City's Approval of Demolition Permit Ruled "Ministerial" Act Not Subject to CEQA

Friends of the Juana Briones House v. City of Palo Alto (Oct. 27, 2010) No. H033275, available at CourtWebsite

In a decision that will impact agencies’ distinction between ministerial and discretionary actions, a court recently held that a demolition permit approval under the City of Palo Alto’s municipal code was a “ministerial” act. Importantly, CEQA does not apply to ministerial actions. Thus, the City was not required to comply with CEQA review prior to approving the demolition permit.

The case concerned the Juana Briones House -- a designated historic landmark that became subject to a Mills Act historic preservation contract in 1988. In 1989, however, the Loma Prieta earthquake struck, causing substantial damage to the property, which ultimately led the latest owners to apply for a demolition permit in 1998 –- after the 10-year preservation contract had expired.

The City initially denied the demolition permit. But, the owners sued, and won a requirement from the court that the City must hold a hearing on their permit application. At the hearing, the City determined the action was “ministerial” and not subject to CEQA. The City then issued the demolition permit.

This time, a group named the Friends of Juana Briones House sued, alleging that the action was "discretionary" -- and thus the City had violated CEQA by failing to perform CEQA review.

In ruling that the City was correct in its ministerial determination, the court made the following holdings:

1) the Palo Alto municipal code only imposed a temporary moratorium on demolition -- not directives to the City to make discretionary considerations like prior cases had involved;

2) the City could not impose conditions on the permit for alleviating environmental conditions, but it could only impose voluntary conditions for preserving certain antiques and native plants, and those conditions did not re-characterize the action as discretionary;

3) the need for a future building permit did not require CEQA review under the “whole of the action” theory, because future action on a building permit might not be “significant in that it will change the scope and nature of the initial project or its environmental consequences”;

4) the possibility that the City could take the property through eminent domain did not make the action discretionary; and

5) there were no procedural violations that justified further proceedings.Thus, the court concluded the decision on the demolition permit was ministerial, and CEQA review was not required.

Court Upholds City’s Discretion to Determine Baseline for Environmental Review and Provides Guidance on Infeasible Agricultural Resources Mitigation

Cherry Valley Pass Acres and Neighbors v. City of Beaumont (Cherry Valley) (Nov 22, 2010) No. E049651, available at CourtWebsite

In a decision affirming the discretion of local agencies to determine the proper “baseline” when conducting environmental review, the Court of Appeal sided with Best Best & Krieger LLP attorneys Michelle Ouellette and Fernando Avila, and upheld the groundwater analysis in an environmental impact report (EIR) prepared for a 560-unit housing development. The decision in Cherry Valley Pass Acres and Neighbors v. City of Beaumont (Cherry Valley) also provided important guidance as to what types of circumstances support a finding that agricultural resources mitigation is infeasible, an issue that many agencies face while complying with the California Environmental Quality Act (CEQA).

In Cherry Valley, a local opposition group challenged the recirculated EIR prepared for a 560-unit housing development, which was itself a scaled-down version of an earlier proposal. Project opponents argued that the City of Beaumont’s (City’s) baseline for water usage on the site was improper because it reflected the amount of water being pumped at the time the Notice of Preparation was released (when the site was an operating egg ranch), and not the minimal amount of water usage occurring at the time the recirculated EIR was released. The court disagreed, holding that the egg ranch’s vested, adjudicated groundwater rights and its history of water usage on the site supported the City’s use of that as a baseline.

The court also noted that the record contained ample evidence supporting a finding that on- and off-site mitigation for agricultural resources impacts, as well as project alternatives that lessened those impacts, would all be infeasible. Key to this determination were the facts that the City’s General Plan explicitly did not anticipate that agriculture could continue long-term and foresaw the eventual conversion of farmland and that the City’s financial analysis determined that various project alternatives that would preserve agricultural uses on-site were not viable.

The Cherry Valley decision represents an important reaffirmation of public agencies’ discretion to conduct environmental analysis and make determinations provided only that they are supported by substantial evidence, even in hotly-debated fields such as water supply and agricultural resources.

Source: www.bbklaw.com

California Voters Reject Effort to Suspend Global Warming Law (AB 32)

California voters yesterday rejected Proposition 23, a measure that supporters argued would save jobs and prevent increased energy costs. Had it passed, Prop 23 would have suspended California’s Global Warming Solutions Act of 2006, widely known as AB 32, until unemployment in the state lowered to specified levels.

The results of the gubernatorial election also indicate that implementation of AB 32 will not be delayed. During the campaign, though she did not back Prop 23, gubernatorial candidate Meg Whitman had pledged to suspend implementation of AB 32 for at least a year. Jerry Brown, the winner in yesterday’s gubernatorial race, opposed efforts to suspend AB 32, though during the campaign he stated that he would be open to adjustments to the law.

In the short term, these election results mean that AB 32's implementation will continue. In fact, the public comment period on the Air Resources Board’s proposed Cap and Trade regulations opened on Monday. Entities that will be directly affected by AB 32 include industries, such as petroleum refineries and manufacturers, that produce large amounts of carbon dioxide and other greenhouse gases. Municipalities and public utilities may also be directly affected through regulations on energy production, solid waste disposal and wastewater treatment.

Tuesday’s election did not remove all uncertainty regarding implementation of AB 32, however, as the electorate did enact Proposition 26. That measure amended the California Constitution to treat regulatory fees more like taxes. Opponents and proponents of the measure produced conflicting predictions of exactly how Prop 26 would affect the funding source for AB 32 and other environmental laws. Future argument over the precise effect of the change is likely.

Source: www.BBKLaw.com

Requirements for Exhausting Administrative Remedies Before Challenging CEQA Exemptions May or May Not Apply

Tomlinson v. County of Alameda (Oct. 6, 2010) No. A125471, available at CourtWebsite [discussing Hines v. California Coastal Commission (June 17, 2010) 186 Cal.App.4th 830, available at CourtWebsite.]


This case was initially decided by the court on June 18, 2010 [CEQA Blog Summary]. However, at almost the same time, another court issued its decision in Hines v. California Coastal Commission (June 17, 2010) 186 Cal.App.4th 830, which dealt with similar requirements for “exhausting” administrative remedies under CEQA. Under the “exhaustion” doctrine, project challengers generally must raise their arguments to the lead agency before they can petition the court to review the agency’s decision. Due to the closeness of these cases, the court decided to rehear this portion of its decision, and – in the end – highlighted the extreme legal complexities involved with “exhausting” administrative remedies. Importantly, this revised decision does not change the court’s holding regarding what constitutes “within city limits” for purposes of exempting infill projects under CEQA Guidelines, section 15332, as was previously reported.

As the new decision notes, the Hines court held that parties challenging a project have failed to “exhaust” under Public Resources Code, section 21177, subdivision (e), if there are “public hearings that include environmental review, ample notice of such hearings is given notifying the public of the agency’s reliance on the exemption, and the public does not raise an objection to the exemption despite such an opportunity to do so.” Throughout the planning process, the Hines challengers did not raise any issue regarding purported CEQA violations at any stage, despite ample notice that staff considered the project exempt, and there was ample opportunity to raise an objection. As a result, the Hines court would have had to decide factual questions about whether wildlife would be impacted and whether the project would open the door to successive projects. This would have entailed much more than merely reviewing the agency's decision. Thus, the court indicated it was appropriate for the Hines court to hold that the challengers could not petition for review of the agency action, because they failed to exhaust their administrative remedies by not raising such CEQA challenges to the agency.

The court distinguished the Tomlinsons' argument, because the question at issue - whether the project occurred “within city limits” for applying the "infill" exemption - did not require particular agency expertise or an evidentiary determination. Thus, the court stood by its original application of Azusa Land Reclamation Co. v. Main San Gabriel Basin Watermaster (1997) 52 Cal.App.4th 1165, that “exhaustion” under section 21177, subdivision (a), would only apply if CEQA provides a public comment period or there is a public hearing before a notice of determination is issued. Finding that exemption determinations do not have these requirements, the court held that the Tomlinsons were not required to "exhaust" by raising specific objections that the project was not “within city limits” in order to seek judicial review of the applied "infill" exemption.

The court’s rehearing of this matter, and its discussion and application of Hines and Azusa, importantly highlights the complexity of "exhaustion" arguments that can be raised related to challenges against a CEQA exemption. Through these decisions, courts have required exhaustion in situations where a lack of comments rendered the court unable to discern the agencies’ factual bases for the exemption; however, courts have not required exhaustion when the exemptions' factual bases were clearly discernable for judicial review. Therefore, the ability of a challenger to seek judicial review without having raised specific arguments to the agency is likely to be impacted by the availability of evidence for the court to adequately perform a review of the exemption.

UC Regents' EIR and Approval Upheld Despite Numerous Alleged Deficiencies

California Oak Foundation v. Regents of the University of California (Sept. 3, 2010) No. A122511, available at CourtWebsite.

The California Oak Foundation and others filed petitions challenging the Regents of the University of California’s certification of an EIR and approval of a project for building athletic facilities at the Berkeley campus. The Oak Foundation alleged that the EIR was inadequate under CEQA in its (1) description of baseline conditions; (2) project description; (3) statement of objectives; (4) discussion of alternatives; and (5) discussion of biological and archaeological impacts. It also alleged improper (1) delegating of authority to certify the EIR to the Regents’ Committee on Grounds and Buildings; (2) giving approval to the project before certifying the EIR; (3) failing to recirculate the Draft EIR; and (4) making findings and a statement of overriding considerations without evidentiary support. The court rejected all of these arguments.

First, the court found that the EIR accurately described the existing baseline conditions, and the geotechnical study made available after DEIR circulation adequately matched up with that baseline. Release of the study after circulation also did not require recirculation because it did not constitute significant new information and merely confirmed information already stated. The court held that omitting discussion of the California Geological Survey and United States Geological Survey comment letters was of no consequence because they did not show that the conclusions in the geology report were erroneous.

The court found the project’s description complied with CEQA Guidelines, section 15124. Evidence supported the degree of specificity used. The methodology for presenting and analyzing project alternatives in matrix and narrative format was appropriate despite some broad wording. The significant environmental impacts and corresponding components of each of the alternatives were evaluated against the corresponding component of the project, thus demonstrating a good faith effort to provide a meaningful discussion of a range of reasonable project alternatives, which according to the court was all that CEQA requires. Finally, substantial evidence supported the Regents’ conclusions on archeological and biological resources, their findings, and the statement of overriding considerations.

The court held that the Committee on Grounds and Buildings appropriately certified the EIR based on its approval authority over the project. Further, the project was not approved before certifying the EIR because the Regents’ policy related to its earlier approval of funding did not constitute project approval until completion of the project’s design review.

Therefore, the court affirmed the denial of the California Oak Foundation’s petition for writ of mandate and upheld the EIR certification and project approval.

Petitioning Group’s Request for Hearing Should Have Been in Writing

Torrey Hills Community Coalition v. City of San Diego (July 2, 2010) 186 Cal.App.4th 429, available at CourtWebsite.

In this case, Torrey Hills Community Coalition did not request a hearing in writing within 90 days of filing a writ petition alleging that the City of San Diego violated CEQA. The court held that Torrey Hills’ failure to make the request for a hearing in writing was a violation of CEQA, pursuant to Public Resources Code, section 21167.4, subdivision (a).

According to Torrey Hills, section 21167.4, subdivision (a), does not refer to a written request, and thus its oral request for a hearing before the deadline should have been considered sufficient. The court, however, found that when the subdivision (a), (b), and (c) are read together, as previously explained in County of Sacramento v. Superior Court (2009) 180 Cal.App.4th 943, it is clear that the request for a hearing under subdivision (a) must be in writing in order for the filing of the request -- pursuant to subdivisions (b) and (c) -- to operate.

The court also rejected Torrey Hills’ argument that it would have been futile to file a written request for a hearing. First, the court found that Torrey Hills failed to show diligence, when the deadline to file the request lapsed. Additionally, despite the court clerk having stated a preference for not immediately “setting” the hearing date, section 21167.4 merely requires the petitioner to file a request for a hearing. It does not require the petitioner to obtain a hearing date, and pursuant to subdivision (c), a hearing date could have been obtained later upon application by any party. Thus, the court affirmed that Torrey Hills violated section 21167.4, subdivision (a), by not filing a written request for a hearing.

Court Directs County to Set Aside Categorical Exemption for In-Fill Project, Clarifies the Requirement for Exempting Projects “Within City Limits”

Tomlinson v. County of Alameda, No. A125471 (June 18, 2010) available at CourtWebsite.

In a decision that clarifies the standards that public agencies should apply when relying on categorical exemptions, a California court of appeal recently held that the County of Alameda applied the wrong legal standard for exempting an in-fill subdivision.

The court noted that to rely on a categorical exemption, the administrative record must disclose substantial evidence of every element of the contended exemption. Looking at each element of the categorical exemption for in-fill developments under CEQA Guidelines section 15332, the court found that the critical hanging point in the case was the requirement that the in-fill development be “within city limits” for the exemption to apply.

In the case, the applicant’s project was located in the an unincorporated part of the county. Although the County of Alameda argued that the project site was surrounded by highly urbanized development, the court rejected such an expanded interpretation of “within city limits.” Rather, the court held that a plain reading of the exemption required that the “within city limits” element could only be satisfied if the project was located within the boundaries of a municipality.

Additionally, the court noted there was not a procedural requirement for the challenging party to exhaust its administrative remedies by making specific comments to the county regarding the improper application of the categorical exemption. The court held that the exhaustion requirement under Public Resources Code section 21177 did not apply because (1) CEQA does not provide for a public comment period before an agency makes an exemption finding, and (2) there is no "public hearing before a notice of determination is issued," as an NOD is not filed if the agency declares an exemption.

The court of appeal remanded the case to the trial court with instructions to issue a writ of mandate directing the county to set aside its decision. This case highlights the care that should be taken when applying a categorical exemption for a project by providing substantial evidence supporting each element of the exemption.

Subsequent CEQA Review Only Required If Agency Has the Discretion to Respond to the Environmental Impacts Raised

San Diego Navy Broadway Complex Coalition v. City of San Diego, No. D055699 (June 17, 2010) available at CourtWebsite.

In a significant decision for public agencies, the Fourth District Court of Appeal recently concluded that the City of San Diego was not required to prepare a subsequent or supplemental environmental impact report (EIR) regarding the potential impact of a project on climate change. The court reasoned that the City did not grant a discretionary approval that would provide it with the authority to address the project's impact on this particular environmental issue. This case reinforces the concept that the application of the California Environmental Quality Act (CEQA) to subsequent approvals is relatively narrow in scope and only requires a new EIR in certain specific circumstances.

In San Diego Navy Broadway Complex Coalition v. City of San Diego, an EIR had previously been certified in the 1990s for the development of waterfront property in downtown San Diego. Under the development agreement that had been approved at that time, later review of development plans would be necessary to ensure that aesthetic design requirements were fulfilled. In 2006 and 2007, these development plans were submitted and it was determined that no subsequent or supplemental EIR under Public Resources Code section 21166 was necessary.

However, the petitioner argued that the fact that the earlier EIR did not analyze climate change impacts did require a subsequent or supplemental EIR. Rejecting this, the Court found that the scope of discretion involved in this design review was limited and did not involve the issue that supposedly triggered the need for a subsequent or supplement EIR (namely, climate change). Thus, the Court held in its opinion issued last Thursday, that, in addition to meeting the conditions of Public Resources Code section 21166, the requirement to prepare a subsequent or supplemental EIR arises only where the agency has discretion to respond to the environmental concerns raised in such a new EIR.

Source: www.bbklaw.com

Bay Area Air District Approves California’s First Regional Thresholds of Significance for Greenhouse Gas Emissions from Projects

The Bay Area Air Quality Management District (BAAQMD) last week announced the adoption of the first region-wide numeric thresholds for greenhouse gas emissions for residential and commercial projects in California. The new standards provide guidance for Bay Area public agencies to review the environmental risks posed by the approval of development projects under the California Environmental Quality Act (CEQA).

In 2006, the California Global Warming Solutions Act of 2006 (AB 32) was enacted to require a statewide reduction in greenhouse gas emissions to 1990 levels by the year 2020. This spring, the state revised the CEQA Guidelines to specifically address impacts caused by development projects related to greenhouse gas emissions. The BAAQMD’s new thresholds can be used for complying with these analytical requirements under CEQA for projects proposed in the Bay Area.

The BAAQMD’s thresholds, approved last Wednesday, allow Bay Area public agencies to consider either a fixed threshold of 1,100 metric tons per year of greenhouse gases emitted from a commercial, residential or mixed-use project, or a per capita threshold of 4.6 metric tons per year of carbon dioxide emitted per subdivision resident or business employee. These thresholds are intended to encourage smart-growth projects, while facilitating large projects that maintain a proportionally low level of emissions. Proposed developments that would exceed the thresholds are required to perform additional environmental review of ways to reduce or offset the emissions.

These thresholds were developed specifically for the Bay Area. However, since they are the first regional air district to adopt numeric thresholds for greenhouse gas emissions from residential and commercial projects, lead agencies throughout the state may receive public comments suggesting application of the BAAQMD thresholds to proposed development projects.

Court Finds Rejection of Alternative Was Not Supported and Water Supply Assessment Was Required for Composting Project

Center for Biological Diversity v. County of San Bernardino (Nursery Products LLC) No. D056652 (May 25, 2010) available at CourtWebsite.

This case deals with the support necessary for rejecting alternatives in a Final EIR ("FEIR") and the requirements for performing a water supply assessment (“WSA”). The court found that the FEIR’s rejection of the alternative to use an enclosed composting facility rather than an open-aired facility was not supported by substantial evidence because it did not show that it was technologically and economically infeasible. The court also found that the composting facility was a “project” under the Water Code and that the proponent had failed to comply with the requirement to perform a WSA.

In the case, Nursery Products LLC proposed to develop and operate an open-aired human waste composting facility in an unincorporated area of San Bernardino County in the Mojave Desert. Nursery Products contended that an alternative enclosed facility was economically and technologically infeasible. The court, however, found there was no meaningful comparative data pertaining to a range of costs in the FEIR because the FEIR only provided the cost of one other enclosed facility. The FEIR ignored other similar facilities despite evidence that there were facilities in Los Angeles and Riverside Counties, and it was known that such enclosed facilities were becoming more common in urban areas. The court also found that Nursery Products’ expert’s opinion related to the economic infeasibility of the alternative was not support by facts. Further, the FEIR contained no information on the technological infeasibility of the alternative. The FEIR showed electricity was not present at the site, but it did not discuss how it was infeasible to establish an electricity supply to the project site. Therefore, the court concluded that the rejection of the enclosed facility alternative as infeasible was not supported by substantial evidence.

Related to water supply, the FEIR did not include a WSA and did not indicate if a well had been drilled or other sources had been evaluated to determine the actual availability of water to the site. Nursery Products argued that a WSA was not necessary because the facility was not a “project” under the Water Code. The court found that the facility was a “project” because it was considered a “processing plant” that was conducted on more than 40 acres of land, pursuant to the definition in Water Code section 10912, subdivision (a)(5). The court found that the definition was not constrained by water usage and expanded the court’s holding in Gray v. County of Madera (2008) 167 Cal.App.4th 1099, 1131, that a WSA is required only if a public water system is impacted. Unlike Gray, here, the court analyzed several provisions in the Water Code and clarified that preparing a WSA was required even if the water source was not a public water system.

First Published Appellate Court Decision On GHG Emissions; Invalidates EIR That Deferred Development of GHG Mitigation Plan

Communities for a Better Environment v. City of Richmond, No. A125618, (Apr. 26, 2010) available at CourtWebsite.

In the first published decision to address greenhouse gas (GHG) emissions under CEQA, the Court of Appeal for the First Appellate District invalidated an environmental impact report (EIR) that deferred the formulation of mitigation for GHG emissions. Though the decision applied existing CEQA principles regarding deferred mitigation, the decision, as well as recent amendments to the State CEQA Guidelines, demonstrates a need for well-developed factual evidence to support a lead agency’s conclusion regarding a project’s climate change impacts.

In Communities for a Better Environment v. City of Richmond (April 26, 2010), the city certified an EIR for modifications to an existing refinery, which concluded the project’s GHG emissions would have a potentially significant effect on the environment. Accordingly, the EIR included mitigation measures that the city contended would result in no net increase in GHG emissions, including the development of a GHG mitigation plan within one year of project approval; an inventory of the project’s GHG emissions; and identification of potential emissions reduction opportunities. Following project approval, the EIR was challenged. The trial court struck down the EIR and an appeal was filed. Ultimately, the Appellate Court agreed with the trial court that the city violated CEQA by deferring the formulation of mitigation measures for GHG emissions.

The Appellate Court clarified that an EIR may only defer formulation of mitigation measures if the lead agency (1) first conducts a full analysis of the significance of the environmental impact, (2) proposes potential mitigation measures early in the planning process, and (3) articulates specific performance criteria to ensure that adequate mitigation is eventually implemented. The court also criticized the EIR’s failure to calculate the actual reduction in emissions that would likely result from each mitigation measure and questioned whether the city’s no net increase in GHG emissions could be achieved by the “handful of cursorily described mitigation measures for future consideration.”

Notably, although not addressed in the court's decision, the recently finalized State CEQA Guidelines addressing GHG emissions state that lead agencies must consider “feasible means, supported by substantial evidence and subject to monitoring or reporting, of mitigating the significant effects of GHG emissions.” To be “feasible” a mitigation measure must be capable of being accomplished in a successful manner within a reasonable period of time.

In sum, this case confirms that, while future mitigation plans for GHG emissions (or other impacts) are not prohibited by CEQA, the ideal time to analyze impacts and to formulate mitigation measures is during the environmental review process before project approval. If practical considerations do not allow for the formulation of mitigation measures prior to project approval, then the agency should, at a minimum, satisfy the three requirements set forth above, including establishing specific performance criteria for such measures.

Court Finds Proper Alternatives Analysis and Adequate Notice of Certification Provided by UC Regents

Jones v. Regents of University of California, No. A123948, (Apr. 7, 2010) available at CourtWebsite(decision); modified by No. A123948M (Apr. 8, 2010) available at CourtWebsite(order modifying).

A group of citizens opposed the certification of an EIR for the development of a laboratory facility operated by the University of California located on land owned by the UC Board of Regents ("Regents"). They alleged that the analysis of alternatives was inadequate in the EIR, and recirculation of the EIR was necessary after adding significant discussion related to impacts from the emission of greenhouse gases. The court found in favor of the Regents on each of these issues.

The court found that the Regents needed not consider every conceivable alternative to the project in the EIR, including the “so-called ‘true no-hillside growth’ alternative” asserted by the plaintiffs, which would have required all growth to occur on a satellite campus, rather than at the laboratory. On this issue, the court concluded that the range of alternatives was sufficient and that the EIR contained substantial evidence supporting the conclusion that the proposed off-site alternative would not meet the proposed project’s objectives.

The Draft EIR had not discussed the project’s potential for climate change as a result of greenhouse gas emissions. In response to public comments, the Final EIR added a discussion about the project’s potential for increasing such emissions and concluded that the cumulative impacts from the project’s contribution to emissions would be less than significant. In an unpublished part of the court's decision, the court noted that the plaintiffs had argued that the revisions constituted “significant new information,” and that the Regents had failed to provide adequate notice for providing further public comments related to the Final EIR. The court of appeal, however, found that the plaintiffs had not raised the issue of “recirculating the EIR” during the administrative proceedings, and that adequate notice had been provided for public comments in a letter that was issued by the laboratory. The letter indicated when the certification of the EIR would occur, where copies of the Final EIR could be reviewed, and the name and information for contacting the Regents. The court noted that the City of Berkeley and Sierra Club had provided comments related to the Final EIR, but that neither had suggested recirculation of the EIR in light of the greenhouse gas discussion. Therefore, the Regents had complied with CEQA’s notice requirements, and the plaintiffs had failed to exhaust their administrative remedies on the issue of whether the Regents were required to recirculate the EIR after adding the discussion about greenhouse gas emissions.

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California Supreme Court Finds Filing Notice of Exemption Triggers 35-Day Statute of Limitations to Any Project Challenge

Stockton Citizens for Sensible Planning v. City of Stockton, No. S159690 (Apr. 1, 2010) available at CourtWebsite

From the Supreme Court of California

The California Supreme Court has found that the 35-day statute of limitations for challenging projects determined to be exempt from environmental review under CEQA applies to any challenge against the underlying project, regardless of the alleged defects or flaws in the approval process. This decision reiterates the importance of complying with CEQA’s short notice-based limitations period intended to foster quick resolution of challenges to environmental review for a project.

In Stockton Citizens for Sensible Planning v. City of Stockton, the city found that its approval of the construction of a Wal-Mart Supercenter on parcels within a previously adopted master development plan for a large urban tract was a ministerial action exempt from CEQA review and filed a Notice of Exemption (NOE). Plaintiffs waited nearly six months to file suit against the project, arguing that the "approval" of the project by the city's Community Development Department director was invalid based on procedural and substantive reasons, and therefore the NOE was void and did not trigger the 35-day statute of limitations for exemptions. Plaintiffs also argued that the form and content of the NOE did not comply with CEQA because it failed to describe the project, omitted material information and included materially false information.

The Supreme Court, in reaching its decision last Thursday, reversed both the trial court and the Court of Appeal for the Third Appellate District, finding that the lawsuit was barred under the 35-day limitations period. The Court held that when a properly filed NOE complies in form and content with CEQA’s requirements and declares the agency has taken an action that would constitute final approval of a project under an exemption, the 35-day period for challenging the validity of this asserted approval begins to run. This conclusion is consistent with the language and the intent in Public Resources Code section 21167, subdivision (d), which specifies a 35-day limitations period for lawsuits claiming that a public agency "has improperly determined" a project is exempt from CEQA.

The Court also found that the form and content of the NOE minimally complied with CEQA and therefore triggered the 35-day statute of limitations. The NOE only had to provide a brief description of the approved project, state its location and set forth reasons for the agency’s finding of exemption under State CEQA Guidelines section 15062, subdivision (a). Compliance with these “basic requirements” was sufficient and the NOE did not have to disclose and explain all environmental implications of the project.

Thus, all CEQA challenges to an agency’s determination that a project is exempt, whether or not they have merit, must be brought within 35 days after the agency files a compliant NOE.

Court Holds that Supercenters Do Not Necessarily Trigger Examination of Urban Decay Effects in EIR

Melom v. City of Madera, No. F055024 (Mar, 24, 2010) available at CourtWebsite

In a decision clarifying when urban decay analysis must be conducted for a development project, the Court of Appeal recently held that building a retail store called a “supercenter” does not automatically require the project’s environmental impact report (EIR) to include an examination of possible urban decay effects.

In Patricia Melom v. City of Madera, Case No. MCV037268 (Ct.App. March, 24, 2010), Melom contended that the City violated CEQA by approving a retail shopping center project without preparing a subsequent or supplemental EIR after the largest retail space on the site plan grew significantly in square footage. In November of 2006, the City had certified an EIR for a project described as a “proposed retail center” with “approximately 795,000 square feet of gross floor area.” A conceptual site plan in the EIR showed approximately 30 retail spaces, the largest of which was 125,000 square feet. In March 2007, the developer submitted a “refined” site plan with the largest retail space described as approximately 198,500 square feet. The refined site plan identified the tenant of the largest retail space as a Super Target store. In June 2007, the City prepared an addendum to the EIR that concluded that there were no substantial changes proposed in the project requiring major revisions of the previous EIR.

The trial court held that the City did not violate CEQA and Melom subsequently appealed. Melom claimed that, based on Bakersfield Citizens for Local Control v. City of Bakersfield (2004) 124 Cal.App.4th 1184 (Bakersfield) and American Canyon Community United for Responsible Growth v. City of American Canyon (2006) 145 Cal.App.4th 1062 (American Canyon), whenever a governmental entity approves a project that includes a so-called “supercenter,” such an approval requires an EIR addressing “potential urban decay effects” that might result from the supercenter.

The Court of Appeal disagreed with Melom’s interpretation, stating that although the holdings in Bakersfield and American Canyon both repeatedly used the term “supercenter,” the term was not defined anywhere in those cases or in any statute or CEQA Guideline. The court went on to explain that for the purposes of CEQA, the important issue is whether an agency proposes or intends to carry out or approve a project that would have a significant effect on the environment. When there has been a subsequent change to such a project, the question then becomes whether those changes would require a major revision of a previous EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects. The court clarified that it is the project or the change in the project that is the focus of the inquiry; not whether the project or change in the project is of a certain type (such as a supercenter). The court expressly declined to interpret Bakersfield or American Canyon as holding that urban decay effects must necessarily be examined whenever a project includes something called a supercenter.

Baseline for EIR Analysis Should Generally be Physical Conditions Existing at Time of Analysis

Communities For A Better Environment v. South Coast Air Quality Management District, No. S161190 (March 15, 2010) available at CourtWebsite

From the California Supreme Court

The Supreme Court of California held that when performing an environmental analysis, the analytical baseline against which project effects are measured should generally be the physical conditions existing at the time of the analysis, rather than the maximum capacity allowed under prior equipment permits. The Court added that for environmental conditions that vary from year to year, it may be appropriate to utilize a baseline that reflects these fluctuations. This decision impacts parties involved in environmental review pursuant to the CEQA.

In the case, ConocoPhillips developed plans for an ultra low sulfur diesel fuel project that, among other things, involved increasing the operations of existing cogeneration plants and four boilers. The plants and boilers were subject to prior permits that stated a maximum rate of heat production for each piece of equipment. ConocoPhillips applied to the South Coast Air Quality Management District (SCAQMD) for a permit to construct all the modifications necessary for the project. SCAQMD concluded that the project did not have the potential to adversely affect the environment and thus a negative declaration, rather than an EIR, was prepared. The plaintiff argued that the project would have significant adverse impacts on the environment because there would be an increase in nitrogen oxide (NOx), and therefore an EIR should have been prepared instead of a negative declaration. SCAQMD did note that the increased operation of existing equipment would cause additional NOx emissions, however, SCAQMD did not consider these increases to be part of the project because they did not exceed the maximum rate of heat production allowed under existing permits. SCAQMD treated any additional NOx emissions stemming from increased plant operations within previously permitted levels as part of the baseline measurement for environmental review, rather than as part of the project. The trial court entered judgment for SCAQMD and ConocoPhillips. On appeal, the Court of Appeal held that the increased use of existing equipment should have been evaluated as part of the project, not as part of the baseline.

The Supreme Court largely affirmed the Court of Appeal and concluded that prior operating permits did not themselves establish a baseline for CEQA review, but rather the physical conditions actually existing at the time of analysis established the baseline. SCAQMD and ConocoPhillips cited several Court of Appeal decisions as supporting the use of maximum operational levels allowed under a permit, rather than existing physical conditions, as a CEQA baseline. Rather than overrule that existing case law, the Court distinguished the cases from SCAQMD’s case. The Court stated that in each of the Court of Appeal decisions, the appellate court characterized the project at issue as merely a modification of a previously-analyzed project and thus requiring only a limited CEQA review, or as merely the continued operation of an existing facility without significant expansion of use and thus exempt from CEQA review. Here, the Court noted as important that SCAQMD had treated the ConocoPhillips project as a new project by requiring ConocoPhillips to apply for a new permit rather than finding that it was exempt as the continued operation of an existing facility. For this reason, the Court also refused to characterize the ConocoPhillips project as a modification of a previously-analyzed project.

City Can Impose Fee for Appeal of Project to City Council Based on CEQA

Friends of Glendora v. City of Glendora, No. B215114 (2009) available at CourtWebsite

In Friends of Glendora et al. v. City of Glendora et al., the Court of Appeal recently reaffirmed that a public agency has the authority to charge a reasonable fee for filing a CEQA appeal of an agency decision. The court decision is significant because it involves an appeal of a negative declaration rather than an EIR. The court, citing the California Supreme Court case of Sea & Sage Audubon Society, Inc. v. Planning Com., found that a city is authorized to charge a reasonable fee for the appeal of a CEQA decision, including a negative declaration.

Friends of Glendora (Friends), a nonprofit organization, filed a complaint alleging that the City of Glendora violated CEQA when its planning commission approved a development project based on a negative declaration and then charged Friends $2,000 to file an appeal. The court stated that under Government Code section 66451.2 a city is authorized to “establish reasonable fees” for various procedures including the appeal of a decision by the planning commission to the city council. The court further explained that the Sea & Sage Audubon Society, Inc. decision approves fees imposed by a local entity such as a city on members of the public.

Friends sought to differentiate this case from Sea & Sage Audubon Society, Inc. by arguing that the appeal involved in this case concerned a planning commission decision based upon a negative declaration rather than an EIR. Friends argued that CEQA does not explicitly state that a fee may be imposed for the appeal of a decision approving a negative declaration.

The court, following the same logic that was used by the California Supreme Court in Sea & Sage Audubon Society, Inc., rejected Friends’ argument. The court stated the Supreme Court did not require a specific statutory authorization for a filing fee under CEQA for the appeal of an agency decision when an EIR was concerned, thus they declined to require such specific authorization for a filing fee when a negative declaration was involved.

City’s Agreement to Provide Services to Tribal Casino is Not a “Project” Under CEQA

Parchester Village Neighborhood Council v. City of Richmond, No. A123859 (Feb. 24, 2010) available at CourtWebsite

In the Parchester Village Neighborhood Council v. City of Richmond decision, neighborhood and environmental groups alleged that the City of Richmond (City) violated CEQA by entering into a municipal services agreement (MSA) with the Scotts Valley Band of Pomo Indians of California (Tribe) to provide police, fire and other public services for the Tribe’s proposed casino. The litigation centered on whether the MSA and casino were a “project,” for which the City should have performed environmental review under CEQA. The First District Court of Appeal sided with the City in finding that a public agency must consider whether the execution of an agreement is a “project” under CEQA in light of all the circumstances.

Following the Tribe’s proposal to build a 225,000 square foot casino on land held in trust for the Tribe, the City began negotiating the terms of a proposed MSA with the Tribe. During these negotiations, City staff determined that the casino project would have a tremendous impact on the City. Because the City would have no say over federal or state decisions concerning the casino, the City approved the MSA in order to secure funding to mitigate the casino’s impacts and to improve services.

After the MSA was executed, a lawsuit was filed contending that the casino and MSA were a “project” requiring the City to conduct environmental review under CEQA before executing the MSA. The court, however, found that the casino was not a “project” requiring environmental review by the City because the City had no legal authority over the property on which the casino was to be developed. Citing the California Supreme Court’s recent Save Tara v. City of West Hollywood decision, the court further found that the totality of the circumstances confirmed that the MSA itself was not a project. Important to the court’s holding was the fact that the City did not commit itself to making any of the physical improvements referenced in the MSA nor did the MSA require the City to issue any land use entitlements. Instead, the court found that the MSA was merely a funding mechanism for uncertain, future improvements. The court found it noteworthy that the MSA included a provision requiring that future improvements undergo environmental review under CEQA. Although not the sole basis for its ruling, the court found that this CEQA compliance provision was a “legitimate ingredient” of the MSA.

The court’s ruling is important because it reaffirms the Save Tara decision by holding that a public agency must consider whether the execution of an agreement is a “project” under CEQA – and hence whether environmental review is required prior to executing that agreement – in light of all the circumstances, such as those described above.

CEQA Guidelines Amendments Filed by California Office of Administrative Law

On February 16, 2010, the California Office of Administrative Law filed the finalized CEQA Guidelines amendments with the Secretary of State. The amendments were initially approved by the California Natural Resources Agency in December 2009 pursuant to Senate Bill 97, and will now become effective on March 18, 2010. The amendments provide guidance regarding the analysis of greenhouse gases in CEQA documents. They are intended to help minimize inconsistencies in the analysis of greenhouse gases and help lead agencies more effectively evaluate greenhouse gas emissions and their associated impacts.

A copy of the amendments is available from the Natural Resources Agency here: CEQA Guidelines Amendments (.pdf file)

30-Day Statute of Limitations Applies to All CEQA Challenges to Decisions Announced in Notices of Determination

From the California Supreme Court

Committee for Green Foothills v. Santa Clara County Board of Supervisors (Board of Trustees of the Leland Stanford Junior University), No. S163680 (Feb. 11, 2010) available at CourtWebsite

Challenges to government actions under CEQA generally face unusually short statutes of limitation, most of which are triggered by the filing of a public notice, which reports an agency’s determination about the applicability of CEQA or the potential environmental impact of a project. An action challenging this determination must generally be brought within 30 days after the notice is filed.

This case involved a particular kind of challenge following a notice of determination (NOD). In the case, Santa Clara County entered into an agreement with Stanford University to dedicate easements and fund improvements for trails to satisfy certain conditions of a permit. The County found that the agreement did not require CEQA review because it contemplated that additional review and consideration was required by other jurisdictions before the improvements could be made. Therefore, the County filed an NOD that reported the agreement and indicated that the County had not approved any specific improvements for the trails. After 171 days had passed, the Committee for Green Foothills filed a CEQA challenge of the County's approval of the agreement.

After the trial court's rejection of the petition, and the Court of Appeal's reversal, the California Supreme Court granted review to confront the question of which statute of limitations should be applied when an NOD has been filed, but the underlying action alleges that no environmental review was undertaken. In such cases, it could either be the general 30-day limit on challenges following a notice or the longer 180-day period that is provided for a case alleging that no environmental determination was made. (See Public Resources Code §§ 21167, subds. (b), (c) & (e); 21167, subd. (a).)

The Supreme Court held that the filing of an NOD triggers a 30-day statute of limitations for all CEQA challenges to the decision announced in the notice. This interpretation is consistent with the language of section 21167 and the general approach of all notice-based statutes of limitation. The Court found that the Legislature clearly intended the 30-day statute to apply when an agency files an NOD, and this limitations period may not be extended based on the nature of the CEQA violation alleged.

Mitigation Measures Cannot Be Destroyed Without Review and Substantial Evidence

Katzeff v. California Department of Forestry and Fire Protection 2010 Cal. App. LEXIS 98 (Cal. App. 1st Dist. Jan. 28, 2010) available at CourtWebsite

The Court of Appeal held that even when approval of an action is ministerial, a public agency may not authorize destruction of prior required mitigation without first reviewing the continuing need for the mitigation, stating the reason for its actions, and supporting it with substantial evidence.

In this case, two prior timber harvesting plans had required, as necessary mitigation for impacts resulting from the plans, that certain trees remain in place to block excessive winds. Several years passed and the timber harvesting plans expires. In a later action, the California Department of Forestry and Fire Protection (CDF) granted a conversion exemption allowing the harvesting of less than three acres of timber without environmental review for the same area of trees. Under the Forest Practices Act of 1973 (FPA) and the Forest Practice Rules, such exemptions are allowed upon determining that they are consistent with the purposes of the FPA and meeting certain regulatory requirements.

Due to the uncertainty regarding whether the mitigation was still necessary, the court found that such an exemption from environmental review was improper under CEQA and the FPA. The court held that the authorization of the destruction or cancellation of mitigation requires a review of the continuing need for the mitigation. Such review is needed regardless of whether or not the approval resulting in said destruction is ministerial. Furthermore, an agency must include a statement of the reason for the action and substantial evidence in support of the decision before destroying such mitigation.

Local Government's Decision Not To Renew a CUP was Exempt From CEQA

Sunset Sky Ranch Pilots Association v. County of Sacramento (Taylor) (Dec. 28, 2009, S165861) __ Cal.4th __.

A lead agency’s decision to not renew a conditional use permit (“CUP”) was not considered a “public project” under CEQA. The act of declining to authorize activities that require obtaining permits did not constitute a public agency action taken to cease the operations of the business.

In the case, the County of Sacramento (“County”) declined to renew a CUP for a privately owned airport. Petitioner Sunset Sky Ranch Pilots Association sought a writ of mandamus that would prevent the airport from closing. The trial court denied the petition. On appeal, the appellate court reversed and held that the County’s action amounted to a “project” pursuant to CEQA.

The Supreme Court of California granted review of the case and ultimately held that the Court of Appeal erred because it had misconstrued the nature of the project. The Supreme Court held that declining to renew the permit was not a “public” project under CEQA, because the County did not “directly undertake” an action to close the airport. Instead, the County was not reauthorizing a private activity that required the issuance of a permit. The airport operation was the nature of a reviewable “project” in question in the case. However, such projects that are rejected by a public agency are specifically exempted from CEQA requirements.

Failure to Approve EIR One Year from Date that the Application is Deemed Complete Does Not Force Certification of EIR and Approval of Project

Schellinger Brothers v. City of Sebastopol (Dec. 2, 2009, A122972) __ Cal.App.4th __

The one-year period for certification of an EIR after a project’s application is deemed complete, as set forth in Public Resources Code section 21151.5, is not a mandatory jurisdictional deadline. A lead agency’s failure to act pursuant to this deadline does not result in certification of the EIR and approval of a project by operation of law.

In this case, a developer appealed a lower court's dismissal of its petition for writ of mandamus, which would have required the City of Sebastopol (“City”) to certify the EIR and approve a subdivision project for the development of 182 single-residential housing units. The developer had revised the scope of the project numerous times, and several years passed without certification of the EIR.

The Court of Appeal held that the one-year period for certification of an EIR set forth in Public Resources Code section 21151.5 was not a mandatory jurisdictional deadline. The City’s failure to act on the EIR did not result in the automatic approval of the developer’s project by operation of law. The statutory deadlines do not constitute a categorical or jurisdictional bar to preparing and certifying EIRs that take more than 365 days after a project’s application is deemed complete.

Accordingly, the court noted that a writ could not issue under either of the mandamus statutes or under Public Resources Code section 21168.9 to compel the exercise of a lead agency’s duty in a particular fashion. The court further found that the developer's action was unreasonably delayed and that the developer had essentially acquiesced to the City’s delay. Thus, the developer was thus barred by the doctrine of laches for seeking relief due to its delay.