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Sixth District Court of Appeal Holds Breach of Public Trust Doctrine Claim Not Ripe for Adjudication in the Absence of Petitioner’s Exhaustion of its Administrative Remedies

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In Monterey Coastkeeper v. Monterey Water Resources Agency (2017) ___ Cal.App.5th ___ (Case No. H042623), the Sixth District Court of Appeal reversed the trial court’s judgment granting Monterey Coastkeeper’s petition for writ of mandate for violation of section 13260 of the Porter-Cologne Act (failure to file a report of waste discharge), holding that the petitioner had failed to exhaust its administrative remedies.

The Monterey County Water Resources Agency (MCWRA) is a flood control and water agency responsible for operation of the Reclamation Ditch and the Blanco Drain, which collects agricultural wastewater and eventually discharges into surface waters that are subject to the Porter-Cologne Act. Petitioner Monterey Coastkeeper alleged that the MCWRA was in violation of section 13260 of the Porter-Cologne Act for failing to submit a report of waste discharge to the Regional Water Quality Control Board (RWQCB) as required under Porter-Cologne.

Petitioner claimed that it did not have an administrative remedy because the Porter-Cologne Act did not have a defined procedure to administratively pursue grievances for failure to file a report of waste discharge. The court disagreed. It stated that the Porter-Cologne Act expressly gives the RWQCB the authority to require a report of waste discharge, and to hold a discharger civilly liable for failure to do so. The Porter-Cologne Act further provides that the RWQCB may be requested to act, and their decision is appealable to the State Water Resources Control Board. The State Water Resources Control Board decision or order is then subject to judicial review by a writ of mandate. The court found that petitioner could have followed these statutory procedures—but it had not done so. The court held that petitioner had failed to exhaust its administrative remedies.

Due to its failure to exhaust, the court further found that petitioner’s claim for breach of duty under the public trust doctrine was unripe. The court held that because petitioner had not initiated the administrative review process, there was no administrative record upon which to base a decision as to whether the public trust doctrine had been violated.

Fifth District Court of Appeal Approves of Oil Refinery EIR’s Use of Cap-and-Trade Program to Mitigate GHG Emissions, But Disapproves of Kern County’s Reliance on Federal Preemption in Failing to Analyze Off-Site Rail Activities

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On November 21, 2017, the Fifth District partially published its decision in Association of Irritated Residents v. Kern County Board of Supervisors (2017) 17 Cal.App.5th 708. The published sections covered arguments about the baseline used for the oil refinery modification project, the mitigation of greenhouse gas (GHG) emissions, and the extent to which federal preemption precludes aspects of CEQA review of project impacts. In reversing the trial court’s judgment denying the petition for writ of mandate, the Court of Appeal upheld the EIR’s treatment of the project baseline and GHG emissions but determined that the county erred in relying on federal preemption to avoid analyzing and mitigating impacts from off-site rail activities.

The project involved modifications proposed by Alon USA to an existing petroleum refinery northwest of the City of Bakersfield. The refinery had undergone several ownership changes since 1932, with Alon USA purchasing it from Flying J and its subsidiary during the latter’s 2008 bankruptcy proceedings. Alon USA sought to expand existing rail, transfer and storage facilities, including the construction of a double rail loop connected to the BNSF railway. The expanded train facilities would allow the transport of crude oil from the Bakken formation in North Dakota to the refinery for processing. The Association of Irritated Residents, Center for Biological Diversity, and Sierra Club filed suit after the County certified an EIR and approved the project.

First, the court dealt with plaintiffs’ arguments about the use of year 2007 as the baseline for air pollution emissions instead of using year 2013 – the year that the County published the notice of preparation. In discussing Neighbors for Smart Rail v. Exposition Metro Line Const. Authority (2013) 57 Cal.4th 439, 457 (“Neighbors”), the court established that it was interpreting Neighbors to only require heightened scrutiny of baselines that use hypothetical future conditions and not of those that use data from past, fluctuating conditions. Based on this interpretation, the court found no error in the County’s use of data from year 2007 because substantial evidence supported this deviation from the “normal” baseline. The court concluded that it was reasonable to include an operating refinery in the baseline because: (a) existing permits and entitlements allow for the processing of up to 70,000 barrels per day; (b) Flying J’s bankruptcy filing in 2008 only temporarily halted processing of hydrocarbons; (c) refinery operations have been subject to prior CEQA review; and (d) the processing of crude oil could begin again without the currently proposed project. The court then turned to whether the County’s choice of year 2007 was supported by substantial evidence, and found that it was because 2007 was the last full year of refinery operations, and was not some hypothetical, maximum authorized amount. The court even included its own calculations of the average barrels per day for the period of 2001 through 2008 to show that the year-2007 figure of 60,389 barrels-per-day was less than the average of 60,994 barrels-per-day.

Second, the court addressed GHG emissions arguments. The court started by analyzing under the de novo review standard a question of first impression: can the volume of a project’s estimated GHG emissions be decreased to reflect the use of allowances and offset credits under the state’s cap-and-trade program? The court concluded that this use of the cap-and-trade program did not violate CEQA because Section 15064.4, subd. (b)(3), effectively directed the County to consider the project’s compliance with the state’s cap-and-trade program as a “regulation[] or requirement[] adopted to implement a statewide . . . plan for the reduction of mitigation of greenhouse gas emissions.” And the court concluded that the project’s compliance with the cap-and-trade program could be part of the substantial evidence supporting a finding of less-than-significant impacts from GHG emissions even though surrender of allowances would not result in the project emitting fewer GHG molecules than if the allowance had not been surrendered. The court explained that the cap-and-trade program was designed so that the “limited allocation and use of allowances means they are not available for use elsewhere” in the state.

In the final published section, the court dealt with federal preemption and off-site rail impacts. Claiming that the Interstate Commerce Commission Termination Act of 1995 (ICCTA) preempted CEQA review, the County had excluded analysis of some of the impacts from off-site main line rail operations that will deliver crude oil to the refinery. The court disagreed. Interpreting the California Supreme Court’s direction in Friends of Eel River v. North Coast Railroad Authority (2017) 3 Cal.5th 677, 722, the court of appeal concluded that the development of information pursuant to CEQA is not categorically preempted but may be preempted on an as-applied basis. Then, as an alternative to that broad legal conclusion, the court considered whether categorical preemption applied to the specific circumstances in this case. It concluded that no categorical preemption applied because analysis of indirect environmental effects “would impose no permitting or preclearance by a state or local agency upon the delivery of crude oil to the project site by a rail carrier,” and “would not control or influence matters directly regulated under federal law.” The court also concluded that there was no as-applied preemption because the environmental analysis of off-site rail activities “would not prevent, burden, or interfere with BNSF Railway’s operation.” Finally, the court directed the County on remand to use the tests stated in this opinion to determine whether particular mitigation measures may be preempted by the ICCTA.

 

 

In a Case of First Impression, First District Court of Appeal Holds That Presentation of Five Alternatives in EIR, Without Designation of One as the ‘Project,’ Does Not Satisfy CEQA’s Requirement for a Stable Project Description

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In Washoe Meadows Community v. Department of Parks and Recreation (2017) 17 Cal.App.5th 277, the First District Court of Appeal upheld the trial court’s decision directing the Department of Parks and Recreation and the State Park and Recreation Commission to set aside project approvals where the draft EIR analyzed five alternative projects in detail, but did not identify one preferred alternative.

In 1984, the Department of Parks and Recreation acquired 777 acres of land in the Lake Tahoe Basin—608 acres of the property were designated as Washoe Meadows State Park and the remainder contained an existing golf course. Studies conducted in the early 2000s indicated that the layout of the golf course was contributing to sediment running into Lake Tahoe, which contributed to deterioration of habitat and water quality in the lake.

In 2010, the Department circulated a draft EIR to address the concerns about the golf course. The draft EIR analyzed five alternatives in equal detail, with the stated purpose of “improv[ing] geomorphic processes, ecological functions, and habitat values of the Upper Truckee River within the study area, helping to reduce the river’s discharge of nutrients and sediment that diminish Lake Tahoe’s clarity while providing access to public recreation opportunities ….” The draft EIR did not identify one preferred alternative. In the final EIR, the Department identified the preferred alternative as a refined version of the original alternative 2, which provided for river restoration and reconfiguration of the golf course. In 2012, the Department certified the EIR and approved the preferred alternative.

Framing the issue as a question of law, the court found that the draft EIR did not “provide the public with an accurate, stable and finite description of the project,” because it did not identify a preferred alternative. The court found that by describing a range of possible projects, the Department had presented the public with “a moving target,” which required the public to comment on all of the alternatives rather than just one project. The court determined that this presented an undue burden on the public.

The court compared the draft EIR to County of Inyo v. City of Los Angeles (1977) 71 Cal.App.3d 185, where the court found an EIR insufficient because the project description described a much smaller project than was analyzed in other sections of the EIR. The court in Washoe Meadows found that rather than providing inconsistent descriptions like in County of Inyo, the draft EIR had not described a project at all. Thus, the court directed the Department to set aside the project approvals.

Fourth District Rejects Challenge to the City of Huntington Beach’s Housing Element, Applying Charter City Exemption

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On October 31, 2017 in Kennedy Commission v. City of Huntington Beach  (2017) 16 Cal.App.5th 841, the Fourth Appellate District reversed the lower court,  finding for defendants on the first cause of action under state housing element, zoning, and planning laws. The court of appeal allowed plaintiffs leave to refile their third to sixth causes of actions, which had been dismissed without prejudice in the court below. A separate ruling on plaintiffs’ fee award from the court below is pending.

Background

The California Department of Housing and Community Development (HCD) determines each region’s Regional Housing Need Allocation (RHNA), including each region’s share of lower income housing. HCD then determines if the housing element of a general plan is compliant and reflects the agency’s share of the RHNA. HCD approved Huntington Beach’s general plan housing element in 2013. At the time, the majority of lower income housing was zoned for the Beach Edinger Corridor Specific Plan area (BECSP). Residents complained about the rapid pace of development in this area. In response, in 2015, the city amended the BECSP, cutting the amount of housing in this area by half. This resulted in a 350-unit shortfall of lower income housing for Huntington Beach. The city then sought to amend the housing element of the general plan to provide for lower-income housing in other areas of the city.

Plaintiffs, a fair housing advocacy organization and two lower-income Huntington Beach renters, filed a writ of mandate with six causes of action. The first cause of action was under state housing element law, for adopting a specific plan that was inconsistent with an approved general plan. The second cause of action was for failure to implement the general plan. The third and fourth causes of action were based on Article XI, section 7 of the California Constitution, alleging that the amended BECSP was preempted by state law. The fifth and sixth causes of action were allegations of housing discrimination, for adverse impacts to racial and ethnic minorities.

In an expedited trial, the trial court found that the amended BECSP violated state housing law because it no longer complied with the general plan (plaintiffs’ first cause of action). The trial court found that under Government Code section 65454, a municipality may not amend a specific plan unless the amendment is consistent with the general plan. The city, in violation of this provision, amended the specific plan without first amending the housing element to find other areas where lower income housing could be built. The BECSP amendment was void when passed and could not be enforced. The third through sixth causes of action were dismissed without prejudice. The second cause of action was not pursued on appeal.

Appellate Court Ruling

For the first time on appeal, the city raised the defense that as a charter city, Huntington Beach was exempt from requirements under Government Code sections 65860 and 65454, requiring that zoning ordinances and specific plans be consistent with the general plan. Charter cities with less than two million residents are exempt from these requirements, per Government Code 65803 (zoning) and 65700 (local planning). An exception to this exemption is when the charter city expressly states, in either its charter or by ordinance, that it intends to adopt the consistency requirement, which Huntington Beach alleged that it had not done. Therefore, the defendants argued, while they were required to provide for their share of lower income housing as determined by the RHNA, the city was permitted to amend the general plan to be compliant. To support this argument, the city moved for the appellate court to take judicial notice of the city’s charter and population, providing the factual basis for the city’s charter city exemption.

First, as a threshold matter, the court of appeal exercised its discretion to take judicial notice of documents that were not before the trial court, that are of substantial consequence in the determination of the action. The court chose to exercise its discretion here, because the trial court had not restricted the issues in its expedited hearing. Although this was not a justification for defendants’ failure to raise the issue, this decision afforded the defendants some latitude in this regard.

As to the merits, the court found that Huntington Beach met the requirements for the charter city exemption, and that the exception to this exemption was inapplicable. First, the court found that the consistency requirement was not adopted by the city in its charter. The court then examined Huntington Beach’s zoning ordinance concerning specific plans and determined that the city did not intend to adopt a consistency requirement there, either. In making this determination, the court heavily relied on its decision in Garat v. City of Riverside (1991) 2 Cal.App.4th 259. In Garat, Riverside, also a charter city, enacted two voter initiatives which changed the zoning to favor agricultural uses in specified areas, creating an inconsistency with the general plan.

In Garat, the court rejected the argument that the adoption of any specific plans, even if they were intended to be consistent with the general plan, creates either a presumption that all specific plans in the general plan area must also be consistent, or that a city has generally adopted the consistency requirement in its land use planning.

More importantly, Garat established that Government Code section 67000 exempts charter cities from local planning requirements, in virtually the same way that section 65803 exempts charter cities from the provisions requiring consistency with to specific plans, and these exemptions are strictly construed.

Turning to Huntington Beach’s zoning ordinance, the city did not explicitly state that any specific plan that was not consistent with the general plan was void. The ordinance did use language concerning consistency, but fell short of expressly adopting the language of Government Code section 65454. To adopt the consistency requirement, a zoning ordinance must state that “[n]o specific plan may be adopted or amended” unless it is consistent with the general plan, or else it is void. Absent this, plaintiffs’ attempt to imbue a consistency requirement in the zoning ordinance must fail, as it did in Garat.

The court also rejected plaintiffs’ argument that even if the charter city exemption applied, the amended BECSP should be considered void, as violating state law. Even if the court were to accept that the BECSP violated state law, the remedy would not be to render the BECSP void. Rather, the remedy would be to grant the city time to amend its housing element. The city is already implementing this remedy. The amendment process can proceed, while leaving the amended BECSP in force.

 The court noted while one may question the wisdom of creating the charter city exemption for certain aspects of land use planning, this was clearly the legislative intent.

The ruling is notable for several reasons. It set a high bar for plaintiffs in the Fourth District who are seeking to establish that a charter city has adopted specific plan consistency requirements, absent express adoption of the language of Government Code section 65454. Additionally, the city’s victory may be pyrrhic. As the city conceded, and the court concurred, the general plan’s housing element will ultimately require amendment to provide the city’s designated share of the RHNA. While the city achieved its goal of slowing down the pace of development, plaintiffs may yet refile and potentially prevail on their claims of housing discrimination, incurring liability for the city. Finally, although the court did decide to exercise its discretion and take judicial notice of the city’s charter, if it had not, the court would have had no basis for finding merit in the city’s defense under the charter city exemption. By not raising this defense in trial, the city came close to forfeiting this ultimately successful defense. Therefore, municipalities would do well to note if they are a charter city, and be prepared to argue that defense where applicable in the first instance.

Sixth District Court of Appeal Upholds Trial Court’s Use of Interlocutory Remand on Determination Regarding General Plan Consistency

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The Sixth District Court of Appeal held in the partially-published opinion, Highway 68 Coalition v. County of Monterey (2017) 14 Cal.App.5th 883, that general plan consistency is not a CEQA issue, and therefore mandate procedures for CEQA violations are inapplicable.

The Trial Court Proceedings

In 2012, Monterey County certified an EIR for an 11-acre shopping center project. The county’s general plan requires a specific finding of “a long-term sustainable water supply,” but in approving the project the board of supervisors determined only that the project had an “adequate long-term water supply.” After the county approved the project, Highway 68 Coalition filed a petition for writ of mandate challenging approval of the project on both CEQA and general plan consistency grounds. The trial court rejected the CEQA claims, but issued an order of interlocutory remand to the county to clarify whether there was a long-term sustainable water supply using the specific language mandated by a general plan policy. The board of supervisors held a hearing on remand and made the specific findings required by the general plan.

Highway 68 then filed, and the court granted, a motion for leave to file a supplemental writ petition regarding the county’s subsequent findings. Highway 68 argued that the county had violated procedural due process and had violated CEQA during the remand proceedings. The trial court denied Highway 68’s claims, finding that the county’s procedures on remand had not violated due process, and substantial evidence supported the board’s findings regarding water supply. The trial court lifted the prior stay and denied the petition for writ of mandate.

The Appeal

On appeal, Highway 68 argued that the trial court erred in issuing interlocutory remand in a CEQA writ of mandate case; the county violated due process requirements on interlocutory remand; and the EIR’s analysis of consistency with the general plan, traffic analysis, and segmentation of environmental review was insufficient under CEQA. The Court of Appeal found that because the issue of whether a proposed project is consistent with a county’s general plan is not a CEQA issue, CEQA’s mandate procedures do not apply. Thus, the court held that because this was a single, discrete issue of general plan consistency, which is reviewed by ordinary mandamus, the trial court did not err when it ordered interlocutory remand. In addition, the court held that Highway 68 did not meet its burden to show, based on the evidence in the record, why the board’s determination was unreasonable. Thus, the court upheld the finding of general plan consistency and affirmed the trial court’s denial of the petition for writ of mandate.

First District Upholds Categorical Exemption with Conditions of Approval and Conditional Use Authorization for Residential Project on Infill Site in Transit Priority Area

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In Protect Telegraph Hill v. City and County of San Francisco (2017) 16 Cal.App.5th 261, the First District Court of Appeal, Division Three, upheld the City and County of San Francisco’s (city) finding that a conditional use authorization for the restoration of a small cottage and construction of a three-unit condominium on Telegraph Hill was categorically exempt from CEQA, and found that the city’s conditions of approval relating to construction were not mitigation for pedestrian and traffic impacts.

The proposed project is a new three-unit condominium fronting on Telegraph Hill Boulevard, the restoration of an existing small cottage at the back of the property, and three off-street parking spaces. The city planning department determined that the renovation of the cottage was categorically exempt from CEQA under the Class 1 exemption (Guidelines, § 15301, subd. (d)), and construction of the new building was exempt under the Class 3 exemption as a residential structure totaling no more than four dwelling units (Guidelines, § 15303, subd. (b)). The planning commission approved a conditional use authorization with some conditions on construction activity. A neighborhood group appealed both decisions to the San Francisco Board of Supervisors. The board approved the exemption and the conditional use authorization, with additional conditions on the construction activity. Protect Telegraph Hill filed a petition for writ of mandate, arguing that the city’s findings relating to the exemptions and approval of the conditional use authorization were unsupported by the evidence, the city failed to consider the entire project, and unusual circumstances and the inclusion of mitigation measures made the reliance on categorical exemptions improper. The trial court denied the petition, and Protect Telegraph Hill appealed.

On appeal, the petitioner argued that granting the exemptions was unlawful because the conditions of approval imposed by the city were intended to mitigate environmental impacts from the project’s construction, indicating that the project would have significant impacts and thus could not be exempt from CEQA. The petitioner also argued that the project description was inadequate to determine whether the project was truly exempt and that the unusual circumstances exception applied.

The court concluded that while some of the conditions of approval addressed traffic and pedestrian safety, they were attached to the approval of the conditional use authorization, and not the exemptions. The exemptions were initially approved by the planning department without qualification, while the conditional use authorization was originally approved by the planning commission with certain conditions. The petitioner had to appeal both decisions separately to the Board of Supervisors, which voted separately on each decision, attaching further conditions to the conditional use authorization only. The court also found that there was no substantial evidence in the record suggesting that the project would have significant effects on traffic and pedestrian safety. The court stated that the appellant’s “expressions of concern” in the record were not substantial evidence. The court also rejected attacks on the project description, finding that the included description complied with the requirements in the San Francisco Administrative Code and there was no evidence in the record suggesting the description was deficient.

Turning to the unusual circumstances exception, the court applied the two-part test announced by the California Supreme Court in Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086. The city’s conclusion that the unusual circumstances exception was not met is reviewed for substantial evidence. But, if there are unusual circumstances, the court considers whether there is a fair argument that there is a reasonable possibility that the project will have a significant effect.

Protect Telegraph Hill argued that the location of the project on Telegraph Hill was itself an unusual circumstance. But the court found that the city’s determination that there were no unusual circumstances was supported by substantial evidence. While Telegraph Hill is described in the design element of the general plan, the project conformed to the zoning requirements for that area and was similar in proportion to the immediately adjacent buildings. The petitioner also argued that the area was heavily traveled because of its proximity to Coit Tower landmark, but the court agreed with the city that large traffic and pedestrian volumes was “more commonplace than unusual” in San Francisco.

Next, the petitioner argued that the project would impair views of the downtown skyline from the public stairway. The court rejected this argument in part by applying new Public Resources Code section 21099, subdivision (d), which applies to residential urban infill projects in transit priority areas, and requires that aesthetic impacts “shall not be considered significant impacts on the environment.” Additionally, the city considered the project’s impact on views from Coit Tower and Pioneer Park and concluded it would not have an adverse effect. The petitioner also argued that the 30% slope of the lot was an unusual circumstance. The court again agreed with the city that the slope was not unusual for San Francisco and found that the city’s engineering report provided substantial evidence supporting its decision. The petitioner also submitted an engineering report that provided conflicting evidence, but that report did not negate the substantial evidence supporting the city’s conclusion.

Lastly, the petitioner argued that the conditional use authorization finding was unsupported because of the project’s potential to obscure views of the downtown skyline from the stairway. The court held that even if there were some conflict with one policy in the general plan, the policies were not strictly construed and the project was consistent with other policies and the Urban Design Element for Telegraph Hill. Ultimately, the court found that the record supported the city’s conclusion that the project would not change the character of Telegraph Hill, and denied the petition.

First District Court of Appeal Upholds Judicial Council of California’s Determination That Closure of Downtown Placerville Courthouse Would Not Lead to Significant Urban Decay Impacts

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

Background

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

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

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

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

The Court of Appeal’s Decision

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

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

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

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

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

First Circuit Finds Environmental Review Under Certified Regulatory Program Inadequate

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In Pesticide Action Network North America v. California Department of Pesticide Regulation (2017) 16 Cal.App.5th 224 (republished as modified) the First Appellate District reversed the Alameda Superior Court and found that environmental documents prepared by the California Department of Pesticide Regulation, regarding amended labelling for two pesticides, inadequately analyzed potential impacts on honeybees. The court held that the Department was required to analyze the environmental baseline, alternatives, and cumulative impacts in documents promulgated under CEQA’s exemption for certified regulatory programs (CRP).

The Department of Pesticide Regulation registers all pesticides in California, after evaluating their efficiency and potential for impacts to human health and the environment. The Department has a continuing obligation to reevaluate pesticides, and may cancel a prior registration. Since 2006, there has been a documented widespread collapse of honey bee colonies in the United States. One suspected factor is exposure to pesticides such as dinotefuran, the active ingredient in pesticides sold by the real parties. For this reason, in 2009, the Department initiated the still-ongoing process of reevaluating dinotefuran’s registration. Simultaneously, in 2014, the Department issued public reports for a proposal to amend labels for pesticides containing dinotefuron. The amended labels would allow the pesticides to be used on fruit trees, and in increased quantities. The reports concluded that the use of each pesticide in a manner consistent with the new labels would have no direct or indirect significant adverse environmental impacts, and therefore the Department did not propose alternatives or mitigation measures. The Department issued a final approval of the label amendments in June 2014. Pesticide Action Network filed a petition for writ of mandate in Alameda Superior Court and after a lower court finding for the Department, this appeal followed.

The Department’s pesticide program falls under the CEQA section 21080.5 exemption for CRPs. This exemption permits a state agency to rely on abbreviated environmental review documents, which are the functional equivalent of CEQA documents. Here, the Department issued the functional equivalent of a negative declaration. The standard of review is whether there was a prejudicial abuse of discretion, which is established if the agency did not proceed in a manner required by law, or if the determination is not supported by substantial evidence.

First, the court rejected the Department’s assertion that because it operates a CRP, its functionally-equivalent environmental review documents are otherwise exempt from CEQA’s substantive requirements. The court found that section 21080.5 is a “limited” exemption, and environmental review must otherwise comply with CEQA’s policy goals, substantive requirements, content requirements stated in section 21080.5, and any other CEQA provisions, as well as the Department’s own regulations.

Second, the court found that the Department’s report was inadequate under CEQA because it failed to analyze alternatives and cumulative impacts, and did not describe the environmental baseline. With respect to alternatives, contrary to the Department’s assertion, a functionally-equivalent document prepared under a CRP must consider alternatives, as required by both CEQA and the Department’s own regulations. The Department argued that it did not need to consider alternatives because it concluded there would be no significant environmental impacts. The court explained that the standard for a CRP for determining whether an adverse impact may occur is the same as the “fair argument” standard under CEQA. Furthermore, the content requirements for environmental review under a CRP require that a state agency provide proof–either a checklist or other report–that there will not be adverse effects. The court found that the Department did not produce or consider such evidence.

The court also held that the substantive requirements and broad policy goals of CEQA require assessment of baseline conditions. The Department argued that it had acknowledged and assessed baseline conditions, but the court disagreed. The Department’s baseline discussion was based on one statement that “the uses are already present on the labels of a number of currently registered neonicotinoid containing products.” The court found that this general statement was not sufficient.

The court found that the Department also abused its discretion when it failed to consider cumulative impacts. In its report, the Department simply stated that the cumulative analysis would be put off until the reevaluation was complete. The court found that this one-sentence discussion lacked facts and failed to provide even a brief explanation about how the Department reached its conclusion.

Finally, the court found that the Department is required to recirculate its analysis. Recirculation is required when significant new information is added to an environmental review document, after notice and public comment has occurred, but before the document is certified. The court explained that, in light of the Department’s required reevaluation, its initial public reports on the amended labeling were so “inadequate and conclusory” that public comment on them was “effectively meaningless.”

Pesticide Action Network provides important guidance regarding environmental compliance under a CEQA-exempt CRP. The court emphasized that unless specifically exempt from a CEQA provision, even functionally-equivalent CRP documents must comply with CEQA’s substantive requirements and broad policy goals. Also notable was the court’s application of the “fair argument standard” to the analysis of whether an impact would be significant under the functional equivalent of a negative declaration.

First District Upholds Categorical Exemption for Planned Parenthood Clinic and Implied Finding of No Unusual Circumstances Under the “Fair Argument” Test

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In Respect Life South San Francisco v. City of South San Francisco (2017) 15 Cal.App.5th 449, the First District Court of Appeal, Division One, upheld the City of South San Francisco’s (City) finding that a conditional use permit for the conversion of an office building into a medical clinic was categorically exempt from CEQA, as well as the City’s implied finding that the unusual circumstances exception did not apply.

The challenged project proposed converting an existing office building into a medical clinic providing a range of services and operated by Planned Parenthood. The City Planning Commission approved the application after a public hearing and found that the project was categorically exempt from CEQA review. Respect Life South San Francisco (Respect Life) appealed that decision to the City Council, arguing that, because of the nature of Planned Parenthood’s services, the project might draw protests that could have environmental impacts. The City Council rejected the appeal and found that the project qualified for three categorical exemptions. Respect Life and three individuals filed a petition for writ of mandate challenging the City’s decision. The trial court denied the petition and Respect Life appealed. On appeal, Respect Life admitted that at least one of the exemptions applied, but alleged that the unusual circumstances exception applied, requiring full environmental review.

The court first rejected Planned Parenthood’s argument that Respect Life lacked standing. Planned Parenthood argued that Respect Life had failed to allege that it had a beneficial interest in the litigation, but the court found that the group’s petition included sufficient allegations to establish standing.

The court then articulated the standard of review for categorical exemptions and the unusual circumstances exception under the California Supreme Court’s recent decision in Berkeley Hillside Preservation v. City of Berkeley (2016) 60 Cal.4th 1086 (Berkeley Hillside). At the administrative level, a challenger must prove to the agency that 1) there are unusual circumstances, and 2) there is a reasonable possibility of a significant impact because of those circumstances. Upon judicial review, a court applies the deferential “substantial evidence” test to the agency’s decision regarding the first prong, and the non-deferential “fair argument” test to the agency’s decision on the second.

Here, the City denied the administrative appeal and found the project categorically exempt, but made no express finding on the unusual circumstances exception. Thus, the record did not reveal whether the City concluded that the project presented no unusual circumstances (a decision entitled to deference) or had found that, while there were unusual circumstances, there was no reasonable possibility of significant impacts due to those circumstances (a decision reviewed under the non-deferential “fair argument” test). The court determined that when an agency makes an implied finding regarding the unusual circumstances exception, the court must assume that the agency determined that there were unusual circumstances. To uphold the agency’s implied finding that the exception is inapplicable, a court must conclude that the record contains no substantial evidence supporting either 1) the existence of unusual circumstances, or 2) a fair argument that such circumstances will have a significant effect on the environment. Thus, the court applies a non-deferential test to both implied determinations.

In this instance, the court found that even assuming that the first condition had been met by Respect Life, it had not identified any substantial evidence supporting a fair argument that the protests may result in significant effects. The court stated that Respect Life contradicted itself by conceding that CEQA review does not consider the identity of the applicant or operator, but also arguing that because the proposed operator is Planned Parenthood, the project might draw protests that will create indirect environmental impacts. The court held that “the possibility of ‘foreseeable First Amendment activity’” does not establish the unusual circumstances exception, where Respect Life “simply assert[ed] that protests will lead to environmental impacts.” The court also found that comments by opponents of abortion, even those that indicated they would protest, were not substantial evidence supporting a fair argument that there is a reasonable possibility that protests will have indirect significant effects on the environment. Ultimately, Respect Life was required, but unable, to point to evidence of the alleged indirect impacts, not just evidence of the protest activity that might lead to such impacts.

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