Tag: Attorney Fees and Costs

Third District Awards Costs and Fees Where Partially Successful Plaintiffs Obtained Primary Litigation Objective, Justifying Entitlement to Recovery

In 2015, Friends of Spring Street (Friends) filed a petition for writ of mandate and complaint against Nevada City challenging the city’s determination that Mollie Poe and Declan Hickey (Real Parties) had the right to reopen a bed and breakfast (B&B) in a residential area. After the court ruled against the City on one of five issues raised, this case, Friends of Spring Street v. Nevada City (2019) 33 Cal.App.5th 1092, followed.

The Original Lawsuit

In 1991 Juneus and Jan Kendall obtained a conditional use permit to operate a B&B in a residential neighborhood. Three years later, the city’s voters passed an initiative, Measure G, which repealed the zoning code provision that allowed for B&Bs in residential zones. The Kendalls continued operation of their B&B until 2002 and sold the property in 2004. From 2002 until 2013, the property was used as a private residence, but the business license was renewed and paid every year.

The Real Parties purchased the property in 2013 and in 2014 applied to resume the conditional use permit to operate the property as a B&B. The city’s planning commission denied the request, concluding that the grandfathered rights to operate a B&B terminated when the use was discontinued. Real Parties appealed to the city council, arguing for the first time that the operation of a B&B was never a nonconforming use, and therefore the conditional use permit was still valid. The city council granted the appeal and vacated the planning commission’s decision.

In granting the appeal, the city council found that Measure G was intended to limit new B&Bs in residential zones, but did not address termination of existing inns. Following the council’s decision, Friends of Spring Street filed a lawsuit challenging the city’s determination, arguing that Measure G had rendered pre-existing B&Bs in residential areas nonconforming.

Ultimately, the Court of Appeal held that the city was incorrect, and the passage of Measure G had in fact rendered the B&B nonconforming. The Real Parties, therefore, were not entitled to resume the use as a matter of right. The Court of Appeal directed the trial court to vacate its denial of the petition for writ of mandate, enter an order granting the writ mandate, and order the city to set aside its granting of the appeal of the planning commission’s denial of the Real Parties’ request (“Friends I”).

Following the decision in Friends I, Friends of Spring Street filed a memorandum of cost and a motion for attorney fees. In response, the City and Real Parties filed motions to strike and oppose the memorandum of costs and motion for attorney fees. This decision is the outcome of those requests.

Friends’ Request for Costs

Under Code of Civil Procedure section 1032, where, like here, a party recovers non-monetary relief, the trial court has the discretion to identify the “prevailing party.” The question for the court is whether the party succeeded at a practical level by realizing its litigation objectives, and whether the action yielded the primary relief sought. In this case, the trial court denied the request for costs, reasoning that: (i) there was no prevailing party, and (ii) Friends did not obtain any practical result that justified the entitlement to costs. The trial court also noted that Friends only obtained relief on one of five causes of action.

The Court of Appeal disagreed. The court noted that the failure to succeed on all but one cause of action is not sufficient reason to deny a party fees and costs. The court also explained that Friends had realized its primary litigation objective when the court ordered the city to set aside its granting of the appeal of the planning commission decision. Contrary to the city’s argument, the court said it had not decided a “jurisdictional issue,” but rather had made a substantive decision on the merits when it determined the meaning and application of Measure G. As a result of its decision, the planning commission’s denial of the Real Parties’ application to re-commence B&B operations remained intact. The court concluded that Friends, therefore, achieved the practical result sought and was thus entitled to collect costs.

Friends’ Motion for Attorney Fees

Code of Civil Procedure section 1021.5, the “private attorney general doctrine,” provides an exception to the general rule that parties in litigation pay their own attorney’s fees. Under section 1021.5, a court may award fees to a successful party where a significant benefit has been conferred on the general public, and the necessity and financial burden of private enforcement makes the award appropriate. The trial court concluded that Friends’ action did not enforce an important right and public interest.

Again, the Court of Appeal disagreed. The court pointed to La Mirada Avenue Neighborhood Assn. of Hollywood v. City of Los Angeles (2018) 22 Cal.App.5th 1149, 1159-1160, noting that zoning laws are a “vital public interest” and are important to preserve the integrity of a general plan. Here, the court concluded, Friends’ action preserved the integrity of the city’s zoning regulations imposed by Measure G. And, the court noted, the public interest in this case was even greater than in La Mirada because the city’s residents voted to implement Measure G.

Second District Upholds Award for Costs Incurred by Agency in Taking Over Preparation of Administrative Record from Petitioner

In LandWatch San Luis Obispo County. v. Cambria Community Service District (2018)25 Cal.App.5th 638, the Second Appellate District ruled that the trial court acted within its discretion in awarding record-related costs to the respondent agency, even though the petitioner had elected to prepare the record, where the petitioner failed to prepare the record in a timely fashion.

In January 2014, the Cambria Community Services District approved an emergency water supply project. The district did not perform any environmental review under CEQA. LandWatch sued and elected to prepare the administrative record. LandWatch also sent the district a letter under the Public Records Act asking for the documents comprising the record. The district sent LandWatch the documents. A month later, the district informed LandWatch that additional documents had been identified, and that the district would provide them upon payment. Three months passed before LandWatch asked for the documents, at which point the district provided them, in April 2015. In August 2015, LandWatch produced a draft index to the record. The district responded by noting that the index was both over- and under-inclusive. That same date, the district produced its own index and certified the record it had prepared. LandWatch filed a motion to include additional documents post-dating the January 2014 approval date. The trial court ordered the district to certify an appendix consisting of the additional documents. Weeks passed and LandWatch did not prepare the appendix. The district wrote that it would prepare the appendix itself, after which LandWatch prepared its own competing appendix, which it lodged in February 2016, a month before the trial. The court accepted the district’s appendix, and rejected the one prepared by LandWatch. Following trial, the court denied the petition. The district filed a memorandum of costs seeking $39,000, including $4,000 for preparing the certified record, and $27,000 for preparing the appendix. LandWatch moved to tax costs. The trial court awarded the district $21,000 ($4,000 for preparing the certified record; $14,000 for preparing the appendix – half of the district’s requested amount; and $3,000 for other items). LandWatch appealed.

LandWatch argued that, because it had elected to prepare the record, the district ought not to recover any record-related costs. The court noted, however, that in electing to prepare the record, LandWatch was required to do so within 60 days. LandWatch missed this deadline. LandWatch argued the district was to blame for the delays. The court disagreed. The trial court, as trier of fact, had concluded otherwise—a determination to which the Court of Appeal must defer.

LandWatch argued the district ought not to recover costs associated with the appendix of post-approval documents because the district had resisted LandWatch’s efforts to augment the record with them. The court was unmoved. The trial court had ordered the preparation of the appendix at LandWatch’s insistence. “For LandWatch to now assert that the appendix is not part of the record to escape the costs it created is fanciful, if not perverse.” (Slip. Op. at pp. 7-8.)

The court also upheld the trial court’s awarding costs for the district’s court-call, copying and transcription costs. The court noted that the trial court had already reduced the costs as requested by LandWatch, or had ample basis for finding the costs to be reasonable.

Second District Upholds Fee Award on Unsuccessful CEQA Claims

On May 3, 2018, in partially published decision in La Mirada Avenue Neighborhood Association of Hollywood v. City of Los Angeles (2018) ­­­­2 Cal.App.5th 586, the Second District Court of Appeals upheld a plaintiff fee award under Code of Civil Procedure section 1021.5, including fees for plaintiff’s unsuccessful CEQA claims.

The underlying dispute concerns the city’s approval of a Target superstore in an area controlled by a subarea of a specific plan. In approving the project, the city granted eight variances to Target. The plaintiff prevailed on its claims that the six of the eight variances were not supported by substantial evidence, but lost on its CEQA claims. An appeal was dismissed as moot (Mirada I).

During the appeal’s pendency, the city created a new planning subarea for the project, where no variances would be required, and approved the project. Those approvals were vacated, and an appeal is pending.

This opinion concerns the lower court’s order of over $900,000 in plaintiff attorney’s fees from Mirada I. The city and Target appealed, contending that the plaintiff is not the successful party and that no significant benefit has been conferred on a large class of persons.  No fees have been earned, appellants contend, because Target successfully advocated for a change in the zoning law, which will allow the store to proceed, and the project’s validity under the changed law is yet to be determined. Appellants further argued that in any event, the fees are excessive. The Second District rejected all of those contentions.

The court applied the “catalyst test” to determine the plaintiff’s status as a successful party under CCP section 1021.5. Under the catalyst test, it is sufficient to earn fees if a plaintiff can demonstrate that their litigation motivated the defendants to alter their behavior. It does not require that the plaintiff achieve a specific outcome.

Here, the plaintiff was “successful” in two ways. First, they vindicated their interest when the variances were set aside and further development was enjoined. Second, the suit prompted the “legislative fix” of creating a changed zoning subarea for the project. The court also determined that the plaintiff conferred a “significant benefit” to the entire city of Los Angeles, considering the significance of the benefit and the size of the class receiving the benefit, in light of the circumstances. When the benefit is a policy change, as here, the court considers whether the law being enforced furthers a significant policy. The court found that the plaintiff secured the benefit of getting the city to comply with the municipal code concerning variances. The orderly enforcement of this vital public interest benefits all city residents.

The appellants also argued that since the suit concerning the new zoning subarea was still pending, the rights at issue were still unsettled, and therefore, the plaintiff was not entitled to fees. Resolving this issue in favor of the plaintiff, the court stated that where a party has obtained a final judgment in its favor on the merits, under the law in existence at the time, and where what remains to be finally adjudicated is the validity of a project under the law as subsequently amended, a plaintiff is entitled to fees.

In support of this rule, the court reiterated that the focus of the inquiry is the litigation objectives of the prevailing plaintiff, not the defendant’s goals. Plaintiff accomplished their stated purpose of judicial review of the city’s variance process. It was not necessarily their goal to stop the project entirely. Additionally, section 1021.5 does not require a showing that the entire dispute is settled. The plaintiff obtained a final judgment in their favor on the merits, under the law in existence at the time. A court can only resolve disputes based on existing law, not the law as it might be amended in the future. The court declined to contemplate whether plaintiff would be entitled to fees under the new zoning of the subarea, which was not at issue in the Mirada I litigation.

Finally, the court found that the lower court did not abuse its discretion in calculating the fee amount, including a multiplier, by allowing the attorneys to recover fees for their time spent on the unsuccessful CEQA claims, noting that attorneys cannot know from the outset which claims will be successful.

Despite Being a “Successful Party,” Real Party in Interest Denied Attorneys’ Fee Award by Fourth District

In Save our Heritage Organization v. City of San Diego (2017) 11 Cal.App.5th 154, the Fourth District Court of Appeal upheld a trial court’s denial of a Code of Civil Procedure section 1025.1 attorneys’ fee award to the prevailing real party in interest.

On the merits, the court of appeal found that the City of San Diego had not abused its discretion when it approved a revitalization project for Balboa Park. Real party then filed a motion in superior court for an award of attorney fees, which the court denied.

The Fourth District concluded that a real party’s status as a project proponent did not categorically bar it from obtaining a section 1025.1 attorney fees award where it otherwise satisfied the award’s requirements. Nevertheless, the court upheld the denial of the fee award to real party holding that petitioner was not the type of party on whom attorney fees were intended to be imposed. The court stated that attorney fees were typically only imposed on parties who had engaged in conduct that had adversely affected the public interest. The court found that the petitioner initiated litigation to correct what it perceived to be a violation by the city of state and local environmental, historic preservation, and land use laws, which did not compromise any important public rights. Rather, it was the type of enforcement action section 1021.5 was designed to promote. Thus, the court held that imposing a fee award on the petitioner would be inappropriate.

Fourth District Court of Appeal Denies Motion for Attorneys’ Fees Finding Petitioner Was Not the Catalyst for City’s Revocation of Land Use Entitlements

Coalition for a Sustainable Future in Yucaipa v. City of Yucaipa (July 6, 2015) __ Cal.App.4th __, Case No. E57589.

A petitioner group challenged the City of Yucaipa’s certification of an EIR and approval of land use entitlements for a Target shopping center project. The project was to be developed on land owned by Palmer General Corporation. The trial court denied the petition and petitioner appealed. That appeal became moot when both Target and the landowner abandoned the project due to a contract dispute, which caused the city to revoke the entitlements. The Court of Appeal directed that the order below be reversed with directions to dismiss the action with prejudice due to mootness. After the trial court dismissed the action as directed, petitioner brought a motion for attorneys’ fees under Code of Civil Procedure section 1021.5, asserting the petition was the catalyst for the city’s action to revoke the entitlements—the relief petitioner had sought at trial. The trial court denied the motion and petitioner appealed again. The Court of Appeal affirmed, finding petitioner’s action was not the catalyst for the city’s actions.

A party seeking attorneys’ fees under Code of Civil Procedure section 1021.5 must first show it is a “successful party.” It is not necessary to achieve a favorable final judgment so long as the petitioner’s actions were the “catalyst” for the defendant’s actions. More specifically, the catalyst theory permits an award of fees absent judicial resolution if the defendant changes its behavior substantially because of, and in the manner sought by, the litigation. To obtain attorneys’ fees under this theory, a plaintiff must establish that (1) the lawsuit was a catalyst motivating the defendants to provide the primary relief sought; (2) the lawsuit had merit and achieved its catalytic effect by threat of victory, not by dint of nuisance and threat of expense; and (3) the plaintiffs reasonably attempted to settle the litigation prior to filing the lawsuit. To satisfy the first prong, a petitioner need not show that litigation was the only cause of respondent’s acquiescence, only that it was a substantial factor.

Here, the court found that evidence supported the trial court’s finding that petitioner’s action was not a substantial factor contributing to the entitlement revocation.

First, before the land use entitlements were revoked, the trial court had denied the petition, which was a win for the city. Petitioner did not prevail, but instead appealed the judgment. Filing an appeal from the adverse judgment did not convert the unsuccessful action into a meritorious one. And the court’s direction to dismiss the action with prejudice on remand was not a favorable outcome. The court noted that none of the cases applying the catalyst theory involved situations in which an adverse judgment had already been rendered against the party seeking attorneys’ fees. Thus, having lost twice, petitioner could not show that it had prevailed by “threat of victory.”

Second, the city did not change its behavior substantially because of, and in the manner sought by,the litigation. The city had been successful in defending the CEQA action and did not revoke the entitlements for any reason related to the EIR or the CEQA violations alleged by petitioner. Rather, the city revoked the entitlements because the developer and the landowner had both abandoned the project due to a contract dispute. Petitioner could not demonstrate a nexus between the merits of its action and the city’s revocation of the entitlements. Therefore, the action was not the catalyst for the revocation and petitioner was not entitled to attorneys’ fees.

Reasonably necessary attorney and paralegal time recoverable as costs of preparing the record of proceeding

In this case, the Fourth Appellate District allowed the County of San Diego to recover over $37,000 in costs for preparing an administrative record, including costs for reasonably necessary paralegal and attorney labor. Otay Ranch, L.P. et al., v. County of San Diego (Sept. 29, 2014), Case No. D064809.

The controversy in this case originates with the County of San Diego’s approval of a mitigated negative declaration for a remediation project at the former Otay Skeet and Trap Shooting Range (the project). Former owners of the shooting range, Otay Ranch, Sky Communities, and Sky Vista, filed a petition for writ of mandate challenging the county’s remediation project. The plaintiffs argued that an EIR was necessary and that the county’s remediation plan did not comply with the Health and Safety Code.

Petitioners elected to prepare the administrative record in this case. After a number of delays, petitioners and the County met to discuss the proposed CEQA record. The County indicated that the record, in its current state, was woefully inadequate. The record improperly included numerous files not related to the project while omitting many necessary, project-specific files. After this conference, the petitioners voluntarily dismissed their CEQA cause of action. They then filed an amended petition and continued to pursue their Health and Safety Code cause of action. But petitioners never filed an administrative record, so the County reclaimed responsibility for preparing the administrative record.

The County did not have the resources available to prepare the administrative record in the limited time available. It therefore employed the help of the outside law firm representing it in the litigation to prepare the record. County’s outside counsel and paralegals worked extended hours to prepare the record in time to file with the County’s opposition briefing. This work included 74 hours of attorney time and 67 hours of paralegal time. The final record included over 300 documents and 18,000 pages, spanning many years of project history—all for a challenged MND. Surprisingly, the day after the county filed and served the administrative record, petitioners dismissed their entire action.

The County subsequently filed a memorandum of costs seeking recovery of approximately $66,000 for preparation of the administrative record. Petitioners moved to tax the majority of these costs. They argued that attorney and paralegal hours could not be included in the cost award for preparation of the administrative record. The County responded that the costs represented the reasonably necessary labor costs of “persons with specialized knowledge,” which is a recoverable record cost. Both the trial court and appellate court agreed.

The County submitted compelling declarations that it was necessary for the attorney and paralegal to be actively involved in reviewing and organizing the record. The documents proposed to be included in the record were technically complex and resulted from a complicated and long procedural history. Specific knowledge and understanding of the project was necessary for the individuals recreating the record. Therefore, the hours spent by the attorney and paralegal were reasonably necessary to the preparation of an adequate administrative record. The trial court awarded $37,528 for record preparation costs, representing the County’s costs incurred after the date the County decided to prepare the administrative record itself. The appellate court found that the trial court did not abuse its discretion when reaching this outcome, so the trial court’s award stood.

Of note in this case, the appellate court dismissed two petitioners from the appeal. The court determined Otay Ranch lacked capacity to appeal because it was a cancelled limited partnership. The court was not convinced that the appeal was part of Otay Ranch’s “winding up” process since the partnership had been cancelled and had completed winding up its affairs well before the appeal. Likewise, Sky Communities lacked capacity to appeal because it was a suspended corporation. A suspended corporation may not prosecute or defend an action, nor appeal from an adverse judgment. Sky Communities insisted the defect was not fatal because the Franchise Tax Board could always revive the corporation, retroactively validating the earlier notice of appeal. But the court noted the Board had not yet issued a certificate of revivor and Sky Communities remained a suspended company lacking the capacity to appeal.

Analysis and Conclusion

The size and complexity of administrative records continues to grow, straining the resources of local governments. However, this case offers hope that at least some courts appreciate the burden of record costs in CEQA litigation. The Fourth Appellate District’s opinion recognizes that, for projects with lengthy procedural history or other technical aspects, specialized knowledge and the expertise of paralegals and attorneys may be required to produce a record sufficient for certification. This characterization is likely applicable to numerous CEQA records, which commonly span tens of thousands of pages as a result of increasingly strict rules created by the courts for CEQA records. Based on this case, local governments should carefully document time reasonably spent by staff and any necessary outside assistance on record preparation in the event these costs are recoverable.

This case also serves as an important reminder for both potential CEQA petitioners and real parties to maintain active partnership or corporate standing. Dissolved partnerships and inactive corporations cannot pursue CEQA litigation.

Unpublished Court of Appeal Decision Holds Rival Theater Owners Cannot Recover Attorney’s Fees Under Private Attorney General Doctrine

In an unpublished decision, in LandValue 77 v. Board of Trustees of California State University, the Fifth District Court of Appeal upheld a lower court’s denial of attorneys’ fees under Code of Civil Procedure section 1021.5, which codified the “private attorney general” doctrine. The doctrine allows plaintiffs to bring suits in the public interest and recover fees when they are successful, but only where plaintiffs show it was not in their economic interest to bring the suit. The court held that the plaintiffs failed to make that showing here.

In the underlying action, a movie theater company and its manager challenged the CEQA review and approval of a new theater. Although the trial court held in plaintiffs’ favor, plaintiffs contended that the remedies were insufficient. The Court of Appeal rejected the plaintiffs’ arguments, but remanded the case for resolution of certain issues. After remand, plaintiffs filed a motion for attorneys’ fees under section 1021.5.

The private attorney general doctrine is an exception to the usual rule that each party bears its own attorneys’ fees. The purpose of section 1021.5 is to compensate litigation brought in the public interest when there are insufficient financial incentives to otherwise justify the litigation—that is, where the financial burden on the plaintiff is much greater than the plaintiff’s stake in the matter. The claimant has the burden of proof to show legal entitlement to the fees under the multi-factor test laid out in Conservatorship of Whitley (2010) 50 Cal.4th 1206. The disputed factor in this case was whether plaintiffs had established a “financial burden of private enforcement,” i.e., that the costs to plaintiffs far outweighed any benefits of prevailing in the litigation. The trial court found plaintiffs failed to satisfy this burden, making a fee award inappropriate. The Court of Appeal agreed.

The court found that the record clearly showed plaintiffs had a financial incentive to stop or delay the opening of the proposed theater, given that plaintiffs had ownership interest in a competing theater only two miles away. Even without proof of an incentive, plaintiffs’ failure to identify with particularity their financial interests in the existing theater and failure to present sufficient evidence to estimate the monetary value of the delay in the opening of the competing theater meant the court could not conduct the proper cost-benefit analysis. Thus, plaintiffs failed to carry their burden of showing that their litigation expenses in fact transcended the monetary value of the benefits obtained. The court noted that a claimant’s declaration of altruistic motives—here, a desire to protect the environment—is not a substitute for presenting the information necessary for the court to perform a cost-benefit analysis.

Fourth District Upholds EIR Prepared for Boutique Winery Ordinance, But Holds Certain Transcript Costs Not Recoverable as Record Costs

The Fourth District recently ordered publication of its decision in San Diego Citizenry Group v. County of San Diego (July 30, 2013, Case No. D059962) __Cal.App.4th__. The Fourth District upheld the trial court’s decision rejecting a challenge to the adequacy of the county’s EIR, which analyzed a zoning ordinance intended to encourage the development of boutique wineries. But the appellate court determined the trial court had erred in awarding the county the costs of preparing planning commission transcripts for the administrative record because these transcripts were not in existence at the time of the board of supervisors’ approval of the ordinance.

Facts and Procedural Background

This case arises from the County of San Diego’s efforts to promote the growth of grapes and the expansion of the wine industry. In 2006, the board of supervisors began exploring ways to allow boutique wineries to expand and operate by right within the county. The county received public comments revealing concerns about traffic and related traffic safety impacts, especially on privately owned rural roads. Nonetheless, in 2008, the board directed its staff to develop a “tiered winery ordinance” that would allow boutique wineries by-right.

In 2009, the county prepared and circulated for public review a Draft EIR analyzing the potential environmental impacts of adopting the winery ordinance. The DEIR concluded that the project would cause 22 significant and unmitigated environmental impacts as a result of approving an unlimited number of future wineries by-right. Despite these impacts, the board adopted a Final EIR and a statement of overriding considerations in 2010. San Diego Citizenry Group filed a petition for writ of mandate challenging certification of the EIR. The Group requested that the county prepare the administrative record.

The trial court denied the petition and ordered the petitioner to reimburse the county for the costs of preparing the record. San Diego Citizenry Group appealed.

The Appellate Court’s Decision

The project objectives were proper.

On appeal, the petitioner argued that the county did not properly make a “preliminary policy determination” regarding the objectives for the project, and in particular, that the EIR improperly relied on these objectives when analyzing the feasibility of mitigation measures. But the court quickly dispensed with this argument, noting that the county included within the EIR a “statement of the objectives sought by the proposed project” in compliance with CEQA Guidelines section 15124. In fact, the county defined nine objectives for adopting its proposed ordinance amendment.

Adequacy of discussion and mitigation of impacts to private roads

Next, the petitioner argued the EIR was inadequate because it did not discuss “any ‘additional’ mitigation measures in ‘meaningful detail.’” But the court noted that the petitioner failed to identify any potentially feasible mitigation measures that the EIR omitted. The county was not required to engage in an extensive discussion of infeasible mitigation measures, including mitigation measures that are incompatible with the project’s “core” objectives. Requiring the county to analyze the incorporation of mitigation measures or alternatives that would defeat a project’s primary objectives would run contrary to CEQA’s definition of “feasible.”

The petitioner also attacked the adequacy of the EIR’s discussion of impacts to private roads caused by the ordinance because the EIR rejected a mitigating traffic measure previously adopted in 2008. But the court determined that the county was not required to adopt the 2008 traffic measure simply because it was suggested and addressed impacts identified in the EIR. An agency may delete previously adopted mitigation during review of a project so long as it states a legitimate reason for doing so. The court determined the county had a legitimate reason for not adopting the 2008 measure because it was developed for a completely different project involving private landowner agreements, rather than by-right uses. Furthermore, the FEIR included mitigation measures, such as limitations on the size of vehicles allowed to enter boutique wineries and various restrictions on operations at the wineries, which specifically addressed these impacts to private roads.

The EIR adequately discussed potential environmental impacts

The petitioner argued that the EIR did not sufficiently analyze the project’s potential significant environmental impacts for a variety of reasons.

Focusing on potential future impacts to traffic, appellants first argued that the EIR analysis was insufficient because the county did not use its “best efforts” to predict how many by-right wineries could be developed under the ordinance. But the court noted that the EIR did not “simply state that the level of development is unknown and then label each impact as significant without meaningful analysis or discussion.” The county based a prediction of future boutique winery development on the pattern of development of existing grape growers and wineries. The county had surveyed 26 existing wineries, eleven of which responded, with eight indicating an intention to convert to boutique wineries under the proposed ordinance. The FEIR analyzed the amount of traffic each new boutique winery would generate and determined the maximum concentration of wineries that could be developed. Therefore, the court found the FEIR adequately analyzed the project’s traffic impacts based on existing and anticipated development.

Second, the petitioner argued that the EIR did not sufficiently identify project impacts to water supplies. But the court disagreed, noting that the FEIR met the standard under Vineyard Area Citizens for Responsible Growth v. City of Rancho Cordova (2007) 40 Cal.4th 412, that “a conceptual plan EIR, such as one for a general plan amendment to allow proposed development,” must identify “the likely source of water for new development, noting the uncertainties involved, and discussing measures being taken to address the situation in the foreseeable future.” The county also collected survey data from wineries located in San Diego and Riverside counties to better estimate impacts on water supplies. This was sufficient.

Third, the petitioner argued the FEIR’s discussion of grading permits was “materially misleading” because it suggested grading permits could mitigate for “every type of environmental impact associated with the winery.” Determining that the FEIR actually acknowledged the exact opposite, the court rejected this argument.

Fourth, the petitioner argued that the board of supervisors’ statement of overriding considerations was invalid because the FEIR was deficient and did not provide a basis for the findings. But the court determined the EIR actually relied on conservative assumptions and disclosed potential environmental impacts in an informative matter. Thus, the board was within its discretion to rely on the EIR when it adopted the statement of overriding considerations.

Fifth, the petitioner argued that the ordinance was inconsistent with the county’s general plan. Specifically, the petitioner argued the ordinance allowed by-right wineries in environmentally constrained areas for which the general plan requires environmental review of development projects. The court found, however, that an EIR is not required to be consistent with a general plan; instead, the EIR must identify and discuss any such inconsistencies. The EIR in this case sufficiently discussed the alleged inconstancy, and the petitioner could not show that the county’s decision to exclude wineries from the environmentally constrained area provisions of the general plan was “unreasonable.”

Reimbursement for transcript costs

Finally, the Court of Appeal concluded that the trial court had erred when it ordered the petitioner to reimburse the county for the cost of preparing certain transcripts for the record since the transcripts were not created until after the approval of the winery ordinance. Section 21167.6, subdivision (e)(4) requires the party preparing the record to include transcripts or minutes “that were presented to the decisionmaking body prior to action on environmental documents or on the project.” The trial court had ordered appellants to pay approximately $6,000 for the costs of creating transcripts of planning commission hearings, but appellants successfully argued that they should not have to pay these costs because it was undisputed that the planning commission transcripts were not before the board when it made its decision to approve the winery ordinance.

First District Holds That Air District’s Adoption of Significance Thresholds for Greenhouse Gas Emissions Is Not a CEQA Project and Does Not Require an EIR

In California Building Industry Association v. Bay Area Air Quality Management District (August 13, 2013, Case No. A136212) ___ Cal.App.4th ___, the First District Court of Appeal reversed a trial court’s decision striking down the Bay Area Air Quality Management District’s (BAAQMD’s) CEQA thresholds of significance for greenhouse gas emissions. The appellate court held that CEQA does not require BAAQMD to prepare an environment impact report (EIR) before adopting “thresholds of significance” to assist in the determination of whether air emissions of proposed projects might be deemed “significant.”

On June 2, 2010, BAAQMD adopted CEQA thresholds of significance for greenhouse gas emissions. The thresholds also set standards for impacts related to toxic air contaminants (TACs) and very small particulate matter (PM2.5). The thresholds were adopted pursuant to CEQA Guidelines section 15064.7, which encourages agencies to “develop and publish thresholds of significance” for “general use as part of the lead agency’s environmental review process.” The section further mandates that the thresholds be “adopted by ordinance, resolution, rule, or regulation, and developed through a public review process and be supported by substantial evidence.”

The California Building Industry Association (CBIA) filed a petition for writ of mandate challenging BAAQMD’s adoption of the thresholds. CBIA argued the issuance of the thresholds was a “project” under CEQA, and that BAAQMD had violated CEQA by not preparing an EIR before adopting the guidelines. CBIA claimed the thresholds were too stringent and would discourage developers from building desirable urban infill projects close to public transportation by making the CEQA review process more burdensome and expensive. This, in turn, would result in more housing being built in the suburbs, causing more commuter traffic and more traffic-related emissions. This increased pollution, CBIA argued, was an adverse impact mandating preparation of an EIR.

The Alameda County Superior Court agreed, ruling that the adoption of the thresholds was a project under CEQA and entered an order awarding the CBIA substantial attorney fees under Code Civil Procedure section 1021.5.

The First District Court of Appeal reversed, reasoning that (1) the district’s adoption of thresholds was not a “project” within the meaning of CEQA and (2) there were no reasonably foreseeable impacts associated with this action.

CEQA defines a project as any activity “which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.” (Pub. Res. Code, § 21065.) The appellate court concluded that the adoption of thresholds was not a project. BAAQMD relied on CEQA Guidelines section 15064.7 in promulgating the thresholds. The court explained that section 15064.7 establishes the procedures for adopting thresholds in some detail, and CEQA review is not part of that procedure. Section 15064.7, subdivision (b), provides that thresholds of significance must be formally adopted through a public review process and supported by substantial evidence if, as in this case, they are to be placed in general use. The agency accepted public comments and responded to comments. Striking an uncommon tone, the court concluded that this process was substantially similar to the EIR process and that requiring more would be a duplicative effort and a waste of tax dollars.

The court noted in any event, the action was not a “project” because the activity would not cause a direct physical change in the environment or a reasonably foreseeable indirect physical change. (Pub. Res. Code, § 21065; CEQA Guidelines, § 15378, subd. (a).) CBIA argued that impacts were reasonably foreseeable because the thresholds were more stringent than earlier thresholds and would require a more thorough environmental analysis; as a result, the CEQA process would become more burdensome, making urban development less desirable and leading to more suburban development with all its attendant impacts including traffic and air quality impacts.

The court was not persuaded, instead reasoning that the analysis posited by CBIA included many assumptions and a great deal of speculation because “the extent to which land development projects might be relocated to a more suburban location would require a prescience we cannot reasonably demand of the [BAAQMD].” The court, therefore, concluded that no CEQA review was required before BAAQMD promulgated the thresholds.

In its petition for writ of mandate, CBIA raised several challenges to the substance of the thresholds that were not decided by the trial court. Though CBIA failed to cross-appeal, the appellate court agreed to consider the other two issues. First, CBIA argued that the standards were inappropriate in any event because they evaluated the effects of the environment on sensitive receptors as part of the project; this is contrary, it argued to the purpose of CEQA, which is to protect the environment from proposed projects, not protect the proposed projects from the existing environment. The court cited a long line of cases for this proposition, including the recent Ballona Wetlands Land Trust v. City of Los Angeles (2011) 201 Cal.App.4th 455. The court did not address whether Ballona, et al., were correctly decided, or whether, as a general rule, an EIR may be required solely because the existing environment may adversely affect future occupants of a project. Instead, finding CBIA’s claim that the receptor thresholds were unauthorized by CEQA analogous to a claim a statute or regulation is unconstitutional on its face, the court held that the regulations were not facially invalid because they were relevant for purposes other than determining the effects of the environment on the project. The court also suggested that continuing vitality of Ballona, et al., was better reserved for a case in which the receptor thresholds were actually applied to a project.

As to the second CBIA challenge not ruled on by the trial court, the First District concluded that BAAQMD’s TAC Single-Source and Cumulative Thresholds were supported by substantial evidence and upheld them.

In reversing the trial court’s judgment in CBIA’s favor and declining to grant the relief CBIA sought on the issues not resolved by the trial court, the court of appeal also reversed the substantial attorney’s fees award, concluding the industry association was no longer the successful party under Code of Civil Procedure Section 1021.5.