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Third District Court of Appeal Holds that the County Relied on the Incorrect Prior EIR in Subsequent Review for a Partial Road Abandonment

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On August 17, 2020, the Third Appellate District in Martis Camp Community Association v. County of Placer (2020) 53 Cal.App.5th 569 reversed the trial court’s decision in part and found that Placer County abused its discretion when it approved a partial road abandonment because it relied on the incorrect prior EIR for its addendum and therefore could not accurately determine whether a supplemental or subsequent EIR was required. The court, however, affirmed the lower court’s rejection of the petitioners’ claim that baseline conditions should include the existing but disallowed use of the road along with other non-CEQA claims.

Background

In early 2005, the Placer County Board of Supervisors approved two residential developments and certified their final EIRs—the Martis Camp and the Retreat projects. Martis Camp consists of 650 homes on 2,200 acres just south of State Route (SR) 267 and west of Northstar ski resort. The Retreat consists of 18 homes on 31 acres just east of Martis Camp and within the larger Northstar development. The main roadway connecting Martis Camp to SR 267 is Schaffer Mill Road, a private street that dead-ends at Martis Camp’s southeastern shared boundary with the Retreat. On the other side of that boundary is Mill Site Road, a public road that ultimately connects to Northstar Drive and Northstar ski resort. As initially planned in the 2003 Martis Valley Community Plan, an emergency access roadway with gated access was constructed between Schafer Mill Road and Mill Site Road. The Martis Camp conditions of approval required the developer to construct  this emergency access roadway, provide the County with access for emergency and transit vehicle use, and place signage notifying traffic coming from Schafer Mill Road that the roadway and gate were for “Emergency Access Only.” The Retreat conditions of approval included construction of Mill Site Road and required Retreat property owners to fund road maintenance and snow removal services because such services represented a “‘special benefit’” to them as the sole approved users of the road. At some point around 2010, Martis Camp residents began regularly using Mill Site Road as a more direct route to Northstar in an effort to bypass SR 267. This use coincided with the Martis Camp developer replacing the manual gate with an automatic one that operated by transponder, issuing transponders to Martis Camp property owners, and removing emergency access signage. Retreat residents quickly complained to the County about this use, and in response the Director of the Community Development Resources Agency issued letters in 2011 and 2012 stating that Martis Camp residents have the right to use this road as “owners of property abutting a pubic roadway.” In 2013, Retreat property owners filed a lawsuit to enforce the prohibition on the use of Mill Site Road by Martis Camp residents. That litigation, separate from this case, resulted in the trial court sustaining the County’s demurrers, but on appeal, the court reversed and remanded for the trial court to consider the CEQA claims.

In 2014, Retreat residents petitioned the County to abandon its public road easement rights in Mill Site Road (and a nearby cul-de-sac) and dissolve the associated maintenance benefits. In 2015, the Board approved the petition requests by partially abandoning the road but reserving an easement for public transit and utility services as well as for emergency access and a multipurpose public trail. In approving the road abandonment, the County prepared, and the Board relied on, an addendum to the Martis Camp EIR. The County initially considered relying on the Retreat EIR, but concluded that the Martis Camp EIR was the appropriate environmental document for its subsequent CEQA review because road abandonment would, in effect, “restore traffic patterns to those that were envisioned by the Martis Camp project and analyzed in its EIR.” .

Martis Camp property owners and the Martis Camp Community Association (MCCA) filed petitions for writ of mandate challenging the County’s actions and alleged that the County violated CEQA when it improperly: (1) relied on an addendum to the Martis Camp EIR instead of the Retreat EIR; (2) prepared an addendum instead of a supplemental EIR; and (3) used a baseline that omitted existing use of the road by Martis Camp residents. Other non-CEQA claims alleged that the County violated statutory standards for abandoning Mill Site Road and violated the Brown Act by improperly modifying project conditions of approval without proper notice. Amended petitions asserted “causes of action for inverse condemnation.” After consolidating the two petitions, the trial court sustained without leave to amend a demurrer on the inverse condemnation claim for Martis Camp property owners, but overruled the demurer with respect to MCCA and bifurcated it from other claims. The trial court then denied all other claims. Petitioners appealed.

CEQA Claims

Discussed below, the Court of Appeal reversed the trial court as to the first and second CEQA claims and affirmed the third and remanded to the County for additional consideration.

Addendum Prepared for Wrong EIR: The court held that the County’s decision to prepare an addendum for the Martis Camp EIR was “not supported by substantial evidence” and that its failure to consider whether the abandonment of Mill Site Road would require major revisions to the Retreat EIR was a prejudicial abuse of discretion, largely because the road “was not part of the Martis Camp project; it was part of the Retreat project.” The County had argued that road abandonment was a change in circumstances surrounding the Martis Camp project such that further environmental review for that project was appropriately triggered. But, the court pointed out that only “a further discretionary decision” on a project triggers subsequent CEQA review and because Mill Site Road is not a part of the Martis Camp project, there was no related discretionary action. As further support, the court cited to the finding that conditions of approval “prohibited” Martis Camp residents from regularly using the road. The court did concede, however, that the County’s approach was “reasonable from the perspective of informed decisionmaking.” Nevertheless, the County “should have looked to the Retreat EIR” when assessing the need for further environmental review.

Supplement or Subsequent EIR May Be Required: The petitioners argued that the County should have prepared a supplemental or subsequent EIR for the Mill Site Road abandonment instead of just an addendum because of “more and severe environmental impacts by forcing Martis Camp residents to use SR 267 to reach Northstar.” The court agreed with the petitioners, but did not address the substance of this claim because of the County’s improper reliance on the Martis Camp EIR. Instead, it generally found that the County had “prejudicially abused its discretion” when it relied on the wrong EIR to conclude that no subsequent or supplemental EIR was required.

In Supplemental Review, “Baseline” is the Approved Project: The court rejected the petitioners’ claim that the baseline should have included the existing use of Mill Site Road by Martis Camp residents. Agreeing with respondents, the court found that the petitioners “are conflating” CEQA rules for initial project review under Public Resources Code section 21151 with rules for supplemental review under section 21166. To that end, the court ordered the matter remanded so that the County may first decide whether the applicable EIR “retains relevance despite changes to the project or its surrounding circumstances,” and then consider whether project changes “require major revisions” to the EIR due to “new significant environmental effects or a substantial increase in the severity of previously identified significant effects,” per Public Resource Code section 21166. If it is found that the road abandonment has “rendered the Retreat EIR irrelevant to the decisionmaking process,” then the County must “start from the beginning” under section 21151 and determine whether a new EIR is required.

Other Claims

As a threshold issue, the court concluded that MCCA’s pending, bifurcated inverse condemnation claim did not preclude it from appealing the denial of other claims because the “‘one final judgement’ rule” does not definitively apply when there are multiple parties in a lawsuit. The court then upheld the trial court’s dismissal of the Martis Camp property owners’ inverse condemnation claim and its denial of the remaining non-CEQA claims, discussed below.

No Inverse Condemnation: The crux of the petitioners’ argument was that they have “abutter’s rights to access Mill Site Road” and “by approving the abandonment…the market value of their properties” is reduced, thereby impairing their property rights and effectuating inverse condemnation. However, as noted by the court, Martis Camp property owners do not own property that physically abuts Mill Site Road from whence an inverse condemnation claim can be made. Moreover, any theoretical “nonexclusive easement” granted to Martis Camp residents in 2011/2012 by the Director of the Community Development Resources Agency “does not alter this result.” Therefore, the court affirmed the trial court’s dismissal of this claim.

Abandonment of Road Was Proper: The court started its analysis by noting that two standards of mandate review—ordinary (legislative) mandate and administrative mandate—have been used by courts to decide issue arising from road abandonment. Ordinary mandate is governed by Code of Civil Procedure section 1085 and applies to ministerial acts and quasi-judicial acts and decisions. Administrative mandate is governed by section 1094.5 and applies only to quasi-judicial decisions resulting from a proceeding where there was a hearing, evidence, and agency discretion “in the determination of facts.” Because “the outcome of this appeal would be the same under either standard, the court declined to “enter [the] debate” as to which standard applied. Thus, “for simplicity” it applied the “less deferential” administrative mandate standard that results in an abuse of discretion determination if an agency’s findings are not supported by “substantial evidence in light of the whole record.”

The petitioners argued that the County violated the California Streets and Highways Code when it abandoned Mill Site Road because it did not possess substantial evidence showing that the road was both unnecessary for public use and that abandonment is in the public interest, as is statutorily required. The petitioners then attempted to evidence the road’s public necessity with the fact that it was used regularly by Martis Camp residents and by the County’s choice to reserve emergency and public transit easements as a condition of abandonment. However, the court pointed out the mere “‘convenient’” use of a road does not make it necessary, and that Mill Site Road was “not planned, designed, or approved to accommodate that use.” Further, the court found no authority to support the notion that emergency and public transit easements denote the public necessity of a roadway. To the contrary, the court noted that the statute expressly authorizes “a legislative body to place conditions on abandonment” or to only partially abandon a roadway. The court also found that abandonment was in the public interest because, per the Board of Supervisors’ findings, it conformed with existing planning and environmental documents, protected “the integrity of the traffic management system,” and alleviated the County of the burden of road maintenance—all of which benefited the public.

No Brown Act Violation: The petitioners argued that the County violated the Brown Act when it approved the abandonment of the Mill Site Road because such abandonment altered conditions of approval established by the 2011/2012 letters from the Director of the Community Development Resources Agency and, therefore, should have been included on the agenda for the Board of Supervisor’s meeting per the Act’s noticing requirements. The trial court rejected this argument, and the Court of Appeal agreed, on grounds that the 2011/2012 letters do not override language in the conditions of approval for Martis Camp or the Retreat, which “did not contemplate Martis Camp residents using the emergency access road as a means of ingress and egress from the community.” Also, the court found that the Board was not bound by the Director’s prior enforcement decisions; therefore, the Board’s overruling of those enforcement decisions was not a “‘distinct item of business’” that required separate notice under the Brown Act.

Casey Shorrock

Fourth District Holds that Agencies May Not Destroy, But Rather Must Retain All Writings Required by CEQA’s Administrative Record Statute.

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The Fourth District Court of Appeal in Golden Door Properties, LLC v. Superior Court of San Diego County (2020) 53 Cal.App.5th 733 (“Golden Door III”) held that the broad and inclusive language in Public Resources Code section 21167.6 requires lead agencies to retain all project-related writings and e-mails during the CEQA statute of limitations period or any CEQA litigation. The court issued a writ of mandate directing the San Diego County Superior Court to permit petitioners to conduct discovery against San Diego County to recover unlawfully deleted e-mails for the record of proceedings. The court also ruled on matters related to mootness, discovery in CEQA cases, the common interest doctrine, and the Public Records Act.

BACKGROUND

San Diego County’s E-mail Retention and Deletion Policy

In June 2008, the County of San Diego (“County”) adopted an administrative policy that provided for the automatic and permanent deletion of e-mails after 60 days, except for e-mails identified by e-mail users as “official records.” E-mails identified as “official records” must be retained for at least two years, and e-mail users must classify qualifying e-mails as “official records” within 60 days of creating them. E-mails considered “official records” under the policy include those: “made for the purpose of disseminating information to the public”; “made and kept for the purpose of memorializing an official public transaction”; “required by law to be kept”; or, “necessary and convenient to the discharge of a County officer’s official duties and…made or retained for the purpose of preserving its informational content.” The policy also excluded “preliminary drafts, notes, or inter- or intra-agency memoranda not kept in the ordinary course of business and the retention of which is not necessary for the discharge of County’s officer’s official duties,” from the definition of an “official record.”

The Newland Real Estate Project & Procedural Background

In January 2015, Newland Real Estate Group (“Newland”) proposed a mixed-use development project (“Project”) consisting of 2,134 new residential units and 81,000 square feet of commercial development. Petitioner, Golden Door Properties (“Petitioner” or “Golden Door”), owned and operated a 600-acre spa and resort near the proposed project site. In April 2014, Golden Door had warned the County it would oppose Newland’s proposed Project—as it had previously done with a similarly proposed project in 2009—citing environmental concerns and general plan violations.

In December 2016, while the County processed Newland’s Project application, Golden Door sued the Vallecitos Water District (“District”), Newland, and the County. The suit alleged that the District lacked adequate water supplies to support the Newland Project, which would result in adverse groundwater overextraction. To defend against that litigation, the District, the County, and Newland, entered into a “Confidential Joint Defense Agreement.”

In June 2017, the County released a draft environmental impact report (EIR) for the Project. Shortly thereafter in July 2017, Golden Door submitted a Public Records Act (PRA) (Gov. Code, § 6250 et seq.) request seeking the draft EIR’s technical analyses. The County refused production on grounds that only consultants had possessory rights to the documents. Golden Door submitted a second PRA request in October 2017, which sought copies of the County’s consultant contracts and “all documents and communications in the County’s possession” pertaining to the Newland Project. In response, the County produced, among other documents, only 42 emails that spanned the 60-day period between September through October 2017. When questioned about e-mails spanning from the entire three-year environmental review process, the County explained its 60-day automatic e-mail deletion program, and refused to produce copies of deleted e-mails that may still have been in consultants’ possession.

On June 18, 2018, the County released a second draft EIR for the Project. The following day, Petitioner sued the County once again, alleging that it: (1) used unauthorized consultants to prepare the EIR’s technical studies; (2) failed to executed a consultant memorandum of understanding (MOU) in accordance with County CEQA guidelines; (3) improperly destroyed official records; and (4) improperly withheld records under the PRA. In July 2018, the County and Newland entered into another “Confidential Joint Defense Agreement.” That same month, the trial court issued a temporary restraining order directing the County to stop deleting project-related emails.

On September 26, 2018, the County’s Board of Supervisors approved the Newland Project and certified the final EIR. In anticipation of potential CEQA litigation, the County and Newland entered into yet another “Confidential Joint Defense Agreement” to defend against potential claims challenging the County’s Project approvals. In October, two CEQA lawsuits were subsequently filed against the County, including one by Petitioner, Golden Door. The superior court consolidated the two CEQA cases, along with Golden Door’s June 2018 PRA action against the County.

In January 2019 and thereafter, Golden Door conducted civil discovery against the County, Newland, and two of the County’s environmental consultants. The County produced nearly 6,000 documents, but partially refused discovery requests that sought documents pertaining to the County’s compliance with Golden Door’s initial PRA requests. Golden Door also attempted to obtain the County’s deleted e-mails from Newland and subpoenaed the consultants for other Project-related notes, e-mails, studies, and agreements, but both parties opposed the requests.

Golden Door subsequently filed motions to compel discovery and to require the production of privilege logs for the withheld documents. A discovery referee was appointed to resolve the discovery disputes and ultimately issued several rulings in favor of the County, Newland, and the environmental consultants. The superior court adopted the referee’s recommendations and the various plaintiffs filed the first of three petitions for writ of mandate with the Court of Appeal. The appellate court denied the petition and plaintiffs sought Supreme Court review. The Supreme Court directed the Court of Appeal to show cause as to why the first petition should not issue. The appellate court did so and filed an additional order to show cause for the second petition, thereby consolidating the two writ proceedings.

In October 2019, the CEQA plaintiffs filed a motion to augment the record by seeking to add documents the County omitted from the record, and other material plaintiffs had submitted to the County prior to its approval of the Project and certification of the EIR. The superior court “mostly” denied the motion, allowing the addition of only certain documents. Thereafter, Plaintiffs filed their third writ petition in the Court of Appeal.

On March 3, 2020, the County’s voters rejected the Newland Project in a referendum election. The County Board of Supervisors rescinded the Project’s General Plan Amendment, Specific Plan, zoning changes, and other approvals in April 2020. However, the Board did not vacate its certification of the Final EIR or its approval of the Project’s tentative map. Though Newland ultimately withdrew the Project, the Court of Appeal rendered a decision given the likelihood of the reoccurring e-mail retention issue.

COURT OF APPEAL DECISION

Mootness

As a threshold matter, the Fourth District considered whether the writ petitions were moot because the County had rescinded some, but not all of its Project approvals. The appellate court held that the petitions were not moot because the County did not rescind all project approvals and counsel for Newland indicated that the Project will likely return in some form, perhaps in reliance on the certified Final EIR and tentative map. The court also explained that even if these issues were moot, it had discretion to retain the case because it presented an issue of broad public interest that is likely to reoccur, the parties’ controversy may reoccur, and the County’s e-mail deletion policy remained a material issue of statewide significance.

The County’s E-mail Retention Policy

The Fourth District’s analysis began by interpreting the scope of requisite administrative record documents contemplated by Public Resources Code section 21167.6. The section requires that the record include any document that “ever came near a proposed development or to the agency’s compliance with CEQA in responding to that development.” Moreover, section 21167.6, subdivision (e) uses very broad and inclusive language, which provides that records “shall” include “correspondence” submitted to and transferred from the respondent agency regarding the Project or CEQA compliance, as well as all “internal agency communications” relating to the Project or CEQA compliance.

The court further found that section 21167.6’s broad mandate comports with CEQA’s intent of providing information and disclosure. A complete record is essential for courts to fulfill their role in assuring that an agency’s determinations are lawful under CEQA and supported by substantial evidence. Based on the plain language of the statute, the court held “that a lead agency may not destroy, but rather must retain writings section 21167.6 mandates for inclusion in the record of proceedings.” The court also found that the trial court erred in finding that the County’s e-mails were extra-record evidence; rather, the e-mails plaintiffs sought to include were record evidence contemplated by section 21167.6.

The appellate court also rejected the discovery referee’s finding that the County’s e-mail destruction policy was lawful. The court found that the referee had inappropriately equated non-official emails with preliminary drafts in determining that “[n]on-official emails and other preliminary drafts” are not included under section 21167.6. The court noted that e-mails are a method of communication, while preliminary drafts describe content. Section 21167.6, subdivision (e)(10) “expressly requires certain preliminary drafts—namely, ‘any drafts of any environmental document, or portions thereof, that have been released for public review’—to be included in the record of proceedings.” In contrast, administrative drafts of EIRs, draft staff reports, and other similar preliminary documents that preceded those circulated for public review are not to be treated as part of the record of the agency’s proceedings. Similarly, agencies need not include e-mails in the administrative record that are irrelevant to a project or a project’s CEQA compliance (i.e., email equivalents to “sticky notes, calendaring faxes, and social hallway conversations” are not within the scope of section 21167.6, subdivision (e) and do not need to be retained).

While the Fourth District held that under the County’s e-mail retention and deletion policy the requisite document should have been retained for at least two years, the court did not reach the issue of how long other agencies must keep their e-mails before destroying them. The court’s opinion does not hold that e-mails must be kept “in perpetuity”—rather, the CEQA statute of limitations and a final judgment serve as relevant considerations to assessing when e-mails may be destroyed.

Discovery in CEQA Litigation

The Fourth District overturned the discovery referee’s denial of plaintiff’s motions to compel discovery against Newland and the County’s consultants. The court held that plaintiffs were not inappropriately attempting to enlarge the record; they were properly seeking discovery of documents that should have originally been included.

Because section 21167.6 is mandatory and broadly inclusive, the court held that discovery to obtain record components should largely be unnecessary. However, in cases such as these where documents may have been wrongly excluded from the administrative record, discovery is possible in a CEQA proceeding.

The Common Interest Doctrine

The County’s objections to Golden Door’s discovery requests cited the common interest doctrine. Golden Door’s subsequent May 2019 motion to compel asked the County to produce a privilege log. The County’s initial privilege log identified 3,864 withheld documents, and amended privilege log identified 1,952 withheld documents.

Golden Door asserted that the common interest doctrine did not apply to the documents shared between the project applicant and the county prior to October 10, 2018, the date the county board adopted the last project approval. The court disagreed, holding that the referee correctly determined the common interest doctrine applied pre-project approval. The court distinguished Ceres for Citizens v. Super. Ct. (2013) 217 Cal.App.4th 889, by pointing out that Golden Door had already sued the County twice prior to Project approval, each time seeking orders to kill the Project, thereby creating a common interest between the County and the Newland to defend the Project pre-approval.

The court explained that entities with common legal interests may share attorney-client privileged information without waiving that privilege. For these reasons, the Confidential Joint Defense Agreement between the County, the District, and Newland was proper because they were entered into after litigation had commenced.

Public Record Act Exemptions

Lastly, the Fourth District considered whether the County appropriately relied on the “preliminary draft exception” and the “deliberative process privilege” to withhold approximately 1,900 documents from discovery. Under the PRA’s preliminary draft exception, agencies need not disclose preliminary drafts, notes, or inter/intra-agency memoranda that are not retained by the public agency in the ordinary course of business if the public interest in withholding those records outweighs the public’s interest in disclosure.  Similarly, the deliberative process privilege applies to the mental processes by which an agency reached a given decision, which includes the substance of conversations, discussions, debates, deliberations, and materials reflecting advice, opinions, and recommendations by which government policy is processed.

Here, the court overturned the referee’s recommendation by finding that the declaration in support of the County’s privilege log lacked sufficient detail to justify withholding over 1,900 documents. The declaration failed to discuss individual documents and how the exceptions apply—rather, the County only discussed the 1,900 documents as one “enormously large unified group.” Moreover, while the court recognized the difficult balance the County must strike in determining what to release or withhold, the County here only provided “broad conclusory claims” that “merely echo[ed] public policies underlying claims of privilege generally.” The court held that the County had failed to carry its burden of establishing that the public interest in withholding the documents clearly outweighed the public interest in disclosure.

Remedy

The court rejected plaintiff’s contention that the County’s inadequate record requires a judgment on the merits as premature. On remand, the plaintiffs are allowed to complete discovery. The court also granted the consolidation of the writ petitions and overturned many of the discovery referee and superior court’s findings. The court directed the trial court to vacate its order denying Golden Door’s motion to augment the record because the County’s long-standing e-mail retention and deletion policy is unlawful. Finally, once discovery is complete, Petitioner should be afforded a reasonable period of time to augment the record.

MODIFIED DECISION ON DENIAL OF REHEARING

On August 25, 2020, the Fourth District issued an order denying three petitions for rehearing filed by Golden Door, the County, and Newland, and modifying the court’s July 30, 2020 opinion. Notably, the order expanded the original opinion’s analysis of the “common-interest”/“joint defense” doctrine. The court reiterated that the discovery referee properly applied the doctrine to communications between the County and Newland because Golden Door’s Vallecitos and PRA lawsuits sought to “defeat” or “mortally wound” the Project before it had been approved. In a subsequent footnote, the court explained that the common-interest doctrine may keep the attorney-client and work-product privileges in-tact for the purposes of defending against those two lawsuits. However, that common interest does not absolve the County of its duties as a lead agency under CEQA.

– Mina Arasteh, Bridget McDonald

First District Court of Appeal Holds U.C. Regents Not Exempt from Analyzing Impacts of Student Enrollment Increases that Exceed Projections in Long Range Development Plan EIRs

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In a partially published opinion issued on June 25, 2020, the First District Court of Appeal in Save Berkeley’s Neighborhoods v. Regents of the University of California (2020) 51 Cal.App.5th 226 reversed a trial court judgment on a demurrer and held that Public Resources Code section 21080.09 does not exempt the U.C. Regents from analyzing the environmental impacts of decisions to increase student enrollment at U.C. Berkeley in exceedance of projected enrollment numbers in their long range development plan EIRs.

Background

In 2005, the U.C. Regents adopted a long range development plan to guide the growth and development of the U.C. Berkeley campus through the year 2020. As is required under Public Resources Code section 21080.09, which pertains specifically to long range development plans at public higher education campuses, the Regents certified a program EIR for the plan. The 2005 development plan projected that, by the year 2020, U.C. Berkeley’s enrollment would increase by 1,650 students and that the university would add 2,500 new beds for students, and the EIR analyzed the potential environmental impacts based on these figures.

In 2018, Save Berkeley’s Neighborhoods, a California non-profit formed “to improve Berkeley’s quality of life and protect its environment,” filed a petition for writ of mandate alleging that, beginning in 2007, the U.C. regents made a series of discretionary decisions that would increase the university’s enrollment well beyond the projections in the 2005 EIR. Under CEQA, Save Berkeley argued, student enrollment projections were part of the project description, and the U.C. Regents changed the project when they approved enrollment increases beyond the 2005 projections. Furthermore, Save Berkeley argued, such increases in student enrollment caused and will continue to cause new significant environmental impacts, including increased use of off-campus housing, displacement of tenants, traffic impacts, noise, and increased reliance on public services. As a result, Save Berkeley argued that CEQA requires the preparation of a new or subsequent EIR. Notably, Save Berkeley alleged it did not learn of the decisions to increase enrollment until October 2017.

In the trial court, the U.C. Regents demurred on grounds that under section 21080.09 enrollment increases are not the “project” or a change in the project that might trigger subsequent environmental review. The Regents also argued the claims were time barred by the statute of limitations or were moot because a Notice of Preparation had recently been issued for a new project that would include analyze impacts from current and foreseeable campus population levels. The trial court sustained the demurrer without leave to amend on grounds that the petition was time barred and that the “project” for purposes of CEQA is the development and land use plan, thus, changes in enrollment are not project changes requiring subsequent CEQA review. Save Berkeley appealed.

Appellate Decision

The First District Court of Appeal reversed, finding the petition sufficient to state a cause of action and survive a demurrer. While the court began by noting that nobody disputes that the 2005 EIR could no longer be challenged because the statute of limitations expired, it then framed the issue as whether changes to the project—i.e., decisions to increase enrollment—required some form of CEQA review.

The U.C. Regents primarily argued that section 21080.09 effectively exempts analysis of increases in enrollment until a plan or physical development project is approved because there is no mention of the word “enrollment” in section 21080.09’s  definition of a “long range development plan.”. The Court of Appeal rejected this argument and pointed to CEQA’s broad definition of a “project” in Public Resources Code section 21065.. As the court explained, while section 21080.9 instructs that the effects of enrollment increases are to be considered in an EIR for a long range development plan, the statute does not state that enrollment changes need only be analyzed in the context of an EIR for a development plan or physical development. In short, section 21080.09 “does not address subsequent enrollment decisions, much less exempt them from CEQA,” and “a public university’s decision to increase enrollment levels can be a ‘project’ subject to CEQA whether or not it is related to a development plan.”

The court had no trouble concluding that Save Berkeley had stated a valid cause of action under CEQA. Accepting the allegations in the petition as true, as is required for a demurrer, Save Berkeley had plead that discretionary decisions since the 2005 EIR to increase enrollment have caused and continue to cause significant environmental impacts not analyzed in the 2005 EIR, which is sufficient to trigger the need for subsequent review under CEQA. The court’s opinion left open how such review could be accomplished, such as through the use of tiering from the 2005 EIR or the preparation of a subsequent or supplement EIR depending on the magnitude of the revisions necessary.

Collin McCarthy

Fourth District Court of Appeal Finds San Diego County Climate Action Plan and Supplemental EIR Inadequate Under CEQA

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On June 12, 2020, the Fourth District Court Appeal issued a decision in Golden Door Properties, LLC v. County of San Diego (2020) 50 Cal.App.5th 467 invalidating San Diego County’s approval of a Climate Action Plan and related Guidelines for Determining Significance of Climate Change, and holding that the County’s Supplemental Environmental Impact Report failed to comply with CEQA. In what is now the third published decision dealing with San Diego County’s 2011 general plan update process, the Fourth District panel largely affirmed the trial court’s judgment in the three consolidated cases challenging the County’s adoption of the CAP and SEIR, including with respect to the primary issue in the case—whether the County’s GHG mitigation measure allowing for the purchase of out-of-County carbon offset credits complied with CEQA. The appellate court reversed the trial court’s judgment on some issues, however, finding the CAP to be sufficiently consistent with the County’s general plan update and the County’s responses to comments on the SEIR adequate under CEQA.

Background

In 2011, San Diego County prepared a Program Environmental Impact Report (PEIR) and adopted a general plan update (GPU) for the unincorporated areas of the County. In order to mitigate GHG emissions that would result from buildout of the general plan update to a level consistent with State-mandated GHG emissions reductions targets, the PEIR included a mitigation measure requiring that the County prepare a climate action plan (CAP). The County began preparing the CAP following the adoption of the GPU, which generally entailed establishing a baseline inventory of known and foreseeable GHG emissions in the County and developing 26 GHG emissions reduction measures for future development projects to implement. The County also prepared a checklist and Guidelines for Determining the Significance of GHG Emissions so that future projects’ consistency with the CAP could be assessed as part of the CEQA process.

In 2018, in order to evaluate the environmental impacts of implementing the CAP, the County prepared a Supplemental EIR (SEIR). The SEIR acknowledged that more than 20 projects proposing general plan amendments were in-process but not approved at the time the SEIR was prepared, and that such projects could result in significant GHG emissions not accounted for in the CAP. To mitigate these potentially significant GHG emissions, the County devised a mitigation measure, M-GHG-1, requiring that any projects that would increase the density or intensity of land use above what is permitted under the GPU to mitigate emissions to a level consistent with the CAP assumptions (i.e., net zero or no new emissions). Under M-GHG-1, mitigation of GHG-emissions was to be accomplished first by incorporating all feasible onsite design features, such as measures to prioritize transit, biking, and walking. Then, in the event project design features were unavailable or insufficient to fully mitigate the additional GHG emissions, M-GHG-1 allowed for the use of offsite mitigation, including the purchase of carbon offset credits, which could be obtained from certain qualifying registries relying on offsets located virtually anywhere in the world.

Following the County’s adoption of the SEIR, CAP, and related Guidelines for Determining the Significance of GHG Emissions, Sierra Club and Golden Door Properties filed separate petitions for a writ of mandate challenging the County’s approvals, alleging multiple violations arising under CEQA and Planning and Zoning Law. After consolidating the two actions (along with a third, previously-stayed case), the trial court granted a peremptory writ of mandate, ordering the County to set aside its approvals. The trial court determined that the CAP was inconsistent with the General Plan, and that mitigation measure M-GHG-1’s reliance on out-of-County carbon offsets violated CEQA. The trial court also determined that the SEIR violated CEQA by inadequately analyzing cumulative impacts, impacts to energy and environmental justice, and project alternatives, and that the County failed to adequately respond to comments on the draft SEIR.

Following the entry of judgment and issuance of the writ, the County appealed.

Court of Appeal

While the appellate court’s 123-page decision addresses a host of legal issues, the primary issue on appeal was whether the SEIR mitigation measure M-GHG-1 violated CEQA’s requirements for mitigation due to the standards imposed, or lack thereof, for the use of out-of-County offsets to mitigate GHG emissions in projects requiring a general plan amendment. Citing CEQA Guidelines section 15126.4, subdivision (c)(3), the court explained that while it is well-established that the use of offsets can be part of a GHG mitigation strategy, the use of such offsets must be “properly restricted” with “verified offsets” that ensure GHG reductions in fact occur. Here, the appellate court held, M-GHG-1 failed to satisfy CEQA’s requirements for adequate GHG mitigation.

Relying heavily on the standards governing the State Cap-and-Trade Program and related California Air Resources Board regulations, the court of appeal agreed with the trial court that the County’s GHG mitigation measure M-GHG-1 lacked sufficient performance standards to ensure the offsets relied on are “real, permanent, verifiable, and enforceable.” Specifically, the court noted that while M-GHG-1 contained some standards governing the entities through which offsets may be purchased, namely, a CARB-approved registry or “any other reputable registry or entity that issues carbon offsets consistent with … [Health and Safety Code] section 38562 [subdivision] (d)(1),” M-GHG-1 did not include any standards or protocols that such qualifying registries must implement to ensure the validity of the offset credits claimed. In the absence of such standards or safeguards, the court found that M-GHG-1 failed to adequately ensure offsets are real, additional, and enforceable and for that reason was inadequate under CEQA.

In addition to the lack of sufficient standards for out-of-County carbon offsets, the court of appeal also held that M-GHG-1 violated CEQA as the measure improperly deferred mitigation. Under M-GHG-1, the County planning director was afforded discretion to approve the use of particular offsets, including determinations such as whether the issuing entity is “reputable” and whether there are no other “financially feasible” offsets “available” in a closer location. On this issue, the court explained that while CEQA allows the specific details of a mitigation measure to be developed after project approval where it is impractical or otherwise infeasible to do so during the environmental review process, in such instances that agency must (1) commit itself to the mitigation, (2) adopt specific performance standards the mitigation will achieve, and (3) identifies the type(s) of potential action(s) that can feasibly achieve that performance standard and that will be considered, analyzed, and potentially incorporated in the mitigation measure.n this case, the court held that M-GHG-1 failed to meet these requirements.

In holding M-GHG-1 violated CEQA as an improper deferral of mitigation, the court of appeal emphasized that M-GHG-1 contained no objective standards for the director to apply in determining whether offsets originating in foreign countries are real, permanent, verifiable, enforceable, and additional. As the court explained, M-GHG-1 entrusted the planning director with making several determinations such as whether the proposed offset registry is “reputable” or whether other offsets are “financially feasible,” however, the measure lacked objective criteria to govern such determinations. Further, the court held that because M-GHG-1 failed to comply with CEQA, the County’s CAP was also inadequate, because, to the extent the CAP assumed that in-process and future projects requiring a general plan amendment would not result in significant GHG impacts based on compliance with M-GHG-1, the County’s finding was not supported by substantial evidence.

In addition to the court’s lengthy analysis of M-GHG-1, the court of appeal’s decision also considered the plaintiff’s arguments that the County’s SEIR failed to comply with CEQA on several other grounds. The appellate court largely agreed with the plaintiffs and affirmed the trial court’s decision, including finding that the SEIR’s cumulative impact analysis was inadequate by failing to analyze impacts other than GHG emissions; that the County’s finding of consistency with the SANDAG Regional Transportation Plan was not supported by substantial evidence; and that the County’s alternatives analysis was inadequate for failing to consider a project alternative aimed at reducing vehicle miles traveled or “VMT”. The appellate court reversed the trial court’s judgment on two issues, however, finding the County’s determination the CAP was consistent with the general plan update was adequately supported under the highly deferential standard of review and that the County’s responses to comments on the draft SEIR were sufficient under CEQA.

Sixth District Court of Appeal holds that seeking a streambed alteration agreement from CDFW was not a “further discretionary approval” by the City of San Jose, and therefore subsequent CEQA review was not required

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Ruling on the petitioners’ second attempt to halt the demolition of the Willow Glen Trestle, the Sixth District Court of Appeal held that the act of seeking a new streambed alteration agreement from the California Department of Fish and Wildlife for the previously reviewed project was not a “new discretionary approval,” and therefore did not require supplemental environmental review. (Willow Glen Trestle Conservancy v. City of San Jose (2020) 49 Cal.App.5th 127.)

Background

In 2014, the City of San Jose (the City) approved a mitigated negative declaration (MND) for the demolition and replacement of the Willow Glen Railroad Trestle, a wooden railroad bridge built in 1922. When the City approved the MND, the trestle was not listed in the California Register of Historical Resources. The Friends of the Willow Glen Trestle filed a lawsuit challenging the MND. The trial court concluded that substantial evidence supported a fair argument that the trestle was a historical resource, and the City was therefore required to prepare an environmental impact report. The Court of Appeal remanded the matter to the trial court, holding that the substantial evidence standard of review, not the fair argument standard, applied to the City’s determination of historical status. (Friends of Willow Glen Trestle v. City of San Jose (2016) 2 Cal.App.5th 457.)

In May 2017, the California State Historical Resources Commission approved listing the trestle in the California Register of Historical Resources. Also in 2017, the City’s streambed alteration agreement (SAA) with the California Department of Fish and Wildlife (CDFW) expired. The City submitted a new notification to CDFW and CDFW issued a final SAA in August 2018. The Willow Glen Trestle Conservancy and Friends of the Willow Glen Trestle (collectively the Conservancy) filed another lawsuit, this time alleging that entering into the SAA was a discretionary approval by the City that triggered supplemental environmental review under Public Resources Code section 21166.

The trial court determined the 2018 SAA did not involve a new discretionary approval and the Conservancy appealed.

The Court of Appeal’s Opinion

Public Resources Code section 21166 and CEQA Guidelines section 15162 require supplemental environmental review, in limited circumstances, when an agency must make a “further discretionary approval” for a project for which the agency has already completed review. The Conservancy argued that the City’s submission of a notification to CDFW in order to obtain a new SAA amounted to an approval by the City, requiring supplemental environmental review. The Court of Appeal disagreed, holding that approval of the SAA was an action by CDFW, not the City.

The Conservancy argued that the City’s act of seeking and accepting the SAA was a discretionary approval. Quoting the Supreme Court in Friends of College of San Mateo Gardens v. San Mateo Community College Dist. (2016) 1 Cal.5th 937, 945, the Court of Appeal emphasized that sections 21166 and 15162 limit the circumstances under which a subsequent or supplemental EIR must be prepared, and promote the interests in finality and efficiency. If every action in connection with a project were considered an “approval,” the court said, each and every step of a lead agency would reopen environmental review under CEQA.

The Conservancy also argued that different rules should apply because this was the City’s own project, rather than a private project. The Conservancy argued that because the City retained discretion to reconsider or alter the project, its failure to abandon the project was itself a new discretionary approval. The court rejected this argument, again because the purpose of section 15162 is to limit subsequent environmental review. In addition, the court said, section 15162 makes no distinction between public and private projects.

The court concluded that the City was implementing the project when it submitted a new notification to CDFW and when it accepted the SAA. The only new approval was CDFW’s, and the Conservancy did not challenge that decision.

Federal District Court Holds the United States Army Corps of Engineers Violated the Endangered Species Act in Reissuing Nationwide Permit 12 Without Initiating Section 7 Consultation

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In Northern Plains Resource Council v. U.S. Army Corps of Engineers (D. Mont. 2020) 454 F.Supp.3d 985, the U.S. District Court for the District of Montana overturned Nationwide Permit 12 (“NWP 12”). Of practical importance, the court’s ruling on this matter applies throughout the nation.

Under the Clean Water Act (“CWA”) (33 U.S.C. § 1251 et seq.), the Army Corps of Engineers (“Corps”) is authorized to issue general nationwide permits to streamline the permitting process for certain categories of activities. Nationwide permits may last up to five years, at which point they must be reissued or allowed to expire. NWP 12 authorizes impacts to waters of the United States as a result of construction, repair, maintenance, and removal of utility infrastructure. All nationwide permits, including NWP 12, are subject to 32 general conditions contained in the federal regulations. As relevant here, General Condition 18 prohibits the use of any nationwide permit for activities that are likely to directly or indirectly jeopardize threatened or endangered species or designated critical habitat for such species under the Endangered Species Act (“ESA”) (16 U.S.C. § 1531 et seq.)

NWP 12 is one of 52 nationwide permits the Corps reissued in 2017. In reissuing NWP 12, the Corps determined that NWP 12 would result in no more than minimal individual and cumulative adverse effects on the aquatic environment under the CWA and further concluded that NWP 12 complied with both the ESA and the National Environmental Policy Act (“NEPA”) (42 U.S.C. § 4321, et seq.). The Corps determined there would be “no effect” to ESA-listed species or critical habitat and did not initiate consultation with the U.S. Fish and Wildlife or National Marine Fisheries Service (collectively, the “Services”). Pursuant to NEPA, the Corps prepared an Environmental Assessment and issued a Finding of No Significant Impact.

Northern Plains Resource Council, et al. challenged the Corps’ action to reissue NWP 12, alleging it violated the ESA, NEPA, and the CWA.

Specifically, plaintiffs argued that the Corps’ failure to initiate programmatic consultation with the Services violated the ESA. The Corps, in response, contended that it did not need to conduct programmatic consultation because project-level review and General Condition 18 ensure that NWP 12 will not affect listed species or critical habitat. The court disagreed, finding there was substantial evidence supporting the contrary conclusion, therefore requiring the Corps to initiate consultation to ensure that activities authorized by NWP 12 complied with the ESA. The court emphasized that the Corps had acknowledged the many risks associated with discharges authorized by NWP 12 when it was reissued in 2017. For example, the Corps found that the construction of utility lines “will fragment terrestrial and aquatic ecosystems” and further stated that activities under NWP 12 “will result in a minor incremental contribution to the cumulative effects to wetlands, streams and other aquatic resources.” Moreover, the Corps had initiated consultation when it reissued NWP 12 in 2007 and 2012. The court also relied on expert declarations submitted by plaintiffs stating that the Corps’ issuance of NWP 12 authorized discharges that may affect endangered species and their habitats.

The court further held that General Condition 18 fails to fulfill the Corps’ obligations under the ESA. General Condition 18 requires the permittee to submit a pre-construction notification to the district engineer if the permittee believes that its activity “might” affect listed species or critical habitat. The court found that this improperly delegated the Corps’ responsibility to make the initial effect determination under the ESA.

Holding that the Corps’ “no effect” determination and resulting failure to initiate consultation prior to reissuance of NWP 12 was arbitrary and capricious, the court remanded NWP 12 to the Corps for compliance with the ESA. The court determined that it need not decide the plaintiffs’ remaining claims as it anticipated that Section 7 consultation will inform the Corps’ assessment under NEPA and the CWA based on the findings of the consultation.

Second District Court of Appeal Upholds Dismissal of CEQA Action as Untimely

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On April 2, 2020, the Court of Appeal for the Second Appellate District in Coalition for an Equitable Westlake/Macarthur Park v. City of Los Angeles (2020) 7 Cal.App.5th 368 affirmed the trial court’s decision sustaining a demurrer without leave to amend because the petitioner’s claims were barred by the famously short statute of limitations for actions brought under CEQA. (Pub. Resources Code, § 21000 et seq.)

On March 3, 2017, after holding a public hearing, the advisory agency for the City of Los Angeles approved a vesting tentative tract map for the Lake on Wilshire Project, a mixed-use project consisting of a hotel, a residential tower, and a multi-purpose center with a theater. Prior to approving the tentative map, the advisory agency adopted a mitigated negative declaration. The city filed a notice of determination (NOD) on March 15, 2017.

Subsequently, on October 12, 2017, the planning commission approved conditional use permits for the project—finding that no subsequent review was required. Two tenants of an existing building on the project site appealed the planning commission’s decision. The city council denied the appeals on January 31, 2018, and further adopted a resolution approving general plan amendments in connection with the project.

On March 2, 2018, the petitioner filed a petition for writ of mandamus challenging the approval of the MND as violating CEQA. The city and real parties in interest filed a demurrer. The trial court sustained the demurrer without leave to amend on the grounds that the petitioner’s claims were time-barred under CEQA for failure to seek relief within 30 days after the NOD was filed on March 15, 2017.

In holding that the petitioner’s suit was untimely, the court found that application of the statute of limitations bar to the petitioner’s challenge was straightforward. The petitioner did not bring the CEQA action until March 2, 2018, nearly a year after the city approved the tentative map and posted the NOD. The court explained that there were only two situations where the filing of a NOD would not trigger CEQA’s statute of limitations—if the NOD is invalid on its face because the information required by the CEQA Guidelines is missing or incorrect, or where the NOD is filed before a decision-making body has approved the project. The court found neither of those circumstances existed.

Rather, the petitioner had attacked the validity of the NOD based on the advisory agency’s authority to make CEQA finding, including that: (1) the planning commission (not the advisory agency) was responsible for initial project approval and CEQA review; (2) the advisory agency lacked authority under the municipal code to make CEQA findings; (3) the advisory agency’s CEQA decisions were not properly appealable to an elected body; and (4) the authority to approve the project was improperly bifurcated from the authority for CEQA approval. In rejecting this argument, the court, quoting the California Supreme Court’s decision in Stockton Citizens for Sensible Planning v. City of Stockton (2010) 48 Cal.4th 481, 499, stated that the petitioner ‘confuses the timeliness of a lawsuit with its merits.’” To the extent a petitioner wished to challenge the advisory agency’s authority to make the initial project approval or adopt the MND, the court held that those arguments needed to be made within the applicable statute of limitations period. Because they were not, the petitioner was precluded from raising such arguments.

Second District Court of Appeal Upholds EIR for Refinery Project

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The Second District Court of Appeal upheld an Environmental Impact Report (“EIR”) for a South Coast Air Quality Management District (SCAQMD) permit for operational changes to two existing refinery facilities. (Communities for a Better Environment v. South Coast Air Quality Management Dist. (2020) 47 Cal.App.5th 588.) Praising both the lead agency and the EIR, the Second District Court of Appeal considered and rejected four arguments made by petitioner. One justice dissented on the issue of baseline.

Tesoro Refining and Marketing Company proposed the Los Angeles Refinery Integration and Compliance Project (“project”), which would integrate two of Tesoro’s oil refining facilities so that Tesoro could more flexibly alter outputs of gasoline and jet fuel, and reduce emissions in order to reduce air pollution and increase compliance. The SCAQMD was required to issue a permit, which allowed the facility to generate more heat, for the project. The court described three key points about the permit: (i) it was a paper change only and did not allow for any physical changes to the heater or other hardware; (ii) it imposed new limitations on emissions; and (iii) it allowed the facility to either process a heavier blend of crude or increase throughput by 6,000 barrels per day, but not both. The project would also shut down a catalytic cracking unit, a major source of emissions.

The SCAQMD prepared and certified an EIR which determined that the project would reduce emissions by 36 percent. The court explained that the analysis of emissions was conservative, in part because the EIR assumed the heater had never operated above 252 million BTUs per hour, when in fact it had. The project also imposed limitations on emissions that did not exist before the project. Although, the project could increase throughput or weight of the crude blend, the facility could have no new emissions under the new permit.

The court cited the following facts as pertinent—the draft EIR included over 1,700 pages; the SCAQMD circulated the EIR for 49 days more than required, for a total of 94 days; the final EIR responded to 1,112 pages of comments with 5,700 pages of responses; the United States Environmental Protection Agency (“EPA”) reviewed the EIR and indicated it had no objection to issuing the permit; and the EIR was “many thousands of pages” with the index alone being 180 pages.

Communities for a Better Environment (“CBE”) challenged the project alleging the EIR was inadequate. The trial court rejected CBE’s arguments and upheld the EIR. On appeal, CBE made four arguments.

Baseline

The court rejected CBE’s argument that the baseline was insufficient under CEQA. The EIR relied on a near-peak 98% baseline, based on an average of the refinery’s worst air pollution emissions during the two years leading up to the project, excluding the top two percent of the data in order to leave out extreme outliers. The EIR compared this 98th percentile analysis with impacts from the project and determined the project would reduce air pollution. CBE argued that CEQA requires an average-value baseline, but the court disagreed. The court emphasized that both peak and average can measure actual situations that truly exist, and there is no one “normal” way to measure the baseline. The court concluded that it was rational, and not “sinister or wrong,” to care most about the worst effects of air pollution, which occur when emissions hit their highest levels. Because EPA relies on a similar approach to regulate air pollution at the federal level, the court concluded the use of the 98th percentile baseline was supported by substantial evidence. One justice, however, dissented because federal custom and practice, which “appear[] to be the only substantial evidence found by the majority,” are not enough to support use of the 98th percentile as the baseline.

Pre-Project Crude Oil Composition

The court also rejected CBE’s argument that the EIR was required to provide the information regarding the existing composition of crude oil at the facility. The EIR explained that in order for the refinery to process a different blend of crude oil, the entire system would need to be changed. The EIR clarified that the project would not make these changes, so the court agreed there was no need to include information regarding the composition of crude oil. The project included a fixed crude operating envelope that would be the same before and after the project, and therefore the court agreed that baseline crude oil data was not necessary.

Failure to Exhaust

CBE argued that the SCAQMD was required to explain how it calculated the amount of additional oil that could be processed with the project. But, the court concluded, neither CBE nor anyone else had raised that exact issue before the SCAQMD, and therefore the issue could not be raised on appeal. The court emphasized that “[m]aking ‘broad’ requests that ‘encompass’ an issue raised on appeal is not raising the ‘exact issue’ during the administrative process.”

Existing Volume of Crude and Refinery’s Unused Capacity

Finally, the court concluded the EIR was not required to disclose the existing volume of crude or the refinery’s unused capacity because this data was immaterial to evaluating the project’s air pollution impact. The EIR explained that in order to increase the crude oil processing rate, the facility would need bigger pipes and stronger pumps. Because the project would not make these changes, it would not increase the refinery’s overall throughput. Data about the existing volume of crude processed and the refinery’s unused capacity, therefore, was not necessary.

Fourth District Reverses Dismissal, Holds Streets and Highway Code Does Not Exempt Caltrans Project from CEQA Review, and Petition Adequately Pled Equitable Estoppel

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In Citizens for a Responsible Caltrans Decision v. Department of Transportation (2020) 46 Cal.App.5th 1103, the Fourth District Court of Appeal overturned the San Diego County Superior Court’s judgment sustaining the California Department of Transportation’s (Caltrans) demurrer and dismissal of Citizens for a Responsible Caltrans Decision’s (CRCD) petition for writ of mandate. The petition claimed Caltrans improperly exempted a highway interchange project from CEQA review and engaged in misconduct that precluded Petitioner from timely filing the action. The Court of Appeal found that Streets and Highway Code section 103 did not exempt the project from CEQA review, and the petition sufficiently plead facts about Caltrans’ misrepresentation of the review process to establish a factual dispute about whether Caltrans was equitably estopped from asserting the 35-day statute of limitations defense.

Background

In 2005, Caltrans filed a notice of preparation (NOP) for an EIR analyzing construction of two freeway interchange ramps that would connect the I-5 and SR 56 highways in San Diego (the I-5/SR56 Project). The I-5/SR56 Project was part of the larger North Coastal Corridor (NCC) project — a multi-project effort proposed by Caltrans and the San Diego Association of Governments (SANDAG) to improve transportation in the La Jolla and Oceanside area.

Streets and Highway Code section 103 went into effect in January 2012. The section provides the California Coastal Commission with integrated regulatory review of a “public works plan” (PWP) for NCC projects, rather than traditional project-by-project review and approval. Four months later, Caltrans circulated a Draft EIR for the I-5/SR56 Project. The Draft EIR explained that “following circulation of the FEIR, if the decision is made to approve the Project, a Notice of Determination (NOD) will be published for compliance with CEQA and a Record of Decision will be published for compliance with the National Environmental Policy Act (NEPA).”

In October 2013, Caltrans issued an FEIR for a separate NCC highway-widening project. The report explained that section 103 did not eliminate project-specific CEQA or NEPA review—rather, it provided the Coastal Commission with streamlined review. In 2014, Caltrans and SANDAG issued, and the Coastal Commission approved, the PWP for the 40-year NCC project. The PWP explained that it did not supplant CEQA, NEPA, or other regulatory review schemes for individual projects proposed under the NCC.

In June 2017, Caltrans released a Final EIR for the I-5/SR56 Project. The report reiterated that, if it approves the Project, the agency will publish a NOD to comply with CEQA and a Record of Decision to comply with NEPA. However, in contradiction to the language above, the Final EIR also added that the passage of section 103, together with Public Resources Code section 21080.5, “mandate that instead of being analyzed under CEQA, the [NCC Project] and all of the projects included therein, shall be addressed under the CCC’s review per its certified regulatory program.” The FEIR reasoned that because the I-5/SR56 Project was identified in the PWP, and the Coastal Commission approved it in 2013, CEQA review was no longer required.

Though Caltrans concluded CEQA no longer applied to the I-5/SR56 Project, it maintained that public disclosure of the Project’s impacts was “still desirable.” Therefore, it released the Final EIR to satisfy CEQA’s analytical and disclosure requirements, and provided the public with a 30-day review and comment period from July 14, 2017 to August 14, 2017. However, before this period commenced, Caltrans approved a “project report” for the I-5/SR56 Project on June 30, 2017, and filed a Notice of Exemption (NOE) on July 12, 2017. The NOE concluded that the Project was exempt from CEQA and its impacts were analyzed pursuant to the Coastal Commission’s certified regulatory program.

CRCD’s counsel first became aware of the NOE on September 28, 2017. After Caltrans refused CRCD’s request to rescind the NOE or agree to a 180-day statute of limitations, CRCD filed a petition for writ of mandate and declaratory relief 35 days later on November 1, 2017. Caltrans filed a demurrer to the petition and the trial court sustained it without leave to amend. The trial court entered a judgment dismissing the petition with prejudice. CRCD appealed.

The Court of Appeal’s Decision

The Fourth District reviewed the trial court’s decision denying CRCD leave to amend and sustaining Caltrans’ demurrer de novo, and considered: (1) whether Streets and Highway Code section 103 exempts the I-5/SR56 Project from CEQA review; and (2) whether CRCD’s petition sufficiently alleged facts showing Caltrans was equitably estopped from raising the 35-day statute of limitations. The Court treated Caltrans’ demurrer as having admitted all of the properly pled material facts in the petition. The Court stated that a demurrer brought on statute of limitations grounds will be overruled if the relevant facts do not clearly establish that the action is time-barred.

Section 103 Does Not Exempt Caltrans from Conducting CEQA Review of the I-5/SR56 Project

First, the Court applied traditional rules of statutory construction to interpret section 103 as a matter of first impression. The Court held that the section did not statutorily exempt Caltrans from conducting CEQA review of the I-5/SR56 Project because it only exempted the Coastal Commission’s approval of the PWP. The Court reasoned that the Legislature intended the PWP to function as a “long range development plan” that could be approved under a certified regulatory program, pursuant to Public Resources Code sections 21080.09 and 21080.5. This certified regulatory program only provided the Coastal Commission with approval authority. Further, section 103 only authorizes the Coastal Commission to prepare substitute documents when certifying or approving the PWP; it did not exempt Caltrans from conducting project-level CEQA review and preparing an EIR for the I-5/SR56 Project.

Finally, the Court rejected Caltrans’ argument that the Coastal Commission’s approval of the PWP implicitly approved the I-5/SR56 Project. The Court explained that the PWP included numerous alternative projects for the NCC, but did not include the I-5/SR56 Project, as defined in the Final EIR. Had the Legislature intended to exempt Caltrans from preparing an EIR for the Project, or provide Caltrans with a certified regulatory program, it would have expressly done so. Because the plain language of section 103 does not provide for such exemptions, Caltrans was required to conduct individual, project-level CEQA review of the Project.

Petitioner Alleged Sufficient Facts Showing Caltrans Was Equitably Estopped from Relying on the Statute of Limitations Defense to Overcome Caltrans’ Demurrer

The Court’s independent review of the petition indicated that CRCD pled facts that sufficiently showed Caltrans was equitably estopped from relying on the 35-day statute of limitations for actions challenging notices of exemptions. A government agency may be estopped from asserting a statute of limitations defense if the petition indicates that the agency’s fraudulent or misrepresentative conduct prevented a reasonably prudent person from timely seeking legal advice or commencing litigation. Here, Caltrans informed the public in its Draft and Final EIRs that Caltrans would file a NOD if it decided to approve the I-5/SR56 Project. However, Caltrans did not inform the public, commenters, or interested parties about its decision to file a NOE instead of a NOD. Caltrans’ statements and conduct further suggested that it would not approve the Project until mid-August 2017, after the public comment and review period closed. The Court held that there was, at minimum, a disputed question of fact whether, by approving the Project in early July after repeatedly stating that project approval would follow the announced Final EIR circulation and review period, Caltrans misled CRCD about facts Caltrans intended to be acted on. CRCD’s petition adequately pled that CRCD was ignorant of the true state of facts, which precluded CRCD from commencing the instant action before the 35-day statute of limitations period expired.

For these reasons, the Court held that Caltrans’ demurrer must be overruled and the trial court’s judgment dismissing CRCD’s petition must be reversed and vacated.

Bridget K. McDonald

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