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Fourth District Court of Appeal Denies Motion for Attorneys’ Fees Finding Petitioner Was Not the Catalyst for City’s Revocation of Land Use Entitlements

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Coalition for a Sustainable Future in Yucaipa v. City of Yucaipa (July 6, 2015) __ Cal.App.4th __, Case No. E57589.

A petitioner group challenged the City of Yucaipa’s certification of an EIR and approval of land use entitlements for a Target shopping center project. The project was to be developed on land owned by Palmer General Corporation. The trial court denied the petition and petitioner appealed. That appeal became moot when both Target and the landowner abandoned the project due to a contract dispute, which caused the city to revoke the entitlements. The Court of Appeal directed that the order below be reversed with directions to dismiss the action with prejudice due to mootness. After the trial court dismissed the action as directed, petitioner brought a motion for attorneys’ fees under Code of Civil Procedure section 1021.5, asserting the petition was the catalyst for the city’s action to revoke the entitlements—the relief petitioner had sought at trial. The trial court denied the motion and petitioner appealed again. The Court of Appeal affirmed, finding petitioner’s action was not the catalyst for the city’s actions.

A party seeking attorneys’ fees under Code of Civil Procedure section 1021.5 must first show it is a “successful party.” It is not necessary to achieve a favorable final judgment so long as the petitioner’s actions were the “catalyst” for the defendant’s actions. More specifically, the catalyst theory permits an award of fees absent judicial resolution if the defendant changes its behavior substantially because of, and in the manner sought by, the litigation. To obtain attorneys’ fees under this theory, a plaintiff must establish that (1) the lawsuit was a catalyst motivating the defendants to provide the primary relief sought; (2) the lawsuit had merit and achieved its catalytic effect by threat of victory, not by dint of nuisance and threat of expense; and (3) the plaintiffs reasonably attempted to settle the litigation prior to filing the lawsuit. To satisfy the first prong, a petitioner need not show that litigation was the only cause of respondent’s acquiescence, only that it was a substantial factor.

Here, the court found that evidence supported the trial court’s finding that petitioner’s action was not a substantial factor contributing to the entitlement revocation.

First, before the land use entitlements were revoked, the trial court had denied the petition, which was a win for the city. Petitioner did not prevail, but instead appealed the judgment. Filing an appeal from the adverse judgment did not convert the unsuccessful action into a meritorious one. And the court’s direction to dismiss the action with prejudice on remand was not a favorable outcome. The court noted that none of the cases applying the catalyst theory involved situations in which an adverse judgment had already been rendered against the party seeking attorneys’ fees. Thus, having lost twice, petitioner could not show that it had prevailed by “threat of victory.”

Second, the city did not change its behavior substantially because of, and in the manner sought by,the litigation. The city had been successful in defending the CEQA action and did not revoke the entitlements for any reason related to the EIR or the CEQA violations alleged by petitioner. Rather, the city revoked the entitlements because the developer and the landowner had both abandoned the project due to a contract dispute. Petitioner could not demonstrate a nexus between the merits of its action and the city’s revocation of the entitlements. Therefore, the action was not the catalyst for the revocation and petitioner was not entitled to attorneys’ fees.

Fourth District Court of Appeal Upholds Supplemental EIR for Jail Facility Upgrade Project

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City of Irvine v. County of Orange (July 6, 2015) __ Cal.App.4th __, Case No. G049527

The court upheld a Supplemental EIR prepared by the County of Orange for a jail upgrade project over a decade after the original EIR had been certified. The court found the project was not substantially different than the project analyzed in the original EIR and that the Supplemental EIR adequately addressed the minor project changes and changed circumstances. And after a hearty dissertation on CEQA’s responses to comments requirement, the court determined that the county’s responses to comments on the Supplemental EIR were adequate.

The county prepared an EIR in the 1990s for the expansion of the James A. Musick Jail Facility. The City of Irvine challenged that EIR and lost; however, project construction was delayed indefinitely by a lack of funding. In 2012, the county decided to move forward with the project and prepared a Supplemental EIR to account for project changes and changed circumstances. Irvine filed a petition challenging the Supplemental EIR on various CEQA grounds. The trial court rejected the challenge and Irvine appealed.

On appeal, Irvine first claimed that the County was required to prepare a “Subsequent EIR” rather than a “Supplemental EIR.” Regarding the Supplemental EIR, Irvine’s contentions focused primarily on traffic impacts during construction and the loss of agricultural land. Irvine’s main argument, however, was that the county’s responses to Irvine’s comments on the Supplemental EIR were inadequate. The court rejected each of these claims in turn.

Irvine’s first claim was that the County was obligated to prepare a Subsequent EIR as opposed to a Supplemental EIR for their analysis of the impacts of the expansion. The court rejected this claim, explaining that courts should look to the substance of the EIR, not its nominal title.

Irvine’s next argument concerned the Supplemental EIR’s analysis of traffic impacts during project construction. Due to delays, there were discrepancies in the county’s construction timeline. Irvine claimed that these discrepancies amounted to an unstable project description that prevented the Supplemental EIR from adequately assessing project impacts. The court disagreed, finding that the project description was distinct from the interim impacts of construction. Specifically, Irvine claimed the county had failed to provide a stable project description because it could not account for the traffic impacts caused by construction in a given year. The court found that CEQA does not require a continuous update of traffic impacts as a result of construction delays and that, regardless of the delay, the impacts would not be substantially different from those disclosed in the Supplemental EIR even if traffic data was updated, and therefore, there was no prejudice.

The third claim concerned mitigation for the loss of agricultural land that would occur as a result of the expansion. The Supplemental EIR discussed seven possible mitigation measures, but none were found to be feasible. Irvine challenged the county’s feasibility findings for three of the measures: (1) the purchase of conservation easements on existing agricultural land to prevent it from being used in the future for nonagricultural purposes, (2) a transfer of development rights program, and (3) a “right to farm” ordinance.

The court held that the county’s findings rejecting these measures as infeasible were supported by substantial evidence. Conservation easements were found infeasible because there was no additional land for agriculture in the county that would be profitable and putting a conservation easement for agricultural use on land that is already used for agriculture would do nothing to mitigate the loss of other agricultural lands. The court also noted that the county’s zoning laws did not support the feasibility of conservation easements. Transfers of development rights were found to be even less feasible because the county did not have land laying fallow for which they could transfer rights in the preservation of agricultural land use. Lastly, the court concluded that a right to farm ordinance was the least viable option of all. The Supplemental EIR recognized that the conversion of current non-agricultural land to agricultural land would itself entail significant environmental effects, including nuisance suits. Beyond that, the court noted, a right-to-farm ordinance is meaningless where no land owner wants to farm. The court held that it is a reasonable inference that no one would want to convert land that is currently non-agricultural and put it to agricultural use even if they have the ostensible legal right to do so.

Lastly, the court addressed Irvine’s claim that the county failed to adequately respond to comments. The court began with a thorough discussion of CEQA’s responses to comment requirement and a detailed assessment of the state of case law on the subject. The court noted several oft-repeated principles by which courts may evaluate the sufficiency of responses, including (1) a general comment can be adequately met with a general response; (2) responses need not be exhaustive; and (3) the sufficiency of responses should be “viewed in light of what is reasonably feasible.” From the cases, the court divined a few more basic standards for the adequacy of responses: (1) when a comment raises a “significant” environmental issue, there must be some genuine confrontation with the issue, it can’t be swept under the rug; (2) responses that leave big gaps in the analysis of environmental impacts are obviously inadequate; (3) comments that bring some new issue to the table need genuine confrontation; and (4) comments that are only objections to the merits of the project itself may be addressed with cursory responses. Based on these guiding principles, the court found that the county had adequately responded to each of Irvine’s comments that merited a response.

Fourth District Court of Appeal Holds Removal of Conservation Overlay on Land Is a Project and Is Not Exempt from CEQA

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Paulek v. Western Riverside County (June 17, 2015) __ Cal.App.4th __, Case No. E059133

In a decision reversing the trial court, Division Two of the Fourth District held that the removal of a conservation overlay constituted a project under CEQA and that the project did not fall within the identified exemptions. The decision involves a Multiple Species Habitat Conservation Plan (HCP) to maintain open spaces in western Riverside County. The HCP identified a “criteria area” broken down into cells, each about 160 acres in size, that were to be evaluated to determine what portions of the criteria area should be included in the conservation area. Part of the criteria area included the Warm Springs Ranch owned by Anheuser-Bush; a conservation overlay had been placed upon the ranch.

In 2005, Anheuser submitted applications to develop the Ranch. The County informed Anheuser that all but 71 acres of the Ranch would be acquired for conservation under the HCP, and in 2011 the parties reached a settlement agreement whereby the Western Riverside County Regional Conservation Authority (the Agency) would purchase the Ranch from Anheuser. The property was to be purchased in 9 phases, and phase 9, which consisted of a 200-acre area, would cost $11 million. One of the purchasing conditions for the phase-9 property was that the conservation overlay would be removed.

Paulek asserted that the Agency should have considered whether removing the conservation overlay would have a significant environmental impact, and contended possible development on that area had the potential to affect wildlife by reducing habitat. The Agency contended that because, as part of the agreement with Anheuser, 1,064 acres would be acquired by the Agency and protected as open space, and because the phase-9 property was highly degraded habitat, the conservation transfer would result in more and better land being protected. Therefore, the Agency reasoned, the action was not a project under CEQA, and if even it was, it was exempt from CEQA.

The court rejected the Agency’s arguments, holding that the removal of the conservation overlay from the phase-9 property constituted a project under CEQA. Among other things, the court reasoned that removing the overlay was analogous to amending a general plan or changing a zoning ordinance, which are projects under CEQA. Removing the conservation overlay embodied a fundamental land use decision that had the potential to cause physical changes in the environment in that the land protected for conservation purposes would no longer be subject to such protections. Therefore, the Agency’s decision to remove the overlay was a project under CEQA.

The court was unpersuaded by the Agency’s arguments concerning the protection of 1,064 acres of more environmentally pristine land in exchange for the 200-acre phase-9 property. The court explained that the decision to remove the overlay was a separate decision from the decision to put 1,064 acres of other land in conservation. But even if the removal of the overlay and addition of overlay elsewhere was considered part of the same project, the fact remained that the 200 acres of the phase-9 property would no longer be protected by the conservation overlay. The court characterized the Agency’s argument as “essentially washing over any negative changes to the phase 9-property by highlighting the positive changes to the [other] properties.” For instance, noted the court, there are two species present on the phase-9 property that are not present on the 1,064 acres, so the land swap would not protect these two species.

The court also rejected the Agency’s argument that the project fell within certain exemptions from CEQA. The court held that a Class 7 exemption, which exempts projects that consist of actions taken by regulatory agencies to assure the maintenance, restoration, or enhancement of a natural resource, did not apply because a fair argument existed that removing the overlay could adversely affect certain species. Although the phase-9 property was not “prime” habitat for those species, there was no indication that it was so superfluous to those species that removing it from conservation would not adversely affect the species.

With respect to the Class 8 exemption, which is nearly identical to a Class 7 exemption except that it applies to the “environment” rather than natural resources, the court held that because there was uncertainty as to whether there would be a significant impact on the environment, the Class 8 exemption did not apply. Evidence in the administrative record demonstrated that the loss of the conservation overlay could affect the neighboring conservation area, and the effects could be significant such that there would need to be an attempt to lessen the effects.

The court also rejected the Agency’s claim that the project fell within the common sense exemption, which applies where it is certain that there is no possibility that an activity will have a significant effect on the environment. The change in designation of the phase-9 property from protected to unprotected had the potential for causing ultimate physical environmental changes, which was sufficient to take the project outside the purview of the exemption.

In addition to rejecting the Agency’s arguments on the merits, the court rejected various procedural arguments made by the Agency, holding that Paulek had standing, that Paulek’s action was timely, and that Paulek did not fail to join an indispensable party.

 

 

Supreme Court Rules in Favor of Inclusionary Housing Zoning

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In a loss for the building industry, the California Supreme Court upheld local jurisdictions’ police power to adopt inclusionary housing ordinances, which are laws that encourage or require developers to set aside a certain percentage of housing units in new projects for low- or moderate-income housing.  The court, in a unanimous decision (with concurring opinions by Justice Werdegar and Justice Chin) rejected the California Building Industry Association’s (CBIA’s) challenge to San Jose’s affordable housing law.

The City of San Jose’s ordinance requires developers creating at least 20 new homes to make 15% of those residences available for purchase by lower-income households, or else pay an in-lieu fee or dedicate land. As an apparent incentive to encourage developers to choose on-site inclusionary units, where the developer chooses one of the off-site options, the required low-income housing percentage rises to 20%. As an additional incentive to encourage developers to comply with the ordinance by providing affordable units on site, the ordinance permits a developer who provides all of the required affordable units on the same site as the market rate units to apply for and obtain a variety of economic benefits, including a density bonus, a reduction in the required-number of parking spaces, a reduction in minimum set-back requirements, and financial subsidies and assistance from the city in the sale of the affordable units.

CBIA filed a lawsuit seeking invalidation of the ordinance. The complaint alleged that the ordinance constituted a facially invalid exaction, in violation of the state or federal constitutions. The trial court agreed with CBIA’s legal position, concluding that the city had failed to show that there was evidence in the record demonstrating the constitutionally required reasonable relationships between the deleterious impacts of new residential development and the new requirements to build and dedicate the affordable housing or pay in-lieu fees.

The Court of Appeal reversed. The appellate court agreed with the City of San Jose that the ordinance’s inclusionary housing requirements must properly be evaluated under the deferential standard ordinarily applicable to general, legislatively imposed land use regulations—i.e., whether the ordinance’s requirements bear a real and substantial relation to the public welfare. CBIA petitioned for review before the California Supreme Court and the court granted the petition.

The Supreme Court affirmed the Court of Appeal’s judgment. The court held that San Jose’s ordinance does not constitute an exaction. Instead, the ordinance only regulates the uses to which property owners may put their lands. Cities and counties have broad authority, under their police powers, to regulate the development and use of real property within their jurisdictions to promote the public welfare and the courts must uphold such regulations provided the bear a reasonable relationship to the public welfare. With regard to the in-lieu fee payment component of the ordinance, the court held that as long as the ordinance provides property owners with at least one alternative means of satisfying the condition, the fee does not constitute an unconstitutional taking.

As noted by the Supreme Court, more than 170 localities in California already have some version of an inclusionary housing ordinance. The decision will make it much more difficult for developers to succeed in challenges to affordable housing requirements in that the decision makes clear that a local agency’s adoption of an inclusionary housing ordinance represents an appropriate exercise of the agency’s police powers, provided that the ordinance bears a reasonable relationship to the public welfare.

In an Unpublished Opinion, Second District Denies Challenges to Temporary Increase in NFL Games at Rose Bowl Stadium

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The court held the City of Pasadena properly evaluated the environmental impacts of hosting an NFL team at the Rose Bowl Stadium, resulting in an additional 13 large-scale events (NFL games) per year, for up to five years. The court affirmed the trial court’s denial of the coalition’s petition. Coalition for Preservation of the Arroyo v. City of Pasadena (May 28, 2015) Case No. B255824.

A funding gap in the Rose Bowl Stadium’s renovation precipitated the city’s efforts to obtain funding by temporarily hosting an NFL team at the stadium, which would add 13 “displacement events” per year. An express purpose of the project was to generate revenue to fund city services and offset the costs of Bowl renovation. Pasadena adopted a statement of overriding considerations finding that the economic benefits of the project outweighed its significant and unavoidable impacts.

The coalition argued the EIR was premature and segmented because the city had not yet negotiated a lease with an NFL team. Given CEQA’s basic tenant that environmental analysis should occur as early as feasible in the planning process, however, the court found the city had performed such review at the most practical and meaningful opportunity. Had the city waited until it negotiated specific contractual terms with a team, those negotiations could have been perceived as a commitment to the project prior to environmental review, in violation of CEQA. The court also concluded the data relied on by the city within the EIR addressed the likely scope of the NFL lease, and thus the review was not segmented. The city had relied on a report for an estimate of the potential revenue that could be generated by an NFL team’s temporary use of the stadium ($5-10 million per year), which was a reasonable method given the city’s lack of any lease agreement with the NFL. The report also constituted substantial evidence supporting the city’s decision that the economic benefits of the project outweighed any environmental impacts it caused.

The court found no basis to the coalition’s argument that the city’s analysis of historical resources did not survey or fully describe the historical environmental setting and failed to address any NFL-related impacts to the immediate surroundings, stating there was no evidence that the project contemplated any physical, material change to an historic resource. The Rose Bowl was constructed specifically to accommodate football games, and an increase in the number of games each year for a temporary period would not materially impact any of the significant character-defining features of the stadium. Additionally, the city had properly and fully identified and described the historical setting of the stadium and surrounding areas; the coalition failed to identify with specificity any deficiencies in this description.

The court also found that studies relied on by the city provided substantial evidence regarding the frequency of recreational use and the number of users that would be impacted by the project. Further study was not necessary to engage in informed decisionmaking—greater exactitude regarding the number of users was not necessary to evaluate the environmental impact and identify mitigation.

The court held the feasibility of the aesthetics mitigation, related to trash cleanup, was supported by substantial evidence in the record. The EIR had determined that aesthetics would not be significantly impacted by the project, and thus mitigation measures were not required.

The coalition argued that the city failed to provide an adequate analysis of air pollution because it lacked an adequate baseline measure of pollutants. It argued the EIR did not utilize the appropriate methodology to determine baseline pollutants in the stadium area and surrounding neighborhoods, indicating the baseline measurement was not taken close enough to the stadium. The court disagreed, finding the city’s decision to use that the nearest air quality monitoring station data as the baseline was supported by the standard, accepted practices of the agencies that engage in air quality monitoring. The choice of methodology was bolstered by the reliability and breadth of data available from that station. The coalition failed to identify evidence in the record showing how the methodology was inaccurate, or explain how the baseline precluded the city from making an informed decision regarding the project.

The court similarly rejected the coalition’s argument that the city failed to accurately estimate travel distances of event visitors in evaluating air quality impacts, as the group provided no evidence that the city had erred in calculating the average trip length. No local trip length data existed for NFL games, so the city had used the pertinent air pollution control agency’s recommended model. The court found this choice of methodology reasonable and supported by substantial evidence.

In response to the coalition’s argument that the city did not present sufficient evidence to support its conclusion that it had adequate police and fire services to serve the proposed project, the court pointed to the EIR’s explanation that the Pasadena Police Department already provides police protection and traffic enforcement service on a regular basis to the stadium, along with a private security company. The EIR found that there was no need to expand police services, and impacts to those services would be less than significant. The assertions regarding fire services were similarly baseless.

Fourth District Upholds Balboa Park Project Approval, Finds Substantial Evidence Supports Determinations

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The court reversed the trial court’s decision in part, agreeing with the City of San Diego that substantial evidence supported the finding that denial of the project would preclude “reasonable beneficial use” of the property. The trial court, finding no such evidence, had not reached the question of whether evidence supported the finding that the project would not adversely affect the applicable land use plan. The Court of Appeal agreed with the City’s position and answered that question in the affirmative. Save Our Heritage Organisation v. City of San Diego (May 28, 2015), Case No. D063992.

The project concerned Balboa Park in San Diego, which in the past had hosted various expositions. During those events, a bridge and complex had been constructed that were later declared a national historic landmark and a national historic landmark district, respectively. The project consisted of closing certain parts of the area to vehicular traffic and restricting those spaces to pedestrian uses, and resurfacing and landscaping those areas in a style evocative of the original design. An increase in parking supply was also proposed. The EIR concluded that, though there would be some significant impacts on historical resources, the project as a whole would primarily benefit those resources, outweighing any negative impacts. Save Our Heritage Organisation (SOHO) filed suit, asserting violations of CEQA and the city’s Municipal Code, and contesting the paid parking. The court below rejected the CEQA and parking challenges, but agreed with the Municipal Code challenge.

The case presented a question of first impression: the proper interpretation of San Diego Municipal Code section 126.0504, subdivision (i)(3)’s requirement that the City only approve projects where it finds, for those projects with impacts on historical resources, that there would be no reasonable beneficial use of the property without the project. Pursuant to this ordinance, the city made several findings to satisfy the “no reasonable beneficial use” requirement, namely, that denial of the project would result in traffic congestion and conflicts between pedestrians and vehicles, and would continue to burden the users of the complex. Furthermore, project denial would prevent the city from recapturing those areas currently being claimed and used by vehicles as thoroughfares and parking lots and reclaiming those lands for parklands and pedestrian spaces.

SOHO contended that so long as it introduced evidence the property would be put to some beneficial use by the owner without the proposed project, it would succeed on the Municipal Code claim. The court disagreed. It found the word “reasonable” preceding “beneficial use” vests discretion in the decisionmaker; even if use of the property absent the project were deemed beneficial, the decisionmaker could find that it was not a reasonable use, and thus, still validly approve the project. The issue, in other words, was not whether there was evidence from which a reasonable person could have concluded that the property had some beneficial use in its unmodified condition, but rather whether substantial evidence supported the decisionmaker’s determination that the property’s use in its unmodified condition was not reasonable under all circumstances.

The court held there was substantial evidence supporting the city’s finding that, without the project, current pedestrian and vehicle conflicts, and resultant safety hazards, would continue. The fact that millions of visitors to the complex chose to visit, notwithstanding the hardships to them posed by the continued vehicular use, did not preclude the city from finding the project was appropriate, and that continued automobile use of the complex was not a reasonably beneficial use of the complex.

The court rejected SOHO’s alternative argument that there was no substantial evidence to support the additional finding ordinarily required under the municipal code when a project would make a substantial alteration of a designated historical resource: that denial of the project would make it infeasible to derive a reasonable economic return from the property. That argument was not preserved below.

SOHO also alleged there was no substantial evidence to support the city’s required findings that approval of the project would not adversely affect the city’s applicable land use plans. Essentially, SOHO asserted that, as long as a project opponent can identify a stated goal or policy within an applicable land use plan that would be adversely affected by a project, the decisionmaker is precluded from finding approval of a project would not adversely affect the applicable land use plans even if the decisionmaker found, based on substantial evidence, the proposed project would be consistent with the vast majority of the goals and policies of the applicable land use plans, as was the case here. SOHO cited no authority for that argument, and the court found none. The court noted that a project need not be in “perfect conformity” with every plan policy, but must instead harmonize with those policies on the whole. Inconsistencies will not nullify project approval so long as the project as a whole will not adversely affect the applicable land use plans.

Finally, regarding the paid parking issue, the court held that any purported limitations placed by an 1870 statute on the city’s power to manage its parklands was annulled by later legislative enactments.

Court Upholds the City of Newport Beach’s EIR and Concludes that the City’s Actions Complied with Its General Plan, Distinguishing and Disagreeing with California Native Plant Society v. City of Rancho Cordova

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In Banning Ranch Conservancy v. City of Newport Beach, the Court of Appeal upheld the city’s EIR for the Newport Banning Ranch Project and held that the city complied with its own general plan. In reaching the latter conclusion, the Fourth Appellate District both distinguished and disagreed with the Third Appellate District’s holding in California Native Plant Society v. City of Rancho Cordova (2009) 172 Cal.App.4th 603.

In 2012, the City of Newport Beach approved the Newport Banning Ranch Project. The project is located on 400 acres of coastal property in Orange County. The project site is home to both oil wells and endangered species. Because the property is in the city’s sphere of influence, the city was asked to approve the project. The city studied the environmental impacts of the project in a 9,000 page EIR before conditionally approving the project. The approvals recognized that the project could not go forward without a number of subsequent actions by other agencies. For the purposes of the litigation, the most important approvals would come from the California Coastal Commission.

The litigation focused on two issues related to the Commission and the Coastal Act. The petitioner argued that the city violated CEQA when it did not identify “environmentally sensitive habitat area” or ESHA in the EIR. The city, for its part, pointed out that EIR evaluated the biological impacts in detail, identifying potential impacts to species and habitat, and adopting mitigation for those impacts. The city insisted, however, that the designation of ESHA was not a biological determination to be made in the EIR, but rather was a legal and policy determination that would ultimately be made by the Commission under the Coastal Act. The city argued that by providing all of the data and scientific analysis that the Commission would need to make such a conclusion, it satisfied CEQA; it argued that the EIR did not speculate as to the Commission’s ultimate conclusions citing Banning Ranch Conservancy v. City of Newport Beach (2012) 211 Cal.App.4th 1209. The court agreed. It held that the city did not have to “prognosticate as to the likelihood of ESHA determinations” in the EIR.

The more significant issue tackled by the court was a claim under the Planning and Zoning Law. The city has a policy in its general plan which requires it to “work with” various resource agencies to identify wetlands and other habitat to be preserved, restored, and developed on the Banning Ranch property. The city did reach some consensus with some agencies on these points, but did not reach an amical point with the Coastal Commission. Indeed, the city consulted and met in person with the commission on a couple of occasions, but a meeting of the minds appeared remote at the time of project approval.

The petitioner cited to the Third District Court of Appeal’s opinion California Native Plant Society v. City of Rancho Cordova, arguing that the City of Newport Beach had to do more to try to reach agreement with the Coastal Commission before approving the project. California Native Plant Society v. City of Rancho Cordova involved a similar policy in Rancho Cordova’s general plan. Rancho Cordova’s policy required the city to “coordinate” with resources agencies to develop mitigation prior to project approval. The Third District in that case held that this policy required something more than merely consulting with the agency, soliciting comments, and responding to them. The court held that “coordination” meant something more than consultation, although whatever that “something more” was it did not have to amount to “abdication.”

The Fourth District considered whether the City of Newport Beach’s policy was similar to Rancho Cordova’s. The court concluded that it was not altogether similar, but it was similar enough that the two could not be readily distinguished. The court nevertheless upheld the City of Newport Beach’s actions. In doing so, the Fourth District rejected the reasoning of the Third District in California Native Plant Society. It held that the Third District’s holding was “incompatible with our deferential review of the City’s legislative acts.” While requiring agencies to work together to reach a consensus “might be good or bad ideas,” the obligations were not set out in either general plan. Without some standard by which to guide the city’s behavior, the court could not readily enforce the obligation to “coordinate with” but not necessarily “capitulate to” the will of another agency, without treading on the legislative authority of the city. The court held that such an obligation should not be invented out of thin air, and in any event was unworkable.

RMM attorneys Whit Manley and Jennifer Holman represented the City of Newport Beach.

Court of Appeal Upholds the City of Newport Beach’s EIR and Concludes that the City’s Actions Complied with Its General Plan

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In Banning Ranch Conservancy v. City of Newport Beach, petitioner challenged the decision by the City of Newport Beach in approving a residential and mixed use development on the Banning Ranch property. The Fourth District Court of Appeal reversed the trial court, and upheld the City’s approvals on all points. RMM attorneys Whit Manley and Jennifer Holman represented Respondent, City of Newport Beach, in this case.

In 2012, the City of Newport Beach approved the Newport Banning Ranch Project on 400 acres of coastal property in Orange County.  Petitioner Banning Ranch Conservancy sued the city, challenging this action under both CEQA and the Planning and Zoning Law.  The trial court and the appellate court both rejected the CEQA claims.  The trial court, however, found that the City violated the Planning and Zoning Law under the authority of California Native Plant Society v. City of Rancho Cordova (2009) 172 Cal.App.4th 603.

Third District Court of Appeal in California Native Plant Society held that a general plan policy that required the city to “coordinate” with a resources agency mandated that the city do more than merely “consult” under CEQA.  In other words, it could not just send the EIR to the agency, consider comments, and respond to comments.  It had to work with the agency to try to reach accord, although ultimately the city did not have to “capitulate” to the agency. Because the City of Newport Beach’s general plan contained a similar policy, the trial court in Orange County considered itself bound to follow California Native Plant Society.  It held that the city had to try to reach accord with the California Coastal Commission on certain issues before approving the project.

The Fourth District in Banning Ranch Conservancy v. City of Newport Beach said that the Third District’s holding in California Native Plant Society v. City of Rancho Cordova went too far and was not sufficiently deferential to the legislative functions of the city. The Fourth District thus reversed the trial court on the Planning and Zoning Law issue and upheld the city’s actions.

Sixth District Court of Appeal Affirms County Violated CEQA in Adopting Mitigated Negative Declaration

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On May 7, 2015, the Sixth District Court of Appeal affirmed the lower court’s holding that the County of Santa Clara violated CEQA in adopting a mitigated negative declaration, instead of requiring an environmental impact report, for a use permit authorizing wedding events on vineyard property in the Santa Cruz Mountains. (Keep Our Mountains Quiet v. County of Santa Clara (May 7, 2015) Case No. H039707.)

Beginning in 2006, Candice Wozniak hosted a number of weddings and other events on the property without obtaining the necessary use permit from the county. She stated that approximately 100 people typically attended the events. Noise complaints from neighbors, however, indicated the events potentially hosted upwards of 200 attendees. The county eventually issued a use permit authorizing 28 special events per year for 100 guests, to be held between 2pm and 10pm on Saturdays and Sundays in the spring and summer. Three years later, in 2011, the county adopted a revised mitigated negative declaration (MND) for the project.

The MND set forth three conditions of project approval: orienting speakers away from neighboring residences; posting a noise complaint phone number; and conducting an annual report assessing compliance with the conditions in the first year. Only one live outdoor band event was permitted in the first year of operation.

The county’s sound consultant found that, though the county’s noise standards were not exceeded during a sample weekend, the consultant was unable to conclude that the events unequivocally did not generate significant noise impacts. A mock event was held at the property to assess noise levels. Neighbors acknowledged not hearing the event, but stated it was not representative of actual events held on the property.

Keep Our Mountains Quiet (the “Association”) filed a petition seeking to require the county to prepare an EIR. The trial court held in favor of the Association, and real party in interest—the Wozniak Trust—appealed. The appellate court laid out the rule that an EIR is required whenever substantial evidence in the record supports a fair argument that significant impacts may occur. An MND may be prepared where the initial study identified potential significant effects on the environment but revisions to the project plans would avoid or mitigate those effects to a level of insignificance. The court noted that relevant personal observations of area residents on nontechnical subjects may qualify as substantial evidence.

In reviewing the project’s noise impacts, the court stated that a project’s effects can be significant even if they are not greater than those deemed acceptable in a general plan. The court agreed with the Association that the lead agency should consider both the increase in noise level and the absolute noise level associated with a project. The court found the neighbors’ comments about the discrepancy in noise levels between the mock event and actual events constituted substantial evidence supporting a fair argument that the project may have unmitigated noise impacts. Relatedly, the court found that substantial evidence supported a fair argument that project-related crowd noise may have significant noise impacts on the surrounding residents.

The court also found evidence supported a reasonable inference that the project may have significant impacts on biological resources, but no substantial evidence supported the argument that the project might have significant noise impacts on visitors in the nearby Open Space Preserve, which was open to the public by permit only. The court stated it “need not consider the impacts on hypothetical users of nonexistent trails.”

The court also found substantial evidence that the project may have significant traffic impacts. The testimony the court cited related facts about road conditions based upon personal knowledge. The court found increased traffic from the project would substantially increase existing design feature-related hazards.

Regarding attorney’s fees, the court was not persuaded by the Trust’s contention that the litigation had not conferred a significant benefit because the trial court did not require the County to perform additional studies for the EIR or impose new mitigation measures. The significant benefit justifying an award of fees, the court noted, is the proper assessment of the environmental impacts associated with the project. Though the number of nearby residents was small, the preservation of biological resources and the safety of public roadways were of interest to the public, and thus the trial court had reasonably concluded that the suit conferred a significant benefit on the general public. The court further found that the Association’s members did not enjoy a direct pecuniary benefit from the litigation; the amount of any monetary advantage in avoiding reduced property values was speculative. The trial court’s denial of a multiplier for Association’s counsel was upheld, as it was not a clear abuse of the trial judge’s discretion.

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