Archives: November 2024

SECOND DISTRICT HOLDS SOME, BUT NOT ALL, CEQA CHALLENGES TO PROPOSED DEVELOPMENT WERE BARRED FOR FAILURE TO COMPLY WITH SUBDIVISION MAP ACT’S 90-DAY DEADLINE FOR SERVICE OF SUMMONS

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In Santa Clarita Organization for Planning the Environment v. County of Los Angeles (2024) ___ Cal.App.5th ___, the Second District Court of Appeal held that the 90-day deadline for service of summons provided by the Subdivision Map Act (SMA) applied to CEQA claims challenging the sufficiency of mitigation measures adopted as conditions of approval of a vesting tentative map, but claims alleging violations of CEQA’s procedural requirements, which could not be brought under the SMA, were not subject to the SMA’s summons requirement.

Background

In 2018, a developer proposed to subdivide roughly 94 acres of open space in an unincorporated portion of the Santa Clarita Valley to develop 37 single-family homes, six public facilities, and two open space areas. To comply with CEQA, the County of Los Angeles prepared a mitigated negative declaration (MND) and a mitigation monitoring and reporting program (MMRP) for the Project.

On March 15, 2022, the County adopted the MND for the Project and conditionally approved a vesting tentative map and related permits for the Project. Among other things, the conditions of approval of the vesting tentative map required compliance with the MMRP.  The County filed a Notice of Determination on March 22, 2022.

On April 20, 2022, Petitioner Santa Clarita Organization for Planning the Environment filed a petition for writ of mandate challenging the County’s approval of the Project. The Petition’s first cause of action alleged that the County violated CEQA, and a second cause of action alleged that the County violated the Planning and Zoning Law and the SMA. Petitioner did not obtain or serve a summons when it filed the Petition.

The developer filed a motion for judgment on the pleadings, arguing that Petitioner was required under the SMA to serve a summons within 90 days of the Project approvals but failed to do so. The trial court granted the motion and entered judgment in favor of the County and the developer on both causes of action. Petitioner appealed, arguing that the CEQA cause of action was not subject to the SMA’s summons requirement.

The Court of Appeal’s Decision

The Second District reversed the judgment with respect to the CEQA cause of action, finding that some, but not all, of the CEQA claims were barred under the SMA.

Initially, the court acknowledged the complexity of determining whether a CEQA challenge to a tentative or final map approval is subject to the SMA’s summons requirement. The court therefore cautioned that petitioners bringing such challenges “proceed at their peril if they fail to obtain and serve a summons within 90 days of the approval.”

The court held that Petitioner’s challenges to the adequacy of the mitigation measures in the MMRP were subject to the SMA’s summons requirement, which is set forth in Government Code section 66499.37. That section imposes a 90-day limitations period for filing a lawsuit and serving a summons, where a party challenges a legislative body’s decision “concerning a subdivision” or “the reasonableness, legality, or validity of any condition attached [to an approval of a subdivision], including, but not limited to, the approval of a tentative map.” Because the County required compliance with the MMRP as a condition of approval of the vesting tentative map for the Project, the court reasoned that Petitioner’s challenges to the adequacy of the mitigation measures necessarily concerned the “reasonableness” of a “condition attached [to an approval of a subdivision].” Accordingly, the court determined that those challenges were within the scope of the SMA.

By contrast, the court held that Petitioner’s claims alleging procedural CEQA violations were not within the scope of the SMA, and therefore not subject to the SMA’s summons requirement. In doing so, the court rejected the respondents’ argument that Government Code section 66499.37 applies to any challenge to a decision “concerning a subdivision.” Citing the statutory language, legislative history and intent, and relevant case law, the court explained that section 66499.37 only applies to challenges that could have been brought under the SMA or that overlap with an SMA claim. Because Petitioner’s procedural CEQA challenges were unique to CEQA and did not arise from or involve any controversy under the SMA, the court determined that those challenges were not subject to section 66499.37.

Accordingly, the court concluded that the trial court erred in granting the motion for judgment on the pleadings in its entirety. Acknowledging that a trial court may not grant a motion for judgment on the pleadings as to only part of a cause of action, the court reversed the judgment and directed the trial court to deny the motion as to the CEQA cause of action.

– Blaine R. Dyas

NINTH CIRCUIT HOLDS MULTIPLE CEQA CHALLENGES TO PROPOSED HOTELS WERE NOT OBJECIVELY BASELESS SHAM LAWSUITS BEYOND THE SCOPE OF FIRST AMENDMENT PROTECTIONS

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In Relevant Group, LLC v. Nourmand (9th Cir. 2024) 116 F.4th 917, the Ninth Circuit Court of Appeals held that the Defendants’ multiple CEQA challenges to Plaintiff’s proposed hotel projects were constitutionally protected under the First Amendment and therefore could not give rise to liability under the federal Racketeer Influenced and Corrupt Organizations Act (RICO).

Background

Beginning in 2015, Plaintiffs proposed four hotel projects in the Hollywood neighborhood in the City of Los Angeles. Defendants opposed the projects during the City’s administrative approval process and in multiple CEQA lawsuits.

In June 2019, after the parties settled two CEQA lawsuits and while a third was underway, Plaintiffs filed a RICO lawsuit, alleging that Defendants had abused the CEQA process to extort Plaintiffs. Defendants filed a motion for summary judgment, which a district court judge initially denied; however, the case was transferred to a new judge, who reversed the prior ruling and granted summary judgment in favor of Defendants. Plaintiffs appealed.

The Ninth Circuit’s Decision

The Ninth Circuit affirmed the summary judgment in favor of Defendants, holding Defendants’ multiple CEQA challenges were constitutionally protected and could not give rise to liability under RICO.

As an initial matter, the court rejected Plaintiffs’ argument that the district court abused its discretion by reconsidering the prior summary judgment ruling. While courts generally may not reconsider prior rulings by the same court in the same case, the court concluded that this case fell under an exception for situations in which the prior ruling was “clearly erroneous” and enforcement would result in a “manifest injustice.”

With respect to the merits, the court held that Defendants’ CEQA lawsuits were protected under the Noerr-Pennington doctrine, which generally protects parties exercising their right to petition from statutory liability. In so holding, the court rejected Plaintiffs’ argument that the Defendants’ CEQA lawsuits fell under the “sham litigation” exception to the Noerr-Pennington doctrine.

The court considered two different tests for the sham litigation exception. The first stems from Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc. (1993) 508 U.S. 49 (PREI). Under the two-step PREI test, the exception applies when a court first determines that a lawsuit is “objectively baseless,” then determines that the motive behind the lawsuit is improper. The second test, from USS-POSCO Industries v. Contra Costa County Building & Construction Trades Council, AFL-CIO (9th Cir. 1994) 31 F.3d 800 (POSCO), applies where a party files a “series” of lawsuits, without regards to their merits, for an unlawful purpose.

The court held that the two-step PREI test, rather than the POSCO test, applied to Defendants’ CEQA lawsuits. The court concluded that Defendants’ CEQA challenges to four of Plaintiffs’ hotel projects did not constitute a “series” of lawsuits for purposes of applying the POSCO test, explaining that POSCO itself involved twenty-nine lawsuits—a stark difference. The court rejected Plaintiffs’ argument that the CEQA challenges to the four projects were really comprised of twenty separate proceedings that brought them within the scope of POSCO, explaining that Plaintiffs’ proposed framework was inconsistent with the case law and would present “line-drawing” problems for future courts.

Applying the first step of the PREI test, the court concluded that Defendants’ CEQA lawsuits were not objectively baseless. Among other things, the court pointed out that Plaintiffs had settled two of the CEQA lawsuits—and that the terms of those settlements included environmental protections—and that a third CEQA lawsuit resulted in a court order directing the City to further consider one of the project’s environmental impacts. Moreover, the court explained that success in a CEQA lawsuit may come in many forms, and that many CEQA petitioners have a “low threshold” for success. Finally, the court emphasized that the Noerr-Pennington doctrine is intended to prevent any “chilling effect” on the constitutional right to petition; thus, it acknowledged that courts should find that litigation is objectively baseless “only with great reluctance.” Given its conclusion that Defendants’ CEQA lawsuits were not objectively baseless, the court did not reach the second step of the PREI test.

Accordingly, the court determined that Defendants’ CEQA actions were protected under the Noerr-Pennington doctrine and could not result in RICO liability.

– Adam D. Nir

SECOND DISTRICT HOLDS NOISE FROM ROOFTOP DECKS IS NOT A SIGNIFICANT IMPACT PRECLUDING USE OF THE CLASS 32 EXEMPTION FOR MULTIFAMILY RESIDENTIAL PROJECT, BUT CITY ERRED BY FAILING TO EVALUATE THE PROJECT’S CONSISTENCY WITH THE APPLICABLE DEVELOPMENT PLAN

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In West Adams Heritage Association v. City of Los Angeles (2024) __ Cal.App.5th __, the Second District Court of Appeal considered challenges to a determination by the City of Los Angeles that a proposed multifamily residential development was categorically exempt from CEQA under the Class 32 exemption for urban in-fill development projects. In the published portion of its opinion, the court held that (1) rooftop noise generated by the Project was not a significant environmental impact precluding the City from relying on the Class 32 exemption, but (2) the City improperly relied on the Class 32 exemption without first finding that the Project was consistent with the applicable redevelopment plan.

Background

Project approval and administrative appeals

The Project applicants proposed to demolish an existing parking lot and two-story building on a 2.8-acre lot and replace them with a seven-building, 102-unit apartment complex with outdoor amenity spaces on the building rooftops. The Project site is less than a mile from the University of Southern California campus and is surrounded by residential, commercial, and educational buildings.

In May 2019, a City zoning administrator approved a conditional use permit and a density bonus for the Project. The zoning administrator also issued a determination letter finding that the Class 32 exemption applied to the Project and that no exceptions to the exemption applied. At the same time, however, the zoning administrator denied a site plan review, concluding that the original Project proposal was not compatible with the surrounding uses due to its size and potential aesthetic, architectural, and noise issues. The Project applicants submitted a revised Project proposal that resolved the zoning administrator’s concerns, and the City Planning Commission overturned the site plan review denial.

Meanwhile, a Project opponent appealed the zoning administrator’s Project approvals and the determination that the Project was categorically exempt from CEQA to the Planning Commission. The Planning Commission denied the appeal in October 2019, and the Project opponent appealed to the City Council.

In November 2019, while that appeal was pending, the City Council passed an ordinance that, among other things, expressly incorporated the land use and development regulations of the local Exposition/University Park Redevelopment Plan (Redevelopment Plan) into the zoning requirements applicable to the Project site (Ordinance 186325). Ordinance 186325 provides that, to the extent the regulations in the Redevelopment Plan (which was adopted in 1966 and last updated in 1989) conflict with the City’s zoning laws, the Redevelopment Plan generally controls.

In December 2019, the Planning Commission issued a corrected letter of determination imposing new conditions of approval on the Project. Among other things, those conditions effectively required a determination that the Project was consistent with the Redevelopment Plan before the City would issue a building permit for the Project.

The City Council denied the Project opponent’s second administrative appeal in February 2020.

Litigation history

Petitioners West Adams Heritage Association and Adams Severance Coalition filed a petition for writ of mandate alleging that the City improperly found the Project to be categorically exempt from CEQA. The trial court denied the petition and Petitioners appealed. In an unpublished opinion filed in August 2023, the Second District reversed, finding that the Project’s potential noise impacts rendered the Class 32 exemption inapplicable.

In September 2023, the Legislature adopted Assembly Bill (AB) 1307. AB 1307 amended CEQA to provide that, for residential projects, “the effects of noise generated by project occupants and their guests on human beings is not a significant effect on the environment.”

The Supreme Court granted review of the Second District’s original decision in November 2023. In July 2024, shortly after issuing its decision in Make UC a Good Neighbor v. Regents of University of California (2024) 16 Cal.5th 43 (MUCAGN II), the Supreme Court transferred the case back to the Second District with instructions to vacate its August 2023 decision and reconsider the matter in light of AB 1307 and MUCAGN II.

Court of Appeal’s Decision

Noise impacts

The Second District held that its original decision could no longer stand after AB 1307 and MUCAGN II. The court explained that under those authorities, any effects of noise from the Project’s rooftop spaces on neighboring uses could not be significant impacts for purposes of CEQA. Relying on the plain language of AB 1307 and MUCAGN II, as well as the legislative history and intent of AB 1307, the court rejected Petitioners’ arguments that the Project was distinguishable from the project at issue in MUCAGN II due to its proposed “rooftop decks that could have amplified music” and the fact that it was proposed by a private developer instead of a university.

The court also rejected Petitioners’ argument that AB 1307 does not apply to CEQA exemptions. The court pointed out that the statutory language expressly applies to CEQA generally and is not limited to any particular subset of CEQA’s provisions. Additionally, while the court acknowledged that AB 1307 did not amend the Class 32 exemption—which requires that covered projects “would not result in any significant effects relating to … noise”—the court explained that AB 1307 conclusively established that certain types of noise could not “result in any significant effects” that would render a residential project ineligible for the Class 32 exemption. Similarly, the court reasoned that noise generated by Project occupants was not a significant impact for purposes of applying the “unusual circumstances” exception to the Class 32 exemption.

Redevelopment Plan consistency

The court nevertheless held that the City improperly relied on the Class 32 exemption—which also requires covered projects to be consistent with the applicable zoning—without first evaluating the Project’s consistency with the Redevelopment Plan. The court explained that under Ordinance 186325, the Redevelopment Plan was part of the applicable zoning with which the Project was required to be consistent to qualify for the Class 32 exemption.

The City and the Project applicants (together, Respondents) argued that Ordinance 186325, which was enacted after the City first approved the Class 32 exemption, did not apply to the Project approvals, but the court disagreed. The court explained that the new law applied retroactively to the Project because (1) MUCAGN II instructed courts to apply current laws in mandamus proceedings, (2) the Project approvals were not final when Ordinance 186325 was passed, as an appeal to the City Council was still pending, (3) the Project applicants had not yet obtained a building permit or other entitlement that might confer a vested right to complete the Project, and (4) Respondents did not cite any local law otherwise precluding the application of new zoning laws to the pending Project approvals.

The court also rejected Respondents’ argument that the City adequately addressed Redevelopment Plan consistency by effectively requiring the Project applicant to obtain a consistency determination before the City would issue a building permit. Respondents cited that requirement as substantial evidence supporting the City’s reliance on the Class 32 exemption; however, the court explained that no such evidence could exist absent an actual determination by the City.

Notably, in response to Petitioners’ argument that the Project’s proposed density was already inconsistent with the Redevelopment Plan, the court clarified that the Redevelopment Plan’s density provisions did not apply to the Project. The court explained that, under the current state density bonus law, density bonuses are calculated using the “greatest number of units allowed under the zoning ordinance, specific plan, or land use element of the general plan” at the time the Project application was submitted. But as the court pointed out, regardless of whether or not the Redevelopment Plan’s density provisions applied when the Project application was submitted, the Redevelopment Plan sets a lower maximum density for the Project site than the City’s generally applicable zoning laws; thus, the court concluded that the City properly calculated the density bonus using the latter. Finally, the court noted that, to the extent the Redevelopment Plan imposes conditions on density bonuses beyond those required under the state density bonus law, state law preempts the Redevelopment Plan.

– Louisa I. Rogers

AFTER THIRD APPEAL INVOLVING CAPITOL ANNEX PROJECT, THIRD DISTRICT HOLDS PROJECT IS EXEMPT FROM CEQA UNDER RECENT LEGISLATION

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In Save Our Capitol! v. Department of General Services (2024) ___ Cal.App.5th ___, the Third District Court of Appeal held that the Capitol Annex Project was statutorily exempt from CEQA pursuant to recent legislation.

Background

Pursuant to the State Capitol Building Annex Act of 2016 (Annex Act), the Joint Rules Committee and the Department of General Services (together, DGS) prepared and certified an EIR for the Capitol Annex Project. In its first published opinion regarding the Project, the Third District held that the EIR violated CEQA and directed the trial court to issue a peremptory writ of mandate.

After the first appeal, DGS prepared a revised EIR and reapproved the Project, and the trial court discharged the writ. In its second published opinion regarding the Project, the Third District held that the trial court prematurely discharged the writ before finding that the revised EIR complied with the writ.

In separate litigation alleging that the revised EIR did not comply with CEQA, the trial court upheld the revised EIR. Petitioner Save Our Capitol! appealed. While this third appeal was pending, the Legislature passed SB 174 to exempt the Project from further CEQA review and to make various appropriations related to the budget bill, effective immediately.

The Court of Appeal’s Decision

The court affirmed the trial court’s decision, holding that SB 174 exempted the Project from CEQA’s requirements. As an initial matter, the court clarified that SB 174 did not moot the case. The court explained that SB 174 did not simply prevent the court from granting effective relief if it decided in favor of Petitioner; rather, SB 174 conclusively established that Petitioner was not entitled to any relief because it could not prevail on the merits.

In so holding, the court rejected Petitioner’s argument that SB 174 violated article IV, section 28 of the California Constitution, which prohibits the Legislature from appropriating funds for various types of alterations to the Capitol via urgency statute. While the court acknowledged some uncertainty about the scope of article IV, section 28, it explained that, regardless, SB 174 specifically prohibited the use of funds in any manner inconsistent with that provision. In response to Petitioner’s suggestion that DGS might nevertheless use the funds in a prohibited manner, the court pointed out that the suggestion merely indicated a hypothetical concern that DGS might violate SB 174 in the future; it did not indicate that SB 174 inherently violates article IV, section 28.

– Blaine R. Dyas