Author Archives: Nathan George

California Supreme Court Holds that CEQA is Not Preempted by the Federal Power Act When Used to Make Decisions that are Outside Federal Jurisdiction or Compatible with the Federal Government’s Licensing Authority

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In County of Butte v. Department of Water Resources (2022) 13 Cal.5th 612, the California Supreme Court partially reversed an opinion from the Third District Court of Appeal that CEQA is completely preempted by the Federal Power Act (FPA), finding instead that CEQA is only partly preempted. Specifically, the Supreme Court held the FPA preempts an agency’s application of CEQA to the extent that it interferes with the federally established licensing process, but not when CEQA is used to make decisions concerning matters outside federal jurisdiction or those compatible with the federal government’s exclusive licensing authority.

Background

This consolidated litigation addresses a license renewal for the Oroville Facilities, a collection of public works projects, including hydroelectric facilities, in Butte County. As part of the renewal process, the California Department of Water Resources (DWR) engaged the alternative licensing process (ALP) authorized by the Federal Energy Regulatory Commission (FERC) prior to applying for relicensing. The ALP process allowed DWR to engage with stakeholders and develop a settlement agreement addressing their concerns, which effectively functions as a first draft of the FERC license. Following five years of negotiations, all but two of the stakeholders signed on to the settlement agreement, which DWR submitted to FERC. The Counties of Butte and Plumas did not sign the agreement. Following submission of the settlement agreement and licensing application by DWR, FERC prepared an Environmental Impact Statement (EIS) pursuant to NEPA, which considered several alternatives, including a “staff alternative” with modifications from the FERC staff. The EIS concluded the “staff alternative” was the preferred alternative.

Also following submittal of the relicensing application, DWR prepared an EIR pursuant to CEQA, analyzing implementation of the settlement agreement and continued operation of the Oroville Facilities as the “project” under CEQA and the same alternatives considered by FERC. DWR prepared the EIR to comply with additional permitting requirements under the Clean Water Act, for which the State Water Resources Control Board was the lead agency, and to help DWR determine whether to accept a license containing the original terms or the “staff alternative.”

Procedural History

Butte County and Plumas County separately filed petitions for writ of mandate, each challenging DWR’s compliance with CEQA in connection with the relicensing of Oroville Facilities. The cases were later consolidated.

The trial court found DWR’s EIR adequate, and the Counties appealed. On appeal, the Third District declined to reach the merits of the case, holding that the Counties’ CEQA claims were entirely preempted by the FPA, the purpose of which is to “facilitate the development of the nation’s hydropower resources” by centralizing regulatory authority over dams, reservoirs, and hydroelectric power plants in the federal government. The California Supreme Court granted the Counties’ petition for review but subsequently transferred the matter back to the Court of Appeal for reconsideration in light of Friends of the Eel River v. North Coast Railroad Authority (2017) 3 Cal.5th 677 (Friends), which held that the Interstate Commerce Commission Termination Act (ICCTA) does not necessarily preempt a State agency’ compliance with CEQA for a new railroad project, and that State, as a railroad operator, could voluntarily subject itself to compliance with CEQA without conflicting with the ICCTA. On remand, the Third District affirmed its earlier holding that CEQA was preempted by the FPA.

The California Supreme Court again granted the Counties’ petition for review to determine whether the FPA preempts CEQA when the state is acting on its own behalf and exercising discretion in relicensing a hydroelectric dam.

The California Supreme Court’s Decision on Preemption

A five justice majority of the California Supreme Court held that CEQA claims are preempted insofar as they conflict with the FPA’s licensing scheme, but not where CEQA is used to make decisions concerning matters outside federal jurisdiction or those compatible with the federal government’s exclusive licensing authority. Specifically, the court determined that any CEQA challenge to the ALP and the terms of the settlement agreement and license being considered by FERC were preempted by the FPA. However, because DWR’s compliance with CEQA was not limited to the FERC relicensing, the Counties’ broader challenges to the adequacy of DWR’s EIR were not preempted. The Court concluded that DWR could use the environmental conclusions reached through the CEQA process to aid its decision whether to accept FERC’s “staff alternative” or request modification to the terms of the license issued by FERC, which the FPA allows.

The Court discussed the federal and state law principles applicable to the case before it, including the presumption against preemption for a state-owned, or state-operated project. The FPA does not include an “express” preemption clause, so the issue was whether “conflict” or “field” preemption applied. The Court concluded that the distinction between the two types of preemption was not meaningful here, particularly considering the presumption that, absent a clear statement of Congressional intent that state regulation is preempted, federal law will not be interpreted as interfering with state-owned or state-operated projects. The Court also found federal caselaw applying “field” preemption to state regulatory schemes related to the FPA distinguishable because those cases addressed state attempts to regulate private actors seeking licensing under the FPA. The Court stated that CEQA, in the context of a state agency applying for a federal license, constitutes “self-governance” rather than traditional state regulation of private actors that has been held preempted in the past.

The Court acknowledged that state courts could not require a CEQA remedy inconsistent with federal law, including the FPA, but noted that the Counties had dropped their previous request to enjoin FERC’s licensing process pending DWR’s compliance with CEQA. The Court reasoned, however, that DWR’s compliance with both CEQA and the FPA was possible without creating any conflict. Specifically, DWR used CEQA analysis, in part, to determine whether it should accept a license from FERC containing the proposed terms or those modified by FERC staff. Similarly, the FPA allows applicants to amend their licensing applications or request that FERC modify the terms of the license. DWR could thus use the environmental conclusions reached in the CEQA process to make its own decisions and then make appropriate requests to FERC without intruding on FERC’s jurisdiction. Just as FERC was not required to issue a license wholly consistent with the terms of the settlement agreement, FERC retained jurisdiction to consider, but in no way be bound by, any subsequent requests from DWR. For these reason, environmental review at both levels of government did not overlap to invoke conflict preemption.

The Court also concluded that any preemption issues related to DWR’s adoption of specific mitigation measures demanded by the Counties were premature, as no court had ruled that any additional mitigation was required. The question before the Court was whether any CEQA challenge to DWR’s EIR was preempted by the FPA, the Court ruled such a challenge, in the abstract, was not inherently preempted. Additionally, the Court noted that it may be possible for DWR to adopt mitigation measures that are either outside of FERC’s jurisdiction or compatible with FERC’s licensing authority. Again, FERC could simply deny any request from DWR that conflicted with the FPA or FERC’s licensing authority.

In sum, where the Counties’ CEQA challenges seek to undermine a FERC license or associated terms, they are preempted by the federal government’s exclusive licensing authority under the FPA. However, Counties’ CEQA claims which implicate the sufficiency of an EIR to inform state self-governance and decision-making are not preempted.

The Concurring and Dissenting Opinion

Notably, the Chief Justice, and author of the Friends decision, filed a concurring and dissenting opinion. The Chief Justice agreed that any CEQA challenge to FERC’s licensing process including the settlement agreement was preempted but disagreed that broader CEQA challenges were not similarly preempted. The dissent reasoned that, in addition to “field” and “conflict” preemption, state law that constitutes an “obstacle” to the purposes and objectives of federal law would be similarly preempted. Here, given the history of federal caselaw concluding that state regulation of hydroelectric facilities is preempted by the FPA, and the express “savings clause” in the FPA reserving regulation of water rights to the states, the Chief Justice concluded that CEQA is an “obstacle” to the objectives and purpose of the FPA, particularly where the FPA licensing process included multiple equivalents of CEQA through the ALP and FERC’s compliance with NEPA and does not contemplate delays caused by state court review of CEQA compliance.

The dissent also concluded that CEQA was subject to “field” preemption because CEQA did not involve state regulation of water rights. The Chief Justice also noted that, while none of the federal FPA preemption cases addressed state-operated projects, the concept of “field” preemption (i.e., where Congress truly intends to “occupy the field”) is broad enough to preempt all state regulation, regardless of who the operator is.

Turning to Friends, the Chief Justice characterized her decision in that case as concluding that CEQA is exempt from preemption under the ICCTA as an example of “self-governance” by the State. Given the purpose of the ICCTA was to deregulate railroads, and thereby allow greater “self-governance” by railroad operators, the State’s voluntary compliance with CEQA was not preempted. In contrast, the dissent concluded that the FPA’s purpose and objectives is to vest exclusive regulation of hydroelectric facilities in FERC and to exclude all state regulation, with the exception of water rights. The Chief Justice concluded that, unlike the ICCTA, the FPA (including the federal caselaw interpreting the FPA) made it “unmistakably clear” that all state regulation of hydroelectricity facilities, except regulation of water rights, is preempted.

Lastly, the dissent concluded that finding CEQA only partially preempted was unworkable because a ruling that DWR’s CEQA compliance deficient would not impact FERC’s decision on whether to issue the license. Forcing DWR to perform additional analysis or consider additional mitigation or alternatives would be an exercise in generating paper, without any practical effect. As the Majority Opinion acknowledges, FERC has complete discretion to deny any request to alter the terms of the license, regardless of whether DWR believes such changes to be necessary to comply with CEQA. The dissent also found that requiring CEQA compliance in this case, where multiple environmental studies have been prepared for FERC’s consideration during the licensing process, would be redundant and have little practical benefit.

By Jordan Wright and Nathan George

FIRST DISTRICT HOLDS CITY’S CURTAILMENT OF WATER DELIVERY TO LEASED PROPERTIES WAS NOT A NEW PROJECT SUBJECT TO CEQA REVIEW

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In County of Mono v. City of Los Angeles (2022) 81 Cal.App.5th 657, the First District Court of Appeal held that the city’s 2018 water allocation to lessees was not a change in water use policy, but merely an exercise of the city’s discretion to curtail water deliveries for the purposes of increasing water deliveries to city residents, which was allowed subject to the terms of a lease agreement approved in 2010.

Background

In 2010, the city approved leases (2010 Leases) governing approximately 6,100 acres of city-owned land to petitioner and others. Relevant here, the 2010 Leases provide for the delivery of no more than 5 acre-feet of water per acre (AF/acre) per irrigation season subject to certain conditions. These conditions made clear that the city’s water use was paramount to rights under the 2010 Leases and that the actual amount of water delivered in any given year is to be determined solely by the city and may be reduced in dry years based on water availability. The 2010 Leases further provided that the supply of water could be discontinued at any time and that lessee has no claim against the city should the city exercise its right to withhold water for its own residents. The initial lease term ran from January 2009 to the end of 2013 after which the leases allow the lessees to holdover as tenant at will. Accordingly, the city and the lessees have proceeded under the 2010 Leases in holdover status since 2013.

In March 2018, the city sent copies of a new form of leases (Proposed Dry Leases), which provided that the city would no longer provide irrigation water to the lessee, but rather from time to time the city may spread water on the leased properties. The Proposed Dry Leases included similar provisions reserving the city’s rights to discontinue water delivery. The city issued a Notice of Preparation (NOP) that it would prepare an environmental impact report for the Proposed Dry Leases in August 2018.

In May 2018 correspondence between the city and petitioner, the city indicated that it was evaluating the impacts of reducing water on the leased ranch land, but that based on the snowpack and anticipated runoff it determined that the city could provide lessees 0.71 AF/acre of water, which was consistent with what it had provided two years earlier when the runoff was 82 percent of normal.

Petitioner challenged the city’s decision to curtail water deliveries in 2018 alleging it violated CEQA in that it committed to the Proposed Dry Leases without environmental review.

Court of Appeal’s Decision

The appellate court initially discussed the propriety of considering a declaration filed by the city which asserted that in 2019 and 2020 the city had delivered 6.6 AF/acre and 3 AF/acre of water, respectively. The trial court denied the city’s request to augment the record with the declaration because it was untimely (filed after the court had issued its tentative order granting the writ petition) yet the trial court relied on the 2019 and 2020 water allocations for purposes of setting the historical baseline and fashioning the remedy. The appellate court found that while the declaration was admissible extra-record evidence under Western States Petroleum Assn. v. Super. Ct. (29915) 9 Cal.4th 559, 576 because the 2018 water allocation is an informal or ministerial administrative action, it agreed with the trial court that the declaration was untimely. Nevertheless, the appellate court held that the trial court’s reliance on the contents of the declaration for purposes of the scope of the remedy was inappropriate given that the trial court had not considered the declaration for purposes of the merits.  Accordingly, the appellate court held that it would consider the declaration.

Next the court considered whether the 2018 water allocation was a new reduced water project or part of either the 2010 leases or the Proposed Dry Leases. In doing so, the court noted that the definition of a CEQA “project” involves three distinct components: “agency involvement, physical change to the environment, and whole of an action including multiple discretionary approvals.” Based on the terms of the 2010 Leases, the history of water allocations under them, and the city’s post-2018 water allocations set forth in the declaration, the court found that the 2018 water allocation was merely a “string of water allocations that the 2010 Leases” allowed the city to make. It was therefore not a new project subject to CEQA.

The court rejected petitioner’s contention that the terms of the 2010 Leases did not allow it to curtail water deliveries. Rather, based on the discussion of water supplies in the 2010 Leases, which expressly provided that lessee understood and acknowledged that any water supplied to leased land was “subject to the paramount rights” of the city and that the city could discontinue water deliveries in whole or in part at any time, the court held that the 2010 Leases reserve the city’s right to curtail water deliveries.

Petitioner argued that the court’s interpretation would allow the city to end all water deliveries under the 2010 Leases. However, the city agreed that eliminating water deliveries would require environmental review. Based on this concession, the court of appeal concluded that the 2010 Leases reserved the city’s rights to reduce water allocations subject to changing water availability so long as such reductions did not convert the 2010 Leases into dry leases.

The court further rejected petitioner’s reliance on Communities for a Better Environment v. South Coast Air Quality Management Dist. (2010) 48 Cal.4th 310. While that case establishes that the city would need to consider the actual amounts of irrigation water provided in the past, rather than a hypothetical right to eliminate water deliveries, it further establishes that doing so does not prevent the city from exercising its right under the 2010 Leases to curtail or reduce water deliveries.

The court also found that the city’s past practices did not support petitioner’s claim that the 2018 allocation was an implementation of a new low- or zero-water delivery policy. While petitioner claimed that the city historically provided up to 5 AF/acre of water reduced proportionally based on deviations in snowpack and anticipated runoff, the court found that the actual water deliveries under the 2010 Leases did not have a linear relationship with runoff. In considering the declaration previously excluded by the trial court as evidence, the court also found that the higher allocations in 2019 and 2020 demonstrate that the 2018 water allocation was an implementation of the 2010 Leases, not a new project.

Finally, the court held that without some evidence beyond the simply the timing of correspondence between the city and petitioner and the city’s issuance of an NOP for the Proposed Dry Leases, it could not find that the NOP meant that the city’s reliance on the 2010 Leases for the 2018 allocation was a pretext for implementing that project.

Because the court found that the 2018 water allocation was within the scope of the 2010 Leases, it held that petitioner’s lawsuit effectively challenged the 2018 implementation of a project approved in 2010 and was therefore barred by CEQA’s statute of limitations.

By Christina L. Berglund

FOURTH DISTRICT UPHOLDS EIR FOR MULTI-FAMILY HOUSING PROJECT AND FINDS CITY PROPERLY USED A PLANNED DEVELOPMENT PERMIT TO ALLOW A VARIATION FROM CONVENTIONAL ZONING REGULATIONS

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In Ocean Street Extension Neighborhood Association v. City of Santa Cruz (2022) 73 Cal.App.5th 985, the Fourth District Court of Appeal held that an EIR for a multi-family housing project properly relied on the biological resources analysis and mitigation measures identified in the initial study for the project, and sufficiently addressed the project objectives, alternatives, and cumulative impacts to water supply and traffic. Reversing the trial court, the Court of Appeal also held that the City complied with its municipal code by using a planned development permit as a variation from its conventional slope regulations.

Background

The proposed project consisted of a 40-unit residential complex on a vacant lot in the City of Santa Cruz. The City prepared an initial study that discussed, among other topics, biological impacts that would be reduced to less-than-significant with mitigation, and later circulated a draft EIR and recirculated draft EIR before certifying the final EIR. The City Council approved a reduced-housing alternative with 32 units.

Along with a general plan amendment, rezone, and other entitlements, the City approved a planned development permit (PDP) to allow a variation from the conventional slope regulations in the City’s zoning code.

The Ocean Street Extension Neighborhood Association (OSENA) filed a petition for writ of mandate challenging the EIR and the City’s approval of the PDP. The trial court ruled that the City complied with CEQA, but found the City violated its municipal code by not requiring compliance with the conventional slope regulations. OSENA appealed and the City and Real Parties in Interest cross-appealed.

The Court of Appeal’s Decision

CEQA and Adequacy of the EIR

Upholding the trail court’s ruling on the CEQA claims, the Court of Appeal concluded that the EIR was adequate. The court held that impacts that are less than significant with mitigation may be discussed in an initial study rather than in the EIR as long as the EIR fulfills its purpose as an informational document. The court noted that the EIR summarized the impacts and mitigation measures, and the EIR’s reference to the initial study—which was attached to the EIR as appendix—sufficiently alerted the public to the environmental issues and provided readers with adequate information. Accordingly, the court determined that it was appropriate for the EIR to rely on the biological resources analysis and mitigation measures identified in the initial study.

The court also rejected OSENA’s argument that the mitigation measures were vague and improperly deferred because OSENA failed to exhaust its administrative remedies as to this issue and did not raise it in the trial court proceedings. The court nonetheless explained that even if it considered this issue on the merits, it would reject OSENA’s arguments because the question of effectiveness of a mitigation measure is a factual one, which, in this case, was supported by substantial evidence in the record.

The court further concluded that the project’s objectives and alternatives analyses were adequate, and that OSENA’s arguments amounted to mere disagreement with the City’s conclusions. The court explained that rejecting or approving an alternative is a decision only for the decisionmakers, and they may reject alternatives that are undesirable for policy reasons or fail to meet project objectives. While the project objectives included specific targets, those objectives did not improperly restrict the range of alternatives analyzed in the EIR, and the City justified its reasons for rejecting alternatives with even less housing than the 32-unit alternative.

Additionally, the court determined that the EIR sufficiently analyzed the project’s cumulative impacts on water supply and traffic. Regarding water supply, the court explained that the EIR’s analysis properly considered the water supply impact in light of city-wide needs and future demand, and properly relied on the City’s Urban Water Management Plan. Regarding traffic, the court held that OSENA’s arguments challenging the EIR’s analysis of LOS impacts were moot because CEQA Guidelines section 15064.3, which took effect after the case was initiated, provides that a project’s effects on automobile delay shall not constitute a significant environmental impact.

Therefore, the Court affirmed the portion of the trial court’s order and judgment concluding that the City complied with CEQA.

Santa Cruz Municipal Code

Reversing the trial court’s ruling on OSENA’s municipal code claims, the Court of Appeal held that the City did not violate its municipal code by granting a PDP without also requiring compliance with the conventional slope modification regulation procedures in its zoning code. The City’s PDP ordinance allows a variation from certain zoning regulations including “Slope Regulations Modifications, pursuant to procedures set forth in Chapter 24.08, Part 9 (Slope Regulations Modifications).” Rejecting OSENA’s claim that the City was required to comply with the conventional regulations in Chapter 24.08, Part 9, in addition to the requirements for a PDP, the court explained that the City should be afforded deference in the interpretation of its own municipal code. The court upheld the City’s determination that the granting of a PDP does not require compliance with the conventional slope regulations, as this interpretation was consistent with the text and purpose of the ordinance and interpreting the PDP ordinance as requiring compliance with both the PDP ordinance and the slope regulations would have served no readily apparent purpose.

RMM Partners Christopher L. Stiles and Tiffany K. Wright represented the Real Parties in Interest in this case.  Chris Stiles argued the case in Court of Appeal on behalf of the City and Real Parties.

-Veronika S. Morrison

THIRD DISTRICT UPHOLDS CITY’S DETERMINATION THAT PROJECT WAS CONSISTENT WITH APPLICABLE PLANNING DOCUMENTS

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In Old East Davis Neighborhood Association v. City of Davis (2021) 73 Cal.App.5th 895, the Third District found the trial court erred in concluding the record did not support the city’s decision that a mixed-use development project was consistent with the general plan, specific plan, and design guidelines. Rather, using the deferential standard of review applied to general plan consistency determinations, the court found sufficient evidence to support that the city’s consistency determination was not unreasonable.

Background

The challenged project is a four-story mixed-use building development offering ground floor retail and apartment units on the three upper levels. The project is located in an area referred to as a “transition area” between the Downtown Core and the Old East Davis residential neighborhood. Both the Downtown Core and the project site are subject to the Core Area Specific Plan and the Downtown and Traditional Residential Neighborhoods Design (DTRN) Guidelines.

A Sustainable Communities Environmental Assessment/Initial Study (SCEA) prepared for the project concluded the project would be consistent with the general plan and would adhere to the design guidelines.

The staff report recommending approval of the project found the project consistent with general plan policies requiring an “architectural fit” with the city’s existing scale and specific plan policies “encouraging more intense mixed-use development and accommodating buildings with floor areas up to three times the site area, while still maintaining scale transition and small city-character.” The report further explained that consistent with the DTRN guidelines the project had been designed to provide a transition area from Downtown to the Old East Neighborhood and to remain in scale with the adjacent area through use, in part, of stepped-back upper stories to concentrate building mass away from the nearby residential properties.

The city council approved the project finding it conformed with the general plan and the specific plan. Petitioner filed suit challenging the approval on the basis that the project failed to meet requirements for an SCEA assessment and that the project was inconsistent with applicable planning guidelines.

The trial court granted the petition in part reasoning that the project did not meet the general plan’s “fundamental policy” that it be a transition property. The city appealed and petitioner cross-appealed.

Court of Appeal’s Decision

On appeal, the city argued that the trial court failed to afford the appropriate deference to the city’s consistency determination. The appellate court agreed. Articulating the applicable standard of review, the court explained that a general plan consistency determination will only be reversed if it is unreasonable based on all the evidence in the record. It further noted that the city is uniquely competent to interpret adopted planning policies and the reviewing court’s role is only to decide whether the city considered the applicable policies and the extent to which the project conforms with those policies.

Applying the correct standard of review, the court found substantial evidence supported the city’s finding that the project serves as a “transition.” The court noted that the applicable planning documents did not provide a formula for determining what constitutes a “transition.” The determination instead rests on subjective criteria, e.g., “architectural fit” and “appropriate scale and character.” The court rejected petitioner’s arguments that the project could not be a transition between Downtown and Old East Davis because it was the largest building in the area, noting that nothing in the planning documents compels such a conclusion. Accordingly, the court held that the trial court erred in applying a formulistic approach that discounted the step-back design, the SCEA analysis, and other factors relied on by the city.

Petitioner also argued that the project violated DTRN guideline language stating that “a building shall appear to be in scale with traditional single-family houses along the street front” — asserting that the use of the word “shall” makes this language mandatory. The court disagreed. The DTRN guidelines explained that, unlike standards, which use unequivocal language to prescribe minimum acceptable limits, guidelines are descriptive statements that illustrate a preferred course of action. Given this, the court held that the DTRN guideline language was “decidedly subjective.” Even if the language could be deemed mandatory, the court found that the city’s conclusion that the scale of the project was consistent with the DTRN guidelines was reasonable based on the evidence in the record.

Petitioner’s cross-appeal raised three issues with the SCEA that were raised in the trial court, but the judgment did not address. Petitioner argued 1) the SCEA failed to adequately analyze historic resources impacts to the Old East Davis conservation district; 2) the SCEA failed to analyze changes to the project that would be necessary if a lease on part of the project site were not renewed; and 3) the SCEA failed to adequately analyze potential hazardous material impacts associated with the historic railroad use of the site.

The Court of Appeal concluded that petitioner had forfeited its claims because it did not challenge the trial court’s tentative decision, and, in any case, found Petitioner’s claims to be without merit. First, the court found that SCEA concluded that the Old East Davis conservation district was not a historic resource. Second, the SCEA did analyze the potential loss of the lease, and the project approvals allowed for that contingency. Third, the SCEA analyzed the potential for discovering hazardous materials and concluded that any impacts would be addressed through standard regulatory conditions.

Lastly, petitioner argued that the project did not meet the requirements for relying on a SCEA because of potential impacts to historic resources and that the city’s findings under Public Resources Code, section 21155.2, were not supported by substantial evidence. The court rejected these arguments, concluding that petitioner relied on the wrong statutory provision in claiming the project did not qualify for a SCEA and failed to raise its challenge to the City’s findings in its opening brief.

– Nina Berglund

Second District Court of Appeal Holds That Reduced Parking at National Monument is not a Direct Environmental Impact and Upholds Alternatives Analysis with Only a “No Project” Alternative.

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In Save Our Access—San Gabriel Mountains v. Watershed Conservation Authority (2021) 68 Cal.App.5th 8, the Second District Court of Appeal held that the plaintiff failed to show that reduced parking within the San Gabriel Mountains National Monument would cause any adverse physical changes in the environment, that the lead agency did not abuse its discretion in setting the baseline for parking based on aerial photography that was not included in the record, and that, based on the project’s purpose, analyzing only a “no project” alternative was a reasonable range of alternatives.

FACTUAL AND PROCEDURAL BACKGROUND

The San Gabriel Mountains National Monument was designated in 2014. The project site includes 198 acres along two and a half miles of the East fork of the San Gabriel River, including public roads, recreational facilities, and the riverbed itself. The site is significantly degraded due to heavy public use and a lack of adequate facilities. The project was proposed to improve and better manage recreation facilities along with ecological restoration and reducing environmental impacts associated with recreational use at the site.

The EIR discussed existing issues associated with parking, including the small number of designated parking spaces and the widespread practice of parking in undesignated areas, which created public safety and traffic issues throughout the site. In total, the EIR estimated that there was a total of 417 parking spaces throughout the site, of which only 48 were designated parking spaces. The estimates were based on aerial photography that was included in the EIR. The EIR also included survey data that found that average weekend use at the site from Memorial Day to Labor Day was 273 vehicles per weekend day. To address the parking and related issues, the project proposed to create a total of 270 designated car spaces and three bus spaces, and to reduce undesignated parking with a combination of signage and physical barriers.

The EIR analyzed the project’s potential impacts to recreation and concluded, based on survey data, that impacts would be less than significant because many users of the site would choose to recreate in other nearby areas if parking or other facilities were unavailable, and, given the number and variety of recreation opportunities in proximity to the site, the impacts of those users going elsewhere would be disbursed and would not be cumulatively considerable. The EIR concluded that all impacts associated with the project would be less than significant with mitigation. The alternatives analysis compared the proposed project to a “no project” alternative but did not analyze any other alternatives.

The plaintiff filed a petition for writ of mandate challenging the Watershed Conservation Authority’s certification of the EIR and approval of the project. The trial court granted the petition, in part, based on the court’s conclusion that (1) the parking baseline lacked substantial evidence support because the aerial photography the baseline relied on was not in the record; (2) the agency failed to disclose the exact number of parking spaces available in each area of the site; (3) the parking survey was unsupported by substantial evidence because of the time of day when the surveys took place; and (4) without an accurate parking baseline, the EIR failed as an informational documents because the proposed parking reduction could be significant and require mitigation.

THE COURT OF APPEAL’S DECISION

Reversing the trail court’s decision, the Court of Appeal determined that the EIR adequately discussed the project’s proposed reduction in total parking spaces and that the alleged discrepancy in total parking spaces (plaintiff alleged that there were 473 available spaces, rather than 417) was immaterial because plaintiff failed to identify any adverse physical impacts on the environment resulting from the reduced parking. The court noted that, in fact, the purpose of reducing and formalizing parking at the site was to protect and restore the environment.

The court went on to analyze two CEQA cases addressing parking issues. First, the court considered San Franciscans Upholding the Downtown Plan v. City and County of San Francisco (2002) 102 Cal.App.4th 656, which held that the inconvenience associated with “hunting” for scarce parking was not an environmental impact, but secondary effects, like traffic and air quality are. Accordingly, the court determined that an EIR need only address the adverse secondary effects of limited parking, not the social impact itself. The court also reviewed Taxpayers for Accountable School Bond Spending v. San Diego Unified School Dist. (2013) 215 Cal.App.4th 1013, which rejected the school district’s argument that a parking shortage is “never” a direct physical environmental impact. The court reasoned that each case must be decided on its facts, and that while, in some cases parking deficits may have direct physical impacts on the environment, plaintiff had not shown that the project’s parking reduction would result in direct or secondary physical impacts on the environment.

Turning to the EIR’s analysis of recreation impacts, the court found that the EIR’s analysis of nearby recreational facilities and likely impacts was adequate and that the EIR’s assumptions, based on survey data, were reasonable. The court rejected plaintiff’s speculation that, instead of leaving to recreate elsewhere, visitors to the project site would “circle and idle” until a parking space became available. Thus, the EIR’s conclusion that recreation impacts would be less than significant was supported by substantial evidence.

Regarding alternatives, the court focused on the EIR’s discussion of alternatives that were considered, but not analyzed in the EIR. The EIR explained that, through a series of workshops, three project design concepts were proposed and assessed for their ability to achieve the purposes of the project, but only one (the project), was selected for study in the EIR, along with the required “no project” alternative. The agency also considered an alternative proposed by the California Department of Fish and Wildlife but decided not to analyze it in the EIR either. The plaintiff argued that, as a matter of law, analyzing only one alternative was inadequate. The court rejected plaintiff’s argument, finding that, although CEQA and the Guidelines use the term “alternatives” (i.e., the plural form), the law is clear that the range of alternatives is subject to a rule of reason, and that each case must be evaluated on its facts. The court rejected the plaintiff’s argument that several feasible alternatives were proposed to the agency by a nearby business owner who was concerned that reduced parking at the site would impact his business. The court concluded that plaintiff had failed to show how the proposed alternatives would attain most of the basic project objectives or feasibly avoid or lessen one or more of the project’s significant impacts. The court found, on the facts of this case, that the inclusion of only a “no project” alternative was reasonable, given the purpose of the project and that the project, with mitigation, would not result in any significant impacts.

Lastly, plaintiff argued that the project was inconsistent with the Angeles National Forest Land Management Plan (LMP) and the designation creating the San Gabriel Mountains National Monument. Plaintiff’s argument centered around the reduction in parking and claimed that the corresponding reduction in access to the National Monument created inconsistencies. The court rejected this argument, finding that it elevated public access above all the other objectives and policies in the declaration. The court reasoned that the agency was required, under the proclamation and LMP, to balance public access with other concerns, including protection of the environment, and that the project did so.

– Nathan O. George

Fifth District Court of Appeal Excuses Petitioner’s Failure to Exhaust Administrative Remedies, Holds that Unlined Landfills are Not “Facilities” for Purposes of the Class 1 Categorical Exemption

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In the published portions of Los Angeles Department of Water and Power v. County of Inyo (2021) 67 Cal.App.5th 1018, the Fifth District Court of Appeal held that the issue exhaustion requirement in Public Resources Code section 21177, subdivision (a) did not apply where the County of Inyo did not provide adequate public notice prior to adopting a Notice of Exemption (NOE) and that the County abused its discretion in finding that condemning three landfill sites was categorically exempt from CEQA under the “existing facilities” exemption in CEQA Guidelines section 15301 (the “Class 1” categorical exemption).

FACTUAL AND PROCEDURAL BACKGROUND

Beginning in the 1950s, the County began leasing land within the County owned by the Los Angeles Department of Water and Power (LADWP) for waste management purposes. At issue in this case were three sites leased by the County for use as unlined landfills. The County’s operation of the landfills is subject to permitting by the California Department of Resources Recycling and Recovery (CalRecycle). Beginning in 2012, the County sought to amend the permits for two of the three landfill sites to increase the permissible daily usage, overall capacity, and to accelerate the closure dates, effectively shortening the useful life of the landfills.

After negotiating with LADWP to extend the lease agreement for one of the sites, the County determined that acquiring all three landfill sites through condemnation was necessary. In a letter to the Board of Supervisors, LADWP objected to the County’s decision, in part, arguing that that the County was required to comply with CEQA before taking any action on the proposed condemnation. At the Board hearing on the condemnation proposal, County staff suggested that the Board’s actions would be exempt from CEQA review for several reasons, including the “existing facilities” categorical exemption under CEQA Guidelines section 15301. The Board approved the condemnation proceedings, but its written decision made no mention of CEQA.

LADWP filed suit. The Kern County Superior Court ruled that the County violated CEQA and issued a writ of mandate directing the County to rescind its resolutions relating to the condemnation proceedings, pending compliance with CEQA. The County appealed.

THE COURT OF APPEAL’S DECISION

Before turning to the merits of LADWP’s CEQA claims, the Court of Appeal addressed the “threshold procedural issue” of whether LADWP’s CEQA claims were barred because it failed to exhaust its administrative remedies with respect to the issues that it raised in court. After discussing the statute and relevant case law, the court acknowledged that because CEQA did not require a comment period prior to determining that a project is exempt from CEQA, the relevant question was whether the agency provided adequate notice to the public prior to considering an exemption. Specifically, the court explained, an agency’s notice must inform the public that the agency will consider a CEQA exemption; otherwise, the issue exhaustion requirement in Public Resources Code section 21177, subdivision (a), does not apply. Here, the court found that the first mention of CEQA and the Board’s consideration of an exemption was made by staff during the hearing, and the hearing notice was silent on CEQA. The court concluded that the public was not provided with adequate notice regarding the exemption, and therefore, LADWP was not required to exhaust on its CEQA challenges to the County’s exemption determination.

Turning to the exemptions relied on by the County, the court found that because the issues before it involved the scope of the “existing facilities” categorical exemption and statutory construction, review of the County’s actions was de novo. After reviewing the language of CEQA Guidelines section 15301, the court concluded that the term “facilities” is ambiguous, agreeing with the Second District Court of Appeal in Azusa Land Reclamation Co. v. Main San Gabriel Basin Watermaster (1997) 52 Cal.App.4th 1165 (Azusa). Further agreeing with Azusa, the court reasoned that, because an unlined landfill was “excavated” rather than “built,” an unlined landfill was more akin to an alteration in the condition of land rather than a facility. The court reasoned that because section 15301 was revised following the Azusa decision but did not expressly mention landfills, the court concluded that the Secretary of Resources who issued the revised Guideline must have agreed with Azusa that unlined landfills are not a class of projects that do not have a significant effect on the environment. Thus, the court concluded that the County abused its discretion in finding the condemnation proceedings categorically exempt under the Class 1 categorical exemptions.

– Nathan O. George

First District Court of Appeal Holds That Governor Newsom’s Certification of Oakland Howard Terminal Project Under AB 734 Was Timely

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In Pacific Merchant Shipping Association v. Newsom (2021) 67 Cal.App.5th 711, the First District Court of Appeal held that there was no deadline for the Governor to certify the Howard Terminal Project as qualifying for expedited judicial review under Assembly Bill (AB) 734, and specifically, that the Howard Terminal Project was not subject to the certification deadline in the Jobs and Economic Improvement Through Environmental Leadership Act of 2011 (AB 900).

FACTUAL AND PROCEDURAL BACKGROUND

The Howard Terminal Project is a proposed development located at Oakland’s Howard Terminal. It includes a new baseball stadium for the Oakland A’s, as well as residential, retail, commercial, and other uses.

In 2018, the Legislature passed AB 734, which provided that, if the Governor certified that the Howard Terminal project met specific environmental standards, then litigation challenging the project’s environmental review would be subject to expedited judicial review. AB 734 was a stand-alone bill applicable solely to the Howard Terminal project. In many respects, AB 734 was modeled after separate legislation, generally referred to as AB 900, providing for expedited judicial review of “Environmental Leadership Development Projects” (ELDP projects).

First enacted in 2011, the Legislature has amended AB 900 several times, in part to extend various deadlines embedded in the statute. In September 2018, when the Legislature enacted AB 734, AB 900 provided that the Governor had to certify a project by January 1, 2020, and the lead agency had to approve the project by January 1, 2021, when AB 900 would sunset. AB 900 also authorized the Governor to adopt guidelines to implement the statute. The Governor’s AB 900 guidelines reflected AB 900’s deadlines.

AB 734 provided that the Governor’s AB 900 guidelines apply to the “implementation” of AB 734 “to the extent the guidelines are applicable and do not conflict with specific requirements” of AB 734. Unlike AB 900, AB 734 did not specify any deadlines in the text of the statute.

Shortly after the Legislature adopted AB 734, Governor Newsom amended his AB 900 guidelines to reference AB 734 and the Howard Terminal project, along with a different project – the Los Angeles Clippers’ proposed basketball arena in Inglewood – subject to its own, stand-alone, fast-track legislation (AB 987) that contained a similar reference to the Governor’s AB 900 guidelines.

In March 2019, the A’s submitted an application to the Governor for certification under AB 734. As a precursor to Governor certification, the California Air Resources Board (CARB) had to find that the Howard Terminal project would meet strict greenhouse gas emission reduction targets mandated by AB 734. In August 2020 – 16 months after the A’s submitted their application, and eight months after AB 900’s January 1, 2020, certification deadline – CARB made this finding. Governor Newsom certified the Howard Terminal project in February 2021.

A coalition of businesses operating at the Port of Oakland, led by the Pacific Merchant Shipping Association (PMSA), sued the Governor, challenging his authority to certify the project. PMSA alleged that the Governor’s authority to certify the project under AB 734 had expired as of January 1, 2020—the deadline for certification in AB 900. Specifically, PMSA argued that, by incorporating the AB 900 guidelines into AB 734 “to the extent the guidelines are applicable and not in conflict with the specific requirements” of AB 734, the legislature had incorporated AB 900’s deadline for certification. The trial court rejected PMSA’s arguments. PMSA appealed.

THE COURT OF APPEAL’S DECISION

After discussing the general rules of statutory interpretation, the Court of Appeal concluded that the text of AB 734 was ambiguous as to whether the January 1, 2020, deadline for certification of ELDP projects under AB 900 also applied to the Howard Terminal project under AB 734.

Turning to the legislative history for insight, the court noted that the author of AB 734 proposed a standalone bill for the Howard Terminal project, in part, because the project could not meet AB 900’s deadlines. Thus, one option the legislature considered was whether to simply extend AB 900’s deadlines and have the project proceed under AB 900. The court reasoned that the legislature was aware of this option but chose to adopt AB 734—with no deadlines—instead. Based on its review of the legislative history as a whole, the court concluded that the legislature had not intended to incorporate AB 900’s certification deadline into AB 734.

The court also determined that its construction of AB 734 was supported by the legislative purpose of the statute. As the court noted, the purposes served by enactment of AB 734 are made clear in the legislation: to assist the City of Oakland in retaining the Oakland A’s by streamlining environmental review for a “state-of-the-art baseball park” project; to generate thousands of high-wage, highly skilled jobs during construction and operation of the project; to support the City’s and region’s goals for sustainable, transit-oriented housing, including affordable housing; to provide an opportunity for investment “in new and improved transit and transportation infrastructure”; and to “implement sustainability measures designed to improve air quality and mitigate the emissions of greenhouse gases resulting from the project.” For all these reasons, the special legislation was deemed necessary so that the Howard Terminal Project could be developed in an “expeditious manner.” In light of the significant environmental, economic, and cultural benefits which prompted the adoption of AB 734, the court concluded that PMSA’s reading of the statute would undermine rather than promote the general purposes of the statute and the objectives to be achieved.

Lastly, the court concluded that a practical reading of AB 734, including its lack of deadlines, supported the respondents’ argument that the legislature did not intend to incorporate AB 900’s certification deadline into AB 734. Among other practical reasons for rejecting PMSA’s reading of the statute, the court noted that CARB’s step in the process alone exceeded PMSA’s alleged one-year deadline for certification.

The Court of Appeal agreed with the trial court and affirmed the judgment.

RMM attorneys Whit Manley and Chris Stiles represented Real Party in Interest Oakland Athletics Investment Group LLC in the litigation.

– Nathan O. George

First District Court of Appeal Holds That a Necessary and Indispensable Party is Not Bound to a Tolling Agreement That It Did Not Sign

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In Save Lafayette Trees v. East Bay Regional Park District (2021) 66 Cal.App.5th 21, the First District Court of Appeal held that PG&E, a necessary and indispensable party in the case, was not bound to an agreement to toll the CEQA statute of limitations executed by only the petitioners and the respondent public agency.

FACTUAL AND PROCEDURAL BACKGROUND

On March 21, 2017, the East Bay Regional Park District’s (District) Board of Directors issued a resolution accepting funding from PG&E as compensation for the removal of 245 trees on District property near PG&E’s natural gas transmission pipelines. PG&E issued this funding as a part of its “Community Pipeline Safety Initiative.” The District and PG&E later signed an MOU for the implementation PG&E’s initiative and ongoing maintenance and monitoring of the area near the natural gas pipeline. On June 27, 2017, the District filed a Notice of Exemption after finding the MOU and related activity categorically from CEQA.

On July 31, 2017, Save Lafayette Trees, Michael Dawson and David Kosters (Appellants), and the District entered into a tolling agreement to toll all applicable statutes of limitations for 60 days. PG&E did not consent to this agreement. On September 29, within the 60-day tolling period, Appellants filed a petition for writ of mandate challenging the District’s approval of the MOU under CEQA, as well as for violations of local ordinances and state constitutional due process rights. The action named PG&E as a real party in interest. PG&E demurred to the CEQA cause of action as time-bared by both the 35-day and 180-day statute of limitations periods under Public Resources Code section 21167. The trial court sustained the demurrer.

THE COURT OF APPEAL’S DECISION

Upholding the trial court’s decision, the Court of Appeal determined that PG&E was not bound to the tolling agreement between Appellants and the District. The court concluded that PG&E was both a necessary and indispensable party in the litigation, and therefore, was entitled to assert or waive the statute of limitations defense. The court noted that CEQA does not statutorily authorize tolling agreements, which means that they are not a statutory right. Rather, tolling agreements are private agreements between parties that have no effect on parties not in privity. Citing Salmon Protection & Watershed Network v. County of Marin (2012) 205 Cal.App.4th 195 (“Salmon Protection”), the court explained that CEQA does not prohibit tolling agreements to extend the limitations period, but to be effective they must include the recipient of an approval (the project proponent), the public agency, and the would-be petitioner. Because PG&E was a necessary and indispensable party, it was not bound to the tolling agreement to which it was not a signatory.

The court further reasoned that binding an indispensable party like PG&E to a tolling agreement to which it did not consent would defeat the purpose of the limitations period in Public Resources Code section 21167 to “protect project proponents from extended delay, uncertainty and potential disruption of a project caused by a belated challenge to the validity of the project’s authorization.”

The court also rejected Appellants’ argument that the 180-day limitations period had not run because they did not have constructive notice of the project. Appellants claimed there was no constructive notice because the removal of the trees was not included in the Board’s agenda for the project nor the accompanying description of the Board’s resolution. Public Resources Code section 21167 provides that the 180-day period begins after the agency’s decision or commencement of a project. The court noted that the Supreme Court has held that a public agency’s formal decision to carry out or approve a project is deemed constructive notice for potential CEQA claims. In this case, the court determined that the MOU for funding the tree replacement was consistent with the Board’s resolution and the project as outlined in the staff report, and did not, as Appellants asserted, constitute a “substantial difference” that would not provide constructive notice. The court explained that any flaws in the project approval process do not delay the applicable limitations period where, as here, the public agency gave notice of the very approval Appellants challenged.

The court concluded that the 180-day limitations period thus began to run on March 21, 2017, when the Board made its final decision and expired on September 18, 2017, eleven days before Appellants commenced their action. Therefore, the court held that the CEQA cause of action was properly dismissed as untimely.

– Veronika S. Morrison

THIRD DISTRICT COURT OF APPEAL DISMISSES PETITIONERS’ CHALLENGE TO A MITIGATED NEGATIVE DECLARATION BECAUSE THE CLAIMS DID NOT ESTABLISH A FAIR ARGUMENT OF SIGNIFICANT ENVIRONMENTAL IMPACTS.

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In Newtown Preservation Society v. County of El Dorado (2021) 65 Cal.App.5th 771, the Third District Court of Appeal affirmed the trial court’s decision to uphold El Dorado County’s adoption of a mitigated negative declaration (MND) for a bridge replacement project. In the published portions of the opinion, the court held that Petitioners failed to establish a “fair argument” that the project would have significant environmental impacts. Instead, Petitioners raised concerns regarding existing wildfire hazards that could impact residents near the project, but did not establish that the project may significantly impact the environment by creating or exacerbating wildfire hazards.

Factual and Procedural Background

The County, in preparing the MND, determined that the bridge replacement project could interfere with emergency response or evacuation plans and—as a result—expose people or structures to risk of loss or injury. However, the County also determined that these impacts would not be significant since a temporary evacuation route would be constructed to mitigate the risk. Such a route would only be used for emergency evacuation and, regardless of whether it was in place, any evacuation or emergency orders would be executed as the El Dorado County Sheriff’s Office of Emergency Services saw fit. Additionally, the County consulted with this office as well as the El Dorado County Fire Protection District in preparing the MND and both entities were comfortable with the document’s conclusions and assessments.

The County initially refrained from discussing the temporary evacuation route in detail in its mitigated negative declaration since it was concerned this would “lead people to believe that they should follow a certain evacuation route.” But, as a result of comments raised by one of the petitioners’ counsel and others regarding the possibility of a temporary evacuation route, the County’s responses to comments elucidated its plans and evacuation procedures in greater detail. It outlined several evacuation options given numerous emergency conditions depending on whether the temporary evacuation route was constructed.

After the County adopted the MND, Petitioners filed a writ a mandate, claiming the County failed to 1) properly consider the no-project alternative and 2) “adequately address the impact of closing the bridge without committing to construction of an evacuation route.” Petitioners claimed there was sufficient evidence in the record—including letters, correspondences, and hearing comments—supporting a fair argument that the bridge replacement project would significantly impact public safety. For example, a resident who lived on Newtown Road discussed past fire damage near her home; another resident complained that the County had not determined with finality whether a temporary route would be constructed; and another expressed concern about the effects of wind in the area on fire management; an aerial firefighter argued that recent history of wildfires demonstrated the danger in the County’s temporary evacuation route plans; Ms. Nagel, one of the petitioners, discussed her extensive firefighting experience; and Ms. Nagel’s attorney argued that the County’s MND violated CEQA by deferring important emergency management analysis.

The trial court, however, found that none of the petitioners’ arguments constituted substantial evidence, especially in light of explanatory testimony and responses to comments by the County and its experts, as well as the detailed evacuation options outlined in the MND. Instead, Petitioners’ letters and comments amounted to mere complaints and fears, backed up by speculation and unsubstantiated, non-expert opinion.

The Court of Appeal’s Decision

On appeal, Petitioners argued that the trial court erred in upholding the MND since “substantial evidence supports a fair argument of potentially significant impacts on resident safety and emergency evacuation.” The court noted that evidence supporting a fair argument can be substantial even though other equally compelling evidence may exist to the contrary. Still, the court concluded that Petitioners’ “framing of the fair argument test [was] erroneous. The question is not whether substantial evidence supports a fair argument that the proposed project will have significant impacts on resident safety and emergency evacuation. . . . [T]he question is whether the project may have a significant effect on the environment.” Yet Petitioners failed to identify any potentially significant effects the project might have on the environment and instead merely raised possible increased effects the environment might have on the community as a result of poorer evacuation procedures.

Furthermore, the Court of Appeal, like the trial court, pointed out that substantial evidence must be based on relevant information and facts; or at least reasonable inferences, assumptions, or expert opinion supported by facts. Unsubstantiated opinions, arguments, or speculations generally will not do. The court noted, however, that lay opinion may be considered substantial evidence where expertise is not necessary, which was not the case with the emergency evacuation issues raised by the Petitioners. The Court of Appeal explained again that Petitioners’ cited comments and letters were “mere speculation” and simply “dire predictions by nonexperts” and that they “fail[ed] to identify any factual foundation” for their assertions. Some comments were even directly contradicted by factual evidence in the record. Nowhere did Petitioners establish that any of the individuals whose testimony was cited were experts in evacuation planning. Thus, the court concluded that Petitioners’ claims did not constitute substantial evidence supporting a fair argument that the project may have a significant impact on the environment.

– Blake C. Hyde

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