The Vision California project, an effort funded by the California High-Speed Rail Authority in partnership with the California Strategic Growth Council, released its first report entitled “Charting Our Future” on June 23, 2010. The report discusses how changes in land use and infrastructure decisions can result in positive benefits for the State, its economy, and the environment.

The report compares “Business as Usual” and “Growing Smart” future scenarios. The Business as Usual scenario combines the trend in past land use decisions with assumptions about modest improvements in energy and water efficiency. On the other hand, the Growing Smart scenario paints a future of increased urban infill and compact growth. The report concludes that the Growing Smart scenario has a higher positive impact on the environment and our wallets, noting that the Growing Smart future reduces annual household costs for gas, auto maintenance and household utility bills by 45% in 2050.

The Vision California project seeks to explore the role of land use and transportation investments in meeting the environmental, fiscal, and public health challenges facing California over the coming decades. One of the major goals of the project is to clearly link land use and infrastructure priorities to the mandated targets set by AB 32, SB 375, and the California Air Resources Board.

A copy of “Changing Our Future” can be found at: www.visioncalifornia.org

In Butte Environmental Council v. United States Army Corps of Engineers (9th Cir. 2010) 607 F.3d 570, Butte Environmental Council sued the Army Corps of Engineers, the Fish and Wildlife Service, and the City of Redding over their decisions to permit a proposed business park in Redding that would destroy 234.5 acres of critical habitat along Stillwater Creek in Redding. Specifically, the Council challenged the Corps’ decision under the Administrative Procedure Act to issue a Clean Water Act section 404 permit for the project and the FWS’s biological opinion that the project would not adversely modify critical habitat for endangered and threatened species.

Endangered Species Act Challenges. The Ninth Circuit, like the district court, upheld the FWS’s determination that the project would not result in the “adverse modification” of critical habitat. The Court first rejected the Council’s argument that the FWS applied an improper definition of “adverse modification” and thus failed to account for “recovery needs” of the affected species as required by Gifford Pinchot Task Force v. U.S. Fish & Wildlife Service (9th Cir. 2004) 378 F.3d 1059.). Gifford Pinchot found fatally flawed a critical habitat analysis that relied on an unlawful regulatory definition of “adverse modification” set out in 50 C.F.R. 402.02. (See Gifford Pinchot, 378 F.3d at p. 1070 [taking issue only with the use of “and” instead of “or” in the regulatory definition of “adverse modification”].) In rejecting the Council’s argument, the Court pointed to the FWS’s statement in the biological opinion that it did not rely on the flawed definition of “adverse modification” of critical habitat set out in 50 C.F.R. 402.02, but instead, relied upon the statute and the decision in Gifford Pinchot for its analysis with respect to critical habitat. In reaching this conclusion, the Court noted that nothing in the biological opinion suggested otherwise.

In perhaps the most significant ruling in the case, the Court explained that Gifford Pinchot did not alter the rule that “‘adverse modification’ occurs only when there is ‘a direct or indirect alteration that appreciably diminishes the value of critical habitat.’” The Court explained that “critical habitat can be destroyed without appreciably diminishing the value of the species’ critical habitat overall.” Therefore, the Court held that FWS’s determination that, while critical habitat would be destroyed, no “adverse modification” would occur because only a very small percentage of the total critical habitat for the affected species would be eliminated. FWS in the biological opinion explained that the affected 234.5 acres of critical habitat along Stillwater Creek in Redding, California would amount to only 0.04% of the vernal pool fairy shrimp’s 597,821 acres of total critical habitat nationwide and only 0.10% of the vernal pool tadpole shrimp’s 228,785 acres of total critical habitat nationwide.

Clean Water Act Challenges. The Court also held that the Corps decision to issue a 404 permit for the project was neither arbitrary nor capricious. First, the Court concluded that the Corps properly applied 40 C.F.R. § 230.10(a)(3), the regulation that applies to non-water dependent activities. That regulation states that, where a proposed activity is not water dependent, “practicable alternatives that do not involve special aquatic sites are presumed to be available, unless clearly demonstrated otherwise.” The Court held that the Corps applied the proper presumption and found that it was rebutted under the appropriate standard. The Corps’ had determined that the project was not water dependent, but that, based on a review of over a dozen alternative sites, the City had “clearly demonstrated that there are no practicable alternative sites available.”

Second, the Court rejected the Council’s argument that the Corp’s decision to issue the permit was inconsistent with its earlier criticisms of the project in an Environmental Impact Statement. The Court concluded that the Council’s argument ignored evidence in the record that the City modified the project to address the Corps’ early criticisms. The Court also stated that agencies are entitled to change their minds and that it had no “trouble discerning the path of the agency’s reasoning over time.”

Third, the Court rejected the Council’s claim that the Corps “simply deferred” to the City’s judgment rather than making an independent determination of the business park’s purpose. The Court disagreed, pointing out that the Corps’ initial project criticisms, which resulted in project changes. Only after the City modified the project did the Corps agree with the City’s point of view. Noting that the Corps has a duty to consider an applicant’s purposes when they are “genuine and legitimate,” the Court found the Corps’ action to be reasonable on this point.

The California Secretary of State has qualified an initiative for the November ballot that would delay enforcement of the Global Warming Solutions Act, more commonly known as AB 32, until certain prosperous economic conditions are observed. In substance, AB 32 requires the state to reduce emissions of certain greenhouse gases to 1990 levels by 2020 and charges various agencies with achieving that goal through various means. The initiative would suspend AB 32 until California’s unemployment rate drops to 5.5% or less for four consecutive quarters. The initiative specifies that, during the suspension, state agencies would be prohibited from implementing AB 32, and all regulations previously adopted under AB 32’s aegis would be void and unenforceable. Initiative proponents argue that AB 32 would increase energy costs and hurt businesses, something that will lead to lost jobs at a time when California’s unemployment rate is already above 12%. Opponents argue that the initiative is a boon to oil companies and an obstacle to developing a clean energy industry and that the initiative is funded largely by out-of-state interests, including out-of-state oil interests.

As a practical matter, it should be noted that the economic conditions that are cited in this initiative have rarely occurred in California’s history. The last time that the unemployment rate in California was below 5.5% was in 2007. According to the California Employment Development Department, there have been three periods since 1976 when unemployment in the state remained below 5.5% for four or more quarters:
• January 1988 through December 1989
• October 1999 through June 2001
• October 2005 through June 2007

Thus, the initiative if passed could arguably be described as an attempt to permanently defeat AB 32 rather than merely suspending it.

In Center for Biological Diversity v. County of San Bernardino (2010) 184 Cal.App.4th 1342, the Court of Appeal, Fourth Appellate District, held that the County of San Bernardino violated the California Environmental Quality Act when it certified a final environmental impact report for an open-air waste composting facility unconnected to any external piped water supply system. The court noted deficiencies in the alternatives analysis and in the water supply analysis.

Infeasibility of environmentally superior alternative. Despite significant and unavoidable air quality impacts of the proposed open-air facility that could be substantially mitigated by an enclosure, the FEIR rejected the alternative of an enclosed facility as infeasible, relying on a memorandum prepared by an environmental consultant, who opined that the alternative was economically and technically infeasible. This case is the latest in a series of exacting opinions, mandating detailed and extensive analysis by experts that an alternative’s costs would render it economically infeasible. (See, e.g., Uphold Our Heritage v. Town of Woodside (2007) 147 Cal.App.4th 587 and Preservation Action Council v. City of San Jose (2006) 141 Cal.App.4th 1336.)

In this case, the court concluded that the “infeasibility” memorandum prepared by the consultant lacked substantiality for at least three reasons. First, the court was critical of the qualifications of expert, suggesting that the expert lacked the necessary expertise on compost facility financing to render an opinion. After noting that the memorandum contained no facts indicating such expertise, the court stated that the expert’s opinion “is at best an irrelevant generalization, too vague and nonspecific to amount to substantial evidence of anything.”

Second, the expert estimated the cost of an enclosed facility based solely on one other particularly high-priced enclosed facility in Rancho Cucamonga, when there was evidence in the record that similar facilities were proliferating in southern California and across the country. The court found that because the expert ignored all of these other facilities in calculating the costs of the alternative, “there is no meaningful comparative data pertaining to a range of economic issues.”

Third, the court found insufficient the report’s conclusions that the alternative would be financially infeasible because it would be 30 times more expensive than the proposed project. The court cited the increasingly familiar refrain, taken from CEQA case law going back to 1988: “The fact that an alternative may be more expensive or less profitable is not sufficient to show that the alternative is financially infeasible. What is required is evidence that the additional costs or lost profitability are sufficiently severe as to render it impractical to proceed with the project.” The expert’s memorandum did cite to other open air facilities operated by competitors in Kern County and Arizona and stated that the costs of this project must be roughly equivalent to those projects in order to compete, but the record apparently did not contain evidence of the costs of these facilities or the prices they charge. Moreover, the court was troubled by the fact that the record did not include evidence of transportation costs that could render a closer, but more expensive facility more competitive than a distant, less costly facility.

The court also rejected the FEIR’s conclusion that the facility was technically infeasible because the proposed site lacked utility connections and was more than one mile from the nearest electric lines. The court reasoned that there was no evidence in the record demonstrating that the costs of establishing such connections would render the alternative financially infeasible.

Deficiencies in the water supply analysis. The court also found the FEIR defective because it did not include Water Supply Assessment (WSA), which is required to be included in EIRs for certain kinds of projects. The project proponent argued that the proposed facility was not such a project because the facility would not use water in amounts roughly equivalent to 500 residential units, one of the triggers for a WSA. (Water Code, § 10912.) The court rejected this reasoning, even though the modest water demand for the project would be satisfied either by an on-site well or water imported by trucks. Water Code section 10912, subdivision (a), defines seven types of “projects” that trigger the need for a WSA. One of those, defined in subdivision (a)(5), includes a “processing plant … occupying more than 40 acres of land, or having more than 650,000 square feet of floor area.” Pointing to this language, the court rejected the project proponent’s argument that section 10912 applied only to large buildings, which were not present on the proposed site, or large water users equivalent to 500 residential units. The court noted that the dictionary defines a “plant” to include land as well as buildings, and that, within subdivision (a)(5), the Legislature included acreage as a factor separate from square floor area. The court therefore concluded that an open-air composting facility was a “project” under section 10912 if it met the acreage threshold of subdivision (a)(5).

The court also disagreed with Gray v. County of Madera (2008) 167 Cal.App.4th 1099, which had held that a WSA is only required if a project impacts a “public water system,” which is defined by statute as a “system for the provision of piped water” involving the “collection, treatment, storage, and distribution” of water for human consumption. The court in this case reasoned that Gray contained no analysis to support its holding and that an analysis of Water Code section 10910 indicates that, even in the absence of a public water system, a WSA is required. The court noted that section 10910, subdivisions (b) and (c)(4), require a city or county to “prepare the water assessment required by this part” if the city or county cannot identify a public water system supplying the relevant project, and subdivision (g)(1) requires a public water system, “or the city or county if either is required to comply with this act pursuant to subdivision (b),” to approve a WSA. Citing these elements of the statute, the court disagreed with Gray and found that, where a city or county cannot identify a third party public water system to serve a proposed facility meeting the definition of a “project” as that term is used in Water Code section 10912, the city or county must prepare a WSA even if the groundwater source involved is not connected to any larger physical “public water system.” By departing from the rule expressed in Gray, the court arguably expanded the range of circumstances in which a WSA will be required. This could lead to closer scrutiny of groundwater use in some cases.

On May 19, 2010, the Transportation Committee of the Sacramento Area Council of Governments (SACOG) released for public comment its draft of proposed greenhouse gas emissions reduction targets. This proposal is part of SACOG’s participation in a Senate Bill 375 target-setting process with the California Air Resources Board (CARB), Caltrans, and other metropolitan planning organizations in the State. SACOG proposes per capita reductions between 5 percent and 6 percent for 2020 and between 14 percent and 15 percent for 2035, as compared to a 2005 base year. SACOG’s Board of Directors will consider the draft reduction targets for approval in June 2010.

SACOG proposed these ranges as a balance between CARB’s directions to pursue “achievable” and “most ambitious” goals, in anticipation of CARB’s own release of regional targets for 2020 and 2035. In implementing SB 375, once CARB settles on these targets in September 2010, SACOG must prepare a Sustainable Community Strategy (SCS) that meets those targets for the Sacramento region. SACOG must further incorporate its SCS into the Metropolitan Transportation Plan for 2035 (MTP). While SB 375 contains provisions for streamlined review under CEQA, the new MTP/SCS will require some level of environmental analysis. Therefore, SACOG is also in the initial stages of preparing both an MTP/SCS and an attendant environmental impact report.

In preparing its May 19 proposal, SACOG evaluated seven greenhouse gas reduction options. SACOG has organized the draft reduction options into four “bundles”: land use measures, transportation system development, transportation system and demand management, and transportation pricing. The most basic reduction option is the current MTP. The other six options expand on the implementation of policies found in the adopted MTP, with the exception of Option 5, which would add significant new transportation pricing policies that are not currently included in the adopted MTP. A larger discussion of the policy options can be found on SACOG’s website at: http://www.sacog.org/mtp/2035/mtpupdate2010-11/GHG%20Handout%20Packet.pdf

This blog is the first in our series on CEQA’s major milestones, and Friends of Mammoth marks a mammoth milestone for CEQA.

As first enacted, the scope of CEQA’s applicability was not well understood.  In particular, CEQA did not initially define the term “project,” which is the governmental activity that triggers the statute.  Many argued, and in fact most city and county governments assumed in the first two years after CEQA’s enactment, that the statute applies only to “projects” that are being undertaken by the government.  Or to put it another way, most people did not interpret CEQA as to apply to purely private actions, even actions that might require a government permit or permission.

The Supreme Court disabused them of this notion in Friends of Mammoth v. Board of Supervisors of Mono County (1972) 8 Cal.3d 247.  This case represents the “old west” of CEQA, and is the result of a “showdown” between the old Republican guard represented by Attorney General Evelle Younger and the new face of the Republican party as represented by Governor Ronald Reagan.  Reagan’s Office of Planning and Research was proposing to adopt guidelines that would interpret CEQA to apply only to governmental projects, and Younger challenged those proposed guidelines, arguing that CEQA’s intent and broad policy mandated that it be applied all areas under significant governmental control, including private projects requiring  government approval or support of some kind. Younger relied heavily on the lengthy policy statements in CEQA touting the importance of protecting the environment and evaluating environmental impacts of governmental action at all levels.

Younger then began looking around for the appropriate case to test his theories in the courts.   The Board of Supervisors for Mono County presented just such a case when it approved a condominium project in the Mammoth Lakes area without considering the environmental impacts of the project.  A local environmental organization—Friends of Mammoth—sued the County, arguing that the County should have complied with CEQA before approving the project.  After having lost in the trial court, Friends of Mammoth took the unusual tack of seeking review directly in the Supreme Court.  For reasons that appear to be lost in the mists of time, the Supreme Court accepted review, bypassing the Court of Appeal entirely.  In the Supreme Court, counsel for Friends of Mammoth were joined by several friends of the court, including the Attorney General.

The parties each tried to convince the Supreme Court that their view of the act was supported by the legislative intent.  The legislative history of CEQA is sparse, so the parties resorted to obtaining declarations from individual legislators.  Not surprisingly, the Attorney General and the Board of Supervisors presented conflicting declarations from legislators regarding the intent of CEQA—one stating it clearly was intended to apply to private projects, the other stating it clearly was intended to apply only to government projects.  In view of this conflict, the Court reiterated its general reticence to rely on statements of individual members of the legislature for expressions of intent of the entire legislative body.  (Friends of Mammoth, at p. 258.)  Instead, the Court looked for evidence of legislative intent in the broad policy language of the CEQA itself and well as to the regulations being promulgated for the National Environmental Policy Act, since that federal legislation served as the model for CEQA.  In those documents, with their sweeping policy declarations about the importance of environmental protection, the Court found sufficient ground to conclude:

In resolving the conflict on intent, as we must, we conclude that the Legislature intended EQA to be interpreted in such manner as to afford the fullest possible protection to the environment within the reasonable scope of the statutory language.  We also conclude that to achieve that maximum protection the Legislature necessarily intended to include within the operation of the act, private activities for which a government permit or other entitlement for use is necessary.

(Friends of Mammoth, at p. 259.)  We query whether such a conclusion would have been reached just a few years later when the judicial vogue for the strict plain meaning rule came to the fore.  But as the California Supreme Court later explained, what’s done is done: “[i]t is, of course, too late to argue for a grudging, miserly reading of CEQA.” (Bozung v. Local Agency Formation Commission (1975) 13 Cal.3d 263, 274.)

You’ve come a long way, baby! This summer CEQA will turn 40. It was enacted by the Legislature and signed into law with very little fanfare on August 1970 by Governor Ronald Reagan. Throughout the remainder of this year, we will be blogging from time to time on the major milestones in the life of CEQA and maybe (sorry, CEQA) pointing out areas where she’s not aging well and could use some work. Stay tuned.

Communities for a Better Environment et al. v. City of Richmond (2010) 184 Cal.App.4th 70.

Communities for a Better Environment et al. v. City of Richmond involves an EIR prepared for a proposal by Chevron to replace and upgrade certain facilities at its oil refinery in western Contra Costa County, to process a more varied mix of crude oil types from a wider variety of sources than are currently processed at the site.

The court found the EIR’s discussion of the types of crude oil that the refinery currently processes, as compared to the types of crude that refinery would be able to process as a result of the project, was so “unclear and inconsistent” that the EIR failed to provide an “accurate, stable, and finite project description.” In particular, the record was unclear as to whether the project would allow the refinery to process heavier crude oil than is currently processed at the site. For instance, the EIR claimed that the project is designed to allow greater flexibility in refining future crude oil supplies that the EIR described as “increasingly heavier”; but the EIR also denied that the project would enable the refinery to process heavier crude. Although one expert testified the project would not enable the refinery to process heavier crude, that expert’s opinion was based on confidential data provided by Chevron, and therefore the expert’s opinion did not meet CEQA’s “informational” goals. Because it was unclear whether the project would increase the refineries ability to process heavier, less clean, crude oil, the court found the EIR’s project description violated CEQA.

The court next considered the EIR’s strategy for reducing the project’s greenhouse gas emissions. The final EIR for the project concluded that the project’s impact to global climate change was too “speculative” for a significance determination. In the face of public opposition to this conclusion, following release of the final EIR, the city issued findings in a new EIR volume that concluded the project would have a significant impact on climate change. The new EIR volume proposed a mitigation measure requiring Chevron to submit to the city council a greenhouse gas reduction plan within one year after project approval that would ensure that the project’s operations would not result in a net increase in greenhouse gas emissions over the baseline. The mitigation measure also included a non-exclusive list of possible measures that Chevron should consider in developing the greenhouse gas emission reduction plan. The court concluded that this mitigation measure impermissibly deferred mitigation by allowing Chevron to formulate mitigation a year later, outside the EIR process, and giving the city council final approval over the mitigation plan without further public review. In so holding, the court distinguished several cases upholding deferred mitigation where circumstances prevented the formulation of aspects of the mitigation measures at the time of environmental review and the measures contained specific performance standards guaranteeing their effectiveness. Unlike those cases, here, there was no evidence that the measures identified in the mitigation measure could feasibly meet the stated “no net increase” standard. Nor did the mitigation measure provide any objective criteria for the city council to apply in measuring their success.

Lastly, the court held the city had not unlawfully segment environmental review. The court determined that because the refinery project did not “depend on” construction of a hydrogen pipeline that would be owned and operated by a third-party industrial gas company, Praxair, the city’s treatment of the hydrogen pipeline as a separate project did not constitute illegal piecemealing.

Communities for a Better Environment v. City of Richmond is the first published court of appeal decision addressing the adequacy of proposed measures to mitigate a project’s greenhouse gas emissions. The case suggests agencies should not rely on a generalized goal of “no net increase” in greenhouse gas emissions in the absence of quantified evidence that such a goal could feasibly be achieved. Any mitigation measures recommended to achieve a no-net increase in greenhouse gas emissions should be well-defined and based on objective success criteria. This case also underscores the importance of maintaining a consistent project description throughout the record of proceedings in order to provide the public and decisionmakers with meaningful information about the actual consequences of a proposed project. Lastly, the case also emphasizes that related projects with independent utility need not be analyzed as a single project under CEQA. This holding is consistent with the recent Second District Court of Appeal decision in Planning and Conservation League v. Castaic Lake Water Agency (2009) 180 Cal.App.4th 210.

Stockton Citizens for Sensible Planning v. City of Stockton (2010) 48 Cal.4th 481.
Committee for Green Foothills v. Santa Clara County Board of Supervisors (2010) 48 Cal.4th 32.

In two recent decisions, the California Supreme Court has found actions brought pursuant to the California Environmental Quality Act (CEQA) barred by expiration of the applicable statute of limitations. Most recently, on April 1, 2010, the Supreme Court reversed a Court of Appeal decision in Stockton Citizens for Sensible Planning v. City of Stockton (2010) 48 Cal.4th 481 (Stockton Citizens), holding that, despite alleged flaws in the decision-making process, a facially valid and properly filed notice of exemption (NOE) triggered the 35-day statute of limitation period for filing a lawsuit to challenge the city’s determination that it had approved a project exempt from CEQA. Prior to the Stockton Citizens decision, on February 11, 2010, the Court also reversed a court of appeal decision in Committee for Green Foothills v. Santa Clara County Board of Supervisors (2010) 48 Cal.4th 32 (Committee for Green Foothills), holding that the filing of a notice of determination (NOD) triggers the 30-day statute of limitations for all CEQA challenges to the decision announced in the notice, regardless of the nature of the CEQA violation alleged.

In Stockton Citizens, the Supreme Court held that a petition filed nearly six months after the City of Stockton had filed an NOE for approval of a Wal-Mart retail center that was consistent with a previously approved master development plan was untimely. The Court held that the posting of the NOE triggered the 35-day statute of limitations period under Public Resources Code section 21167, subdivision (d), regardless of whether the exemption determination was properly made.

The petitioners argued that the filing of an NOE could only have force or effect to trigger the 35-day limitations period if the underlying project approval were valid. The Court found that the petitioners’ argument ran contrary to the principle that limitations periods apply regardless of the merits of the claims asserted. Section 21167, subdivision (d), clearly requires suits claiming that an agency has “improperly determined” a project to be exempt from CEQA to be brought within 35 days after the filing of an NOE that complies with CEQA requirements. The Court also looked to the legislative intent of the statutory limitations periods and found that the approach argued for by the petitioners would circumvent CEQA’s unusually shortened statute of limitations for challenges where the agency has given public notice.

The Court also rejected petitioners’ argument that the NOE itself was defective, concluding that it demonstrated minimal compliance with CEQA in that it described the project in question, including its location, set forth the action taken, and detailed the reasons for the exemption finding. The NOE thus alerted the public that the statute of limitations for bringing a CEQA challenge to the noticed action had begun to run. Because petitioners had not filed their challenge within the 35-day limitations period, their claims were time-barred.

In Committee for Green Foothills, the Supreme Court held that a challenge to Santa Clara County’s approval of a trail alignment for a countywide trail master plan was untimely. The petitioners alleged the county had failed to determine whether review was required, and therefore argued that the 180-day statute of limitations under section 21167, subdivision (d) should apply. The county had, however, filed an NOD.

Noting that Section 21167 does not specifically define the limitations period that applies to such a scenario, the Court found that the determinative question in identifying the appropriate statute of limitations was not the type of violation alleged, but whether the action complained of was disclosed in a public notice. According to the Court, when an agency gives the public notice of its decision under CEQA, the public can be expected to act promptly in challenging this decision. In contrast, when an agency does not give the statutorily required notice and the public is held to constructive notice based on the start of the project, a longer limitations period applies. Regardless of the type of violation alleged by petitioners, they had notice of the county’s action when the NOD was filed, and the Court concluded the petitioners thereafter had 30 days to file suit challenging that action.

The court also rejected the petitioners’ contention that the NOD was defective, and thus did not trigger a 30-day limitations period. The record supported the trial court’s finding that both the initial and the revised NODs were, at a minimum, in substantial compliance with CEQA guidelines.

In both of these cases, the posting of a CEQA notice, whether in the form of an NOD or NOE, was a crucial factor in determining the period during which CEQA challenges could be brought. In both cases, the Court found that the language of section 21167 strongly suggested that the Legislature intended the filing of an NOD or NOE to trigger a 30-day or 35-day, respectively, statute of limitations. Of particular concern to the Court seems to be the unusually short limitations periods set forth in CEQA, which are meant to ensure finality and predictability in land use planning decisions.