The Third District Court of Appeal held that the California Department of Fish and Wildlife’s program EIR analyzing the Department’s statewide fish hatchery and stocking enterprise passed muster. The Department did not abuse its discretion in the manner it organized the EIR, analyzed the project, and mitigated numerous impacts. The court also found, however, that the Department had violated the Administrative Procedure Act (APA) by adopting three mitigation measures, which imposed new obligations on private aquaculture facilities and required the Department to perform new duties, without complying with APA procedures. Center for Biological Diversity v. Dept. of Fish and Wildlife (Feb. 10, 2015) ___ Cal.App.4th ___, Case No. C072486.

The Department operates 14 trout hatcheries and 10 salmon and steelhead hatcheries throughout the state, stocking fish at close to 1,000 locations each year. After CEQA’s enactment, the hatching and stocking enterprise was found categorically exempt from complying with CEQA. Subsequently, concerns arose regarding the enterprise’s impact on native and wild animals due to predation and genetic hybridization. To address these concerns, the Department developed aquatic biodiversity management plans and hatchery genetic management plans. Center for Biological Diversity sued the Department in 2006, and the trial court agreed with the Center that the enterprise was not categorically exempt from CEQA because it likely caused significant environmental impacts. The court in this prior suit ordered the Department to prepare an EIR and comply with CEQA.

The Department prepared a broad-scope, program EIR/environmental impact statement pursuant to that decision and to additionally comply with NEPA. The EIR analyzed the statewide hatchery and stocking enterprise, as well as three other programs, including the Fishing in the City Program (providing fishing opportunities in urban areas), and the Private Stocking Permit Program (authorizing fish stocking by private aquaculture facilities in private and public lakes and ponds). The Department selected operations from 2004 to 2008 as the baseline and identified more than 200 impacts on biological resources. The EIR proposed a number of mitigation measures to lessen these impacts, and laid out three project alternatives. The EIR did not consider closing the hatcheries or eliminating trout stocking as alternatives.

The Department’s EIR was challenged by the Center and other plaintiffs representing environmental interests in two separate CEQA suits, with plaintiffs representing recreational fishing interests bringing a third suit under the APA. The trial court upheld the EIR and found no violations of the APA. The appellate court affirmed in part and reversed in part.

First, the Third District addressed the EIR’s level of analysis. The CEQA Guidelines do not specify the level of analysis required to be performed in a program EIR. Rather, the Guidelines require an EIR to provide sufficient information in light of what is reasonably feasible. The court found the EIR satisfied that standard. The document reviewed and analyzed the hatchery and stocking enterprise specifically and comprehensively, but within reason, providing for further environmental review where warranted. Given the nature and statewide scope of the project and the consistency of its impacts across the state, the court found the analysis adequate to serve as a program EIR that also operated as project EIR. No additional site-specific environmental review was required given the agency’s determination that site-specific impacts were sufficiently addressed in the program EIR, and there were no new impacts. Indeed, that is the function of a program EIR.

The court also found the EIR did not impermissibly defer formulation of mitigation measures, as it provided sufficient performance standards for future mitigation to meet. The court noted that the rule prohibiting deferred mitigation prohibits loose or open-ended performance criteria. Here, in contrast, the EIR’s performance standards were sufficient to inform the Department what it had to do and accomplish, and committed the Department to mitigating impacts before proceeding with the enterprise. The performance standards were sufficient to ensure the aquatic biodiversity management plans would mitigate impacts in mountain lakes to insignificance. The Department also relied upon federal regulations to develop mitigation measures for impacts on anadromous fish.

The court held that the Department properly used the existing enterprise as the environmental baseline. The court rejected the Center’s contention that the EIR must use the existing environmental conditions—absent the project—as the baseline. It noted that though the origin of present conditions may interest enforcement agencies, such information is irrelevant to CEQA baseline determinations. The CEQA baseline must include existing conditions even when those conditions have never been reviewed and are unlawful. Furthermore, despite using the existing enterprise as the baseline, the EIR described, as much as reasonably possible the impacts hatcheries and stocking have had statewide on the environment from the enterprise’s inception more than a century ago, and proposed mitigation for those continuing impacts. Thus, the EIR did exactly what the Center sought.

Finally, the court held the EIR considered an adequate range of alternatives. For the no project alternative, the EIR considered the baseline project—continuation of the existing enterprise without making any changes. The court upheld this decision, noting that where the EIR is reviewing an existing operation or changes to that operation, the no project alternative is the existing operation; it is a factually based forecast of the environmental impacts of preserving the status quo. The court rejected the Center’s argument that the no project alternative should have been the elimination of the stocking enterprise, stating that the EIR is not the approval of a new program, but review of an ongoing one. The Department was not required to analyze the alternative scenario of discontinuing its hatchery and production enterprise, as it had no legal authority to implement a no-stocking alternative.

Turning to the APA contentions, the court concluded that three mitigation measures imposed by the Department were underground regulations, i.e., regulations adopted without complying with the notice and procedure requirements imposed by the APA. The mitigation measures at issue were: MM BIO-226 (Implement Private Stocking Permit Evaluation Protocol), MM BIO-229 (Require and Monitor Invasive Species Controls at Private Aquaculture Facilities), and MM BIO-233b (Implement Private Stocking Permit Evaluation Protocol). The court found that the measures fell within the definition of a “regulation” and were not exempt from APA requirements. The court rejected the Department’s argument that MM BIO-226 was exempt as a regulation relating “only to the internal management of the state agency,” and that MM BIO-229 and MM BIO-233b were exempt as regulations that embody the “only legally tenable interpretation of a provision of law.” In particular, the court concluded that MM BIO-226 required the Department to “perform a new duty” and MM BIO-229 imposed on a “class of persons a new affirmative duty.” The court’s application of the APA to mitigation measures in a state agency’s EIR appears to be a first and could have far-reaching implications on other EIRs studying statewide activities.