys’ fees. California’s private attorney general statute allows some successful litigants in public interest litigation to recover their attorneys’ fees from the losing side. But before a court can award fees, it must find that the litigation imposed a financial burden on the winners that was out of proportion to their individual stake in the matter. The district argued that the city could not recover any attorneys’ fees, in part because the city had sued to protect its citizens’ interests in ensuring that the environmental consequences of the project were fully disclosed and adequately investigated. Relying on a recent California Supreme Court decision holding that a private party’s nonpecuniary stake in the outcome of the case is irrelevant in determining whether it is entitled to fees, the court of appeal held that a public agency’s nonpecuniary interest in the outcome of the case, no matter how strong, is also irrelevant to the agency’s ability to collect attorneys’ fees.
EIR’s Project Objectives Must Reveal the Underlying Project Purpose
The importance of carefully drafted project objectives can’t be overemphasized. CEQA requires that an EIR analyze alternatives that can reduce significant project impacts and still accomplish most of the basic project objectives. This means that the project objectives define the range of alternatives that must be analyzed and are a key policy consideration in deciding their feasibility.
Objectives that are overly broad aren’t helpful in paring down possible alternatives to those most useful to decision-makers. Objectives that are too narrow can mean that few, if any, alternatives will qualify for consideration. In Habitat and Watershed Caretakers, the court singled out another type of flaw that can arise in formulating project objectives: identifying objectives that do not accurately describe the project’s underlying purpose.
The city and the University of California had settled litigation challenging the University’s long-term development plan for the Santa Cruz campus. A key provision of the agreement required the city to seek Local Agency Formation Commission approvals for it to provide water and sewer service for planned expansion of the campus outside the city’s boundaries. The city’s EIR prepared for the LAFCO’s use stated the project objective was to implement the settlement and to obtain necessary LAFCO approvals. The EIR didn’t discuss a limited-water alternative reasoning it wouldn’t accomplish those objectives.
The court ruled that the EIR’s statement of objectives improperly focused on the nature of the approvals required rather than the project’s purpose. As a result, it did not include any alternatives that might reduce impacts on the city’s limited water supplies. This, the court concluded, denied the LAFCO the information on alternatives needed for informed decision-making, in violation of CEQA.
The decision also contains important rulings upholding the EIR's analysis of water supply impacts and rejecting arguments that possible future actions to obtain more water had to be studied. The EIR revealed that the city wouldn't have sufficient water to serve its constituents, and acknowledged that the only feasible new source of water (construction of a desalination plant) was uncertain. The EIR also acknowledged that the project would contribute to a growing water deficit and revealed that if conservation proved inadequate, the city would be forced to "deprive users of water, essentially forcing them to conserve." Because the EIR fully disclosed this harsh reality, however, the court found it was sufficient as an informational document. Further, the court rejected arguments that the EIR should have evaluated the effects of increasing the city's surface water diversions. Because the city was not actively proposing such a project, it didn't have to be evaluated in the EIR for the campus expansion site.
Court Upholds EIR Project Description for Municipal Park That Excludes Mixed-Use Development on Adjacent Property
In rejecting the claim that the City of Newport Beach improperly "piecemealed" its environmental review of a municipal park project, the court upheld the city's decision to exclude from the EIR’s project description a pending proposal to build residential and commercial uses on an adjacent property. The court ruled that two projects may properly undergo separate environmental review where "the projects have different proponents, serve different purposes, or can be implemented independently."
The court recognized the mixed-used development was reasonably foreseeable at the time the EIR for the municipal park was being prepared. The court also recognized the mixed-use development likely would benefit from the roadway improvements needed to serve the park project.
However, the court found the mixed-use development was not a "consequence" of the park. The court emphasized that while the roadway improvements proposed to provide access to the park could be "reasonably seen as easing the way" for the mixed-use development, the improvements were "only a baby step" toward that development, which would require an "enormous undertaking" regardless of whether the park was constructed. These facts made the two proposals separate actions that did not need to be analyzed together as one project under CEQA.
Although the result may seem unsurprising, claims that projects expected to benefit from major infrastructure improvements are related, and therefore should be studied in a single EIR, are not uncommon. The court’s incisive analysis provides a particularly useful framework for resolving such claims.
The court also upheld the EIR against a number of other CEQA challenges. First, the court found the EIR adequately evaluated the cumulative traffic impacts from the park in combination with the adjacent mixed-use development. The EIR cited the city's prior analysis of its general plan, which assumed maximum traffic impacts from developing residential and commercial uses in the area. While the cumulative impact analysis could have been clearer, the court noted that "an EIR need not achieve perfection."
The court found the EIR's discussion of the park's growth-inducing impacts also was adequate. The EIR explained the park would meet an existing deficiency in the city's need for parklands, rather than inducing new growth in the city.
The court next upheld the EIR's discussion of cumulative biological impacts. While the petitioner complained that the draft EIR did not mention the adjacent mixed-used development, the final EIR clarified that the analysis of cumulative biological impacts was based on the Natural Communities Conservation Plan for the region, which covers both the park site and the adjacent mixed-development site.
The court also found that substantial evidence supported the EIR's finding that the impacts from developing the park on the California gnatcatcher, a threatened bird species, would be mitigated to a less-than-significant level. The petitioner claimed the EIR understated the acreage of gnatcatcher habitat that would be affected, but the court made clear this was a factual issue and it refused to second-guess the observations and opinions of the city's biologist.
Finally, the court rejected the argument the EIR failed to address the project's inconsistency with the California Coastal Act. In response to the petitioner's claim that the Coastal Commission was highly likely to designate two areas on the project site as "Environmentally Sensitive Habitat Areas," the court explained the EIR adequately flagged the potential issues that could arise and addressed them in advance through mitigation.
Court Upholds Revised EIR for Wal-Mart Supercenter
Once an EIR has been successfully challenged, courts reviewing the revised EIR often are not inclined to send it back for more analysis. Such was the case in Citizens for Open Government v City of Lodi.
Background. An EIR for a Wal-Mart Supercenter had been found inadequate in its analysis of cumulative urban decay impacts. The revised EIR addressed that topic, as well as cumulative effects on agricultural resources and alternatives. After certification, the city asked the court to find it had complied with CEQA and two of the petitioners filed new actions. The Third District found for the city on all claims.
Alternatives. The revised EIR considered five alternatives, but concluded only the no project alternative and two others were potentially feasible. Ultimately, after discussing three alternatives in detail, the city rejected all of them because none could fully satisfy the project objectives. For example, the city found the reduced size alternative would not avoid significant impacts (although it would lessen some impacts) and it would be "substantially less effective" in meeting the city's goals. The court found rejection of the alternatives to be reasonable—adding to the recent string of cases upholding an agency's decision to reject alternatives on policy grounds.
Urban decay. The court also addressed urban decay — an issue often wielded as a sword against proposed Wal-Mart projects. The trial court had overturned the original EIR because it failed to consider cumulative effects of two other nearby Wal-Mart projects in determining whether the new Lodi Supercenter would draw business from existing stores and lead to urban decay. Two economic consultants prepared analyses to respond to this defect in the EIR.
In the renewed proceedings, the petitioners switched gears by claiming the EIR also should have addressed existing urban "blight" conditions that had been identified in redevelopment agency documents. The court ruled, however, that "blight is different from urban decay." The blighted conditions might have nothing to do with the retail environment, and so those conditions did not have to be discussed in describing the baseline conditions.
Importantly, the court also considered whether the baseline for measuring urban decay should have been updated to account for the declining economy. The court reviewed the question under the substantial evidence standard, and found the EIR met the standard by explaining that the current economic turmoil would make further analysis subject to a "moving target."
Agricultural resources. The court next considered arguments challenging the sufficiency of the EIR's analysis of cumulative impacts to agricultural resources, and the city's rejection of the opponent’s preferred mitigation ratio.
The original EIR quantified the farmland that would be lost due to the project and other proposed projects, and found the resulting cumulative impacts to be significant and unavoidable. The court ruled there was no duty to update the analysis given that it had not been found invalid during the earlier litigation.
The EIR also explained the city's position that no mitigation could reduce the impact to a less-than-significant level because the land "once converted, loses its character as agricultural land and is removed from the stock of agricultural land." The city chose to require the applicant to purchase conservation easements over other agricultural land at a 1:1 ratio, but rejected requests to impose a higher ratio. The final EIR stated "agricultural easements are not mitigation in the true sense of the word" because they do not lessen the impact to the farmland that is affected by development. The court rejected the petitioners' argument the city didn't demonstrate the infeasibility of purchasing conservation easements at a higher ratio, explaining that the city did not have to because the question was "whether the finding there were no feasible mitigation measures was supported by substantial evidence." Put simply: "It was."
Litigation procedure. The decision also includes a novel procedural ruling relating to the treatment of disputes about the contents of the administrative record in CEQA cases.
The court refused to order a new trial court hearing even though documents had been improperly excluded from the administrative record. The court found the city hadn’t shown the omitted documents — email messages between its staff and the EIR consultants — were protected from disclosure under the deliberative process privilege. Nevertheless, it ruled that the petitioners had failed to demonstrate the omission was prejudicial; it wasn't enough to simply argue that documents were missing from the record. Because the documents had not been disclosed, the petitioners were unable to show why they might have made a difference in the case.
The court noted that the petitioners' only remedy for the trial court’s refusal to order that the documents be disclosed would have been immediate review of that decision by the court of appeal, before the trial court’s hearing on the merits. Future litigants should note that use of this procedure when disagreements about confidentiality of documents arise could lead to significant delays in reaching a final decision by the trial court in such cases.
EIR Cannot Ignore Comment Raising a Significant Issue
A lead agency proceeds at its own peril when it ignores a comment identifying a way to reduce a significant and unavoidable impact. Even where there may be a sound basis for rejecting the commenter's suggestion, the final EIR needs to include a response.
In Flanders Foundation,the city's EIR evaluated the impacts of selling an historic mansion located in the middle of a city-owned park and nature preserve. The EIR concluded the project would result in a significant and unavoidable impact due to the "permanent loss of locally significant parkland that is considered to be an integral component of the Preserve." A commenter suggested the impact could be reduced by reducing the size of the parcel that would be sold, and asked that this alternative be considered. The final EIR didn’t respond.
In court, the city argued that conservation easements included as mitigation amounted to a reduced-size alternative because the easements would restrict uses on the surrounding property. The court didn’t buy the argument. The CEQA Guidelines state that when a comment raises a significant environmental issue, the lead agency must address the comment "in detail giving reasons why" the comment was not accepted. An after-the-fact attempt to respond in a lawsuit is too late.
In better news, the court upheld the city's decision to reject an alternative as economically infeasible. The EIR had analyzed the alternative of leasing the mansion rather than selling it. An economic report concluded, based on the leasing market and the cost to rehabilitate the mansion that the city could not expect lease revenues to result in a return on the rehabilitation cost for at least 10 years. The court ruled this was sufficient evidence to support rejection of the alternative. Notably, the court also explained that for public agency projects, it is appropriate to consider competing demands on limited agency resources when determining whether alternatives are economically feasible.
Decision on Use of Future CEQA Baseline to Be Reviewed by the Supreme Court
In Neighbors for Smart Rail v Exposition Metro Line Construction Authority, the Second District Court of Appeal ruled that in appropriate circumstances, projected future conditions may serve as an appropriate baseline for measuring a project’s impacts under CEQA. The decision is the latest in a series dealing with the question whether CEQA bars use of future conditions, rather than conditions that exist when the EIR is prepared, for measuring a project’s impacts. The court disagreed with two controversial decisions from other appellate courts, Sunnyvale West Neighborhood Association and Madera Oversight Coalition, in which the courts held that CEQA prohibits use of future conditions expected to occur after an EIR is certified as the baseline for an impact analysis. The case involved an EIR that the Exposition Metro Line Construction Authority prepared for a light rail line connecting downtown Los Angeles with Santa Monica. For traffic and air quality impacts, the EIR used projected 2030 conditions without the project as the baseline.
The court upheld the agency’s decision, ruling that while an agency may not use a future hypothetical scenario as the baseline, it may, in appropriate circumstances, use a realistic projection of future conditions. The court noted that nothing in the statute requires the use of existing conditions, or prohibits the use of future conditions, as the environmental baseline. While the CEQA Guidelines state that the environmental setting at the beginning of environmental review “will normally constitute the baseline,” the court explained that “to state the norm is to recognize the possibility of departure from the norm.”
Applying these principles, the court observed that future population growth in Los Angeles County over the next 20 years, with its resulting effects on traffic and air quality, is not hypothetical – “it is inevitable.” The court noted that since the project at issue would not even begin operating until 2015 at the earliest, “its impact on presently existing traffic and air quality conditions will yield no practical information to decision makers or the public.” By contrast, “an agency’s use of projected future baseline, when supported by substantial evidence, is an appropriate means to analyze the traffic and air quality effects of a long-term infrastructure project” that is designed to serve a future population.
On August 8, the California Supreme Court granted the project opponents’ petition for review of the decision. The court’s website describes the case as involving the question whether a public agency is “required to evaluate a project’s potential traffic and other impacts using a baseline consisting of the existing physical conditions in the affected area during the period of environmental review, or may an agency elect to evaluate the impacts of a project only against projected future conditions?”
A decision by the supreme court will provide critical guidance for local agencies, project sponsors, and the lower courts on the controversial question of how much flexibility an agency has when setting the baseline for evaluating environmental impacts under CEQA.
California Supreme Court May Decide Whether Mitigation Is Required for Impacts on Public Services
Two important, recurring CEQA questions were answered in City of Hayward, a case involving the EIR for a California State University Hayward campus master plan: whether CEQA requires funding of mitigation for a project’s effects on public services; and whether an adaptive mitigation program for traffic and parking impacts improperly defers decisions about mitigation. The court of appeal answered no to both questions.
No mitigation required for impacts on public services. With the master plan’s increase in campus population, the city would need eleven fire fighters, a new fire station, and additional equipment to maintain response times and service levels. The court of appeal rejected the city’s argument that an increased demand for emergency services, and the lengthened response times that would result, was an environmental impact requiring mitigation. The court noted that providing fire and emergency medical services is the city’s legal responsibility. While campus expansion will increase the demand for those services, this is an economic effect, the court said, not an environmental effect that must be mitigated under CEQA. As the court put it, there is no legal support for the claim “that CEQA shifts financial responsibility for providing fire and emergency response services to the sponsor of a development project.”
Adaptive transportation demand plan is adequate mitigation. The second question before the court involved the legal adequacy of a transportation demand management plan for mitigating traffic and parking impacts, which included a menu of measures to be put in place in stages, evaluated and then adjusted as conditions evolved. Ruling that the plan did not improperly defer decisions about mitigation, the court highlighted the components of the plan that together made it sufficiently concrete to pass legal muster:
- performance goals
- identification of the types of TDM policies to be evaluated
- an implementation plan, including timelines
- monitoring of effectiveness of measures as they are deployed
- an enforceable commitment to mitigation
On October 17, 2012, the California Supreme Court granted review of the court of appeal decision. The court has ordered that briefing be stayed, however, pending its decision in the case of City of San Diego v California State University, discussed below, which includes several issues relating to the scope of the University’s duty to fund mitigation.
California Supreme Court to Decide When a State Agency May Find That a Mitigation Measure Is Economically Infeasible
The court of appeal in City of San Diego reviewed the EIR for a plan to expand the California State University San Diego campus. It ruled that CSU erred in finding that fair share contributions for traffic mitigation measures would be infeasible if the legislature refuses to provide funds for that purpose, and found the EIR deficient in several other respects. The California Supreme Court granted review of the appellate court's decision in April.
Available sources of funding for mitigation not considered. To mitigate off-site traffic impacts, the EIR recommended measures consisting primarily of "fair share" payments by CSU toward the costs of building various traffic improvements. However, the EIR concluded that any fair share contributions by CSU would be conditioned upon obtaining funds from the California Legislature for that purpose. The EIR explained that "if the Legislature does not provide funding, or if funding is significantly delayed, all identified significant impacts would remain significant and unavoidable."
The court of appeal ruled, however, that in deciding whether funds are available for mitigation, state agencies such as CSU are not limited to legislative appropriations earmarked for that purpose. CSU erred because it did not consider other sources of funds besides specific legislative appropriations that might be available for mitigation.
Improper deferred mitigation. With respect to other traffic issues, the court found that a traffic mitigation measure that required consultation with other agencies to develop a transportation demand management program constituted an improper deferral of mitigation. The mitigation set only a "generalized goal" of reducing vehicle trips, without establishing a specific performance standard that must be achieved.
Impacts on transit facilities not examined. The court found that CSU's treatment of the project's effects on transit facilities constituted another CEQA defect. Although the EIR acknowledged that the project would increase transit use, it did not analyze the project's effects on local transit facilities, including “whether the capacity of the trolley station and system may be exceeded and thereby cause rider congestion at the station, denigration of trolley service, infrastructure, and rolling stock, and additional infrastructure and operating costs.” The court ruled this was an environmental impact that should have been studied.
Question before the supreme court: The supreme court's website describes the key issue in the case: "Does a state agency that may have an obligation to make 'fair-share' payments for the mitigation of off-site impacts of a proposed project satisfy its duty to mitigate under [CEQA] by stating that it has sought funding from the Legislature to pay for such mitigation and that, if the requested funds are not appropriated, it may proceed with the project on the ground that mitigation is infeasible?"
It is expected that the court will decide the case in early 2013.
EIR Required for Oak Woodland Management Plan
Public agencies generally prefer not to prepare EIRs – at least for their own plans and projects – unless they have to. And CEQA attempts to avoid redundancy by encouraging reliance, to the extent possible, on a previously certified EIR to support the approval of a subsequent action. So, in 2008, when El Dorado County adopted its long-awaited countywide oak woodland management plan, the county didn’t prepare an EIR, but instead relied on its 2004 general plan EIR.
Not so fast, said the Third District Court of Appeal, in Center for Sierra Nevada Conservation v County of El Dorado. The court held that although the General Plan EIR anticipated the development of the oak woodland management plan, it didn’t analyze key provisions of the plan the county ultimately adopted, so the plan had to be analyzed in a new tiered EIR.
Background. El Dorado County’s 2004 general plan allowed development that would cause significant and unavoidable impacts on oak woodland habitat and its dependent wildlife. The general plan created two options for mitigating this impact. Under Option A, a project applicant would adhere to tree canopy retention standards and would replace removed woodland habitat onsite. Under Option B — added late in the general plan process due to objections to Option A — an applicant would not be required to retain oak woodlands onsite but would instead pay a fee to a new conservation fund. The general plan required further action by the county: an integrated plan that would identify important habitat in the county and establish a program for effective habitat preservation and management.
In 2008, the county adopted the oak woodland management plan, which was intended to be the first component of the integrated plan. The plan included an Option B fee program allowing developers to pay 40% of the value of the land under any oak canopies to be removed. The county adopted the oak woodland management plan based on a negative declaration, finding that there would be no significant environmental effects that had not previously been examined in the general plan EIR.
An EIR was required. The court of appeal agreed with the Center for Sierra Nevada Conservation that an EIR was required. The county’s primary argument was that the oak woodland management plan fit within the 2004 EIR as a mitigation measure under the General Plan. The court, however, identified several matters in the new plan that had not been previously addressed, including the Option B alternative, the prioritization of valley oaks, land acquisition options and proposed use of the mitigation funds collected. The court required the county to analyze all of these new matters in a new EIR.
EIR couldn’t await integrated plan. The court also rejected arguments that an EIR could await adoption of the county’s full integrated plan, reasoning that approval of the oak woodland management plan alone “had the effect of allowing developers to pay a mitigation fee instead of preserving a substantial population of trees on site.”
General Plan EIR’s impact conclusion didn’t obviate a subsequent EIR. Finally, the county argued that no EIR was required for the mitigation plan because the General Plan EIR had recognized that development would have a significant unavoidable impact on oak woodlands. The court rejected this argument as well, holding that the County may not shield all subsequent projects affecting the environment on the basis of its prior recognition that development and increased population will have an adverse effect on the region’s oak woodlands. Because the General Plan EIR did not adequately cover the Option B mitigation fee program, the EIR’s acknowledgement of a significant unavoidable impact was of no assistance to the county; a new EIR was required to consider the effects of the oak woodland management plan and Option B fee program on the environment as it existed with only Option A available to developers in El Dorado County.
Need for Further Environmental Review Not Presumed, Even if Original CEQA Document Was a Negative Declaration
CEQA presumes that once an agency has completed environmental review for a project, no further CEQA document will be necessary. Absent substantial project changes, changed circumstances or new information, an agency need not prepare a new EIR or negative declaration. In other words, after a project has undergone environmental review, the statutory presumption weighs against further review.
In Abatti v Imperial Irrigation District, the Fourth District Court of Appeal confirmed that, even where the original CEQA document was a negative declaration, the deferential substantial evidence standard of review applies to a lead agency decision not to require further CEQA documentation. Project challengers argued that where no EIR has been prepared, the far less deferential "fair argument standard" should apply at all stages of project approval. The court disagreed, reasoning "it would make little sense to set a lower threshold for further environmental review of a project that is determined not to have a significant effect on the environment than . . . for a project that may have significant effects on the environment. "The court cited Benton v Bd. of Supervisors, a 1991 decision that had rejected a similar claim.
The court reviewed the irrigation district's decision to adopt regulations implementing its previously approved water shortage plan, finding that substantial evidence supported the district's finding that the regulations did not constitute a substantial change to the water shortage project requiring additional environmental review. The court also ruled that a recent decision by the district to supply water to a large-scale industrial operation did not show the priority preferences included in the regulations would result in new environmental effects or a substantial increase in environmental effects — the contract involved "less than one quarter of one percent of the water supply to be distributed" under the water shortage plan, and the evidence showed that overall demand for industrial water use had been relatively constant over time.
New South Coast Air District Rules Withstand Manufacturer's Second CEQA Challenge
A court of appeal has upheld the South Coast Air Quality Management District’s second attempt to adopt a rule imposing strict limits on paint thinners and solvents. The court rejected a manufacturer’s claim that CEQA required the district to study alternatives and mitigation measures before adopting the new regulations.
Traditionally, paint thinners and solvents have relied on mineral spirits, which have a relatively high flash point — the temperature at which a chemical bursts into flame when exposed to an ignition source. But use of such products releases 10 tons per day of volatile organic compounds, a key contributor to ground-level ozone, in the South Coast Air Basin.
In 2009, the district adopted Rule 1143, which slashed the permissible VOC content of thinners and solvents sold in the basin. The district acknowledged that manufacturers might replace mineral spirits with acetone, which has a much lower flash point than mineral spirits. Fire officials feared consumers would be unaware of the products’ reduced flash point.
The district operates a certified regulatory program under which it prepares a CEQA equivalent document — an environmental assessment — rather than a negative declaration or EIR. When the district first approved Rule 1143 based on an EA, Barr, a manufacturer, sued. The trial court ruled in its favor, finding the EA did not adequately evaluate the potential fire hazard posed by increased use of acetone-based paint thinners.
In 2010, the district proposed to revise Rule 1143 to require that product packaging draw attention to safety warnings. The fire chief who had expressed the greatest concern about Rule 1143 advised that the changes fully addressed his concerns. The district approved the amended rule after preparing a supplemental EA that evaluated the relative flammability of each product and found no significant fire hazard.
Barr sued again. Instead of asserting impacts had not been addressed, however, Barr alleged that CEQA required that the EA include an alternatives analysis and mitigation measures. The court disagreed, ruling that substantial evidence supported the district’s conclusion that Rule 1143 would cause no significant environmental impacts, and therefore CEQA did not require discussion of alternatives or mitigation measures.
Speak Now Or Forever Hold Your Peace — Issue Exhaustion Applies to CEQA Exemptions
The California Supreme Court has issued a landmark decision holding that the exhaustion doctrine — which requires parties to raise their claims at the administrative level before litigating them in court – applies to challenges to an agency decision that a project is exempt from CEQA. Overturning a 15-year-old precedent, the court ruled that if the decision-making agency holds a hearing on the project, prospective litigants must apprise the agency of their concerns before they can take them to court.
Since a 1997 decision in the Azusa case,1 courts have ruled that the exhaustion requirement does not apply to an agency determination that a project is exempt from CEQA. More recently, two decisions were in conflict — the court of appeal’s decision in this case, which sided with Azusa, and another court of appeal case decided about the same time holding that exhaustion was required.2
The California Supreme Court made the issue seem easy. The court explained that CEQA states that a proposed project can be challenged only on grounds that were presented to the public agency orally or in writing by any person during the public comment period . . . or prior to the close of the public hearing on the project before the issuance of the notice of determination3 The court acknowledged that when an agency determines a project is exempt from CEQA, there is no public comment period, so that part of the statutory test does not apply. But it concluded the other part of the test does apply: exhaustion is required if the public agency holds a hearing on the project before making its decision. It does not matter whether the hearing was required by law. Nor does it matter whether the agency ultimately filed a notice of determination or a notice of exemption.
In Tomlinson, Alameda County held multiple hearings on a proposed housing project. The county gave notice before each hearing that the project fit within CEQA’s infill housing exemption. The county also gave notice that if parties did not raise issues during the agency proceedings, they could not raise those issues in court. The litigants appeared at the county’s hearings, and lodged several complaints. But no one asserted that, because the project was located on unincorporated county land rather than within city limits, the infill housing exemption didn’t apply. Nevertheless, this was the issue the litigants chose to highlight when they challenged the county’s approval in court.
The court of appeal excused the litigants’ oversight, ruling that the requirement to first raise issues at the agency level does not apply to exemption decisions. The supreme court disagreed, holding that the requirement to first raise issues at the agency level is a necessary prerequisite to litigation whenever the agency holds a hearing on the project before making its decision.
The California Supreme Court has not been reluctant to enforce the prerequisites to litigation contained in CEQA. This decision on exhaustion of administrative remedies follows two recent decisions strictly construing CEQA’s statutes of limitation. Taken together, these decisions give greater certainty to agencies and developers that disputes will be resolved consistent with CEQA’s timelines, and the issues that are litigated will be restricted to those raised during the agency proceedings.
A Premature Notice of Exemption Does Not Trigger CEQA’s Short Limitations Period
CEQA provides an extraordinarily brief period for bringing suit if a public agency files the proper notice with the county clerk – 30 days for approvals based on a negative declaration or an EIR, and 35 days for projects that are exempt. If a notice isn’t filed, a challenger has 180 days after project approval to sue.
While these rules appear straightforward, a vexing question has spawned two recent decisions by the California Supreme Court and now, a new court of appeal decision: whether the courts may look behind the notice the agency files to decide whether it accurately reflects the action the agency took.
In the first of these cases, Committee for Green Foothills,4 the opponents filed a CEQA suit almost six months after Santa Clara County filed notice of its determination to approve a project proposed by Stanford University. The opponents asserted the notice was invalid, claiming the county had not actually determined whether the project would result in significant impacts on the environment, even though the notice said it had done so. The supreme court rejected the opponents' argument, and announced a new, bright-line rule: that CEQA’s short statute of limitations is triggered whenever a complete notice has been filed and is not extended by allegations the notice is inaccurate. A legally adequate notice starts the time running on a challenge to any of the CEQA determinations referred to in the notice.
Several months later, in the Stockton Citizens case,5 the supreme court extended this rule to a notice of exemption. There, the city filed notice that it had approved a Wal-Mart supercenter based on a CEQA exemption. The project opponents tried to skirt the 35-day limitations period by asserting a letter from city staff, which the city relied on as showing it had approved the project, was not valid or effective, and therefore the city’s notice of exemption was itself invalid. Again, the court refused to look behind the notice the city had filed to test its accuracy, and held the CEQA challenge was time-barred.
The issue decided by the court of appeal in Coalition for Clean Air v City of Visalia also involved a claim the agency’s notice for an exempt project was deficient, but for a different reason: that the city had not approved the project until several days after it filed its notice. Although the city’s notice of exemption contained all of the information required by CEQA and was legally adequate on its face, the court ruled a notice of exemption would be void if it is not properly filed. Noting that CEQA specifies that an agency may file a notice of exemption after the public agency has approved the project, the court concluded that a notice of exemption filed before project approval is not properly filed, and is therefore invalid.
Can this ruling be squared with the supreme court's statements on the subject? Arguably, no. The supreme court has ruled that the statute of limitations is triggered when a notice that is legally adequate on its face has been filed, and that courts cannot look behind the notice to see if the agency had a sound basis for filing it. But then again, maybe so.
The supreme court has made it clear that to be effective, the notice must be both facially valid and properly filed.
The supreme court denied a petition for review of the court of appeal’s decision on December 19.
CEQA's Statute Of Limitations Starts To Run When Project Is First Approved
In July 2009, the Board of Trustees of the Los Angeles Community College district approved a series of resolutions providing for the lease of the publicly owned Van de Kamps Bakery building for community and educational purposes. Several months later, the petitioner filed a lawsuit challenging the resolutions under CEQA. After the suit was filed, the Board took a number of actions to implement the resolutions, including leasing a portion of the building for an employee retraining program and executing an amended contract for architectural services, which the petitioner attempted to challenge in a second lawsuit.
The court of appeal determined that the second case was barred by CEQA's 180-day statute of limitations. Parsing the provisions of CEQA, the court noted that when no Notice of Determination or Notice of Exemption is filed, a CEQA lawsuit "shall be commenced within 180 days from the date of the public agency's decision to carry out or approve the project." The court also looked to CEQA's definition of "approval," which means "the decision by a public agency which commits the agency to a definite course of action in regard to a project." The court found the Board of Trustees committed itself to a definite course of action on the project — leasing the Van de Kamps building for educational and community purposes — in July 2009. Thus, the court determined, the 180-day period started to run on that date, and the petitioner's second lawsuit, filed more than a year later, was time-barred.
The court rejected the argument a new limitations period was triggered each time the Board made a discretionary decision after July 2009 to implement the project.
The court explained that a new limitations period is triggered only when a subsequent agency decision substantially changes the project as initially approved. Here, the court found the Board's subsequent decisions merely implemented the original project.
The court emphasized that while CEQA's substantive provisions are interpreted broadly to protect the environment, "this does not mean that the same standard of liberality should necessarily be applied in interpreting the procedural requirements of CEQA." Rather, the court declared, "the strict CEQA time requirements must be applied as written."
Agreements Tolling CEQA Statute of Limitations Upheld
Agreements to toll the statute of limitations for filing suit are generally favored under the law because they enable parties to negotiate and resolve issues without the distraction of litigation. But in land use and CEQA cases, there are countervailing public policies favoring prompt filing and disposition of such matters. The tension between these considerations was at issue in Salmon Protection and Watershed Network v County of Marin, a case that drew amicus briefs from such divergent interests as the Sierra Club and the Building Industry Association, both urging that tolling agreements be upheld. After balancing the competing interests, the court came out squarely in favor of tolling agreements.
The case involved a challenge to Marin County’s EIR for its countywide general plan update. The county entered into a series of tolling agreements with the petitioners, and after settlement discussions proved unsuccessful, the petitioners filed suit seeking to overturn the EIR. Property owners intervened in the case, claiming the tolling agreements were ineffective and the lawsuit was untimely. The court disagreed, reaching the following conclusions:
The public policy favoring tolling agreements is not outweighed by the public policy of prompt resolution of CEQA cases. The court acknowledged the public policy favoring the prompt filing and disposition of CEQA challenges, but found an equally strong public policy encouraging the settlement of controversies in preference to litigation. The court noted the multiple benefits of tolling agreements: increasing chances of successful settlement, conserving judicial and local agency resources, avoiding the costs and time required for litigation, and minimizing the inevitable delay while project approval is litigated. The court also pointed out that CEQA itself encourages settlement and automatically tolls the statute of limitations for pre-litigation mediations.
The consent of intervenors – property owners affected by the decision, but not real parties in interest – was not required for the tolling agreement. In a prototypical CEQA controversy where there is a project proponent, the court said, a valid tolling agreement must have the assent of the project proponent, the public agency, and the petitioner. In this case, where there was no project proponent, only the assent of the public agency and the petitioner was necessary. Although intervenors might be affected by the General Plan Update, they were not real parties in interest, and their assent was therefore unnecessary for the tolling agreement.
The primary beneficiary of CEQA’s time limits is the project proponent, not the general public, and the general public cannot prevent parties from waiving the CEQA limitations period. The limitations period in CEQA section 21167 serves public purposes, the court acknowledged, but its primary purpose was to protect project proponents from extended delay, uncertainty and disruption of projects. Intervenors’ indirect concerns about delay of litigation were not sufficient to prevent those directly affected from waiving or agreeing to extend the limitations period.
Irrigation District Has Standing to Challenge Residential Development Project
To have standing to bring a writ of mandate proceeding, the petitioner must generally be able to show a beneficial interest — a special interest to be served or right to be protected over and above the interest held in common with the public in general. The issue here was whether an irrigation district had sufficient beneficial interest to challenge a proposed residential development under CEQA. The court concluded it did.
The district challenged the City of Selma’s approval of a 160-unit residential development, contending that potentially significant impacts to agricultural land, air quality and groundwater, as well as cumulative impacts, should have been studied in an EIR. The city argued that a public agency has a beneficial interest in CEQA proceedings only if the project affects a natural resource subject to its jurisdiction, relying on the provision of CEQA that requires “public agencies having jurisdiction over natural resources affected by the project” to provide the lead agency with performance objectives for mitigation measures to address the project’s significant impacts on the resource.
The appellate court disagreed, noting that other provisions of CEQA and the Guidelines authorize an agency to make substantive comments involving matters within its expertise, regardless of whether the project affects a resource within its jurisdiction. The district’s operation of groundwater recharge basins, the court held, gave the district the necessary expertise to submit comments under CEQA as well as a special interest not held by the public at large sufficient to confer standing.
Court Expands on Statutory Requirements for the Contents of the Record of the Agency’s Proceedings
Courts must decide CEQA litigation based on the record of the agency’s proceedings in the review and approval of a project. The required contents of the record are governed by statute. The decision in Consolidated Irrigation District addresses some questions that public agencies commonly face when assembling the record:
Can the agency include meeting minutes in the record instead of a transcript? According to the court, generally no. The statute specifies that transcripts or minutes of proceedings before the agency’s decision-making body must be included. However, the court interpreted this provision to require that a transcript of the proceedings be included in the record if one is prepared. It is not sufficient to include minutes of the meeting if a more complete record is available because issues such as whether a party exhausted administrative remedies cannot be adequately resolved based solely on the contents of the minutes. The court went so far as to rule that, if the petitioner does not pay to have a written transcript prepared, and audio recordings are available, the audio recordings must be included in the record.
What constitutes submission of written evidence to the agency? Making a document readily available, the court ruled. According to the court, written evidence cited in a comment letter has been submitted to the agency for the record when the commenter has made the document readily available for use or study by lead agency personnel. While providing a general citation to a website is not sufficient to make a specific document readily available to the agency, citing the URL of a specific web page is equivalent to submission of the document on that web page. The court did not address the question whether this would require that agencies make hard copies of the cited documents for inclusion in the record because a citation to a URL is not necessarily sufficient to make the cited documents “readily available” to reviewing courts. Nor did the court address the problem that a URL or website may change after submission of the letter referencing the site, but before a printout is made or decision-makers attempt to access the document.
Does evidence previously delivered to the agency on a prior project have to be submitted again for the record in a different project? In some circumstances, no, according to the decision. Documents previously delivered to the agency in connection with comments on a prior project have been “submitted” to the agency for the record in a later project if: the comment letter identifies the documents; states the documents were previously provided; offers to provide another hard copy if the agency requests it; and requests the document be included in the record of its proceedings. Documents that are simply named in a comment letter have not been made readily available to the agency and, therefore, do not qualify as evidence submitted to the agency.
Are documents in a consultant’s files deemed to be included in the record? That’s a matter of contract, said the court. Files maintained by consultants that the agency does not own, or have other rights to, do not qualify as files in the public agency’s possession for purposes of the Public Records Act. Accordingly, the documents in such files also do not qualify as documents in the record of the agency’s proceedings on the project, according to the decision. Although the decision could be read to imply that documents the agency does own or otherwise have a right to possess should be treated as contained in the record of the agency’s proceedings, it is doubtful that such a rule could be squared with the statutory description of the record of the agency’s proceedings in a CEQA case. Under the statute documents in the agency’s files on the project are included in the record if they are relevant to its compliance with CEQA or its decision on the merits of the project. Documents buried in a consultant’s files that were not forwarded to the agency would not meet either test.
No Right to Appeal LEA’s Certification of EIR for Solid Waste Facilities Permit to Board of Supervisors
The First District Court of Appeal has held that community organizations had no right to have the county’s board of supervisors hear an appeal of an EIR certification determination by the county’s solid waste management agency. The decision in No Wetlands Fill Expansion addresses the interplay between CEQA and the Integrated Waste Management Act.
Acting as the designated local enforcement agency under the Waste Management Act, Marin County Environmental Health Services certified an EIR for issuance of a revised solid waste facilities permit to the operator of a landfill adjacent to the Petaluma River.
Community groups attempted to appeal the certification decision to the board of supervisors, but county counsel denied the request, stating an appeal to the board was not available.
The community groups then filed a petition for writ of mandate, which the trial court granted, ruling the board of supervisors was required to hear the appeal. The court of appeal, however, sided with the county, concluding the board had no duty or power to review the certification decision.
Under the Waste Management Act, the court ruled, Marin EHS, acting as the local enforcement agency, had responsibility for issuing the permit and therefore was the CEQA lead agency. CEQA provides for an appeal to a local lead agency’s elected decision-making body if a nonelected decisionmaking body within that agency certifies an EIR. But because the board of supervisors had no authority to approve or disapprove the permit, or make any decisions under CEQA relating to the permit, it had no power to hear an appeal of Marin EHS’s certification decision.
An Attorney Petitioner in a CEQA Lawsuit May Be Awarded Attorneys’ Fees
In a case of first impression, a court of appeal has held that an attorney can be a named petitioner in a CEQA case, litigate the case on behalf of all of the petitioners, and then, if the litigation succeeds, obtain an award of attorneys’ fees from the defendants.
In Healdsburg Citizens, an organization and two individuals challenged the EIR for a resort project, winning some of their claims and losing others. One of the individuals, an attorney and a member of the organization, did much of the legal work in the case.
The organization claimed attorneys’ fees from the defendants under Code of Civil Procedure section 1021.5, California’s private attorney general statute. After discounting the fee claim because some of the petitioners’ CEQA arguments had failed, the trial court awarded fees to the attorney/petitioner.
The defendants appealed, arguing the court erred in awarding any fees to an attorney who was also a party to the case. The court of appeal disagreed.
In the court’s view, three key factors distinguished the situation from others in which a fee award was denied because the attorney/plaintiff was found to be self-dealing.
First, there were several petitioners in the case—one of them an organization with more than 100 members—so the attorney was not just representing herself and her own interests in the case, but was also acting as attorney for the other petitioners.
Second, the attorney worked to vindicate the important public interest of ensuring CEQA compliance.
Third, the attorney worked on a contingent fee basis, taking the risk that she would not be compensated for her time.
The decision is a noteworthy reminder of the courts’ readiness to award attorneys’ fees in CEQA cases under section 1021.5 and the very substantial discretion courts enjoy in deciding fee requests.
1 Azusa Land Reclamation Co. v Main San Gabriel Basin Watermaster (1997) 52 CA4th 1165.
2 Hines v California Coastal Com. (2010) 186 CA4th 830 (2010).
3 Pub. Res. Code 21177(a).
4 Committee for Green Foothills v Santa Clara County Board of Supervisors (2010) 48 C4th 32.
5 Stockton Citizens for Sensible Planning v City of Stockton (2010) 48 C4th 481.
©2012 Perkins Coie LLP