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First District Court of Appeal Strikes Portion of Local Ordinance for Conflict with State Density Bonus Law

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On July 11, 2013, in Latinos Unidos Del Valle De Napa Y Solano v. County of Napa (2013) __Cal.App.4th__ (Case No. A135094), the First District Court of Appeal issued a partially published opinion addressing the County of Napa’s local density bonus ordinance. The appellate court determined that a provision of the County’s local ordinance conflicted with the State Density Bonus Law and was invalid.

The state Density Bonus Law (Cal. Gov. Code, § 65915) provides incentives to encourage development of low, very-low income, and senior citizen housing developments. These incentives are generally granted in the form of density bonuses for qualifying projects. To ensure compliance, local governments are required to adopt ordinances establishing procedures for implementing the statute.

Napa County amended its density bonus zoning ordinance in 2010. The amended ordinance indicated that density bonuses described in Section 65915 would be granted at the request of the applicant if the applicant also met the local ordinance’s new “inclusionary requirement.” This new ordinance required up to 20 percent of new dwellings within a residential development project be made available at prices affordable to moderate-income households.

Plaintiffs argued this new local ordinance required developers to include a higher percentage of affordable units than section 65915 requires to obtain a density bonus. The ordinance did so by excluding from the target units necessary to qualify for the density bonus those units necessary to satisfy the county’s inclusionary requirement. Thus, for example, under the wording of the county’s ordinance, a developer would only qualify for a density bonus if it restricted 22% of the project units to lower-income households. Under the state law, a density bonus is available if a developer agrees to restrict at least 10% of the project’s units to lower-income households. The court agreed that the county ordinance impermissibly placed a greater burden on developers than is permissible under the state law.

The court cited Friends of Lagoon Valley v. City of Vacaville (2007) 154 Cal.App.4th 807, where the court had previously determined that Section 65915 sets forth the maximum density bonus a city is required to provide (35 percent), but not the maximum amount a developer can ever obtain. The court noted in Friends of Lagoon Valley that because the aim of Section 65915 is to provide incentives to developers to construct low income housing, a local government could exercise its discretion to award density bonuses greater than those described in Section 65915. In this case, however, the requirements of the county’s ordinance represented the opposite situation. The county argued that the language of Section 65915 implied the county had discretion to set the (higher) minimum requirements to quality for a density bonus. The court disagreed and found that neither the language of the statute nor its legislative history supported such an interpretation. The court found that allowing local governments to increase the minimum number of affordable units required for a density bonus would directly conflict with Section 65915, subdivision (f), which bases the amount of density bonus on the percentage of affordable housing units in the project. The appellate court concluded that the provision in the county’s ordinance stating that units satisfying the inclusionary requirement do not count towards the number of units necessary to qualify for the density bonus was invalid due to this conflict with state law. The court directed that a writ of mandate be issued striking down this requirement in the ordinance.

Fifth District Court of Appeal Holds “Common-Interest” Doctrine Cannot Apply to Protect Disclosures Between a Lead Agency and a Developer before Project Approval

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Citizens for Ceres v. Superior Court of Stanislaus County (2013) __Cal.App.4th__ (Case No. F065690) involved a petition for writ relief from an order of the superior court. The Fifth District Court of Appeal’s order upheld claims by the city and developer that hundreds of documents could be excluded from the administrative record under protection by the attorney-client privilege or the attorney work-product doctrine. The court ruled that CEQA does not abrogate the attorney-client or attorney work-product privileges, but that the common-interest doctrine does not protect otherwise privileged communications disclosed by a developer to the city, or vice versa, prior to the approval of a project.

Background

On Sept. 12, 2011 the City of Ceres certified an EIR for a project by real parties in interest, Wal-Mart Stores, Inc. and Wal-Mart Real Estate Trust. Citizens for Ceres (Citizens) challenged the EIR alleging that the city failed to comply with CEQA. Citizens also challenged the city’s decision to exclude all communications between itself and the developer from the administrative record. Citizens argued that under CEQA (Public Resources Code, § 21167.6, subd. (e)) communications between the city and developer, as well as the city’s internal communications, are required to be included in the record. Further, Citizens alleged that no privileges applied because Section 21167.6 states that it applies “notwithstanding any other provision of law.”

The city argued that that the communications were protected by attorney-client privilege, work-product privilege, or other privileges and protections, including the common-interest doctrine. The city and the developer deliberately structured their communications to be based on privilege, realizing the project would be controversial. The city provided a privilege log, but maintained there was no obligation to do so.

After production of the privilege log and multiple hearings, however, the parties had not reduced the number of documents in dispute and Citizens were still contesting several hundred documents. The trial court upheld all the privilege claims on the basis that Citizens had not met its burden to prove the privilege asserted for the documents was inapplicable.

Court of Appeal’s Decision

On appeal, Citizens argued that Section 21167.6 renders all privileges inapplicable, or alternatively that the City never made the necessary showing of facts to establish that the privileges applied to the documents.

The court began by reviewing attorney-client privilege, the attorney work-product privilege, and the purposes of both. The court noted that the party claiming a privilege has the burden of establishing facts necessary to support the prima facie claim. This establishes a presumption the relevant communication was made in confidence, shifting the burden of proof to the opponent to establish that the communication was either not confidential or that the claimed privilege does not apply. According to the court, the “purpose of the attorney-client privilege is to enhance the effectiveness of our adversarial legal system by encouraging full and candid communication between lawyers and clients.” The purpose of the work-product privilege is to protect attorneys’ privacy to encourage thorough trial preparation, which includes analysis of unfavorable aspects of cases.

The court, however, rejected Citizens’ argument that the phrase “notwithstanding any other provision of law” in section 21167.6 abrogates the attorney-client privilege or the attorney work-product privilege. The court noted that Evidence Code section 911(b) forbids courts from creating privileges or exceptions through case-by-case decision making. The court found, however, that knowing this constraint, “the Legislature did not likely intend to make CEQA administrative records a privilege-free zone by the indirect means of placing the phrase ‘notwithstanding any other provision of law’ at the beginning of section 21167.6, four subdivisions away from the administrative-record provisions in subdivision (e).” The court noted that public policy and the public interest support granting privilege to public agencies, despite competing concerns for open government. In light of the similar considerations that apply to the attorney work-product doctrine, the court stated it believed that if the Legislature had intended to abrogate all privileges for the purposes of compiling CEQA administrative records, it would have expressly stated such intent.

With respect to the application of the common-interest doctrine to communications between an agency and a developer for the purposes of CEQA, the court found that the doctrine does not protect agency-applicant disclosures made before project approval. The common-interest doctrine is derived from Evidence Code sections 912 and 952 and a Law Revision Commission comment on Evidence Code 952 which remarks about extending the attorney-client privilege to communications between two parties’ attorneys regarding matters of “joint concern.” In general, the doctrine permits disclosure between parties with a common interest, without waiving privileges, when the disclosure is necessary to accomplish the purpose for which the parties sought legal advice. The court found, however, that prior to completion of environmental review and project approval, an agency and developer cannot have an interest protected by the common interest doctrine. The court noted that the applicant’s primary interest is that the agency produces a legally defensible EIR that is favorable to the project. Yet, a lead agency is presumptively neutral and objective in its interests during the environmental review and project approval process. Therefore, before a lead agency has approved a project, it cannot have a biased interest in producing an EIR that supports the applicant’s proposal. While both parties have an interest in producing a legally adequate EIR, the court determined that “the agency cannot share the applicant’s interest in an EIR that supports the project as proposed until the environmental review process is complete.” Thus, the court found that the lead agency and developer interests are “fundamentally at odds” such that they waive privileges associated with any communications they disclose to each other before the project’s approval.

The court recognized that its holding may conflict with the holding by the Third District Court of Appeal in California Oak Foundation v. County of Tehama. There the court upheld the application of the common-interest doctrine as preventing waiver in the county’s disclosure of certain document to counsel for the developer. The Third District found that the purpose of achieving compliance with CEQA includes producing an EIR what will withstand a legal challenge for noncompliance and, therefore, disclosing “advice to a codefendant in the subsequent joint endeavor to defend the EIR” falls under the common-interest doctrine. The court of appeal in Citizens for Ceres argued that italicized language from California Oak impliedly referred to a disclosure occurring after the project’s approval. The City and Developer argued that the Third District’s remarks in California Oak referred to all privileged communications, including those related to the production of a legally defensible EIR (i.e., occurring prior to project approval). The court disagreed and declined to follow California Oak if that was the case.

The court further found that, while San Bernardino Valley Audubon Society, Inc. v. County of San Bernardino (1984) 155 Cal.App.3d 738 supports the view that an agency and applicant may have a common interest in ensuring an EIR is compliant with CEQA, it does not establish a common interest for the purposes of the common-interest doctrine. Furthermore, the court rejected the city and developer’s contentions that the court’s holding conflicted with the proposition that the applicability of the common-interest doctrine does not depend on the commencement of litigation. The court noted the attorney-client privilege and attorney work-product doctrine apply in many situations not yet involving litigation and that, in this case, the time of project approval, rather than commencement of litigation, was the crucial point in time.

Thus, the court of appeal concluded the city and developer waived attorney-client and attorney work-product privileges for all communications disclosed before the city approved the project. Therefore, communications under the scope of Section 21167.6, subdivision (e) must be included in the administrative record. The common-interest doctrine still applies to communications protected by privilege disclosed after project approval.

Five RMM Attorneys Selected for Inclusion in 2013 Northern California Super Lawyers® magazine

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RMM congratulates Jim Moose, Whit Manley, and Sabrina Teller on being listed in the 2013 Northern California Super Lawyers magazine.  Amanda Berlin and Laura Harris were also included in the Rising Stars section.  The selection process is based on 12 indicators of peer recognition and professional achievement and includes the top five percent of attorneys in their practice areas.

U.S. Supreme Court Holds Nollan-Dolan Limits Apply to Monetary Exactions and the Denial of Permits

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In a 5-4 decision written by Justice Alito, the Supreme Court of the United States reversed the Florida Supreme Court in Koontz v. St. Johns River Water Management District, holding that the government cannot condition the issuance of a land-use permit on the applicant giving up a portion of his property, including financial property, unless there is a “nexus” and “rough proportionality” between the government’s demand and the proposed land use.

Background

Two earlier Supreme Court cases, Nollan v. California Coastal Commission, and Dolan v. City of Tigard, set limits on governments’ ability to impair property interests with land use regulations. Under those decisions, there must be a “nexus” and “rough proportionality” between the government’s demand and the effects of the proposed land use. This test was historically applied when the government requested that the owner relinquish some of his or her property, like an easement, as a condition on a land use permit.

In this case, Koontz sought to develop his land in Florida. The land was classified as wetlands, and Florida law requires permit applicants wishing to build on wetlands to offset the resulting environmental damage by creating, enhancing, or preserving wetlands elsewhere. Koontz offered to mitigate by deeding to the defendant water management district a conservation easement on nearly three-quarters of the property. The district found this mitigation inadequate.  The district then suggested that they would grant his permit request if he reduced the size of his development even further (from 3.7 acres to 1 acre) or hired contractors to make improvements to district-owned wetlands several miles away. Koontz did neither; instead he sued under a state law permitting him to seek damages for agency action that is an “unreasonable exercise of the state’s police power constituting a taking without just compensation.”

The trial court and the appellate court in Florida found that the district’s demand failed the Nollan-Dolan test. The Florida Supreme Court reversed, holding that Koontz did not have a claim because: (1) the Nollan-Dolan standard does not apply to the denial of a permit; and (2) the standard does not apply to a demand for the payment of money. Koontz appealed to the U.S. Supreme Court.

Supreme Court’s Decision

On the first issue, both the majority and the dissent (authored by Justice Kagan) agreed that the denial of a permit should be held to the Nollan-Dolan standard. If the government coerces the project applicant into giving up property rights—a condition precedent—that implicates the Fifth Amendment in the same way that granting a permit with conditions does—a condition subsequent. To hold otherwise would allow governments to evade the Nollan-Dolan limitations by framing demands as conditions precedent.

The majority and the dissent disagreed on the second issue: whether monetary exactions were subject to the same limitation. Justice Kagan, joined by Justices Ginsburg, Breyer, and Sotomayor, believed that this issue had already been settled in Eastern Enterprises v. Apfel, 524 U.S. 498 (1998). In Eastern Enterprises, the court held that the Takings Clause did not apply to government-imposed financial obligations “that do not operate upon or alter an identified property interest.” Justice Alito felt that Koontz’ property interest was altered by the District’s demand for money to improve wetlands on a District-owned parcel because of the direct link between the government’s demand and a specific parcel of real property. The dissent disagreed since it was not Koontz’s property that was affected, but the public wetlands. Citing Eastern Enterprises, the court saw this as the government simply imposing “an obligation to perform an act that costs money.” The District did not place any restrictions on Koontz’s property. They did not demand any particular lien, or bank account, or income stream from property. So according to the dissent, Koontz was never asked to relinquish a constitutional right.

The majority believed that this was a clear application of the unconstitutional conditions doctrine, which prevents the government from denying a benefit to a person because he exercises a constitutional right. Here, according to the majority, Koontz was exercising his constitutional right not to have his property taken without just compensation and should not have his permit denied because of that exercise. The majority emphasized that land-use permit applicants are especially vulnerable to the type of coercion that the unconstitutional conditions doctrine prohibits, because the government often has broad discretion to deny a permit that is worth far more than the property it would like to take. This makes the landowners likely to accede to the government’s demand, no matter how unreasonable.

The dissent viewed the District’s request as part of a negotiation process with the developer, not as an unconstitutional condition. In his permit application, Koontz suggested one kind of mitigation (a conservation easement on his property). The District found this inadequate and countered with other forms of mitigation that would be acceptable (a larger easement or improving public wetlands). There were no conditions placed on the permit itself, only a suggestion of how the permit application could comply with state law. Had the District denied the permits outright, without providing Koontz with suggestions on how to modify his applications, it would not have run afoul of the Takings Clause under the majority’s test. The dissent expressed concern that the majority’s reasoning will prevent local governments from providing suggestions to or negotiating with project applicants.

Implications

This decision extends the Takings Clause into more local land-use actions. Property owners can challenge demands for money during the permit application process, whether the demand comes before or after the permit is granted. This will only result in compensation, however, when property is actually taken. In this case, Koontz was not entitled to just compensation under the Fifth Amendment because he never paid for the improvements to the other wetlands.

The majority emphasized that the decision does not prevent local governments from insisting that the “applicants bear the full costs of their proposals.” Rather, they are only “forbidding the government from engaging in out-and-out extortion that would thwart the Fifth Amendment right to just compensation.” Taxes and user fees are not takings, so this case “does not affect the ability of governments to impose property taxes, user fees, and similar laws and regulations that may impose financial burdens on property owners.” The court did not decide “at precisely what point a land-use permitting charge denominated by the government as a ‘tax’ becomes so arbitrary that it was not the exertion of taxation but a confiscation of property,” but noted that the determining if something is a tax or a taking is more difficult in theory than in practice. The dissent disagreed, and would have preferred the majority provide a more straight-forward, like the one used in California, which states that Nollan-Dolan only applies to permitted fees that are imposed ad hoc, and not to fees that are generally applicable. Finally, the majority emphasized that “so long as a permitting authority offers the landowner at least one alternative that would satisfy Nollan and Dolan, the landowner has not been subjected to an unconstitutional condition.”

Sixth District Upholds EIR and Cancellation of Williamson Act Contracts for Solar Farm Project

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In Save Panoche Valley et al. v. San Benito County (2013) __Cal.App.4th__ (Case No. H037599), the organizations Save Panoche Valley, Santa Clara Valley Audubon Society, and Sierra Club (collectively Save Panoche Valley) challenged the County of San Benito’s certification of an EIR prepared for a proposed solar power project. The Sixth District Court of Appeal affirmed the trial court’s decision denying the petition and upholding the EIR.

Facts and Procedural Background

In 2009, PV2 Energy LLC (applicant) proposed to build a 420-megawatt photovoltaic Panoche Valley Solar Farm Project (the Project) in San Benito County on 4,885 acres of land primarily used for cattle grazing. The surrounding area is also mostly used for cattle grazing, though some land supports other limited agricultural uses. The proposed project site included land held under Williamson Act contracts. The applicant requested that the County make a finding that the project was compatible with the Williamson Act, but the County denied this request. Subsequently, the applicant requested cancellation of Williamson Act contracts on approximately 6,953 acres of land, of which approximately 4,563 were within the boundaries of the proposed project.

The County prepared a Draft EIR and circulated it for public review and comment in June 2010. The DEIR concluded that the project would result in significant and unavoidable visual impacts. The DEIR also identified potential biological impacts on populations of blunt-nosed leopard lizards, giant kangaroo rats, and San Joaquin kit foxes. The DEIR analyzed several alternatives to the proposed project, including a reduced density alternative and an alternative project site.

During the public comment period on the Draft EIR, the California Department of Fish and Wildlife (formerly Fish and Game), submitted comments recommending measures to avoid unlawful take of special species of concern, including the blunt-nosed lizard. A Final EIR was released in September 2010 which included a revised project alternative. This alternative included a conservation easement on the project site, which reduced the project size and density. Under this proposal, the project would generate approximately 399 megawatts of power. The Final EIR concluded that this revised alternative would meet most of the project objectives and eliminate five of the previously significant and unavoidable impacts on biological and visual resources.

Following release of the Final EIR, the County held a public hearing at which it certified the EIR, adopted CEQA findings, and approved the request to cancel Williamson Act contracts. Save Panoche Valley filed suit, but the trial court denied the petition for writ of mandate, and the petitioners appealed.

The Williamson Act Claims

On appeal, Save Panoche Valley argued the County erred when it cancelled the Williamson Act contracts on land within the proposed project’s boundaries. They argued the record failed to support the County’s findings that “other public concerns substantially outweigh the objectives of the Williamson Act,” and that the cancellations were made in error because land suitable for a large-scale solar facility was available which was not held under contract

Government Code sections 51200 et seq. describe the procedures for cancelling a Williamson Act contract. An city or county can only approve a cancellation if it makes certain findings. The findings must conclude either that cancellation is consistent with the Williamson Act, or that cancellation is in the public interest. In this case, the County Board found that “other public concerns” substantially outweighed the objectives of the Williamson Act.

The appellate court found support in the record for the Board’s finding. California has a well-established interest in promoting the development of renewable energy sources, apparent in legislation such as AB 32, the California Global Warming Solutions Act of 2006, and the Renewables Portfolio Standard. The record indicated that the solar project would help further the state’s progress towards achieving its renewably energy goals. Further, agriculture would continue in limited amounts on land within and adjacent to the project site encumbered by conservation easements requiring cattle grazing. The court determined this substantial evidence supported the Board’s findings, despite evidence in the record that Save Panoche Valley pointed to that supported the denial of the Williamson Act cancellations. It was the duty of the Board to weigh the pros and cons of cancelling the contracts, and not the court’s.

The appellate court also rejected Save Panoche Valley’s argument that proximate, non-contracted alternative land was available for a solar project. Under the Williamson Act, “proximate” has been construed as meaning “close enough to the restricted parcel to serve as a practical alternative for the proposed use.” The record demonstrated that the suggested alternative land was located approximately 60 miles away, in two different counties, and also included land encumbered by Williamson Act contracts. Further, portions of the land were held by water districts that the applicants had previously approached regarding a solar project but with whom the applicant had been unable to reach a deal. The court found that these and other factors provided substantial evidence supporting the Board’s determination that no proximate, non-contracted land was available for use as an alternative project site.

The CEQA Claims

In addition to their Williamson Act claims, Save Panoche Valley also challenged both the adequacy of the EIR under CEQA and the evidence supporting the Board’s various CEQA findings.

First, Save Panoche Valley argued the Board violated CEQA because it approved a project for which a feasible alternative was available. To support this argument, appellants pointed to the same alternative site they believed made the Williamson Act cancellations improper. But the Board cited several reasons for determining that the suggested alternative site was infeasible for the proposed solar project, including timing, financing, regulatory, and jurisdictional issues. These various factors provided substantial evidence in support of the Board’s rejection of the alternative site.

Second, appellants challenged the project EIR’s analysis and mitigation of biological impacts. They argued that the EIR failed to include adequate biological surveys regarding the blunt-nosed leopard lizard. But the court determined additional surveys were not necessary merely because they might be helpful. The Final EIR responded to comments from the California DFW and established a protocol for surveys to occur prior to construction. This was sufficient.

Third, Save Panoche Valley raised various challenges to mitigation measures adopted in the EIR to address biological impacts. Appellants argued that the EIR improperly deferred mitigation of impacts to the blunt-nosed leopard lizard. But the court determined the mitigation measures were not impermissibly loose or open-ended. For example, upon completion of the lizard survey, a minimum buffer of 22 acres would be set aside for each lizard. The measures did not simply call for adopting recommendations of the consultants conducting surveys. Instead, the measures provided for specific actions to be taken upon the discovery of a certain species. This particularity was sufficient to avoid improper deferral of mitigation.

The court also determined that substantial evidence supported the Board’s findings that mitigation measures would significantly reduce other biological impacts, such as potential impacts to San Joaquin kit foxes and the giant kangaroo rat. Further, substantial evidence supported the Board’s conclusion that certain mitigation lands were suitable for conservation. Finally, substantial evidence supported the Board’s selection of various ratios for mitigating certain habitat and land, such as mitigation of giant kangaroo rat habitat at a 3-to-1 ratio.

Lastly, the appellants challenged the EIR’s agricultural impact analysis. The project would convert some prime agricultural land, but mitigation measures were adopted which included the protection of land in and around the project site and the creation of agricultural conservation easements. Save Panoche Valley argued these mitigation measures failed to “minimize, rectify, reduce, and eliminate [agricultural] impacts,” because the measures did not ensure the creation of additional agricultural lands. But the court determined this was not the proper standard for “mitigation” as defined by CEQA Guidelines section 15370. Mitigation can be achieved by: (1) avoiding the impact altogether; (2) minimizing impacts by limiting the scope of the project; (3) rectifying the impact by rehabilitating or restoring the impacted environment; (4) reducing or eliminating the impact over time through preservation and maintenance operations during the life of the project; and (5) compensating for the impact by replacing or providing substitute resources or lands.

Ultimately, the court determined that the record supported conclusions reached in the EIR and the CEQA findings made by the Board, including findings made in its statement of overriding considerations.  Thus, the court of appeal affirmed the trial court’s judgment upholding certification of the EIR and project approval.

First District Court of Appeal affirms trial court judgment upholding San Francisco’s certification of a mixed-use project EIR.

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In a CEQA case originating in San Francisco, the First District Court of Appeal affirmed a trial court judgment denying a petition for writ of mandate and upholding an EIR certified by the city. The decision, Neighbors for Fair Planning v. City and County of San Francisco (2013) __Cal.App.4th__ (Case No. A135745), was filed on May 31, 2013 and recently ordered published.

Facts and Procedural Background

The real party in interest in this case, the Booker T. Washington Community Service Center (the Center), proposed demolition of the Center’s existing facility, which would be replaced by a mixed-use facility. This new facility would include 48 affordable housing units and an expanded and updated community center. The existing facility is a one-story building, while the proposed project would reach five stories.

The city planning department circulated a DEIR for the proposed project in June 2010. The project received both positive and negative comments. Numerous individuals and community groups objected to the project’s size, scope, and density, as well as the project’s visual impacts and effects on traffic and parking. To address concerns regarding the project’s visual character, the Center modified the project to break up its bulk into smaller components, reduce massing on the fifth story, and incorporate setbacks on the upper floors. The city certified the EIR and granted the Center a conditional use permit in April 2011.

The city upheld the EIR certification and use permit approval on plaintiff’s appeal. The city also approved an ordinance creating a special use district to increase allowable building height in the project area to 55 feet and density to 54 units.

The City did not violate CEQA by “preapproving” the project.

In the subsequent lawsuit, the petitioner (“Neighbors”) cited Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116 in support of their argument that the city impermissibly “preapproved” the project in violation of CEQA. Specifically, the Neighbors asserted the city committed to approving the project prior to certification of the EIR. The appellate court noted that determining the appropriate timing for preparation of an EIR requires a balancing of competing factors. The CEQA Guidelines express these competing policies by recognizing legislative policy that: (1) CEQA should not be interpreted to require an EIR before a project is defined enough to facilitate meaningful review; and (2) CEQA should not be interpreted as allowing delay of EIR preparation beyond the point which it can serve its intended purposes—to inform and guide decision makers.

The general principle for balancing these two policies is described in the CEQA Guidelines: before conducting CEQA review, agencies must not “‘take any action’ that significantly furthers a project ‘in a manner that forecloses alternatives or mitigation measures that would ordinarily be part of CEQA review of that public project.’” Courts have approached this principle by asking “whether, as a practical matter, the agency has committed itself to the project as a whole or to any particular features” in a way that precludes consideration of alternatives or mitigation measures that CEQA would otherwise require to be considered.

In this case, the Neighbors argued the city preapproved the project by improperly committing itself to the project and foreclosing consideration of all alternatives in 2010, when the Mayor’s Office of Housing “provided substantial funding for the project, signed commitments for millions of dollars, assigned numerous senior staff to the project, and coordinated and designed the project long before CEQA review was conducted.” Specifically, the Neighbors cited a pre-development loan agreement between the city and the Center that covered about 4% of the estimated project costs. A maximum disbursement of $550,000 was authorized prior to the completing of CEQA review. These funds were to cover predevelopment activities, such as survey and appraisal preparation, preparation of environmental studies, CEQA and NEPA review, and other expenses. The loan also described terms of repayment. It even explicitly stated that the city was not committing itself to the project.

The appellate court was not convinced by the Neighbors’ argument. Under the loan agreement, the project remained subject to review by the city, and the city’s financial support of the project extended only to exploratory and development costs recognized in Sava Tara not to require CEQA review. Further, the Center was required to repay the loan whether or not the project was approved. Finally, the city’s support of the low-income aspect of the project was only a single factor to be considered under Sava Tara and not tantamount to project approval.

The Neighbors also argued that the city preapproved the project based on adoption of the special use district ordinance allowing increased height and density. The court rejected this argument. Essentially, the Neighbors argued that the introduction of the ordinance constituted legislative action and therefore project approval under CEQA. But approval of the ordinance occurred two months after the EIR for the project was certified.

Finally, the Neighbors argued the city preapproved the project based on commitment of city staff resources and public comments by the Mayor’s Office of Housing. The appellate court was not persuaded by this evidence, stating that a supervisor’s advocacy for a project, an email from a non-profit soliciting support for the project, and a publication by the Center were insufficient to indicate the City improperly committed to the project prior to CEQA review.

The EIR prepared for the project was sufficient.

Challenging the substance of the EIR itself, the Neighbors first argued the EIR was inadequate because it relied on an improper baseline. The Neighbors pointed to one figure in the draft EIR that incorrectly identified all two-story buildings in the immediate project vicinity as three-story buildings. But the court found the DEIR as a whole adequately described the surrounding vicinity and, specifically, the heights of adjacent buildings. Further, a corrected version of the figure was included in the Final EIR certified by the Board of Supervisors, so informed decision making was not thwarted.

The Neighbors also argued the EIR was deficient for failing to evaluate relocating the Center’s existing facility to a new site as project alternative. But the court noted that the CEQA Guidelines do not require analysis of an off-site alternative in every case. The court held that the city reasonably determined, with analysis supported by substantial evidence, that it would not be feasible to relocate the Center away from the community it had historically served to an unidentified location, especially in light of the Center’s non-profit status and limited means for acquiring alternate property.

The City properly rejected a code-compliant alternative and properly issued the conditional use permit.

The Neighbors further argued the City’s rejection of a “code compliant” alternative was unsupported by substantial evidence. This alternative would reduce the number of affordable housing units from 48 to 30. The city determined this would cause the project to run an annual deficit that would need to be subsidized by the city. The Mayor’s Office of Housing testified that sound public policy supported construction of financially self-sustaining developments that would create more affordable housing units without additional public funds. Further, if the city were required to subsidize this project, it would have less funding available for other affordable housing projects. The court found these and other points to be well-established in the administrative record. Substantial evidence supported the city’s decision to reject the code-compliant alternative.

The Neighbors also argued the city’s findings that the project was necessary and desirable for, and consistent with, the neighborhood was unsupported by substantial evidence under section 303 of the San Francisco Planning Code. The record demonstrated that the city considered both the immediate neighborhood and its broader vicinity and found that the project would not be detrimental to the public health, safety, and welfare or adversely affect the General Plan. The city further found that the project was necessary or desirable because it would continue and expand upon services provided by the Center, particularly for at-risk emancipated foster youth. The findings were supported by substantial evidence, and the court found no merit in the Neighbors’ argument.

The project was consistent with the General Plan.

Lastly, the Neighbors argued that the project is inconsistent with the San Francisco General Plan because “it is incompatible with, and fails to preserve, the existing neighborhood character.” The standard of review for consistency findings is an arbitrary and capricious standard of review. Further, policies in general plans often reflect a range of competing interests that the governmental agency must weigh and balance when applying to legislative actions. Precise conformity is not required, just compatibility. The city made explicit findings that the project was consistent with various objectives and policies, including findings regarding the project’s scale and design—the Neighbors’ primary concern.  These findings were sufficient, and the court declined the invitation to second-guess the city’s determination.

Claims Dismissed in Tahoe Regional Plan Update Challenge

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On June 17, 2013, the U.S. District Court for the Eastern District of California dismissed one federal claim and all state claims in Sierra Club and Friends of the West Shore v. Tahoe Regional Planning Agency and ordered Plaintiffs to pay for the production of the administrative record. The case involves a challenge to the Regional Plan Update approved by the Tahoe Regional Planning Agency (“TRPA”) on December 12, 2012.  TRPA had moved to dismiss the complaint for failure to prosecute, moved to dismiss all state law claims, and moved to dismiss two of the federal causes of action included in the Complaint.  TRPA moved to dismiss for failure to prosecute because Plaintiffs refused to pay for the costs associated with the production of the administrative record as required under the TRPA Rules of Procedure.  The court rejected Plaintiffs’ challenges to the validity of the administrative record provisions in the TRPA Rules of Procedure.  Rather than dismissing the entire case, the court held that the Plaintiffs were required to pay the costs to produce the record within 15 days of the court’s ruling.  The court also held that the Plaintiffs could not bring state law claims against TRPA or seek attorney’s fees under California law because the Congressional consent transformed the Tahoe Regional Planning Compact (“Compact”) into federal law. Finally, the court held that the Plaintiffs did not have standing to bring one of their federal claims, which challenged the provision of the Regional Plan Update that allowed the TRPA to delegate permitting of certain projects to local governments through Area Plans. The court held Plaintiffs lacked standing to pursue this claim because no delegation had occurred and thus there was no injury to the Plaintiffs. Although the remainder of the federal claims will proceed, the court’s ruling represents a substantial step forward for TRPA and the Regional Plan Update. Remy Moose Manley, LLP partners Whitman F. Manley and Howard F. Wilkins represent the TRPA along with TRPA attorneys John L. Marshall and Scott Lichtig. See TRPA’s press release for more information.

Delta Stewardship Council faces numerous lawsuits challenging its certification of an EIR for the Delta Plan

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The California State Legislature created the Delta Stewardship Council in 2009 by enacting SBX7 1, the Delta Reform Act. The Council’s primary mission is to adopt a comprehensive management plan for the Sacramento-San Joaquin Delta (the “Delta Plan”) that achieves the “coequal goals” of providing a more reliable water supply for California and protecting, restoring, and enhancing the Delta ecosystem.

In developing its recently adopted Delta Plan, the Council was required to prepare an Environmental Impact Report (EIR). The Council published a notice of preparation in December 2010 indicating that it would prepare a programmatic EIR to evaluate the potential environmental impacts of the proposed Delta Plan.

An EIR was required under CEQA because the Delta Plan could have significant environmental effects relating to the binding regulatory policies included within the Plan. The Council will not directly construct, own, or operate facilities in the Delta, or directly undertake any other specific activities to implement the Delta Plan, so adoption of the Plan would not result in direct physical changes to the environment. But adoption of the plan could indirectly cause such changes by influencing the decisions and actions of other agencies. The EIR focused on these potential indirect impacts.

Preparation of the EIR involved an extensive drafting and public review process. Numerous public workshops and hearings were held, culminating in nearly 100 public meetings, and many draft documents were circulated to the public. Five draft versions of the Delta plan were released between 2010 and 2011, with a final draft released in 2012. The Draft PEIR for the Delta Plan was circulated in 2011, and recirculated in 2012. A final EIR responding to public comments was certified by the Council at its May 16-17, 2013 meeting.

Despite the extensive public review process, multiple interest groups have challenged the Council’s certification of the EIR in court. Following certification of the EIR, the Council published a notice of determination, which starts a 30-day statute of limitations in which to bring a suit under CEQA. By the close of this limitations period, seven lawsuits had been filed in various courts challenging the adequacy of the EIR.

Three lawsuits were filed in the Sacramento County Superior Court. The San Luis & Delta-Mendota Water Authority and Westlands Water District filed a petition alleging numerous causes of action under CEQA and also alleging that the Council violated the Delta Reform Act. A second lawsuit was filed by the State Water Contractors, who were joined by various flood control and water districts. This suit also alleges similar violations of CEQA, such as inadequate mitigation measures and inadequate responses to comments and claims that the Delta Plan is inconsistent with the Delta Reform Act. A third suit was filed by the North Coast Rivers Alliance, Pacific Coast Federation of Fishermen’s Associations, San Francisco Crab Boat Owners Association and the Winnemem Wintu. Again, this suit included numerous allegations of CEQA violations, as well as violations of the Delta Reform Act.

The City of Stockton filed suit against the Council in San Joaquin County Superior Court. This suit alleges the EIR violated CEQA for numerous reasons and that the Delta Plan and regulations adopted by the Council conflict with state law and vested rights created by statutory and common law.

The three remaining suits were filed in the San Francisco County Superior Court. These included a suit by a new interest group, Save the California Delta Alliance, and a suit brought by the California Water Impact Network, Friends of the River, California Sportsfishing Protection Alliance, and Center for Biological Diversity, among others. The final petition was brought by in-Delta interests, including the Central Delta and South Delta Water Agencies, and local agencies of the north Delta. These suits too allege numerous violations of CEQA.

The plethora of suits against the Delta Council implicates upcoming procedural hurdles in the litigation over the Delta Plan and Delta Plan PEIR. First, the cases will likely need to be at least partially consolidated, so they may be tried before a single judge based on a single administrative record. And second, the preparation of the administrative record itself may be a hurdle because some petitioners have elected to prepare the record themselves, while others have requested that the agency prepare the record. In short, the filing of these seven lawsuits indicates that the Council will have to travel down a long and litigious road in order to implement the Delta Plan as directed by the State Legislature.

Third District Court of Appeal Holds Siskiyou County Does Not Have Exclusive Jurisdiction Over Scott River Groundwater Public Trust Doctrine Case and that Sacramento Venue is Proper

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The Third District Court of Appeal issued its decision in County of Siskiyou v. Superior Court (2013) __Cal.App.4th__ (Case No. C067252) on June 13, 2013. The court denied Siskiyou’s petition for writ of mandate, which challenged the trial court’s decision on issues of exclusive jurisdiction and change of venue.

Background

In the underlying action, real parties in interest—Environmental Law Foundation, Pacific Coast Federation of Fishermen’s Associations, and Institute for Fisheries Resources—filed a petition for writ of mandate in Sacramento County. Real parties sought to halt the issuance of well-drilling permits, alleging Siskiyou and the State Water Resources Control Board (Board) failed to manage specific groundwater resources interconnected with the Scott River in a manner consistent with the public trust doctrine. They argued that Siskiyou and the Board’s failure to protect and manage public trust resources was harming the Scott River as well as its fish and wildlife populations. Real parties limited their prayer for relief to “groundwater not previously adjudicated within the Scott River sub-basin,” recognizing a 1980 Siskiyou County Superior Court decree that adjudicated water rights in the Scott River and reserved jurisdiction to review and modify the decree in the interests of justice. Real parties asserted that the 1980 decree did not extend to groundwater at least 500 feet from the Scott River. Real parties also argued venue was proper under Code of Civil Procedure section 401, subdivision (a) because the Board, a state agency, may be tried where the Attorney General has an office.

Siskiyou demurred to the petition, claiming that the Siskiyou Superior Court had exclusive jurisdiction to hear the case under the 1980 decree. Siskiyou argued that the 1980 decree “expressly applies to all interconnected groundwater . . . including interconnected groundwater located more than 500 feet from the river.” Siskiyou stated that the Siskiyou Superior Court had exclusive jurisdiction in this case because a public trust claim would require the Board and County to regulate the same groundwater resources that are subject to the 1980 decree.

In the alternative, Siskiyou moved to transfer venue to the Siskiyou Superior Court under section 392. Siskiyou asserted that that under section 392 the superior court where real property is located is the proper venue for issues pertaining to a right or interest in real property. Siskiyou interpreted Civil Code sections 658 and 662 to define groundwater as real property under section 392. Siskiyou therefore argued that section 392 applied to the underlying case because the parties’ petition implicated an interest in groundwater, and thus an interest in real property.

The trial court overruled the demurrer, holding that the real parties’ petition did not seek to adjudicate groundwater rights specifically identified in the 1980 decree. It also denied the change of venue, holding section 392 did not apply because the petition alleged injury to usufructuary water rights, not injury to real property.

Claim of Exclusive Concurrent Jurisdiction

On appeal, Siskiyou argued that exclusive concurrent jurisdiction applies when two actions relate to the same subject matter. It further argued that the real parties’ petition to apply the public trust doctrine to groundwater interconnected to groundwater of the Scott River related to the same subject matter as the 1980 decree. Siskiyou claimed the parties’ petition would affect the rights of groundwater users in the 1980 decree.

The Court of Appeal stated there are two limits to exclusive concurrent jurisdiction. Matters in the latter case must be “necessarily related” to the first, and issues in the cases must be “substantially the same.” The court held that the parties’ claim was not a matter necessarily related to the 1980 decree — there was no evidence that the 1980 decree considered the public trust doctrine. The court likewise stated that the issues were not substantially the same. The parties’ petition argued that the Board and Siskiyou have authority under the public trust doctrine to protect public trust resources, while the 1980 decree determined water rights to groundwater interconnected with the Scott River. Finally, the court noted that “the rule of exclusive concurrent jurisdiction is a rule of policy, and countervailing policies may make the rule inapplicable.” Thus, the court held Siskiyou did not have exclusive jurisdiction.

Request to Transfer Venue

On appeal, Siskiyou argued that the trial court erred in finding water is not real property within the meaning of section 392, but rather a usufructuary right, and it cited several cases holding that water is a part of the land. Siskiyou also reasserted that the parties’ petition implicated an interest in property whereby section 392 controlled proper venue. The court found two problems with Siskiyou’s analysis of section 392. The court noted that under section 401, venue was proper in Sacramento and that Siskiyou failed to cite authority for the proposition that section 392 takes precedence over other venue statutes. Second, the court pointed out that section 392 is limited to specific types of actions involving real property. The court distinguished actions listed under section 392 from the issue of whether the Board had authority to apply the public trust doctrine to the interconnected groundwater. The court clarified that the parties’ petition did not affect the rights of individual water rights holders. Thus, the court denied Siskiyou’s petition for writ of mandate.

The decision is available at http://www.courts.ca.gov/opinions/documents/C067252.PDF.

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