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On October 16, 2017, the First District Court of Appeal published its decision in Placerville Historic Preservation League v. Judicial Council of California (2017) 16 Cal.App.5th 187, upholding the San Francisco County Superior Court’s denial of a petition for writ of mandate challenging the Judicial Council of California’s decision to certify a Final EIR and approve the New Placerville Courthouse Project.

Background

El Dorado County’s court facilities are currently divided between the Main Street Courthouse, a historic building in downtown Placerville, and the County administrative complex. The Judicial Council proposed to consolidate all court activities in a new three-story building to be built on undeveloped land adjacent to the County jail, less than two miles away from the existing Main Street Courthouse.

In October 2014, the Judicial Council published a draft EIR for the proposed new courthouse. The draft EIR acknowledged that retiring the downtown courthouse could have an impact on downtown Placerville. The EIR also recognized that the Judicial Council was required address neighborhood deterioration as a significant environmental effect under CEQA if urban decay was a reasonably foreseeable impact of the project. The draft EIR defined “urban decay” as “physical deterioration of properties or structures that is so prevalent, substantial, and lasting a significant period of time that it impairs the proper utilization of the properties and structures, and the health, safety, and welfare of the surrounding community.” The draft EIR concluded that urban decay, so defined, was not a reasonably foreseeable consequence of the new courthouse project.

Comments received both during and after the public review period on the draft EIR voiced the concern that closing the historic Main Street Courthouse could negatively affect businesses in downtown Placerville. In response to such concerns, the Judicial Council reiterated the draft EIR’s conclusion that the project was not likely to lead to urban decay. In support of this conclusion, the Judicial Council observed that it was working with both the city and county to develop a re-use strategy for the building that would support the downtown businesses and local residences. The Judicial Council also cited evidence of the City and County’s efforts to find a new use for the historic courthouse building.

Following the Judicial Council’s certification of the final EIR, the Placerville Historic Preservation League (League) filed a petition for writ of mandate, which the trial court denied. The Court of Appeal affirmed.

The Court of Appeal’s Decision

On appeal, the League argued that the Judicial Council erred in concluding that urban decay is not a reasonably foreseeable indirect effect of relocating the courthouse activities from downtown Placerville to their new location. The court held that substantial evidence in the record supported the Judicial Council’s conclusion that the type of physical deterioration contemplated in the term “urban decay” is not reasonably foreseeable. The court explained that there is no presumption that urban decay would result from the project. To the contrary, as defined by CEQA—which focuses on the physical environment—urban decay “is a relatively extreme economic condition.” Evidence in the record, including comments submitted by the public, suggested that downtown Placerville was an economically stable area, and could withstand business closures without falling into urban decay.

The League also characterized the likelihood of the re-use of the historic courthouse building as an “‘unenforceable and illusory”’ commitment. The court explained, however, that the lack of a binding requirement for the re-use of the building does not undermine the EIR’s reasoning. Specifically, the issue before the Judicial Council was whether urban decay was a reasonably foreseeable effect of the project, not whether its occurrence was a certainty. It would be the best interest of the City of Placerville and the County of El Dorado to re-use the historic courthouse building, suggesting that the building was likely to be put to a new use. While the re-use was by no means guaranteed, it was reasonably likely. Therefore, the Judicial Council did not err in relying on the possibility of re-using the building as one basis for concluding that urban decay was not reasonably foreseeable.

The League also argued that the administrative record contained evidence, in the form of comments submitted by local residents and businesses, of the impact of moving the courtroom activities outside of downtown Placerville. The court held that although these letters and comments provided credible grounds to conclude that relocating the courthouse activities would constitute a hardship for some local businesses, it was not substantial evidence to support the conclusion that such economic effects would lead to substantial physical deterioration of the downtown.

The League further argued that the Judicial Council should have prepared an economic study evaluating the effects of removing the courthouse functions from downtown. The court disagreed, noting that in “any endeavor of this type, financial resources are limited, and the lead agency has the discretion to direct resources toward the most pressing concerns.” Just because a financial impact study might have been helpful does not make it necessary.

The Judicial Council was represented by RMM attorneys Andrea Leisy and Laura Harris in the trial court and on appeal.

In Banning Ranch Conservancy v. City of Newport Beach (2017) 2 Cal.5th 918, the California Supreme Court held that CEQA requires an EIR for a project located within a coastal zone to identify which areas in a project site might qualify as “environmentally sensitive habitat areas” (ESHA) under the California Coastal Act and account for those areas in its analysis of project alternatives and mitigation measures.

Background

Banning Ranch is a privately owned 400-acre tract of land. A small portion of the site is within the City of Newport Beach; the remainder is in unincorporated Orange County, within the City’s Sphere of Influence. The City’s general plan sets forth two options for the site. The preferred option is community open space. The second option would allow construction of up to 1,375 residential units, 75,000 square feet of retail facilities, and 75 hotel rooms. The City was unable to raise funds to buy Banning Ranch for open space. So in 2008, Real Party in Interest Newport Banning Ranch, LLC (NBR) submitted a proposal for development consistent with the second option for the site outlined in the general plan.

The Banning Ranch site is in a designated coastal zone under the Coastal Act. Under the Coastal Act, local governments within the coastal zone must submit a local coastal program for Coastal Commission approval. The program consists of a coastal land use plan (CLUP) and implementing regulations. The City has not yet adopted the regulatory component of its local coastal program, so the Coastal Commission exercises permitting authority over the Banning Ranch development. Further, the Banning Ranch site is not included in the City’s CLUP.

Because the site is within a coastal zone, the Costal Act places limits on what can be developed on the site. The Coastal Act specifies that ESHA “shall be protected against any significant disruption of habitat values, and only uses dependent on those resources shall be allowed within those areas.” (Pub. Resources Code, § 30240, subd. (a).) ESHA is defined as an area in which plant or animal life or their habitats are either are or especially valuable because of their special nature or role in an ecosystem and which could be easily disturbed or degraded by human activities and developments. (Pub. Resources Code, § 30107.5.) In order to issue a coastal development permit for the project, the Coastal Commission must determine whether the project violates the ESHA requirements of the Coastal Act.

The City prepared an EIR for the Banning Ranch project. Although the EIR contained an extensive analysis of biological impacts, it did not identify potential ESHA or discuss the subject in substantive detail. Rather, it noted that the project would require a permit from the Coastal Commission, which would determine whether the site contained ESHA.

Comments on the draft EIR criticized the EIR for omitting an analysis of ESHA. The Coastal Commission submitted 15 pages of staff comments, suggesting that the EIR should address whether the proposed development was consistent with the policies of the City’s CLUP and the Coastal Act. The letter pointed out that the development must avoid impacts to ESHA and recommended that the EIR use the CLUP, which includes criteria for the determination of ESHA, to evaluate sensitive habitat areas and appropriate buffer zones. The letter concluded that based on its preliminary analysis, Coastal Commission staff had found the project to be inconsistent with the ESHA requirements of the Coastal Act. Commission staff requested that the EIR more fully consider alternatives that would avoid ESHA impacts.

In the final EIR, the City responded to comments, but maintained that it was not required to reach a legal determination as to whether Banning Ranch contained ESHA. The responses to comments explained that this determination would be made by the Coastal Commission at the time the applicant applies for a coastal development permit. The responses stated: “no conclusions of ESHA can and will be made by the City at this time as part of the EIR process that would in any way bind the Coastal Commission or elucidate on the Coastal Commission’s ultimate conclusions…. Rather, as appropriate under CEQA, the City has analyzed the impacts of the project, and concluded that they can be reduced to a less-than-significant level or avoided with appropriate measures.” In response to the Coastal Commission staff’s comments, the final EIR explained:

The purpose of the Draft EIR is to analyze a proposed project’s impact on the physical environment. It is not, in and of itself, a policy consistency analysis, except to the extent that such inconsistencies reveal impacts that otherwise are not discussed. … [T]he Draft EIR analyzes the proposed Project’s impact on biological resources, including federal and State listed endangered and threatened species, sensitive plant and animal species, and specific habitats such as wetlands and vernal pools. All impacts to these resources would be mitigated or avoided with the Mitigation Program. … The Draft EIR acknowledges that the Coastal Commission makes the determination as to whether any or all of these constitute ESHA under the Coastal Act, and application of the policies of the Coastal Act to the existing conditions on the Project site would be undertaken as part of the Coastal Commission’s Costal Development Permit process.

The City certified the final EIR in 2012 and approved the project. Petitioner Banning Ranch Conservancy (BRC) filed a petition for writ of mandate, contending that the EIR did not adequately analyze environmental impacts and mitigation measures with respect to ESHA, instead deferring this critical analysis to the Coastal Commission. BRC also alleged that the City had violated the requirement under the City’s general plan to coordinate with and work with the Coastal Commission to identify habitats for preservation, restoration, and development. The trial court denied the petition as to Petitioner’s CEQA claims, but granted the petition as to the General Plan claim. The Court of Appeal reversed, holding that the City complied with its General Plan. The Court of Appeal agreed with the trial court that the EIR complied with CEQA. With respect to BRC’s ESHA arguments, the Court of Appeal held that “CEQA does not require the City to prognosticate as to the likelihood of ESHA determinations and coastal development permit approvals.”

The California Supreme Court’s Opinion

The Supreme Court reviewed the City’s decision not to identify ESHA in the EIR under the “de novo” standard of review. The Court reasoned that “whether an EIR has omitted essential information is a procedural question” to which the court owes no deference to the agency.

Having established that the de novo standard of review applies, the Court rejected the City’s argument that CEQA imposes no duty on the City to reach conclusions as to whether the Project site includes ESHA. The Court explained that “CEQA sets out a fundamental policy requiring local agencies to ‘integrate the requirements of [CEQA] with planning and environmental review procedures otherwise required by law or by local practice so that all those procedures, to the maximum feasible extent, run concurrently, rather than consecutively.” (Slip Op. pp. 18–19, quoting Pub. Resource Code, § 21003, subd. (a).) Likewise, the CEQA Guidelines state that “‘[t]o the extent possible, the EIR process should be combined with the existing planning, review, and project approval process used by each public agency.”’ (Slip Op. p. 19, quoting CEQA Guidelines, § 15080.) Additionally, agencies are encouraged to consult with responsible agencies in preparing EIRs “‘so that the document will meet the needs of all the agencies which will use it.’” (Slip Op. p. 19, quoting CEQA Guidelines, § 15006, subd. (g).) Here, concluded the Court, the City ignored its duty to integrate CEQA review with the requirements of the Coastal Act, and “gave little consideration to the Coastal Commission’s needs.”

Further, reasoned the Court, the CEQA Guidelines require an agency to consider related regulatory regimes, such as the Coastal Act, when discussing project alternatives. In particular, an EIR must “‘describe a range of reasonable alternatives to the project,’ or to its location, that would ‘feasibly attain’ most of its basic objectives but ‘avoid or substantially lessen’ its significant effects.” (Slip Op. p. 19, quoting CEQA Guidelines, § 15126.6, subd. (a).) Among the factors that may be taken into account when addressing the feasibility of alternatives is whether there are “other plans or regulatory limitations [and] jurisdictional boundaries (projects with a regionally significant impact should consider the regional context).”’ (Slip Op., quoting CEQA Guidelines, § 15126.6, subd. (f)(1).) Projects with substantial impacts in coastal zones are, by definition, “regionally significant.” (Slip Op. pp. 19–20, citing CEQA Guidelines, § 15206, subd. (b)(4)(C).) Accordingly, “the regulatory limitations imposed by the Coastal Act’s ESHA provisions should have been central to the Banning Ranch EIR’s analysis of feasible alternatives.” (Slip Op., p. 20.)

The City and amicus curiae League of California Cities argued that lead agencies under CEQA are not required to make legal determinations that are within the sole jurisdiction of another agency. The League of Cities voiced a concern that ESHA identifications in EIRs might be subject to de novo judicial review. The Court rejected these arguments, reasoning that “a lead agency is not required to make a ‘legal’ ESHA determination in an EIR. Rather, it must discuss potential ESHA and their ramifications for mitigation measures and alternatives when there is credible evidence that ESHA might be present on a project site.”  (Slip Op., p. 21.) Such discussions would only be reviewed by the courts for “sufficiency.” (Ibid.)

The City further contended that the identification of potential ESHA would be merely speculative. The Court rejected this argument because, on the record before it, there had been positive identifications of ESHA on the Project site by Coastal Commission, and the applicant’s own consultant had identified areas of potential ESHA. The Coastal Commission staff had also offered the City assistance in identifying ESHA. Thus, the City had “ample bases” for an informed ESHA analysis. Further, the City routinely identified ESHA in EIRs for projects within the City’s CLUP. The fact that Banning Ranch is not in the CLUP did not excuse the City from identifying ESHA in the Banning Ranch EIR.

The Court also rejected the City’s argument that ESHA would be fully considered during the coastal development permitting phase of the project. The Court explained that such a delay “is inconsistent with CEQA’s policy of integrated review.” (Slip Op., p. 23, citing Pub. Resources Code, § 21003, subd. (a).) Further, the City’s position was inconsistent with CEQA’s requirement that lead agency’s “consider related regulations and matters of regional significance when weighing [the feasibility of] project alternatives.” (Slip Op., p. 23, citing CEQA Guidelines, § 15126.6.) Moreover, lead agencies “must take a comprehensive view in an EIR.” (Slip Op., p. 23, italics added by Court, citing Pub. Resources Code, § 21002.1, subd. (d).)

Finally, the Court rejected the City’s supposition that if the City were required to identify ESHA in the EIR, it would have to accept the Coastal Commission staff’s opinions about what constitutes ESHA and what mitigation measures are required. The Court noted that CEQA does not require a lead agency to agree with the opinions of other agencies. But to serve the public and decisionmakers, the EIR must lay out competing views. Although the Coastal Commission makes the final ESHA determination, the public and the members of the Coastal Commission are “entitled to understand the disagreement between commission staff and the City on the subject of ESHA.” (Slip Op., p. 25.)

Because the Court determined the Banning Ranch EIR violated CEQA for failing to identify ESHA and account for ESHA in its discussion of alternatives and mitigation measures, the Court declined to address the general plan issues.

Whit Manley, of counsel at Remy Moose Manley, LLP, represented Respondent City of Newport Beach in the case.

On March 8, 2017, the California Legislative Analyst’s Office (LAO) released its report Do Communities Adequately Plan for Housing?, which considers whether the housing elements of city and county general plans achieve their objective of meeting housing needs. The report is not optimistic.  While it offers a few suggestions that the Legislature could consider to encourage cities and counties to increase their housing supplies, the report concludes that real change will only come with a “major shift in how communities and their residents think about and value new housing.” Without a paradigm shift in favor of more residential development, “no state intervention is likely to make significant progress on addressing the state’s housing needs.”

As reported in LAO’s earlier report, California’s High Housing Costs: Causes and Consequences (March, 2015), home prices and rents are higher in California than nearly anywhere else in the U.S. These high costs are driven by a lack of housing supply to meet the state’s demand. To combat this, Governor Brown proposed creating new state rules to streamline housing development approvals. In Considering Changes to Streamline Local Housing Approvals (May, 2016), the LAO considered this streamlining proposal, but cautioned that streamlining provisions would have little effect if local planning and zoning rules did not provide adequate opportunities for projects to take advantage of the streamlining. In the new report, the LAO builds upon these previous studies to consider how the state government could influence local planning and zoning rules to encourage cities and counties to approve more housing development projects.

The report explains that the primary existing means for the state to combat inadequate local planning and zoning laws is the state’s Housing Element Law. This law requires city and county general plans to include a housing element, which outlines a long-term plan to meet the community’s existing and projected housing demands. The housing element must also demonstrate how the city or county plans to accommodate its “fair share” of the regional housing needs allocated to that community as part of the Regional Housing Needs Allocation (RHNA) process. Each housing element must provide an inventory of sites designated for new housing sufficient to meet the community’s fair share of regional housing needs.

The new LAO report looks at existing deficiencies in local housing elements. It notes that forecasting housing needs and identifying ideal sites for future housing, is difficult, and rarely accurate. Community resistance to new housing complicates this already difficult task. Residents frequently push back against the projections of future housing needs and question whether their community should bear the responsibility of accommodating new growth. Partly because of this push-back, many cities and counties seem to place a low priority on updating their planning and zoning laws to accommodate future housing needs. Indeed, about one-fifth of cities and counties have gone more than 20 years without a comprehensive update to their land use and circulation elements. With limited staff and budget, the California Department of Housing and Community Development can do little to ensure that cities and counties are fully vetting the sites available to them for future housing.

The report further explains that evidence shows that the housing element process is not meeting its goals. For one, recent RHNA projections are not fully capturing demand for housing in many communities. For instance, in the San Francisco Bay area, cities and counties permitted roughly the amount of housing projected to be needed to meet their fair share of regional housing needs, but the evidence shows there is still significant unmet demand for housing. Typical monthly rents exceed $2,000, more than twice the national average, demonstrating that there is a housing shortage in the Bay Area.

Further, there are disincentives to homebuilding that make it difficult to anticipate places where developers will ultimately propose housing. For instance, housing element inventories frequently overlook sites that need a zone change to accommodate new housing. The Housing Element Law is supposed to encourage local agencies to rezone properties that could accommodate residential development, but many local agencies fail to do so.

The report offers a few options for the Legislature to consider to make the Housing Element Law more effective. First, the process of developing RHNA projections could be improved to better account for unmet housing demands and give cities and counties a more realistic view of their housing needs. For instance, communities with high rents could be projected to have a higher RHNA goal, since higher rents typically mean there is a housing shortage. The state could also increase local fiscal incentives to build housing, but doing this could be difficult to implement, particularly if it would require tax increases.

The report ends by noting that absent dramatic changes to preempt local land use decisionmaking—which would likely be met with fervent resistance—there is not much the state can do to ensure cities and counties approve a sufficient amount of new housing development projects to meet all income needs. As concluded in the report:

Convincing Californians that a large increase in home building—one that would change the character of communities—could substantially better the lives of future residents and future generations necessitates difficult conversations led by elected officials and other community leaders interested in those goals. Unless Californians are convinced of the benefits of more home building—targeted at meeting demand at every income level—the ability of the state to alter local planning decisions is limited.

 

 

On February 27, 2017, the California Supreme Court issued its unanimous opinion in Central Coast Forest Association v. Fish and Game Commission (2017) 2 Cal.5th 594, reversing an appellate decision holding that Plaintiff’s petition to delist coho salmon south of San Francisco from the register of endangered species was procedurally improper.

Background

In 1995, the Fish and Game Commission (Commission) listed coho salmon populations south of San Francisco as endangered under the California Endangered Species Act (CESA) (Fish and G. Code, § 2050 et seq.). In 2004, the Commission joined this population with coho Salmon north of San Francisco (to Punta Gorda in Humboldt County) as members of an “evolutionary significant unit.” That same year, Central Coast Forest Association and Big Lumber Creek Lumber Company (Plaintiffs) petitioned to delist coho salmon south of San Francisco Bay. The delisting petition argued that the coho salmon south of San Francisco had been artificially introduced into the area and have since then been maintained via hatcheries, and so are not “native” within the meaning of CESA. The Commission denied the petition.

The trial court found in favor of plaintiffs and the Commission appealed. In a 2–1 decision, the Third District Court of Appeal held that the petition to delist the endangered coho salmon under CESA failed for the procedural reason that, according to the Court of Appeal, CESA only authorizes delisting when a species is no longer endangered. Where, as in the case before it, plaintiffs challenge the original listing decision, they must do so via a mandamus action in state court. Based on this perceived procedural flaw, the Court of Appeal did not reach a decision on the merits of the case.

The Supreme Court granted review of the case in February 2013.

The Supreme Court’s Decision

The Supreme Court held that the Court of Appeal erred in concluding that a delisting petition is an improper vehicle for challenging an “original listing” decision of the Commission. The Court explained that no provision of CESA directly establishes that the Commission’s decision to delist cannot be based on new evidence showing that the listed species does not qualify for listing. Rather, CESA’s delisting mechanisms make clear that the delisting decision can be made “at any time based upon a petition or other data available to the [D]epartment and the [C]ommission.” (Fish and G. Code, § 2077, subd. (d).) Moreover, CESA includes requirements for the Department of Fish and Wildlife to make delisting recommendations based on the “best scientific information available,” reflecting a Legislative intent that the Commission’s decisions should evolve along with scientific understanding. Other provisions in CESA similarly suggest that the Commission has broad authority to reconsider its listing decision based on new information. The Court held, therefore, that the appellate court erred in holding that it is procedurally improper to use a delisting petition as a mean to challenge the Commission’s decision to list a species as endangered.

Although the Court had granted review of the question whether the delisting petition filed by plaintiffs for coho salmon contained sufficient information to warrant the Commission’s further consideration, the Court chose not to reach that question. Instead, given its reversal of the procedural ruling, the Court found it appropriate to remand the matter to the Court of Appeal to consider the unresolved issues on the merits in the first instance.

On December 20, 2016, the First District Court of Appeal ordered published its decision in The Committee for Re-Evaluation of the T-Line Loop v. San Francisco Municipal Transportation Agency (2016)  6 Cal.App.5th 1237. The court upheld the San Francisco Municipal Transportation Agency’s (Muni’s) determination that a supplemental EIR was not required for the final “loop” of a light-rail project that Muni’s predecessor agency had approved and certified an EIR for in the late 1990s. In so holding, the court rejected the petitioners’ argument that the loop constituted was a “new” project under CEQA. The decision is the first to rely on the California Supreme Court’s recent opinion in Friends of the College of San Mateo Gardens v. San Mateo Community College District (2016) 1 Cal.5th 937 (San Mateo), which established that the deferential substantial evidence standard of review applies to an agency’s decision that a proposal is part of the same project reviewed in an earlier EIR, rather than a new project.

Background

In the 1990s, Muni’s predecessor agency proposed to connect the southeastern part of San Francisco to the rest of the city via the Third Street Light Rail Project, which would link the Visitacion Valley/Little Hollywood and Bayview Hunters Point neighborhoods with Chinatown, Downtown, and South of Market. As relevant to the case, “Segment 4” of the project’s initial operating segment runs along Third Street from Kirkwood Avenue north to 16th Street, and includes a short-turn “Loop” from Third Street following 18th, Illinois, and 19th Streets. This Loop would allow the extension of an existing line to serve Mission Bay and provide an area for two-car trains to lay over. The San Francisco Planning Commission certified a Final EIR for the project in 1998.

By 2003, construction of the project’s initial operating segment was completed, including the Segment 4 along Third Street and much of the Loop. Due to budget constraints, however, the Loop was not fully completed.

In 2013, FTA awarded Muni a grant to fund completion of the Loop. In connection with applying for the grant, in 2012 Muni prepared a memorandum to the San Francisco Planning Department, seeking the department’s concurrence that, under Public Resources Code section 21166, and its implementing CEQA Guidelines sections 15162 and 15163, a supplemental or subsequent EIR was not required for the Loop to be completed. In the memorandum, Muni stated that the environmental impacts of the Loop had been analyzed in the certified Final EIR; there had been no changes to the Loop’s design since the Final EIR was certified; part of the Loop had been built; and, although there were new developments near the Loop, the Final EIR’s analysis assumed those developments would be built. The Planning Department responded that it agreed with Muni that no further environmental evaluation was required.

The project design for the Loop was then finalized. In August 2014, Muni prepared another memorandum to the Planning Department about the Loop, noting that it had been two years since the department had concluded that no further environmental review was required, and since then, the City had approved the stadium for the Golden State Warriors basketball team on the northeast corner of 3rd and 16th Street. The memorandum explained that the arena would likely increase demand for transit, and that the Loop would help meet this demand, and also allow light-rail vehicles to be stored near the arena for quick response to post-event surges in transit demand. The Planning Department responded that it agreed that no further environmental review was required.

In September 2014, the Muni Board of Directors adopted a resolution authorizing the execution of a construction contract for the Loop. The resolution explained that the Loop had been analyzed in the Final EIR certified by the City in 1998 and that the Planning Department had determined that no further environmental review was required.

The petitioners filed a petition for writ of mandate alleging Muni violated CEQA in approving the Loop without first preparing a new EIR. The trial court denied the petition and the petitioners appealed.

The Court of Appeal’s Decision

Under CEQA, an agency must prepare an EIR in the first instance if there is substantial evidence supporting a fair argument that a proposed project may have a significant effect on the environment. This “fair argument” standard creates a low threshold for requiring an EIR. In contrast, once an EIR has been certified for a project, CEQA prohibits an agency from requiring further EIRs, unless: (a) substantial changes are proposed in the project which will require major revisions in the EIR; (b) substantial changes with respect to the circumstances under which the project is being undertaken will require major revisions in the EIR; or (c) new information, which was not known and could not have been known at the time the EIR was certified, becomes available. (Pub. Resources Code, § 21166.)

As the Court of Appeal explained, until recently, the law was unsettled as to the standard of review that applied to an agency’s determination that an activity is a “new” project as opposed to a project that had previously been considered in an EIR. In San Mateo, however, the Supreme Court held that the substantial evidence standard applied. As stated by the high court, “the question ‘whether an initial environmental document remains relevant … is a predominantly factual question,” so the court must defer to the agency’s determination on that issue if it is supported by substantial evidence in the record.

Turning to the record before it, the Court of Appeal concluded that substantial evidence supports Muni’s conclusion that the Loop is not a new project, but part of the previously approved project analyzed in the 1998 certified EIR. The court also held substantial evidence supported Muni’s implicit decision that the Final EIR retains informational value with respect to the Loop. The court explained that the Final EIR described and analyzed the Loop in connection with the project’s initial operating segment. Among other things, the Final EIR analyzed the effects of the initial operating segment on parking and pedestrians and the interrelationship between projected growth in population and employment in the southeastern part of San Francisco. In view of this evidence, the court held Muni did not abuse its discretion in treating the Loop as part of the earlier-approved light-rail project.

The petitioners argued that even assuming that the Final EIR did analyze the Loop as part of the project, the Final EIR did not provide sufficient detail about the Loop. The court rejected this argument, holding that it amounted to an untimely challenge to the Final EIR. The court explained that under Public Resources Code Section 21167.2, an EIR is conclusively presumed valid unless a lawsuit has been timely brought to contest its validity, which no one contended to have happened in this case.

The court further held that substantial evidence supported Muni’s conclusion that no subsequent or supplemental EIR was required for the Loop under Public Resources Code section 21166. Evidence supporting this conclusion included the 2012 and 2014 statements from the San Francisco Planning Department that no further environmental review was required as well as the memoranda prepared by Muni to which those statements respond. In addition, the record included a 2013 environmental assessment (EA) prepared by FTA under NEPA, which concluded the Loop would not result in any adverse environmental effects. The EA provided further substantial evidence in support of Muni’s conclusion that a supplemental EIR was not required.

The petitioners claimed that the Loop had changed since the Final EIR was certified, but the only change they cited was the fact that Muni deferred construction of the Loop, whereas the rest of Segment 4 was built in 2003. The court rejected this argument, noting that the petitioners had not cited any authority holding that mere delay in completing construction constitutes a substantial change in a project under CEQA.

Lastly, the court rejected the petitioners’ argument that Muni abused its discretion by failing to follow procedures in determining that no further CEQA analysis was requited. According to the petitioners, Muni based its decision that no further environmental review was necessary solely on “an unsupported staff conclusion.” But the court noted that this was not a procedural flaw, as CEQA does not set forth any procedure that an agency must follow in deciding whether a new EIR is required. And, in any event, the record shows that Muni relied on more than just the staff report.

 

 

In Orange Citizens for Parks and Recreation et al. v. Superior Court of Orange County (2016) 2 Cal.5th 141, the City of Orange approved a proposed 39-unit residential development on a former golf course. The project was controversial because the private development would replace open space. Nevertheless, the city approved the project’s proposed general plan amendment to allow residential development on the property. In response, petitioners Orange Citizens for Parks and Recreation et al. challenged the city’s amendment to the general plan by referendum. The city then changed its position, claiming that there was no need to amend its general plan for the development project in the first place, since a resolution from 1973 allowed residential development on the property. The city thus concluded that whatever the outcome of the referendum, it would have no effect on the development. In November 2012, a majority of voters rejected the project’s general plan amendment. The Supreme Court’s decision honored the voters’ intent, holding that the city abused its discretion in determining that the project was consistent with the city’s general plan.

Background

The case has a complicated—and, it is hoped, unique—factual background. Orange Park Acres, the property at issue in the case, is located in the foothills of the Santa Ana Mountains. In 1973, the city established an Orange Park Acres development committee to resolve disputes about what to do with the land. After several weeks of outreach, the development committee adopted the Orange Park Acres Specific Plan (OPA Plan). The OPA Plan designated the property at issue for use as a golf course, or should that prove economically infeasible, for recreation and open space.

The city planning commission considered the OPA Plan, and after hearing, in November 1973, adopted a resolution recommending the city council to adopt the OPA Plan, but with a significant amendment: the OPA Plan should designate the property for open space and low density (1 acre) instead of open space. The City Council adopted the OPA Plan on December 26, 1973. Curiously, however, neither the city council resolution approving the OPA Plan, nor the OPA Plan itself, described the planning commission’s proposed amendments to the OPA Plan.

In 1977, the city council passed a resolution that would allow low-density development in Oak Park Acres, and to update the land use map to reflect this change. Again, for reasons that are unclear, the city never made these changes. Neither the text of the OPA Plan, nor its attached land use policy map, were updated to designate the property low-density residential.

The city again revised its general plan in 1989. The intent of the 1989 General Plan was to establish “definitive land use and development policy to guide the City into the next century.” The 1989 land use policy map, which the general plan described as the “most important” feature of the land use element, designated the property for open space/golf. The 1989 General Plan also incorporated the OPA Plan under the heading “Area Plans”— but the version of the OPA Plan that was publically available designated the property as open space.

In view of these facts, in 2007, when the developer for the residential project at issue submitted its development application, the developer requested a general plan amendment to change the property’s land use designation from “open space” to “estate residential.” In 2009, while the city was still processing the application, the developer’s counsel discovered the 1973 resolution that recommended the OPA Plan designate the property for open space and low-density residential. The developer’s counsel promptly conveyed the resolution to the city attorney, prompting the city to conduct a comprehensive review of its planning documents concerning the property. Based on this investigation, the city attorney concluded: (1) 1973 OPA Plan is part of the general plan; and (2) the OPA Plan designates the property as “Other Open Space and Low Density (1 acre).”

Around that same time, the city was again in the process of revising its general plan. A final version of the general plan was approved in March 2010. The 2010 General Plan identifies the project site as “open space.” But it also references the OPA Plan and states that development must be consistent with the OPA Plan.

On June 14, 2011, the city council certified a final EIR for the project. The final EIR explained that the OPA Plan was part of the general plan, and that at the time the OPA Plan was adopted, the city council intended the project site to be designated for one-acre residential development. Due to a clerical oversight, however, this designation did not make it into the plan itself. The final EIR further reported that the project’s proposed general plan amendment would remove any uncertainty pertaining to the project site’s land use designation and honor the city council’s original intent for the project site.

The city council approved the project, including the project’s proposed general plan amendment. A few days later, the petitioners circulated a referendum petition challenging the city’s general plan amendment. The city council thereafter approved the project’s proposed zone change, concluding that the zone change was consistent with the 2010 General Plan.

Around that same time, the developer’s counsel wrote the city attorney with an “elegant solution” to the referendum: to take the position that the 1973 Planning Commission resolution designated the property for low-density residential, and the clerical error of not recording the designation did not alter the site’s true designation. The city attorney adopted this position, and prepared a report explaining that the project would remain consistent with the general plan regardless of the outcome of the referendum.

In November 2012, the voters rejected the project’s general plan amendment.

The Supreme Court’s Decision

The trial court and the Court of Appeal sided with the city and the developer, holding that the project was consistent with the 2010 General Plan because the 1973 designations applied to the project site, and the clerical failing to record the designations did not alter this fact. The Supreme Court reversed.

In the opinion, authored by Justice Liu, the court first explained that a local agency’s determination of whether a project is consistent with a general plan is a quasi-adjudicative, rather than a quasi-legislative determination. As such, the question before the court was whether the city abused its discretion in finding the project consistent with the 2010 General Plan. The court explained that reviewing courts “must defer to a procedurally proper consistency finding unless no reasonable person could have reached the same conclusion.” (Italics added.) The court determined that under the facts before it, no reasonable person could conclude the residential project was consistent with the city’s 2010 General Plan.

In reaching this conclusion, the court was especially swayed by the fact that members of the public, seeking to review the General Plan, would have no way of knowing that General Plan designated the project site for low-density residential. To the contrary, based on the publically available 2010 General Plan, members of the public would have thought the OPA Plan was consistent with the general plan map designating the property as open space. Indeed, even the city and the developer believed this to be the case—as evidence by the fact that the project proposed a general plan amendment.

The developer argued that the city should not be bound by a clerical error because doing so, in the developer’s view, would give greater power to staff than to the city council. But, explained the court, a city official cannot exercise a “power” that is by definition inadvertently exercised. Nor was there any evidence that staff purposely failed to carry out the intent of the 1973 resolution. And, in any event, the city council could have made it clear that the site was designated for low-density residential when it adopted the 2010 General Plan, but it did not.

Adding to the unreasonableness of the city’s conclusion that the project was consistent with the 2010 general plan was the fact that voters had rejected the project’s general amendment via referendum. As eloquently stated by Justice Liu:

The open space designation for the Property in the 2010 General Plan did not inform the public that the Property would be subject to residential development. The City’s proposed general plan amendment puts its citizenry on notice that such development would be possible. In response, Orange Citizens successfully conducted a referendum campaign against the amendment. If “legislative bodies cannot nullify [the referendum] power by voting to enact a law identical to a recently rejected referendum measure,” then the City cannot now do the same by means of an unreasonable “administrative correction” to its general plan undertaken “’with the intent to evade the effect of the referendum petition.’” [Citation.]

Conclusion

Although there is no specific format a general plan must take, a general plan must still comprise an integrated, internally consistent, and compatible statement of policies for future development. In this case, anyone reviewing the city’s general plan would have concluded that the project site was designated to remain in open space. While one can easily imagine the glee the developer and its attorney must have felt upon discovering the 1973 resolution designating the property low-density residential, in the view of the court, it was too little, too late. If the site was designated low-density residential, the planning documents should have reflected this. After voters expressed their intent not to have the site designated low-density residential, the city should have respected that intent, rather than attempting to re-write 35 years of planning documents. The opinion seems to affirm, however, that in general, the courts must defer to a city or county’s conclusion that a project is consistent with the general plan. Only where—as in this case—no reasonable person could conclude that the project is consistent with the general plan should the courts interfere with the city or county’s determination of general plan consistency.

The First District, in Defend Our Waterfront v. California State Lands Commission (Sept. 17, 2015) ___Cal.App.4th___, Case Nos. A1496 & 141697,  upheld the trial court’s grant of a petition for writ of mandate challenging a land exchange between the City and County of San Francisco and the project applicants for the 8 Washington Street Project.

The 8 Washington Street Project is a plan to develop waterfront land near the San Francisco Ferry Building. The project site includes the “Seawall Lot 351” parcel, which is currently owned by the City and County of San Francisco through its Port Commission (the City), subject to the public trust for uses benefiting the people of California. The public trust restriction on the use of the Seawall Lot 351 is inconsistent with the development proposed by the 8 Washington Project. To remove this inconsistency, the applicants and the City proposed to transfer Seawall Lot 351 out of the public trust and replace it with a different parcel of property pursuant to a land exchange agreement with the State Lands Commission (SLC). In August 2012, SLC approved the land exchange agreement, finding, among other things, that the agreement is a statutorily exempt activity under CEQA.

Defend Our Waterfront (DOW), argued that SLC abused its discretion in determining that the land exchange agreement was exempt from CEQA. SLC, the City, and the project applicants argued that DOW had not exhausted its administrative remedies on this issue. The trial court held the exhaustion requirement was inapplicable because there was no effective notice of a public hearing on a CEQA matter prior to the SLC ruling. The Court of Appeal affirmed. The appellate court explained that the only notice provided by the agenda for the SLC meeting was that the SLC was considering a land exchange agreement proposed by the City. The agenda made no reference to CEQA.

The applicants argued that although the agenda itself did not specify that staff considered the project exempt from CEQA, the staff report, which was available online through a link provided in the agenda, set forth this information. The Court of Appeal held, however, that the staff report did not provide legally sufficient public notice of SLC’s CEQA decision for two reasons. First, someone would have to take the additional step of clicking on the agenda’s link to the staff report to learn that a CEQA issue would be decided at the SLC meeting. Second, the hyperlink to the staff report was added after the 10-day notice requirement under Government Code section 11125, subdivision (a), so could not provide adequate notice.

The applicants alternatively argued that DOW had actual notice that the SLC was going to consider the CEQA exemption at the meeting. To support this argument, the applicants pointed to an e-mail from a member of DOW that referred to the staff report. The e-mail, however, did not mention CEQA, so the court refused to assume that the e-mail’s author had read the section of the staff report regarding the CEQA exemption. Furthermore, even if the e-mail’s author had read the entire report, the staff report still did not provide adequate notice because it was not provided until after the 10-day notice period, discussed above.

Moving to the CEQA issue, the Court of Appeal agreed with the trial court that the land exchange agreement was not exempt from CEQA review. SLC had found that land exchange agreement was statutorily exempt under Public Resources Code section 21080.11, which states: “This division shall not apply to settlements of title and boundary problems by the State Lands Commission and to exchanges or leases in connections with those or leases in connection with those settlements.” Applying principles of statutory construction, the Court of Appeal held that the statutory exemption for “settlements and title boundary problems” did not apply as a matter of law because there was neither a title or a boundary dispute nor settlement of any such dispute relating to Seawall Lot 351. Instead, the express purpose of the exchange is to further the 8 Washington Street Project. In reaching this conclusion, the Court of Appeal declined to defer to the public agencies’ interpretation of Public Resources Code section 21080.11.

RMM Attorneys Whit Manley, Chip Wilkins, and Chris Stiles represented Real Parties in Interest in the matter.

On August 19, the Supreme Court granted a petition for review in Banning Ranch Conservancy v. Superior Court (2015) 236 Cal.App.4th 1341 (Sup. Ct. Case No. S227473). The high court will consider the following three issues:

  1. Did the City of Newport Beach’s approval of the Banning Ranch project comport with the directives of the City’s General Plan to “coordinate with” and “work with” the California Coastal Commission to identify habitats for preservation, restoration, or development prior to project approval?
  2. What standard of review should apply to a city’s interpretation of its general plan? and
  3. Was the City required to identify environmentally sensitive habitat areas – as defined in the California Coastal Act of 1976 (Pub. Resources Code, § 3000, et seq.) – in the EIR prepared by the City for the project?

A summary of the Court of Appeal’s decision, which is no longer citable precedent, is available here. Whit Manley, of RMM, represents the Respondent City of Newport Beach in the matter.

 

On April 29, 2015, Governor Brown issued Executive Order B-30-15 setting an interim target to cut California’s greenhouse gas emissions to 40 percent below 1990 levels by 2030. According to the Governor’s announcement, California is on track to meet or exceed its current target of reducing GHG emissions to 1990 levels by 2020, as required by the California Global Warming Solutions Act of 2006 (AB 32). The new goal of reducing emissions to 40 percent below 1990 levels by 2030 is intended to help the state achieve its ultimate goal of reducing emissions 90 percent under 1990 levels by 2050, a target established by Governor Schwarzenegger’s Executive Order S-3-05. The new interim target is consistent with the recommendation of the California Air Resources Board, in its First Update to the Climate Change Scoping Plan (May 2014).

The new executive order requires the Air Resources Board to update the Climate Change Scoping Plan to express the 2030 target in terms of million metric tons of carbon dioxide equivalent. All state agencies with jurisdiction over GHG emission sources must implement measures to achieve the 2030 and 2050 targets.

In addition, the Natural Resources Agency is to update the state’s climate adaptation strategy, Safeguarding California,  every three years and ensure that its provisions are fully implemented. The Safeguarding California plan will help California adapt to climate change by identifying vulnerabilities by sector (e.g., vulnerabilities to the water supply, the energy grid, the transportation network, etc.); outlining primary risks of these vulnerabilities to people, property, and natural resources; specifying priority actions needed to reduce the risks; and identifying lead agencies to spearhead the adaption efforts for each sector. Each sector will then be responsible to prepare an implementation plan by September of this year outlining adaptation actions and report back to the Natural Resources Agency by June 2016 on the actions taken.

Brown’s executive order also requires state agencies to take climate change into account of their planning and investment decisions, and employ full life-cycle cost accounting to evaluate investments and alternatives. The order establishes principles that state agencies must use in making planning and investing decisions. These principles include: prioritizing actions that both help the state prepare for climate change and reduce GHG emissions; implementing flexible and adaptive approaches, where possible, to prepare for uncertain climate change impacts; protecting the state’s most vulnerable populations; and prioritizing natural infrastructure solutions.

Executive Order B-30-15 follows relatively swiftly on the heels of Executive Order B-29-15, issued earlier this month, which imposes a 25-percent mandatory water reduction in 2015 over 2013 usage for urban areas, commercial, industrial, and institutional properties, along with other restrictions.

In Woody’s Group, Inc. v. City of Newport Beach, the Fourth District Court of Appeal, Division 3, reversed the trial court’s decision denying a writ of administrative mandamus and held that the City Council of Newport Beach violated principles of fairness in overturning a permit application approved by the city’s planning commission.

Woody’s Warf (“Woody’s”) is a long-established restaurant overlooking the harbor in Newport Beach. In 2013, the Newport Beach Planning Commission voted to approve a conditional use permit to allow Woody’s to have a patio cover, remain open until 2 a.m. on weekends, and allow dancing in the restaurant. Four days after the planning commission’s decision, a member of the Newport Beach City Council filed an appeal of the planning commission’s decision because the council member “strongly believe[d]” the conditional use permit was inconsistent with the city’s general plan. Following a “lively” public meeting, in which the council member who filed the appeal presented a lengthy presentation on why the planning commission’s decision should be overturned, the city council voted to reverse the planning commission’s decision.

Woody’s thereafter filed with the Orange County Superior Court a petition for a writ of administrative mandate with the superior court, seeking to set aside the city council’s decision. The trial court denied the writ. The Court of Appeal reversed.

The Court of Appeal first held that Woody’s had established an “‘unacceptable probability of actual bias”’ on the part of the council member that filed the appeal. According to the court, the council member’s notice of appeal “showed he was strongly opposed to the planning commission’s decision on Woody’s application” – that is, he took a position against the project. Furthermore, the court explained, the council member’s speech to the council had been written out beforehand, “wholly belying his own self-serving comment at the hearing that “‘I have no bias in this situation.’” Therefore, the court held, the council member should not have been part of the body hearing the appeal.

Second, the court held that the appeal did not meet the procedural requirements of the city’s municipal code, and therefore should not have been brought. The city argued that the city had a “policy and practice” of allowing council members to appeal the planning commission’s decision. This argument was not well taken by the court. As the court explained: “The City violated the rules laid down in the city’s own municipal code, then purported to exempt itself from that code by invoking some previously undocumented custom of ignoring those rules when it comes to council members themselves. Needless to say, changing the rules in the middle of the game does not accord with fundamentally fair process.”

 

In Sierra Club v. County of Fresno (2014) 226 Cal.App.4th 704, the Fifth District Court of Appeal held that an EIR prepared for an active adult community in Fresno County violated CEQA for failing to include an analysis correlating the project’s regional air emissions to specific health impacts that could result. In reaching this conclusion, the Court of Appeal reviewed the EIR de novo, rather than for substantial evidence. The Court of Appeal also held that the mitigation measures adopted by Fresno County to reduce the project’s otherwise significant and unavoidable air quality impacts violated CEQA for several reasons, including the failure to specify adequate performance standards. Real Party in Interest, Friant Ranch, LP, represented by RMM attorneys James Moose, Tiffany Wright, and Laura Harris, filed a petition for review. The petition asked the Court to clarify the applicable standard of review for claims that an EIR includes insufficient information on a topic required by CEQA. The petition also requests guidance from the Court as to the standards of adequacy of mitigation measures adopted to reduce, but not eliminate, a project’s significant and unavoidable impacts. Several amicus curiae letters were filed in support of the petition, including letters on behalf of the League of California Cities and the California State Association of Counties, the CEQA Research Council, the Building Industry Legal Defense Foundation, and the Association of Environmental Professionals. On October 1, 2014, the Supreme Court granted the petition for review. Although it is not known at this time what issues the Court will consider, it is hoped that the Court’s opinion will provide useful guidance to CEQA practitioners and the lower courts concerning CEQA’s informational disclosure and mitigation requirements.

On May 27, 2014, the Fifth District Court of Appeal issued its decision in Sierra Club et al. v. County of Fresno et al. (Case No. F066798). The case involves the County of Fresno’s approval of the Friant Ranch project, a master-planned retirement community for “active adults” (age 55 and older) on an approximately 942-acre site in north central Fresno County.

In the trial court, petitioners Sierra Club, Revive the San Joaquin, and League of Women Voters of Fresno (collectively, the Sierra Club), argued that: (1) the Friant Ranch project was inconsistent with the county’s general plan policies regarding agricultural land use and traffic levels of service; (2) the EIR’s analysis of the project’s air quality impacts was inadequate; and (3) the EIR’s analysis of water quality impacts associated with the project’s wastewater treatment plant was inadequate. The trial court denied the Sierra Club’s petition for writ of mandate. The Sierra Club appealed.

On appeal, the Sierra Club argued that the general plan policy to “maintain agriculturally designated areas for agricultural use” prohibits the county from redesignating land designated as agriculture to other uses. Because the Friant Ranch project included a general plan amendment redesignating the project site from agriculture to residential and commercial designations, the Sierra Club argued the county’s approval of the project violated the agricultural policy. Respondent County of Fresno, and Real Party in Interest, Friant Ranch, LP, represented by RMM attorneys Jim Moose, Tiffany Wright, and Laura Harris, contended that the general plan does not require the county to maintain land currently designated agriculture in that designation in perpetuity. The court agreed that the general plan allows the county to amend land use designations. And, because the project site is no longer designated agriculture, the project is not inconsistent with the requirement to maintain agriculturally designated areas in agricultural use. The court also held that the Sierra Club had failed to exhaust its arguments concerning the county’s transportation policies.

The Sierra Club also argued that the EIR lacked sufficient detail about the amount and location of wastewater discharge from the project’s proposed wastewater treatment plant. Although the Sierra Club did not make this argument in the trial court (and therefore would ordinarily be deemed to have forfeited the argument), the Court of Appeal exercised its discretion to consider the argument because matters involving the disposal of wastewater affect the public interest and the argument raised a question of law. Although not directly stated, the Court of Appeal appeared to believe that CEQA requires detailed information regarding the water balance to be included in the project’s CEQA documents. The court explained that the fact that the county’s experts opined that sufficient storage was available was irrelevant because, according to the court, the existence of substantial evidence in the record does not mean that sufficient information was disclosed in the EIR. The court therefore undertook an exhaustive review of various statements in the EIR and its supporting appendices about the amount of wastewater anticipated to be generated by the project and the size of the storage pond. Based on this review, the court determined that sufficient information was included in the CEQA documents regarding the amount and location of wastewater disposal.

The Sierra Club further claimed that the EIR’s discussion of air quality impacts was inadequate because the EIR: (1) did not explain what it meant to exceed the thresholds of significance by tens of tons per year; and (2) provided no meaningful analysis of the adverse health effects that would be associated with the project’s estimated emissions, which were above the thresholds. Although the EIR disclosed the types of health impacts associated with unsafe levels of the pollutants, quantified the project’s emissions, and concluded that the project would exceed the thresholds of significance set by the local air district, which are based on standards necessary for public health, the court held that this was not enough.

The court concluded that although the EIR had identified the adverse health impacts that could result from the project’s effect on air quality, it did not sufficiently analyze this effect. For example, the information disclosed in the EIR did not enable the reader to determine whether the 100-plus tons per year of coarse particulate matter, reactive organic gases, and mono-nitrogen oxides would require people with respiratory difficulties to wear filtering devices when they go outdoors in the project area or nonattainment basin. Nor did the information provided in the EIR make it possible to know how many additional days the San Joaquin Valley Air Basin would be in nonattainment due to the project. The court noted that answers to these examples are not necessarily required in a revised EIR, but that the EIR must contain some analysis of the correlation between the project’s emissions and human health.

The court also concluded that the county’s mitigation measures adopted for the project’s significant and unavoidable operational air quality impacts violated CEQA because, in the court’s opinion, the mitigation measures were too vague and unenforceable. The court reasoned that the mitigation measures needed to be more specific about who would implement the measures, and when. As an example, the court noted that the mitigation measure that trees “shall be carefully selected and located” to protect buildings from energy consuming environmental conditions uses the passive voice to hide the identity of the actor—that is, the person or entity selecting and locating the trees.

The court also concluded that the mitigation measures were impermissibly deferred. Although the Sierra Club had not raised this argument in the trial court, the court decided to consider the issue because it raised an important issue of policy. The mitigation measures stated that the county and the San Joaquin Valley Air Pollution Control District may substitute different air pollution control measures that are “equally effective or superior” to those set forth in the EIR, as better technology becomes available. The court found that this possibility of substitution rendered the mitigation measures deferred because the contents of the substituted provisions are unknown at present. Therefore, the court looked to whether the mitigation measures contained adequate performance standards to determine what types of measures would be “equally effective or superior” and concluded that many did not. For example, one mitigation measure required nonresidential projects to have bike lockers, which the court held failed to specify any performance standard to determine how to substitute the measure for an equally or more effective measure.

Furthermore, the court held that the statement in the EIR that the mitigation measures would “substantially” reduce air quality impacts was not supported by a discussion in the EIR and therefore violated CEQA.

Lastly, the court rejected Sierra Club’s claim that the county had not responded in good faith to comments suggesting that the county consider off-site emission reduction programs, such as the air district’s “Voluntary Emission Reduction Agreement” program. The court found that the county’s response to such comments, which explained that VERAs are voluntary and would be considered in connection with future project approvals was reasoned and met an objective good faith standard.

Environmental Protection Agency et al. v. EME Homer City Generation, L.P., et al. (2014) __U.S.__ (April 29, 2014, Case no. 12-1182)

Over the past several decades, Congress and the Environmental Protection Agency (EPA) have made several efforts to address the difficult challenge of curtailing air pollution emitted in upwind states, but causing harm in downwind states. Under the Clean Air Act, the EPA must establish national ambient air quality standards (NAAQS) for pollutants at levels that will protect health. Once the EPA establishes a NAAQS, it must designate “nonattainment” areas—locations where pollution concentration exceeds the NAAQS. Within three years of any new or revised NAAQS, each state must submit a State Implementation Plan (SIP) to achieve the NAAQS. If the EPA determines a SIP is inadequate, it must prepare and adopt a Federal Implementation Plan (FIP). Among other things, the SIP must “contain adequate provisions … prohibiting … any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will … contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any … [NAAQS].” (42 U.S.C. § 7410 (a)(2)(D)(i).) This requirement is known as the “Good Neighbor Provision” of the Clean Air Act.

Many times over the past two decades, the EPA has attempted to delineate the Good Neighbor Provision’s scope by identifying under what circumstances an upwind state can be said to “contribute significantly” to nonattainment in downwind states. One such attempt is the EPA’s Cross-State Air Pollution Rule (Transport Rule), which aims to reduce mono-nitrogen oxides (NOx) and sulfur dioxide (SO2) emissions in 27 upwind states to achieve attainment of three NAAQS in downwind states. Under the Transport Rule, an upwind state “contribute[s] significantly” to downwind nonattainment if its exported pollution: (1) produces one percent or more of a NAAQS in at least one downwind state; and (2) could be eliminated cost-effectively, as determined by the EPA. Upwind states whose emissions meet both these criteria must eliminate their emissions. Based on complex modeling, the EPA also created an annual emission “budget” for each of the regulated upwind states, representing the total quantity of pollution an upwind state may produce in a given year under the Transport Rule. Having determined that each of the regulated upwind states’ SIPs was inadequate, the EPA also adopted FIPs concurrently with its adoption of the Transport Rule.

A group of state and local governments, joined by industry and labor groups, petitioned for review of the Transport Rule in the D.C. Circuit. The Court of Appeal vacated the rule in its entirety, holding that: (1) the EPA must give states a reasonable opportunity to allocate their emission budgets before issuing the FIPs; and (2) the EPA must not consider cost in determining whether an upwind state “contribute[s] significantly” to a downwind state’s nonattainment. In an opinion delivered by Justice Ginsburg, in which Justices Roberts, Kennedy, Breyer, Sotomayor, and Kagan joined, the Supreme Court reversed.

First, the Court held that the Clean Air Act does not require the EPA to give states a second chance to file a SIP after the EPA has quantified the state’s interstate pollution obligations. Although the state respondents in the case did not challenge EPA’s disapproval of any particular SIP, they argued that the EPA is nevertheless required to give upwind states an additional opportunity to promulgate adequate SIPs after the EPA has set the state’s emission budgets. The Court found that the Clean Air Act’s plain text does not support this argument. Rather, the Clean Air Act only requires that once the EPA disapproves of a SIP, the EPA must issue a FIP. Although the EPA had previously provided upwind states an opportunity to allocate emission budgets among their in-state sources, this did not mean that the EPA acted arbitrarily in declining to do so here.

Second, the Court held that EPA’s cost-effective allocation of emission reductions among upwind states is a permissible, workable, and equitable interpretation of the Good Neighbor Provision. The Court noted that the Good Neighbor Provision does not dictate a specific method of apportioning responsibility among the upwind contributors. In the absence of specific guidance, the EPA’s use of costs in the Transport Rule is an efficient and equitable solution to the allocation problem presented by the Good Neighbor Provision. Furthermore, contrary to the D.C. Circuit’s holding, the EPA must have leeway in fulfilling its mandate to maximize achievement of attainment in downwind states.

A revised version of SB 731, the CEQA Modernization Act of 2013, has been released by California pro tem Darrell Steinberg. This bill includes numerous but limited revisions to CEQA, with a focus on streamlining the approval process for what the bill considers to be environmentally beneficial projects. Various revisions address transportation issues and infill development to further facilitate the Sustainable Communities Strategy previously adopted by SB 375. The most substantive revisions to CEQA in SB 731 are described below.

One provision addressed in SB 731 revises Government Code section 65457, which exempts residential development projects from CEQA within specific plan areas for which an EIR has been certified. Under the current law, this exemption cannot be applied if an event specified in CEQA (Pub. Resources Code) section 21166 occurs. The revision states, that for the purposes of Government Code section 65457, an event specified in CEQA section 21166 does not include “any new information consisting solely of argument, speculation, unsubstantiated opinion or narrative, evidence that is clearly inaccurate or erroneous, or evidence of social or economic impacts that do not contribute to, or are caused by, physical impacts on the environment.” This provision could reduce redundancy in EIR preparation by making the use of tiering under these circumstances more defensible.

SB 731 also proposes standardized thresholds of significance for environmentally beneficial projects. This revision directs the Office of Planning and Research to propose revisions to the CEQA Guidelines establishing thresholds of significance for noise and for transportation and parking impacts of qualifying projects within “transit priority areas.” In addition, this revision declares that aesthetic impacts of qualifying projects within transit priority areas shall not be considered significant impacts on the environments. The bill does not prevent local jurisdictions from considering aesthetic impacts pursuant to local ordinances or other discretionary powers.

Another substantive revision addresses preparation of the administrative record in CEQA cases. The bill would add section 21167.6.2 to CEQA, which describes a process by which the administrative record is prepared concurrently with the administrative process, and documents must be made available electronically to the public shortly after receipt by the lead agency. This process will be applied to projects of statewide, regional, or areawide environmental significance, or if requested by the project applicant.

SB 731 would also amend Section 21091 of the Public Resources Code and related provisions of law to establish clear statutory rules under which “late hits” and “document dumps” are prohibited or restricted prior to certification of an EIR, if a project proponent or lead agency has not substantively changed the draft EIR or substantively modified the project.

The bill would also revise CEQA section 21081.5 to require agencies to make findings described in section 21081 available in draft form for public review at least fifteen days prior to approval of the proposed project.

The revised SB 731 also adds a provision to section 44273 of the Health and Safety Code to provide funding of up to $30 million annually to the Strategic Growth Council in order to fund planning activities for transit priority projects by local agencies.

Finally, SB 731 revises CEQA section 21168.9, which describes how courts should proceed when issuing a writ of mandate in a CEQA action. Section 21168.9 already encourages courts to issue detailed writs which are no more broad than necessary to address defects in the CEQA process. The revised section 21168.9 requires even further specificity in a writ of mandate. The bill can be viewed at: http://ct3k1.capitoltrack.com/Bills/13Bills/sen/sb_0701-0750/sb_731_bill_20130423_amended_sen_v98.pdf  [John Wheat]