UPDATE: Review Denied and Ordered Not to be Officially Published as of February 15, 202.
In G.I. Industries v. City of Thousand Oaks (2022) 84 Cal.App.5th 814, the Second District Court of Appeal determined that the City of Thousand Oaks violated the Brown Act when it voted to adopt a CEQA exemption for a new waste-hauling Franchise Agreement without including the exemption on the meeting agenda at least 72 hours before the meeting.
In 2020, the City of Thousand Oaks considered entering into a 15-year franchise agreement with Arakelian Enterprises, Inc., doing business as Athens Services, to provide solid waste management for the City. On March 4, 2021, the City posted an agenda for a March 9, 2021, City Council meeting, with an item to consider staff’s recommendation to approve the Athens franchise agreement. There was no indication on the agenda that the City also would consider finding the agreement exempt from CEQA.
On the day of the March 9th meeting, the City posted a supplemental agenda item and information packet with staff’s recommendation that the City find the agreement categorically exempt from CEQA under the Class 1 exemption for existing facilities, the Class 7 exemption for actions by regulatory agencies for the protection of the natural resources, and the so-called “common sense” exemption. At the meeting, the City attorney recommended adopting staff’s finding supporting the CEQA exemption. The City Council then moved to adopt a motion to approve the franchise agreement. At the suggestion of the Mayor, the Council amended the motion to also include the corresponding CEQA exemptions. The meeting minutes indicated that council took separate actions in approving the agreement and finding it exempt from CEQA.
The City filed a notice of exemption (NOE) on March 15, 2021. Thereafter, Waste Management sent a “cure and correct” letter asserting the City violated the Brown Act by voting to “adopt” the NOE before approving the franchise agreement. The City did not respond to the letter within 30 days, thus was deemed to not have cured or corrected the challenged action pursuant to Brown Act section 54960.1(c)(3). Waste Management filed a petition challenging the approval of the franchise agreement and exemption determination. Respondents filed a demurrer, which the trial court sustained without leave to amend. And, although it agreed with Waste Management that the CEQA exemption determination and franchise agreement approval were separate items of business, ruled that CEQA does not require a public hearing for an exemption determination, therefore, the Brown Act did not apply. Waste Management appealed.
Court of Appeal’s Decision
The Court of Appeal first held that the factual allegations in Waste Management’s petition were sufficient to state a Brown Act claim. Under the Brown Act, at least 72 hours prior to a regular meeting, the legislative body of a local agency must post an agenda containing a brief general description of each item of business to be transacted. (See Gov. Code § 54954.2, subd. (a)(1).) The agenda must provide the public with an opportunity to address the legislative body on any item of interest, effectively barring the agency from acting on any item that does not appear on the agenda.
The City argued that the CEQA exemption did not need to be on the agena because it was not a separate item of business within the meaning of the Brown Act. Rather, the City argued, it adopted the CEQA exemption only as a component of the agenda item awarding the franchise agreement to Athens. The court rejected this argument and cited San Joaquin Raptor Rescue Center v. County of Merced (2013) 216 Cal.App.4th 1167, which, although involving the adoption of a mitigated negative declaration (MND), the court determined applied here. The court reasoned that, because members of the public are entitled to have notice of, and an opportunity to participate in, a local agency’s determination that an MND should be issued, they are also entitled to participate when an agency determines a project is exempt from CEQA.
The Second District noted that applying the Brown Act’s notice requirements do not alter an agency’s existing obligations under CEQA, which does not require public noticing of exemptions to CEQA. Rather, the Act requires only that the exemption, if it is to be discussed at a meeting of a local legislative body, must be placed on the meeting agenda so that the public be provided an opportunity for comment.
The City had argued that applying the Brown Act to a CEQA exemption determination would place an intolerable burden on local agencies. The court disagreed. According to the court, where an agency’s legislative body intends to vote on or discuss a CEQA exemption at a regular meeting, “it will require minimal effort to include it as an agenda item.” And while the agency may delegate some responsibility to staff before rendering a decision, the court cautioned that agencies cannot delegate its entire duty as the final decisionmaker on a project—i.e., approving an exemption—to avoid its Brown Act obligations. Accordingly, the court concluded that “[t]he addition of words to the agenda indicating the local agency is considering a project subject to staff determination of CEQA exemption will not unduly tax a local agency’s resources.”
The Second District also rejected the City’s claim that Waste Management’s “cure and correct” letter, pursuant to Brown Act section 54960.1(b)), was deficient because it stated the City “adopted,” rather than “filed,” an NOE. Section 54960.1(b) requires a prospective litigant to state, in writing, the nature of the alleged violation. The court determined that Waste Management’s letter satisfied this obligation because it informed the City that it violated section 54954.2 by considering the CEQA exemption without describing the action in the agenda for at least 72 hours before the meeting. That the letter stated the City had “adopted” an NOE, versus using the proper term filing, was immaterial—the letter adequately stated the substantive point in regards to the Brown Act violation. The court reiterated that the purpose of the section is to notify the local agency of its alleged violation so that it can cure it to avoid litigation; its purpose is “not to allow a local agency to avoid the consequences of Brown Act violations by launching nit-picking technical attacks on the language use in the cure and correct letter.”
By Bridget McDonald
*RMM represented Petitioner G.I. Industries (aka, Waste Management) in this litigation.