First District Reversal Allows for Challenge to Local Air District’s Limited Discretionary Approval Under CEQA

Friends of Outlet Creek v. Mendocino County Air Quality Management District (2017) 11 Cal.App.5th 1235.

The First District Court of Appeal held that a responsible agency air quality management district may be sued under CEQA, but such suit must be limited to the agency’s specific discretionary action and may not challenge prior lead agency approvals. In addition, the court held that such an action must be brought as an administrative mandamus proceeding under Code of Civil Procedure section 1094.5.

In 2014, Grist Creek Aggregates, LLC (Grist Creek), initiated a process with Mendocino County to resume aggregate and asphalt production after years of reduced operation due to market conditions. The site had been used for aggregate and asphalt production since 1972. In 2009, the county updated its general plan and certified an EIR to, among other things, change the land use designation at the site from rangeland to industrial, and in 2010, the county rezoned the site to conform to the updated land use designations. No legal challenges were brought against the county’s actions.

In response to Grist Creek’s request to resume aggregate and asphalt production, the county Board of Supervisors issued a March 2015 resolution declaring that the resumption of asphalt production was neither a new, nor a changed, industrial use, and therefore it was allowed under a previously issued permit. The county issued a notice of exemption and Friends of Outlet Creek (Friends) filed a lawsuit challenging the county’s determination. Grist Creek then applied to the Mendocino County Air Quality Management District for an Authority to Construct (ATC), which the district issued in June of 2015 based on the county’s previous actions as the CEQA lead agency.

After its administrative appeal was denied, Friends filed a lawsuit against the district alleging that the district failed to comply with CEQA because it did not conduct a separate environmental analysis, and alleging the district did not follow its own regulations. The district and Grist Creek filed demurrers asserting that Friends could not sue the district directly under CEQA, and instead could only sue under Health and Safety Code section 40864. The trial court sustained the demurrers and Friends appealed.

The Court of Appeal cited to several cases to support its determination that the district could be sued under CEQA, including those that addressed challenges to individual permit decisions. In addition, the court pointed out that no court has ever declared that Health and Safety Code section 40864 is the only statute that can be invoked in challenging an action by an air quality management district. Therefore, the court held, Friends could sue directly under CEQA and was not required to sue under Health and Safety Code section 40864.

The court then turned to the scope of the CEQA challenge. Relying on the fact that the district’s role was limited to issuing the ATC, the court found that Friends could not challenge any of the county’s land use decisions through this litigation. The court further determined that, because a hearing was required, evidence was taken, and the administrative agency had discretion in determining the facts, the lawsuit must be brought as an administrative mandamus proceeding under Code of Civil Procedure section 1094.5. Thus, the challenge was limited to the record from the administrative appeal and matters judicially noticeable.

For information on Grist Creek’s action against the trial court seeking to vacate its demurrer rulings, see: http://www.rmmenvirolaw.com/2017/07/air-district-boards-tie-vote-on-authority-to-construct-permit-is-effectively-a-decision-not-to-revoke-it-which-is-reviewable-for-prejudicial-abuse-of-discretion/.

[Casey Shorrock Smith]