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Court of Appeal Upholds State Water Board’s Broad Authority to Prohibit Unreasonable Use of Water

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The court held that the State Water Resources Control Board has broad regulatory authority to prevent the unreasonable use of water, upholding a Board regulation that prohibits certain diversions by grape growers in the Russian River watershed. The First District Court of Appeal issued a partially published opinion in Light v. State Water Resources Control Board (2014) __Cal.App.4th __ (Case No. A138440) on June 16, 2014.

In April 2008, young salmon were found to have been fatally stranded along the banks of the Russian River stream system. Scientists from the National Marine Fisheries Service concluded the deaths were caused by abrupt declines in water level that occurred when water was drained from the streams and sprayed on vineyards and orchards to prevent frost damage, a common practice in the watershed.

Following a series of hearings and the preparation of an EIR, the Board adopted Regulation 862 in September 2011. Regulation 862 is likely to require a reduction in diversion of water from the stream system for frost protection, at least under certain circumstances. It applies to “any diversion of water from the Russian River stream system … for purposes of frost protection from March 15 through May 15.” The regulation itself contains no substantive regulation of water use, instead delegating the task of formulating regulatory programs to “water demand management programs” (WDMPs), which will be created by self-organized groups of agricultural diverters who will act as the “governing bodies.” Each WDMP must be submitted annually to the Board for approval. The regulation declares that any water use inconsistent with the programs, once they have been formulated and approved by the Board, is unreasonable, and therefore prohibited.

Regulation 862 was challenged in two petitions for writ of mandate. The petitions alleged that the Board lacked regulatory authority to adopt the regulation and that the regulation would unlawfully interfere with plaintiffs’ use of water drawn from the Russian River stream system. The trial court granted a writ invalidating the regulation on several grounds. The Board appealed. The Court of Appeal reversed.

The Court of Appeal first addressed plaintiffs’ argument that Regulation 862 was invalid because the Board lacked sufficient regulatory authority to adopt the regulation. Plaintiffs argued that the Board lacked authority to adopt the regulation because, according to them, the Boards’ authority to regulate the unreasonable use of water was limited to enforcement actions. The Court of Appeal disagreed, finding that the Board may exercise its regulatory powers through the enactment of regulations, as well as through the pursuit of judicial and quasi-judicial proceedings. The court noted that the Board is charged with acting to prevent unreasonable and wasteful uses of water, regardless of the claim of right under which the water is diverted, and that the Board’s authority to enact regulations in furtherance of this purpose was addressed and upheld nearly 40 years ago in People ex rel. State Water Resources Control Bd. v. Forni (1976) 54 Cal.App.3d 743. The court concluded that, given the Board’s statutory charge to “prevent waste, unreasonable use, unreasonable method of use, or unreasonable method of diversion of water in this state” and the recognized power of the Legislature to pass legislation regulating reasonable uses of water, the Board’s grant of authority to “exercise the … regulatory functions of the state” necessarily includes the power to enact regulations governing the reasonable use of water.

The Court of Appeal next addressed Plaintiffs’ contention that the Board lacks regulatory authority to limit water use by riparian users and early (pre-1914) appropriators, whose diversion is beyond the permitting authority of the Board. Rejecting this argument, the court explained that, although the Board has no authority to require such users to obtain a permit to divert, that does not mean their use of California’s water is free from Board regulation. Preventing these users from the unreasonable use of water necessarily requires the imposition of limits on that use by the Board. The Court explained that there is “no question” the Board has the power to prevent riparian users and early appropriators from using water in an unreasonable manner.

The court also determined that the regulation did not violate the rule of priority. When the supply of water is insufficient to satisfy all persons and entities holding water rights, it is ordinarily the function of the rule of priority to determine the degree to which any particular use must be curtailed. Yet, as the court explained, even in these circumstances, the Board has the ultimate authority to allocate water in a manner inconsistent with the rule of priority, when doing so is necessary to prevent the unreasonable use of water. Because no one can have a protectable interest in the unreasonable use of water, when the rule of priority clashes with the rule against unreasonable use of water, the latter must prevail. The court was careful to point out that since this was a facial challenge, its holding extended only to whether the regulation was valid on its face. It explained that the regulation does not declare any specific diversion of water for frost protection unreasonable, much less all such use. Rather, frost protection diversion is unreasonable only when it occurs in violation of the WDMP. As among individual water rights holders, the regulation requires the WDMP’s to respect the rule of priority in assigning corrective actions. Thus, a determination of whether specific regulatory measures adopted by the WDMP’s violate the rule of priority, must await implementation of the regulation.

The court also concluded that the Board properly found the regulation to be necessary to enforce water use statutes and did not unlawfully delegate its authority by requiring local governing bodies to formulate the substantive regulations.

Lastly, in an unpublished portion of the opinion, the court upheld the Board’s certification of the EIR for the regulation.

 

 

Court Holds Petition Over Tree Removal in Community College Expansion Project Came Too Late

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A published opinion by the First District Court of Appeal emphasizes the importance of filing timely CEQA lawsuits. In Citizens for a Green San Mateo v. San Mateo Community College District, the court determined that, even under the most generous interpretation of CEQA’s statute of limitations, a petitioner’s lawsuit was time-barred under Public Resources Code section 21167.

The controversy arose when the San Mateo Community College District removed and pruned over 200 invasive eucalyptus trees on the northern edge of the community college campus. The district began removing trees on December 28, 2010. On January 5, 2011, a member of Citizens for a Green San Mateo contacted the district expressing concern over the tree removal and pruning. Citizens for a Green San Mateo filed a petition for writ of mandate on July 1, 2011, alleging that the district violated CEQA and was required to prepare an EIR to study the tree removal. The trial court determined the challenge was timely and granted the petition, finding the district had violated CEQA. The district appealed.

The Appellate Court’s Decision

On appeal, the district argued the 30-day statute of limitations period established by Public Resources Code section 21167, subdivisions (b) or (e) applied to bar the CEQA lawsuit because the district filed a Notice of Determination. The NOD described the mitigated negative declaration prepared by the district when it approved the Facility Improvements at College of San Mateo project, or the “CSM Project,” in 2007.

The CSM Project included renovation, demolition, replacement, or new construction of about 25 buildings, numerous pedestrian and automobile circulation enhancements, and other improvements to modernize the campus. The negative declaration also determined that the proposed project would result in the removal and pruning of an unknown number of trees, but tree plantings proposed as part of the project would mitigate any unavoidable tree removal, resulting in a less than significant impact. At the hearing, a district trustee expressed concern regarding campus-wide tree removal proposed as part of the CSM Project, but noted that, due to the mitigation required by the negative declaration, “the number of newly planted trees will be greater than that of removed trees.” No public comments were offered at the hearing.

The appellate court rejected the petitioner’s claim that the tree removal was “materially different” from the activities discussed in the mitigated negative declaration and subsequent NOD that the community college district filed for the CSM Project. The court emphasized that the term “project,” for the purposes of CEQA, does not mean each separate governmental approval that may ultimately be required to complete the proposed action. The court concluded that the record demonstrated the tree removal was a subsequent activity encompassed within the scope of the CSM Project. Since the district filed an NOD recording its approval of the CSM Project, and the public was on notice that trees could be removed anywhere on campus as a result of the CSM Project, the 30-day statute of limitations established by section 21167, subdivisions (b) and (e) applied to bar the lawsuit.

Even if the 180-day limitations period, which applies when no NOD is filed, applied to this case, the appellate court determined the lawsuit was still time-barred. Assuming, for the purposes of analysis, that the district failed to adequately notify the public of the tree removal, any challenge would need to be filed within 180 days from the date of the district’s decision to carry out or approve the project, according to section 21167, subdivision (a). Here, the district committed to the tree removal at the public trustee meeting on November 17, 2010. The appellate court emphasized that section 21167, subdivision (a), does not require any special notice requirement to start the 180-day clock; all that is required is a formal decision by a public agency to carry out or approve the project. Therefore, the petition was time-barred, even assuming the tree removal was not described in the mitigated negative declaration certified for the CSM Project.

Finally, the appellate court was not persuaded by the efforts of Citizens for a Green San Mateo to avoid the result of filing its complaint outside CEQA’s statute of limitations. Citizens asserted it had no notice of the potential for tree removal activities until a neighbor/member observed the trees being cut down on January 5, 2011. To support this argument, the citizens cited the California Supreme Court’s opinion in Concerned Citizens of Costa Mesa, Inc. v. 32nd District Agricultural Association (1986) 42 Cal.3d 929. But the appellate court noted that the citizens interpreted the test established in that case incorrectly. In Concerned Citizens, the agency approved a fairground on six acres that would have seated 5,000. As constructed, the theater actually seated 7,000 across 10 acres, so the project constructed was materially different than the project the agency initially approved. Further, the agency never alerted the public to these changes. Therefore, the Supreme Court determined the 180-day statute of limitations ran from when the public reasonably should have known the project being constructed was different than the project approved. In contrast, the mitigated negative declaration prepared by the community college district notified the public that the district intended extensive landscaping improvements across campus that could require the removal of mature trees. Further, the tree removal activities conducted were not materially different from those approved by the district at an open hearing in November 2010. So even under the most generous interpretation of section 21167 and the case law established by the Supreme Court, Citizens for a Green San Mateo’s petition was time-barred.

RMM partners James Moose and Sabrina Teller represented the San Mateo Community College District.

President Obama Signs the Water Resources Reform and Development Act

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On June 11, 2014, President Obama signed the Water Resources Reform and Development Act (WRRDA). Historically, water resources legislation has been enacted every two years to provide policy direction to the Army Corps of Engineers (Corps) and the Administration. The WRRDA is the first water resources bill that has been signed since 2007, however.

The WRRDA authorizes 34 federal, state, and local projects aimed at maintaining the nation’s ports, levees, dams, and harbors. For example, the WRRDA authorizes projects to deepen the Boston Harbor and the Port of Savannah, to restore the Everglades, and to strengthen levees in the Sacramento region. The Congressional Budget Office estimates the total cost to implement these projects will be $12.3 billion between 2014 and 2025. This cost will be offset by $18 billion in project deauthorizations contained in the WRRDA.

Some key components of the WRRDA:

  • Authorizes approximately $45 million for flood risk management measures for the Orestimba Creek in the San Joaquin River Basin to protect the City of Newman.
  • Authorizes approximately $689 million for flood risk management measures in the Sutter River Basin.
  • Allows local communities, which may have state or local funding sources, to carry out work in advance of the Corps and receive a credit for this work.
  • Requires the Corps to set firm deadlines for preparing its studies.
  • Expedites project permitting and approvals by reducing the number of studies to be performed by the Corps.
  • Requires the Corps to allow for regional variances regarding vegetation patterns and characteristics on levees, among other variances, with feedback from state, regional, and local entities.
  • Authorizes financial assistance through the Water Infrastructure Finance and Innovation Act of 2014 to carry out pilot projects by public or private entities for flood damage reduction, hurricane and storm damage reduction, environmental restoration, coastal or inland harbor navigation improvement, or inland and intracoastal waterways navigation improvement.
  • Deauthorizes $12 billion for old, inactive port projects.
  • Reforms and preserves the Inland Waterways Trust Fund, which is used to fund the construction and rehabilitation of the nation’s inland waterways system.

In addition to the aforementioned projects, the WRRDA authorizes construction activities to strengthen 24 miles of levees protecting over 100,000 residents and $7 billion in property in the Natomas area, north of downtown Sacramento. Federal maps show that a levee breach could put homes and businesses in the area under 20 feet of water. In 2012, the Sacramento Area Flood Control Agency finished upgrading 18 miles of Natomas levees. The WRRDA authorizes the Corps to complete upgrades to the remaining 24 miles of levees, which had been stalled because of the lack of federal authorization.

Read the full text of the WRRDA here.

Appellate Court Upholds Permit for Landfill Expansion in Solano County

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After years of environmental review and litigation, the First District Court of Appeal upheld permits authorizing the expansion of a landfill in Solano County. Waste Connections, Inc., has sought for more than a decade to expand the Potrero Hills Landfill, which is in an upland “secondary management area” of Suisun Marsh. In SPRAWLDEF v. San Francisco Bay Conservation and Development Commission, ___Cal.App.___, an environmental group challenged the San Francisco Bay Conservation and Development Commission’s approval of the permits, arguing that the commission should have approved a smaller expansion that would not affect a marsh watercourse. The court disagreed. Applying CEQA case law to the county ordinance at issue, the court held that substantial evidence in the record supported the commission’s determination that smaller alternatives were not economically reasonable.

Solano County Ordinance, section 31-300, allows modification of a marsh watercourse only if no “reasonable alternative” exists. The commission determined that a smaller expansion alternative, designed to avoid encroaching on the intermittent watercourse, would not be economically realistic. The trial court agreed with the petitioner, Sustainability, Parks, Recycling and Wildlife Legal Defense Fund (SPRAWLDEF), that no substantial evidence supported the commission’s determination. The Court of Appeal reversed.

In evaluating whether the commission had substantial evidence for its decision, the court applied CEQA principles. The court noted that, under CEQA, governments must choose “feasible” alternatives and “feasible” mitigation measures to lessen the significant environmental impacts of projects. Employing CEQA’s definition of “feasible” and CEQA case law concerning economic infeasibility, the court concluded that CEQA’s definition of economic “feasibility” embraces the concept of reasonableness. From there, the court engaged in an extensive discussion of CEQA case law.

The court distinguished this case from CEQA cases where a determination of economic infeasibility was legally inadequate. In those cases, meaningful comparison of the proposal and the alternatives was not possible because there was no evidence regarding the cost of the alternatives. Here, the court focused on the commission’s ability to compare the costs of the proposed expansion with that of the alternatives. Waste Connections, Inc. the landfill operator, explained its profit margins and advised the commission that the economic consequences of the alternatives would be so great that the project would not be “financially viable.” It submitted data for both the proposed expansion and the alternatives, comparing the per unit cost, capacity, and the life of the landfill for each. Thus, according to the court, the commission had an “adequate record before it to fairly determine the smaller alternatives were not economically reasonable.”

The court stated that there was “no merit” to SPRAWLDEF’s assertion that the economic information regarding the costs of the proposal and alternatives should be discounted or ignored because it was provided by the real party in interest, Waste Connections, and that it was within the province of the commission to find the information credible and accept it as accurate and relevant. The court determined that this data provided the commission with “some context” to assess the economic feasibility of the alternatives and held that there was substantial evidence to support the commission’s determination that the smaller alternatives were not economically feasible.

Energy Information Administration (EIA) Reduces Its Estimates of Recoverable Oil in the Monterey Shale to 600 Million Barrels, down 96% from 2012 Estimates

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At the May 21, 2014 Oil & Gas Strategies Summit in New York, EIA Administrator Adam Sieminski shocked many with his announcement that the federal agency has drastically cut its estimates of technically recoverable oil in the Monterey Shale from 13.7 billion barrels to 600 million barrels. According to Sieminski’s reported comments, the revision was prompted, in part, by new evidence the EIA and U.S. Geological Survey collected on output from wells where new techniques have been tested.

In 2011, the EIA published a report by INTEK Inc. that estimated there were 15.4 billion barrels of technically recoverable shale oil, or “tight oil” in the Monterey Formation.   Sometime in 2012, the EIA reduced this estimate to 13.7 billion barrels.  Now, the agency plans to release a report in the coming months that will explain why it has decided to severely reduce the estimate to 600 million barrels.

The Post Carbon Institute’s December 2013 report on the Monterey Shale presaged this news.   The PCI report—“Drilling California: A Reality Check on the Monterey Shale”—provided several reasons why the EIA’s 2011 estimates were likely to be “highly overstated.”  For example, the report asserts that:

  • “Existing fields within the Monterey are areally restricted and are primarily controlled by structural and stratigraphic trapping mechanisms, thus the assumption of broad regions of prospectivity is highly questionable.”
  • “An analysis of every well producing from Monterey shale reservoirs reveals that average initial productivity is less than half of the typical horizontal and vertical shale wells assumed in the EIA/INTEK report, and less than a quarter of the ‘typical Elk Hills vertical shale well’.”
  • “Fracking and acidization have doubtless been tried extensively on Monterey shale wells, yet the data do not show any significant increase in initial well productivity or likely cumulative oil recovery for recent wells.”

(J. David Hughes, PCI Fellow, Drilling California: A Reality Check on the Monterey Shale, at p. 46.)

EPA Sets Emission Reduction Goals for Power Plants

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After hundreds of stakeholder meetings during the past year, the U.S. Environmental Protection Agency has issued emissions guidelines for states to follow as they develop plans to address greenhouse gas emissions from existing power plants. On June 2, 2014, EPA released a proposed rule that would require fossil fuel-fired electric generating units to reduce their 2005-level carbon dioxide emissions 30% by 2030. The rule falls under Section 111(d) of the Clean Air Act.

Each state would have its own rate-based CO2 emissions standard. Interim checkpoints for the ultimate emissions reduction goal would begin in 2020. Aside from improved fossil fuel efficiency, the rule encourages emissions reductions in the energy sector by taking advantage of renewable energy sources and reducing electricity demand across the grid.

The comment period will run for 120 days. States must submit implementation plans by June 30, 2016.

The proposed rule is available here.

Fifth District Court of Appeal Rejects Claims that Active Adult Housing Project Conflicts with Fresno County’s General Plan, but Concludes EIR for the Project Failed to Provide Sufficient Detail Regarding Air Quality Impacts on Human Health

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On May 27, 2014, the Fifth District Court of Appeal issued its decision in Sierra Club et al. v. County of Fresno et al. (Case No. F066798). The case involves the County of Fresno’s approval of the Friant Ranch project, a master-planned retirement community for “active adults” (age 55 and older) on an approximately 942-acre site in north central Fresno County.

In the trial court, petitioners Sierra Club, Revive the San Joaquin, and League of Women Voters of Fresno (collectively, the Sierra Club), argued that: (1) the Friant Ranch project was inconsistent with the county’s general plan policies regarding agricultural land use and traffic levels of service; (2) the EIR’s analysis of the project’s air quality impacts was inadequate; and (3) the EIR’s analysis of water quality impacts associated with the project’s wastewater treatment plant was inadequate. The trial court denied the Sierra Club’s petition for writ of mandate. The Sierra Club appealed.

On appeal, the Sierra Club argued that the general plan policy to “maintain agriculturally designated areas for agricultural use” prohibits the county from redesignating land designated as agriculture to other uses. Because the Friant Ranch project included a general plan amendment redesignating the project site from agriculture to residential and commercial designations, the Sierra Club argued the county’s approval of the project violated the agricultural policy. Respondent County of Fresno, and Real Party in Interest, Friant Ranch, LP, represented by RMM attorneys Jim Moose, Tiffany Wright, and Laura Harris, contended that the general plan does not require the county to maintain land currently designated agriculture in that designation in perpetuity. The court agreed that the general plan allows the county to amend land use designations. And, because the project site is no longer designated agriculture, the project is not inconsistent with the requirement to maintain agriculturally designated areas in agricultural use. The court also held that the Sierra Club had failed to exhaust its arguments concerning the county’s transportation policies.

The Sierra Club also argued that the EIR lacked sufficient detail about the amount and location of wastewater discharge from the project’s proposed wastewater treatment plant. Although the Sierra Club did not make this argument in the trial court (and therefore would ordinarily be deemed to have forfeited the argument), the Court of Appeal exercised its discretion to consider the argument because matters involving the disposal of wastewater affect the public interest and the argument raised a question of law. Although not directly stated, the Court of Appeal appeared to believe that CEQA requires detailed information regarding the water balance to be included in the project’s CEQA documents. The court explained that the fact that the county’s experts opined that sufficient storage was available was irrelevant because, according to the court, the existence of substantial evidence in the record does not mean that sufficient information was disclosed in the EIR. The court therefore undertook an exhaustive review of various statements in the EIR and its supporting appendices about the amount of wastewater anticipated to be generated by the project and the size of the storage pond. Based on this review, the court determined that sufficient information was included in the CEQA documents regarding the amount and location of wastewater disposal.

The Sierra Club further claimed that the EIR’s discussion of air quality impacts was inadequate because the EIR: (1) did not explain what it meant to exceed the thresholds of significance by tens of tons per year; and (2) provided no meaningful analysis of the adverse health effects that would be associated with the project’s estimated emissions, which were above the thresholds. Although the EIR disclosed the types of health impacts associated with unsafe levels of the pollutants, quantified the project’s emissions, and concluded that the project would exceed the thresholds of significance set by the local air district, which are based on standards necessary for public health, the court held that this was not enough.

The court concluded that although the EIR had identified the adverse health impacts that could result from the project’s effect on air quality, it did not sufficiently analyze this effect. For example, the information disclosed in the EIR did not enable the reader to determine whether the 100-plus tons per year of coarse particulate matter, reactive organic gases, and mono-nitrogen oxides would require people with respiratory difficulties to wear filtering devices when they go outdoors in the project area or nonattainment basin. Nor did the information provided in the EIR make it possible to know how many additional days the San Joaquin Valley Air Basin would be in nonattainment due to the project. The court noted that answers to these examples are not necessarily required in a revised EIR, but that the EIR must contain some analysis of the correlation between the project’s emissions and human health.

The court also concluded that the county’s mitigation measures adopted for the project’s significant and unavoidable operational air quality impacts violated CEQA because, in the court’s opinion, the mitigation measures were too vague and unenforceable. The court reasoned that the mitigation measures needed to be more specific about who would implement the measures, and when. As an example, the court noted that the mitigation measure that trees “shall be carefully selected and located” to protect buildings from energy consuming environmental conditions uses the passive voice to hide the identity of the actor—that is, the person or entity selecting and locating the trees.

The court also concluded that the mitigation measures were impermissibly deferred. Although the Sierra Club had not raised this argument in the trial court, the court decided to consider the issue because it raised an important issue of policy. The mitigation measures stated that the county and the San Joaquin Valley Air Pollution Control District may substitute different air pollution control measures that are “equally effective or superior” to those set forth in the EIR, as better technology becomes available. The court found that this possibility of substitution rendered the mitigation measures deferred because the contents of the substituted provisions are unknown at present. Therefore, the court looked to whether the mitigation measures contained adequate performance standards to determine what types of measures would be “equally effective or superior” and concluded that many did not. For example, one mitigation measure required nonresidential projects to have bike lockers, which the court held failed to specify any performance standard to determine how to substitute the measure for an equally or more effective measure.

Furthermore, the court held that the statement in the EIR that the mitigation measures would “substantially” reduce air quality impacts was not supported by a discussion in the EIR and therefore violated CEQA.

Lastly, the court rejected Sierra Club’s claim that the county had not responded in good faith to comments suggesting that the county consider off-site emission reduction programs, such as the air district’s “Voluntary Emission Reduction Agreement” program. The court found that the county’s response to such comments, which explained that VERAs are voluntary and would be considered in connection with future project approvals was reasoned and met an objective good faith standard.

Ninth Circuit Upholds EIS for Southern California Delivery of Colorado River Water

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The Imperial County Air Pollution Control District and the County of Imperial challenged the United States Department of the Interior’s Environmental Impact Statement analyzing the effects of water transfer agreements on the Salton Sea and in southern California. The court held that the Department did not violate NEPA or the Clean Air Act. The case is People of the State of California ex rel. Imperial County Air Pollution Control District v. U.S. Department of the Interior (May 19, 2014) 14 C.D.O.S. 5454.

History

The Salton Sea’s access to Colorado River water—the Sea’s only water supply— is in jeopardy. In 1922, states in the Colorado River basin agreed to divide the river’s water among the upper- and lower-basin states. In 1931, southern California irrigation and water districts agreed to a framework for distributing the state’s share of the river water, which assumed a perpetual surplus of the water. In 1963, the Supreme Court held in Arizona v. California that California’s Colorado River allotment was limited to 4.4 million acre-feet per year, and that the state could only exceed this limit if other lower-basin states did not use their allotments or there was a surplus of water. In 1999, several water districts negotiated Quantification Settlement Agreements to reduce Colorado River water usage.

In 2001, the Secretary of the Interior announced that she would prepare an Implementation Agreement EIS to consider the consequences of delivering a portion of Imperial Irrigation water at different diversion points on the Colorado River for use outside of the Imperial Valley. The Final EIS (“FEIS”) discussed on-river environmental impacts of altering Colorado River delivery diversion points, indirect effects of changing the amount of water received by the California districts, and potential mitigation measures to reduce off-river ecological consequences. In 2003, the Secretary evaluated minor modifications to the proposed master implementation agreement, the Colorado River Water Delivery Agreement. She determined a supplemental EIS was unnecessary and issued a final record of decision. Plaintiffs sued and the district court granted summary judgment to the defendants, holding that plaintiffs lacked standing and, alternatively, rejecting their NEPA claims on the merits.

Ninth Circuit Decision

The Ninth Circuit Court of Appeal held that plaintiffs had established Article III standing, and thus moved on to plaintiffs’ substantive arguments. In assessing plaintiffs’ NEPA claims, the court first considered whether the Secretary had taken a “hard look” at the environmental consequences of the proposed action and reasonably evaluated the relevant facts.

Plaintiffs argued that the Implementation EIS either did not clarify whether it incorporated the state Transfer Environmental Impact Report or the Federal Transfer EIS, or improperly cited to a non-NEPA document—the Transfer EIR. The court determined that plaintiffs’ assertion that the FEIS cited to the separate CEQA and NEPA reviews as if they were a single document was “fly-specking,” and the court stated it would not let a minor misstatement prejudice its review. The court also found harmless a reference to a document as “tiered to and incorporated” when the analysis should have only said “incorporated.” The court further held that the Secretary did not act arbitrarily by separately preparing a Transfer EIS and an Implementation Agreement EIS, since the project could be properly segmented in that manner under the independent utility test.

The court held that the Secretary did not abuse her discretion in concluding that a supplemental EIS was unnecessary. The changes contained in the FEIS: (1) were qualitatively considered through a no-mitigation alternative; (2) were a secondary aspect of the EIS; (3) reduced overall an adverse environmental impact; and (4) did not alter the project’s cost-benefit analysis. Additionally, the FEIS and the record of decision sufficiently considered potential mitigation measures.

The court also held that the decision to discuss only one alternative—no action—was not arbitrary and capricious. NEPA does not require discussion of a minimum number of alternatives; the number depends on the stated goal of the project. The FEIS compared the project to only one alternative because the project was a negotiated agreement. Discussing a hypothetical alternative that no one had agreed to or would likely agree to, the court reasoned, would have been unhelpful.

The court also found the EIS sufficiently discussed air quality, reclamation, and growth-inducing impacts.

Finally, the court addressed plaintiffs’ Clean Air Act claims. The court noted that neither federal nor state conformity rules (which prohibit the authorization of activities that do not conform with an approved implementation plan) identify the form an agency must use when deciding whether a project necessitates a full-scale conformity determination. Here, the Secretary announced her decision that a conformity determination was unnecessary in the FEIS. The court stated that an agency need not prepare a stand-alone document explaining that decision. Furthermore, the Secretary did not abuse her discretion by concluding that Interior Department actions would not directly cause PM10 emissions. The project only committed the Secretary to changing the delivery point of Colorado River Water; any actions would occur at dams far from those diversion points.

The court affirmed the judgment of the district court.

First District Court of Appeal Upholds Use of Class 3 Categorical Exemption for Utility Project in San Francisco

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The First District Court of Appeal ordered publication of its opinion upholding San Francisco’s determination that a city-wide utility project was exempt from CEQA under the “Class 3” categorical exemption. The case, San Francisco Beautiful v. City and County of San Francisco (April 20, 2014) ___ Cal.App. ___, was published May 30, 2014.

The challenged project was AT&T’s proposal to install 726 metal utility boxes housing telecommunications equipment on San Francisco sidewalks in order to expand its fiber-optic network. San Francisco approved the project without requiring an EIR, based on its conclusion that the project fell within the “Class 3” categorical exemption described in CEQA Guidelines section 15303. Class 3 establishes exemptions for “[1] construction and location of limited numbers of new, small facilities or structures,” and “[2] installation of small new equipment and facilities in small structures.” (CEQA Guidelines, § 15303.) Among the examples of this exemption are “[w]ater main, sewage, electrical, gas, and other utility extensions, including street improvements, of reasonable length to serve such construction.” (Guidelines, § 15303, subd. (d).)

The petitioners argued that the project was not exempt under clause 1 of the Class 3 exemption because the 726 new structures were not a “limited number,” and that it was not exempt under clause 2 because it involved the construction and location of new structures, rather than the “installation” of equipment in existing small structures. The Court of Appeal disagreed, finding that under clause 2, the terms of the exemption were not limited to the installation of equipment in existing small structures. Rather, it determined that the Class 3 exemption can apply even when new structures are installed or constructed. Based on this determination, the court held that the city’s project fit into the Class 3 exemption. Because it found the project exempt on this basis, the court found it unnecessary to address the “limited number” argument.

The petitioners also claimed that, even if the Class 3 exemption applied, the city was still required to prepare an EIR because exceptions to the exemption applied. Specifically, they argued that the project would have a significant environmental effect due to unusual circumstances and would have cumulative impacts. (See CEQA Guidelines, § 15300.2, subd. (b), (c).) Regarding the unusual circumstances exception, the court determined that the petitioners identified no unusual circumstances relating to placement of the new utility structures in an urbanized area that already housed similar structures. The court also determined that, even if there were unusual circumstances, the petitioners failed to demonstrate that the project would have a significant environmental effect.  Notably, the court rejected the petitioners’ argument that residents’ views on the project’s aesthetic effects constituted evidence of a significant impact sufficient to trigger the need for an EIR.

The court acknowledged that the appropriate standard of review for the “unusual circumstances” exception is an issue currently pending before the Supreme Court (Berkeley Hillside Preservation v. City of Berkeley (S201116, rev. granted May 23, 2012). The court was careful to explain that its decision would be the same under either standard of review (“substantial evidence” or “fair argument”) and, therefore, it was not necessary for the court to determine that issue or any other issues that are before the Supreme Court in Berkeley Hillside.

The court also rejected the applicability of the cumulative impacts exception, explaining that the city did not have to consider the cumulative impact of all similar equipment to be installed throughout the city because the CEQA Guidelines instead limit the cumulative impact exception to successive projects of the same type in the same place. For the purposes of the utility boxes, the court found the “same place” meant the individual locations where the boxes would be placed.

Lastly, the court determined that the city had not improperly relied on mitigation measures in concluding the project was categorically exempt from CEQA. Although the city was required to review the utility cabinets to evaluate their potential to impede travel, inconvenience property owners, or otherwise disturb use of the right-of-way, that review is required by a Public Works Order, which is generally applicable to excavation permits for surface-mounted facilities. According to the court, this was not considered mitigation because an agency may rely on generally applicable regulations to conclude an environmental impact will not be significant and therefore does not require mitigation.

 

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