Archives: 2018

Second District Court of Appeal Applies Broad Definition of “Project” and Upholds Determination that Settlement Agreement Exempt as Part of Beach Restoration Project

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The Second District Court of Appeal upheld the trial court’s determination that a beach restoration project, including incorporation of a settlement agreement entered into by the Broad Beach Geologic Hazard Abatement District (BBGHAD) and the City of Moorpark, constituted a single project that is statutorily exempt from CEQA review. The court also held that BBGHAD abdicated its police power in parts of the settlement agreement, rendering certain provisions void. (County of Ventura v. City of Moorpark (2018) 24 Cal.App.5th 377)

BBGHAD was formed to restore a 46-acre stretch of beach in Malibu. The restoration project, which was determined to be statutorily exempt from CEQA, required deposits of large quantities of sand at five-year intervals. Each deposit would generate 44,000 one-way truck trips over the course of three to five months. Moorpark officials were concerned that the haul trucks would negatively impact the city’s residents. Moorpark and BBGHAD ultimately entered into a settlement agreement to resolve these concerns. The settlement agreement contained restrictions on the haul routes that BBGHAD could use for the project.

The County of Ventura challenged the project. The trial court denied Ventura’s petition for writ of mandate and request for injunctive relief, and denied in part and granted in part the request for declaratory relief. This appeal followed.

CEQA Exemption Claim

Ventura argued that the settlement agreement was distinct from the beach restoration project, and was therefore not exempt from CEQA. The court disagreed, finding that the settlement agreement was part of the whole of the action because it was one piece of a single, coordinated endeavor to address erosion. The court applied CEQA’s broad definition of “project” in the context of the statutory exemption. The court considered the test for “separate projects” from Banning Ranch Conservancy v. City of Newport Beach (2012) 211 Cal.App.4th 1209: (i) both respondents were proponents of the settlement agreement; (ii) the agreement and beach restoration served a single purpose, to abate a geologic hazard; and (iii) even if the beach agreement could be completed without the agreement, the two became inextricably linked when the agreement was incorporated into the coastal development permit. Thus, the court found, the agreement was not a separate project under Banning Ranch.

The court also determined that the settlement agreement, as part of the restoration project, was exempt from CEQA as an “improvement” (Pub. Resources Code, § 26505) undertaken by a geologic hazard abatement district “necessary to prevent or mitigate an emergency” (Pub. Resources Code, § 26601). CEQA provides a statutory exemption for such actions. (Pub. Resources Code, § 21080, subd. (b)(4).) The court emphasized that statutory exemptions cannot necessarily be harmonized with CEQA’s general purpose of protecting the environment.

Preemption Claim

Ventura argued the settlement agreement was void because Vehicle Code section 21 preempts Moorpark’s ability to control project traffic. The court disagreed. The court explained that, under the state constitution, cities may only enact and enforce laws that do not conflict with state law. The court further explained that Vehicle Code section 21, subdivision (a), preempts local traffic control ordinances and resolutions. Applying the independent review standard, the court determined that the settlement agreement is an ordinance rather than a contract or resolution, and therefore Vehicle Code section 21 did not apply. Thus, the court found, there was no preemption problem with the settlement agreement.

Extraterritorial Regulation Claim

Ventura argued the settlement agreement was an unlawful attempt by Moorpark to exercise its regulatory powers outside of city limits. Again, the court disagreed. The court explained that the prohibition against extraterritorial regulation does not apply to a local authority’s contracting power. In addition, the court said, a city has authority to enter into contracts to enable it to carry out its necessary functions. Applying the independent review standard, the court explained that trucks’ use of roads can create a public nuisance, and Moorpark appropriately entered into the settlement agreement in an attempt to abate that nuisance.

Police Power Claim

Ventura argued BBGHAD abdicated its police power when it granted Moorpark the power to dictate sand hauling routes that BBGHAD’s contractors were required to use. Ventura also argued this rendered the settlement agreement void in its entirety. The court explained that BBGHAD is allowed under state law to exercise a portion of the state’s police power, but it may not contract away its right to exercise its police power in the future. The court explained that the determination of hauling routes is a police power, and therefore the portions of the settlement agreement that surrendered BBGHAD’s discretion to alter those routes in the future were void.

The court next considered whether the settlement agreement was invalid in its entirety. The court determined the settlement agreement had at least two purposes: (i) to determine permissible and prohibited sand hauling routes, and (ii) to describe the duration of and limited discretion to modify the route restrictions. Only the second purpose was unlawful, the court found, and because that could be extirpated from the agreement, the court determined the remainder of the agreement could remain in force. Thus, the court declined to find the agreement void in its entirety. (Elizabeth Pollock)

Court Upholds “Existing Facilities” Categorical Exemption for Diablo Canyon Nuclear Power Plant Lease Replacement

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World Business Academy v. California State Lands Commission (2018) 24 Cal.App.5th 476.

The Diablo Canyon nuclear power plant is partially situated on state-owned submerged tidal lands managed by the State Land Commission. The Nuclear Regulatory Commission issued two 49-year leases before the plant began operating in 1985. In 2015, PG&E submitted an application to the State Lands Commission to replace the leases before they expired. In approving the application, the Commission found that the lease replacement was categorically exempt from CEQA under the Class 1 “existing facilities” categorical exemption.

Two non-profit organizations filed a petition for writ of mandate challenging the Commission’s decision. They argued that the lease replacement did not qualify for the “existing facilities” exemption, and even if it did, the “unusual circumstances” exception applied. The trial court rejected these contentions and the petitioners appealed.

Upholding the trial court’s decision, the Court of Appeal first rejected the petitioners’ assertion that the nuclear power plant was not an “existing facility” within the meaning of CEQA Guidelines section 15301. The “existing facilities” exemption covers “the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of use beyond that existing at the time of the lead agency’s determination.” (Guidelines, § 15301.) The court held that the lease replacement plainly fit within these terms because the nuclear power plant was an existing facility and the lease replacement would not expand its use. According to the court, the petitioner did not point to any evidence that suggested the lease replacement would expand the plant’s current operative condition.

The court also rejected the petitioners’ contention that the “unusual circumstances” exception precluded the Commission for relying on the exemption. That exception applies “where there is a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances.” (Guidelines, § 15300.2, subd. (c).) The court explained that the party seeking to invoke the unusual circumstances exception is typically required to make a two-part showing: (1) that the project has some feature that distinguishes it from others in the exempt class, such as its size or location, and (2) that there is a reasonable possibility of a significant effect on the environment due to that unusual circumstance. The court found it unnecessary to determine whether the lease replacement presented unusual circumstances (the first part of the test) because, even assuming their existence, the petitioners failed to establish that there was a fair argument that any environmental impacts may occur. In making this determination, the court emphasized that the project was simply a lease replacement, and the environmental impacts alleged by the petitioners were not a change from conditions as they had previously existed under the current leases.

First District Finds Noise Analysis by Non-Expert Attorneys Not Substantial Evidence

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In Jensen v. City of Santa Rosa (2018) 23 Cal.App.5th 877, the First District upheld a negative declaration for a youth treatment center, finding that noise analysis offered by non-expert attorneys was not substantial evidence in support of a fair argument of a potentially significant noise impact from outdoor recreation activities and the parking lot at the center.

In 2014, Santa Rosa approved plans to convert the shuttered Warrack Hospital to the SAY Organization’s new Dream Center. SAY is a non-profit organization that provides housing, counseling, and job services to youth and families in Sonoma County. The facility would offer temporary housing, job skills training, health services, and enrichment activities. The property is in a developed area, surrounded by residential housing, offices, and a hospital.

SAY filed applications for a conditional use permit, rezoning, and design review to implement the project. The initial study/negative declaration concluded there would be no significant impacts, and the planning commission approved the project. Two neighbors appealed the decision to the city council on the basis that the city’s noise impact analysis was flawed. The neighbors filed suit after the city rejected their appeal. The lower court found for the city, and petitioners appealed.

The First District evaluated whether substantial evidence supported a fair argument that noise impacts from the project’s parking lot and outdoor recreation area could be significant, thus requiring an EIR.

Petitioners urged the court to reject the city’s noise study, and rely instead on their independently calculated findings purporting to show the project’s noise levels would be significant. Petitioners’ attorneys extrapolated their own analysis from a previous study conducted by noise experts for the city, for another project, at a different site. Petitioners also argued that the city’s noise ordinance set the maximum allowable noise levels, and any noise that would exceed those thresholds was a significant impact.

The court rejected all of petitioners’ arguments. First, the court rejected petitioners’ interpretation of the city’s noise ordinance, finding that its “base” noise values set the standard or normally acceptable levels, not maximum allowable levels, and thus, were not significance thresholds for CEQA’s purposes. Furthermore, the ordinance was not as inflexible and quantitative as petitioners alleged, but rather, allowed for experts to consider factors such as the noises’ level, intensity, nature, and duration when determining if impacts would be significant. Under this analysis, petitioners failed to identify any evidence in the record that noise impacts would exceed the allowable threshold.

The court rejected the petitioners’ contention that their noise calculations based on another study for a different project were substantial evidence that this project could result in noise impacts. Substantial evidence must be reasonable, credible, and of solid value. In testing for potential significant impacts, a party cannot just import the values of one study onto those of another, particularly in the absence of qualified expert opinion. Petitioners’ convoluted methodology and ultimate conclusions were based on speculation, rested on supposition and hypothesis, and were not confirmed by experts. The analysis also ignored key facts, such as limitations on parking lot use and hours of operation.

The court also noted that petitioners’ conclusions, which they drew from the different project’s noise study, were not presented to the city during the approval process, and did not appear in any part of the administrative record; rather the other study was simply attached to their comments during their city council appeal. Only during appellate briefing did petitioners present the calculations they extrapolated from the other study. For that reason alone, the court stated it was justified in rejecting the petitioners’ calculations.

Given the court’s conclusion that the offered evidence lacked the requisite foundation and credibility, petitioners failed to demonstrate, even under the comparatively low fair argument standard, that further environmental review was required.

(Bridget K. McDonald)

Second District Upholds Fee Award on Unsuccessful CEQA Claims

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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.

Responses to Comments on a Draft EIR Carry the Day in Challenge to Oil Refinery EIR

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On March 20, 2018, the First District ordered published its decision in Rodeo Citizens Association v. County of Contra Costa (2018) 22 Cal.App.5th 214, which involved a challenge to an EIR prepared for a propane and butane recovery project. Specifically, the Court of Appeal affirmed the trial court’s judgment that substantial evidence supported the EIR’s air quality, greenhouse gas (GHG), and hazards analyses.

Background

Phillips 66 Company (Phillips) owns two refineries, one near Santa Maria, the other near Rodeo. The Santa Maria refinery processes heavy crude oil, then sends it via pipeline to the Rodeo refinery where the product is finalized into petroleum products. The Rodeo refinery is able to process both heavy and light crude oil into petroleum products. In addition to the Santa Maria refinery, the Rodeo refinery receives crude oil from a variety of domestic and foreign crude sources delivered via ship. The final products are shipped by rail from the refinery for sale.

In June 2012, Phillips applied to Contra Costa County for a permit to modify the existing Rodeo facility and add new facilities to enable Phillips to recover butane and propane and ship it by rail for sale.

In June 2013, the County released a Draft EIR for the Project. A Final EIR was released in November 2013. Based on comments from the Bay Area Air Quality Management District, the Board of Supervisors ordered staff to prepare a Recirculated EIR (REIR) addressing the air and health issues raised by the Air District. After circulating the Draft REIR, in early 2015, the County published a Final REIR and approved the project.

Rodeo Citizens Association (Citizens) filed a petition for writ of mandate, alleging the EIR’s project description was inaccurate; the EIR failed to address the increased risks of accidents from train derailments or explosions caused by the project; and the EIR insufficiently addressed the project’s impacts to public health, air quality, climate change, and cumulative impacts. The trial court found certain deficiencies in the air quality section of the EIR, and issued a writ of mandate requiring the County to reconsider that section, but rejected the remainder of Citizens’ arguments. Citizens appealed.

The Court of Appeal’s Decision

Citizens argued the EIR’s project description incorrectly defined the project to include only the recovery and sale of propane and butane from refinery fuel gas. According to Citizens, the real purpose of the project was to allow Phillips to process increased amounts of non-traditional crudes, including imported tar sands and Bakken crudes, which contain higher levels of dangerous chemicals and result in worse air pollution during the refining process. Citizens contended the EIR’s project description violated CEQA for not disclosing the true scope of the project, which, in turn, caused the EIR to understate the project’s impacts. The court found, however, that substantial evidence supported the REIR’s project description. In particular, the Final EIR included a master response directly addressing the “project description,” which presented substantial evidence that the refinery would use its existing fuel gas stream to extract propane and butane, and the project is not dependent on new sources of crude oil feedstock. Citizens “only weakly” contested the accuracy of the master response and failed to demonstrate the County lacked substantial evidence for the project description.

Turning to the EIR’s GHG analysis, Citizens contended the analysis violated CEQA because it failed to consider GHG emissions resulting from the combustion of propane and butane by downstream users. The EIR addressed the issue of downstream users, but concluded that due to the lack of data and changing market conditions, it was not possible to determine to which uses purchases of the propane and butane would be put. In many instances, a switch to propane actually reduces GHG emissions as compared with gasoline and diesel. Indeed, California has adopted a program to encourage companies to switch from gasoline/diesel to propane. Ultimately, the EIR concluded that it would be too speculative to reach a conclusion regarding the significance of the Project’s GHG impacts resulting from downstream users. The Court of Appeal held that substantial evidence, including comments from the Air District, supported this conclusion.

Regarding the project’s public and environmental health hazards impacts, Citizens argued that the EIR failed to assess the impacts of the project on a child care center located approximately 500 feet from the rail lines on which the propane and butane would be transported from the refinery. The court first observed that this argument was “arguably barred” by the exhaustion doctrine, because Citizens failed to raise it prior to the County’s approval of the project. In any event, although the EIR did not specifically address how the transport of the project’s hazardous materials might impact the child care center, the EIR disclosed that the risk zone for rail transport under the project was 262 feet from the tracks. At around 500 feet away, the child care center is safely beyond this distance.

Finally, Citizens contended the EIR’s cumulative hazards analysis was inadequate because it failed to consider sufficiently the cumulative risk of rail accidents. The Final EIR’s response to comments on this issue explained that most of the projects cited by the commenters are located a substantial distance from the refinery and do not involve the transport of liquid propane gas by rail. On appeal, Citizens argued this response was inadequate because “CEQA does not require a nexus between projects or that they be of a similar type to be included in a cumulative impact analysis.” The court found, however, that the County’s explanation for why a cumulative analysis for transportation hazards was not included was not unreasonable, which is all that CEQA requires.

Conclusions and Implications

Because the court applied the deferential “substantial evidence” standard of review to Citizens’ claims, the burden was on Citizens to show that the County lacked substantial evidence to support the EIR’s factual conclusions. Here, the County had taken care to respond in detail to the substantive issues raised in comments on the Draft REIR, thereby providing a road map of the evidence supporting the EIR’s analyses and conclusions. The case thus highlights how thorough responses to comments can “save the day” in litigation.

RMM Successfully Defends Sustainable Communities Project Against Multiple Challenges

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In what may be the first litigation of its kind, RMM has defeated three challenges to the City of Los Angeles’s reliance on the Sustainable Communities Project exemption. The exemption—for Transit Priority Projects that meet other environmental and efficiency standards—was adopted as part of SB 375. The exemption has not been frequently used, presumably because of its rigorous standards for access to transit and other sustainability requirements. But more cities are reexamining the exemption in light of California’s housing crisis and renewed focus on transit, infill development, energy and water efficiency, and other sustainability features. The City, with help from RMM, developed a model for evaluating such projects. The City’s approval was upheld against challenges contained in three separate lawsuits. Tiffany Wright and Elizabeth Pollock represented the applicant, CRM Properties.

101 High Occupancy Vehicle Lane in Santa Barbara Can Move Forward

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RMM, representing the Santa Barbara County Association of Governments and working with attorneys for Caltrans, defeated a challenge to Caltrans’ EIR for the 101 HOV project in Santa Barbara County. The project—an 11-mile HOV lane on Highway 101 from the City of Carpenteria to the City of Santa Barbara—will provide much needed congestion relief to the region. RMM joined SBCAG’s team after previous litigation required Caltrans to revise the EIR for the project. The successful defense of the revised EIR required an in-depth knowledge of the transportation analysis to respond to highly-technical challenges to the analysis, both in response to comments and in litigation. The court’s discharge of the previous writ allows the agencies to move forward with this key piece of transportation infrastructure. Tiffany Wright and Laura Harris represented SBCAG.

RMM Successfully Defends Metro’s Board on 710 North Gap Project

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The Los Angeles County Metropolitan Transportation Authority, along with Caltrans, is in the process of preparing an EIS/EIR for the 710 North Gap Project. For decades, the agencies have considered ways to connect the 710 and 210 freeways. The voters of Los Angeles County approved $780 million in sales tax revenues for the project as part of Measure R. The Draft EIS/EIR for the project considers four build alternatives to close the gap. After the public comment period on the EIS/EIR, Metro’s Board identified the Transportation Systems Management/Transportation Demand Management alternative as its preferred alternative and allocated Measure R funds for the alternative. The City of Rosemead filed suit alleging that Metro’s identification of a preferred alternative and allocation of funds constituted premature “approval” of a project prior to completing the CEQA process. The Los Angeles Superior Court rejected Rosemead’s claims. Tiffany Wright and Laura Harris represent Metro.

Sixth District Upholds Categorical Exemption Determination for Microcell Transmitter Project

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In Aptos Residents Association v. County of Santa Cruz (2018) 20 Cal.App.5th 1039, the Sixth Appellate District upheld a county’s determination that the installation of microcell transmitters on existing utility poles for the purpose of providing wireless coverage was exempt from CEQA review.

The county zoning administrator considered 11 applications for the installation of 13 microcell transmitters in the Day Valley area of Aptos, finding that the project fell within the Class 3 categorical exemption that applies to small structures and that no exceptions to the exemption applied. The petitioner association appealed to the county planning commission, which denied the appeal—and the board of supervisors declined to take jurisdiction over the appeal. The petition for writ of mandate alleged that the county had improperly segmented the project and that several potential exceptions applied to the project, thereby defeating the county’s use of the Class 3 categorical exemption. The petitioner also alleged that the board had abused its discretion in declining to take jurisdiction of the administrative appeal.

With respect to “piecemealing,” the court held that the county had not improperly segmented the project. The applicant’s filing of separate permit applications and the county’s issuance of a separate permit and exemption for each project were not evidence of piecemealing. The court found that throughout the administrative proceedings, the county had considered the entire group of microcell units to be one project. It stated that “[t]he nature of the paperwork required for approval of the project is immaterial.”

Next, the court held that the board had not abused its discretion in finding that new evidence submitted by petitioner about a possible future AT&T project was not significant new evidence relevant to its decision. The petitioner had submitted a declaration from its attorney stating that county staff had been contacted by AT&T about a cell transmitter project in the same area. The court found that the evidence was too vague to support a finding that a possible AT&T project would be of “the same type in the same place.”

The court also held that the location exception to the exemption in CEQA Guidelines section 15300.2, subdivision (a) did not apply. The court rejected the argument that the neighborhood’s residential-agricultural zoning classification designated the area “an environmental resource of hazardous or critical concern,” because nothing in the statement of the purpose for that zoning district indicated as much.

Finally, the court found that the unusual circumstances exception also did not apply because petitioner produced no evidence that it is unusual for small structures to be used to provide utility extensions in a rural area or in an area zoned residential-agricultural.

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