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THIRD DISTRICT HOLDS TRIAL COURT MUST DETERMINE REVISED EIR IS CONSISTENT WITH PREVIOUS APPELLATE DECISION BEFORE DISCHARGING WRIT ON REMAND; THE ISSUE CAN BE HEARD BY CHALLENGE TO WRIT RETURN

General Posted by Chris Stiles

In Save the Capitol, Save the Trees v. Department of General Services (2024) 101 Cal.App.5th 1237, the Third District Court of Appeal reversed the trial court’s discharge of a peremptory writ of mandate and found that on remand, the trial court must determine whether a revised Final EIR remedied the CEQA violations identified by the appellate court in its earlier opinion before discharging the writ. The court held that the matter could be brought by a challenge to the writ return because the court retained jurisdiction to address issues within the scope of the previous merits challenge.

Background

In an earlier case, Save Our Capitol! v. Department of General Services (2023) 87 Cal.App.5th 655, 711 (Save Our Capitol), the Court of Appeal determined that an EIR analyzing alterations to the California State Capitol violated CEQA. The court remanded the matter with directions to the trial court to issue a writ “directing [the Department of General Services] (DGS) to partially vacate its certification of the EIR and to revise and recirculate the deficient portions of the EIR consistent with this opinion before it considers recertifying the EIR.” On remand, the trial court ordered: (1) partial EIR decertification and vacation of the project approvals “consistent with the Opinion of the Court of Appeal”; (2) suspension of activities that would physically alter the capitol and no further discretionary approvals in reliance on the decertified EIR; and (3) for DGS to file a final return to the writ “upon certification of a revised EIR.”

DGS partially vacated its certification of the EIR and the associated project approvals and revised, recirculated, and certified the Final EIR. DGS then partially reapproved the project without a visitor center component that was part of the originally approved project. DGS then filed a final return, requesting that the court discharge the writ. The trial court discharged the writ, over plaintiff Save the Capitol’s objection, without determining whether the revised Final EIR remedied the CEQA violations identified by the appellate court.

The Court of Appeal’s Opinion

Remedial Action Ordered

The Court of Appeal held that the trial court could not discharge the writ without determining whether the revised EIR remedied the CEQA deficiencies identified earlier in Save Our Capitol. The trial court’s peremptory writ issued all three types of mandates authorized by Public Resources Code section 21168.9: (1) to void the action or decision by the agency under subdivision (a)(1); (2) to suspend project activities that affect the physical environment until action is taken to bring the situation into compliance under subdivision (a)(2); and (3) to take specific action to bring the determination into compliance under subdivision (a)(3). The court emphasized that the third directive required DGS to remedy the CEQA deficiencies consistent with the appellate court’s earlier opinion. In addition, section 21168.9, subdivision (b), required the trial court to retain jurisdiction, pending compliance with CEQA. The court noted that “ensur[ing] CEQA compliance after violations have been identified” is the “manifest purpose of a peremptory writ in this context.”

The court distinguished McCann v. City of San Diego (2023) 94 Cal.App.5th 284, as an instance where the appellate court’s prior direction to the trial court did not order remedial action in compliance with CEQA.

Writ Return Challenge

The parties disagreed whether Save the Capitol was permitted to challenge the sufficiency of the discharge of the writ by writ return or whether it was required to file a new action. The court held that it was acceptable for Save the Capitol to proceed by writ return challenge because the court retained jurisdiction under Public Resources Code section 21168.9, subdivision (b), as expressly stated in the writ.

The court rejected DGS’s argument that Save the Capitol should have used clearer language in the writ to make its preferred interpretation explicit, finding instead that the writ properly encompassed applicable law, the purpose of the writ, and the court’s order. The court also rejected DGS’s argument that requiring remedial action could result in inconsistent adjudications of the same issue if one plaintiff challenges the adequacy of the revised EIR via a new writ, while another does so by objection to the writ return. The court explained that such a result could be eliminated through a consolidation order. The court was similarly unpersuaded by DGS’s argument that allowing Save the Capitol to challenge the revised EIR via objection to the writ return would open the door to new merits challenges because no new issues are permitted to be raised in this manner.

Lastly, the court disagreed with Save the Capitol’s argument that discharge of the writ was premature because one component of the project was not yet reapproved. The court held that that because that component was not reapproved, it was no longer part of the project, and any later approval of that component would trigger a new deadline to challenge the action under CEQA.

CALIFORNIA SUPREME COURT UPHOLDS EIR FOR UC BERKELEY’S LONG-RANGE DEVELOPMENT PLAN AND PEOPLE’S PARK HOUSING PROJECT PURSUANT TO AB 1307 CEQA AMENDMENTS

General Posted by Chris Stiles

In Make UC a Good Neighbor v. The Regents of the University of California (2024) 16 Cal.5th 43, the California Supreme Court held that the EIR for UC Berkeley’s Long-Range Development Plan (LRDP) and the People’s Park housing project complied with CEQA, reversing an earlier decision by the First District Court of Appeal. In doing so, the Court relied on new CEQA amendments (“AB 1307”) enacted by the Legislature for the purpose of abrogating the Court of Appeal’s decision. Pursuant to AB 1307, the Court held that: (1) the EIR was not required to analyze potential impacts related to student noise that could result from either the LRDP or the People’s Park housing project, and (2) the EIR was not required to analyze alternative locations for the People’s Park housing project.

Factual and Procedural History

The Regents approved UC Berkeley’s LRDP in July 2021. The LRDP identifies campus space, housing, and parking needs and describes development strategies generally intended to assist the university in addressing these needs. Among other things, the LRDP proposed the development of 11,073 student beds and 549 faculty and staff beds, in anticipation of enrollment increases.

Shortly after, in September 2021, the Regents approved the People’s Park housing project. Consistent with the LRDP, the People’s Park housing project sought to redevelop the People’s Park site near the UC Berkeley campus to provide 1,113 new student beds, 125 affordable and supporting housing beds, and 1.7 acres of open landscape.

In the summer of 2021, ahead of these approvals, the Regents certified an EIR that analyzed the environmental impacts of both the LRDP (on a programmatic level) and the People’s Park housing project (on a project level).

CEQA Litigation

Petitioners Make UC a Good Neighbor and People’s Park Historic District Advocacy Group (together, “Good Neighbor”) filed a petition for writ of mandate in October 2021, seeking to void the certification of the EIR and overturn the approvals of the LRDP and the People’s Park housing project. The trial court denied the petition. Good Neighbor appealed.

The Court of Appeal reversed, holding that the EIR violated CEQA in two ways: (1) by failing to study the noise impacts resulting from an increase in loud student parties, and (2) by failing to consider a reasonable range of alternative sites for the People’s Park housing project.

Both Good Neighbor and the Regents petitioned for review. The Supreme Court granted the Regents’ petition and denied Good Neighbor’s petition.

AB 1307

While the case was pending in the Supreme Court, and in response to the appellate court’s decision, the Legislature passed AB 1307. Under CEQA, as amended by AB 1307, (1) “for residential projects, the effects of noise generated by project occupants and their guests on human beings is not a significant effect on the environment” and (2) “institutions of public higher education shall not be required, in an environmental impact report prepared for a residential or mixed-use housing project, to consider alternatives to the location [if certain requirements are met].”

The Supreme Court’s Decision

Applying AB 1307, the Supreme Court held that none of Good Neighbors’ claims had merit.

Good Neighbor conceded—and the Court agreed—that under AB 1307, social noise could not be considered an impact of the People’s Park housing project, and the Regents were not required to analyze alternative locations for the People’s Park housing project.

Good Neighbor argued, however, that the EIR was still required to consider social noise impacts resulting from the LRDP because, unlike the People’s Park housing project, the LRDP was not a “residential project” for purposes of AB 1307. The Court disagreed. After finding the meaning of the statutory term “residential projects” to be ambiguous and acknowledging the Legislature’s intent to abrogate the appellate court’s interpretation that CEQA covered social noise from students and their guests, the Court determined that the Legislature intended for AB 1307 to apply to the residential aspects of the LRDP as well as the People’s Park housing project.

Additionally, Good Neighbor argued that the Court should decide its “moot” claim regarding the need to consider alternative locations because it raised issues that involved the public interest and were likely to recur. The Court declined. The Court explained that the mootness doctrine only applies where it is impossible for a court to provide effective relief—not where, as in this case, a petitioner is not entitled to any relief. Accordingly, the Court found that Good Neighbor’s request to consider AB 1307’s application to future projects constituted an impermissible request for an advisory opinion.

Accordingly, the Court reversed the appellate court’s opinion and held that judgment should be entered in favor of the Regents.

-Louisa Rogers

THIRD DISTRICT UPHOLDS CONSTITUTIONALITY OF INCREASED HOUSING DENSITY LEGISLATION (SB 10)

General Posted by Chris Stiles

In AIDS Healthcare Foundation v. Bonta (2024) 101 Cal.App.5th 73, the Third District Court of Appeal affirmed the trial court’s judgment that Senate Bill 10 (SB 10), which allows local legislative bodies to supersede local housing density caps on a parcel-by-parcel basis, did not unconstitutionally interfere with the initiative power.

Background

Article II, section 11, of the California Constitution authorizes city and county voters to enact local laws through the voter initiative process. Generally, unlike laws enacted by a legislative body, laws enacted by voter initiative may only be altered by another vote of the electorate or in a manner specified in the text of the initiative measure.

SB 10, which the Legislature enacted in response to a “severe shortage of housing at all income levels in this state,” grants counties and cities discretion to supersede local housing density caps—even those adopted via the voter initiative process—on a parcel-by-parcel basis. For qualifying parcels, local legislative bodies may supersede density caps enacted by a local ordinance with a simple majority vote, and those enacted by a voter initiative with a supermajority, two-thirds vote.

Petitioners AIDS Healthcare Foundation and City of Redondo Beach filed a petition for writ of mandate seeking an injunction compelling the State of California to cease enforcement of SB 10 and a declaration that SB 10, on its face, unconstitutionally “eviscerates the fundamental protection against subsequent legislative amendment of initiatives without a vote of the people.”

The trial court concluded that SB 10 did not unconstitutionally impair the initiative power and, accordingly, denied the petition. Petitioners appealed.

Court of Appeal’s Decision

Employing a multi-step analysis, the Third District Court of Appeal affirmed the trial court’s decision.

First, the court considered the circumstances in which the Legislature can supersede local zoning and land use laws. The court explained that, generally, state laws generally have supremacy over conflicting local ordinances enacted by non-charter cities and counties. With respect to charter cities, however, any state laws concerning “municipal affairs” supersede conflicting ordinances enacted by charter cities only if the state law (1) pertains to subject matter of regional or statewide concern and (2) is reasonably related to resolving that concern. The court concluded that, given the statewide housing crisis and the reasonable connection between housing shortages and restrictive housing density caps, the circumstances permitted the Legislature to displace local zoning and land use laws by enacting SB 10.

Second, the court determined that SB 10 did in fact displace local laws that set housing density caps. The court explained that local housing density caps expressly prohibited actions authorized by SB 10 (i.e., exceeding the cap), and moreover, that density caps frustrated SB 10’s purpose of promoting higher density housing projects. With respect to local density caps enacted through the voter initiative process, the court explained that statutes may preempt local initiative measures so long as the Legislature clearly intended such an outcome. Accordingly, because SB 10 expressly granted local governments the authority to supersede both legislatively enacted and initiative-based density caps, the court held that SB 10 preempted both types of housing density cap.

Third, the court held that the Legislature’s approach of providing local legislative bodies the power to supersede local housing density caps on a parcel-by-parcel basis—as opposed to outright nullifying these caps statewide—was constitutional. In so holding, the court first pointed out earlier case law in which the California Supreme Court held that the Legislature may grant local legislative bodies discretion regarding local decisions while simultaneously preventing initiatives and local ordinances from impairing that discretion. Additionally, the court reasoned that SB 10’s parcel-by-parcel approach was more protective of the local initiative process than a statewide invalidation of all local housing density caps, especially because it did not prevent voters from passing housing density caps that would require a two-thirds vote by the local legislative body to exceed.

Fourth, the court held that SB 10 did not apply differently to housing density caps already in existence. The court pointed out the SB 10 did not include any exemption for existing density caps, and further reasoned that such an exemption would frustrate the legislative intent behind SB 10’s enactment by substantially limiting local legislative bodies’ discretion to supersede housing density caps.

Accordingly, the court concluded that the Legislature’s enactment of SB 10 did not violate the California Constitution.

– Adam Nir

FIRST DISTRICT HOLDS COMPLETION OF PROJECT DID NOT MOOT CEQA CLAIM; GOVERNMENTAL INACTION MAY GIVE RISE TO CEQA VIOLATION

General Posted by Chris Stiles

In Vichy Springs Resort, Inc. v. City of Ukiah (2024) 101 Cal.App.5th 46, the First District Court of Appeal reversed the trial court’s judgment sustaining a demurrer to claims that a project to demolish an existing shooting range, and construct a new one, should have been subjected to CEQA review. In the published portion of the opinion, the court held that the claim raised by Petitioner Vichy Springs Resort, Inc. that Mendocino County improperly declined to exercise its regulatory authority over the project, was sufficient to state a CEQA cause of action. The court also held that completion of the project did not moot the CEQA claims.

Background

Ukiah Rifle and Pistol Club operates a shooting range in an unincorporated area of the County, on land that it leases from the City of Ukiah. When the Club sought to demolish the existing range and construct a new range, Vichy sued the City and County, alleging that both entities violated CEQA. According to Vichy’s petition for writ of mandate, the County erroneously determined that it had no regulatory authority over the project, and therefore improperly allowed the project to proceed without first completing CEQA review. Vichy similarly alleged that the City improperly determined that the project was not subject to CEQA. Vichy did not seek a preliminary injunction and the Club completed the project while the case was pending in the trial court.

The County demurred to Vichy’s CEQA cause of action, arguing that the County’s alleged failure to exercise its regulatory authority was not a “project” subject to CEQA. Additionally, the Club and the City demurred to the CEQA cause of action, arguing that it became moot when the Club completed the project. The trial court sustained the demurrers without leave to amend. Vichy appealed.

Court of Appeal’s Decision

The Court of Appeal reversed the trial court’s judgment. In the published portion of its opinion, the court held that the Petition properly alleged a violation of CEQA by the County and that the Project’s completion did not render Vichy’s CEQA cause of action moot.

CEQA claim was not moot after project completion

As a threshold matter, the court held that the CEQA claims were not moot because the petition alleged that some of the project’s environmental impacts could still be alleviated. The court noted that the petition included examples of post-completion measures that could mitigate the project’s alleged significant environmental impacts, such as developing a lead removal program, implementing a pollution prevention plan, limiting the hours and scope of shooting range operations, and requiring lead-free ammunition. Additionally, while acknowledging that it would have been preferable for Vichy to seek a preliminary injunction to halt the project, the court nevertheless concluded that Vichy’s failure to do so did not require a finding that the CEQA claims were moot.

The court distinguished other cases holding that completion of the project rendered CEQA claims moot, explaining that the petitioners in those cases did not adequately allege or demonstrate that post-completion modifications or mitigation measures could remedy the claimed CEQA violations.

County’s failure to exercise its regulatory authority could give rise to a CEQA violation

The court also held that the petition properly alleged a CEQA violation by the County. The County argued that its decision to not regulate the project did not rest on any provision of CEQA such that Vichy could properly sue the County “on the grounds of noncompliance” with CEQA’s statutory requirements. The court, however, concluded that the County’s proposed interpretation of CEQA was “overly formalistic,” as Vichy’s ultimate contention was that the County would have been required to comply with CEQA had it properly exercised its authority.

The court similarly rejected the County’s arguments that the petition did not describe a “project” for purposes of CEQA and that CEQA applies only to project approvals but not to governmental inaction. The court explained that the “project” at issue in the litigation was the shooting range demolition and construction—not the County’s alleged failure to regulate. Thus, because the County’s inaction allowed the project to proceed without environmental review that might have otherwise been required had the County exercised its authority over the project, Vichy properly alleged a CEQA violation by the County.

– Natasha Roland

Environmental Organizations and Air District Secure Remand on Scope of CEQA Remedy in Case Challenging the Port of Los Angeles’ Air Pollution Mitigation Measures

General Posted by Chris Stiles

In an opinion filed December 29, 2023, the Fourth District Court of Appeal ruled that the San Diego County Superior Court too narrowly interpreted CEQA’s remedy statute (Public Resources Code section 21168.9). Although the trial court had found that a supplemental EIR (SEIR) certified by the Los Angeles Board Harbor Commissioners violated CEQA in multiple ways, the trial court ordered LABHC only to prepare a revised SEIR, finding that it had no authority under CEQA to issue a broader remedy. The Court of Appeal concluded that the trial court misunderstood the full scope of remedial authority available to the trial court and remanded the case back to the trial court to reconsider the remedy. The Court of Appeal also held that the Port of Los Angeles (Port) lacked substantial evidence to modify certain air quality mitigation measures that had been adopted in connection with a prior EIR prepared for continued operation of the China Shipping Container Terminal at the Port.

Background

The Port of Los Angeles is North America’s largest port, both in terms of container volume and the value of goods handled. Together with the Port of Long Beach, it oversees 64 percent of the West Coast’s maritime trade and 3 percent of the shipping activities across the United States. Spanning 23 cargo terminals, the Port stretches over 43 miles of waterfront. The Los Angeles Harbor Department functions as the Port’s landlord, renting out spaces to tenants who manage cargo operations.

One terminal within the Port is managed by China Shipping, under a lease agreement with Los Angeles Harbor Department. The lease agreement, signed in 2001, grants China Shipping the rights to build and manage the 142-acre terminal over a period of 25 years, with options for renewal. In the case of National Resources Defense Fund v. City of Los Angeles (2002) 103 Cal.App.4th 286 (NRDC I), the Court of Appeal held that the Port was required to prepare an EIR for three planned development phases of the China Shipping terminal.

In 2004, the plaintiffs in NRDC I and the Port reached a court-approved settlement that allowed the Port to finish building the China Shipping terminal and initiate its first operational phase while preparing the court-ordered EIR. In exchange, the Port agreed to incorporate multiple mitigation measures into the project. The settlement also stipulated that the Port must modify its leasing contract with China Shipping to ensure that China Shipping adhered to these mitigation measures, despite not being a party to the settlement.

In 2008, the Port completed an EIR (2008 EIR) for all three construction phases of the terminal and its ongoing operations under a new 40-year lease agreement with China Shipping. The EIR revealed that the operations at the terminal would have significant environmental impacts, particularly on air quality. To address these impacts, the EIR proposed several mitigation measures, including: (1) using 100 percent alternative maritime power by 2011; (2) limiting ship speeds consistent with an expanded vessel speed reduction program; (3) shifting towards the use of cleaner and zero-emission equipment for handling cargo; and (4) increasing the use of liquified natural gas for a larger share of drayage trucks.

Following the 2008 EIR’s certification, the Port failed to amend its leasing agreement with China Shipping to incorporate the recommended mitigation measures. Discussions between the Port and China Shipping reached an impasse, and public documents exposed that the Port had no intention of forcing China Shipping to implement the mitigation measures. Facing public criticism, the Port thereafter announced plans to prepare a SEIR.

In 2019, the Port released a SEIR, detailing revised mitigation measures and asserting that the mitigation measures would be included in the new lease agreement. Despite this, the document did not establish a legal mechanism to enforce the identified mitigation measures, although it did assume that the mitigation measures would be implemented.

Following the SEIR’s certification, environmental organizations and the South Coast Air Quality Management District (SCAQMD) filed separate petitions for writ of mandate, which were later consolidated. The California Air Resources Board and the California Attorney General intervened and the case was transferred to San Diego Superior Court.

The San Diego Superior Court held that the SEIR violated CEQA because none of the proposed mitigation measures was enforceable. Additionally, the trial court concluded that the Port did not have substantial evidence to justify the claim that two mitigation strategies outlined in the 2008 EIR were infeasible. With respect to the remedy, the court held that, in the absence of a consent decree, it could only declare the EIR invalid and order it set aside. In the trial court’s view, it could not order any other remedy because it must not direct the Port as to how to exercise its discretion.

The Court of Appeal’s Opinion

Mitigation Measures

The Court of Appeal first considered the petitioners’ various challenges to the Port’s rejection of suggested mitigation measures as well as the Port’s decision to modify certain mitigation measures adopted in connection with the 2008 EIR. The court held that although substantial evidence supported some of the Port’s mitigation determinations, others lacked sufficient evidentiary support and reasoned explanation.

Aero-Emission Technology for Cargo-Moving Equipment

The petitioners contended that the Port prematurely rejected a potential a pilot program and a subsequent requirement for zero-emission equipment in cargo operations. The Court of Appeal found, however, that substantial evidence supported the Port’s decision to reject this suggested mitigation measure. The Port’s examination of the available technology indicated that zero-emission solutions for cargo-moving equipment do not yet meet the commercial viability or technical standards required for operations at marine terminals. This position was supported by a 2018 Feasibility Study for Cargo-Handling Equipment, which was part of the 2017 Clean Air Action Plan jointly developed by the Ports of Long Beach and Los Angeles. The SEIR concluded that, although promising, zero-emission technologies require further development in terms of technical validation, reliability in operations, and broader industry support from equipment manufacturers. Therefore, at this stage, zero-emission options are not feasible for the existing cargo handling machinery at the terminal. The Court of Appeal found this rationale to be adequate and supported by substantial evidence.

The petitioners also argued that, even if zero-emission equipment is not currently available, the Port should have considered implementing a pilot program for zero or near-zero emission cargo handling machinery. The court rejected this argument, explaining that such a pilot program, being experimental, would not qualify as a mitigation measure because it would not guarantee a reduction in impacts.

Decision to Make a Greenhouse Gas Emissions Fund a Lease Measure (Rather Than a Mitigation Measure)

The 2019 SEIR reported that terminal operations would generate over 10,000 metric tons of carbon dioxide equivalent annually, resulting in a significant environmental impact. To minimize this impact, the 2019 SEIR proposed two initiatives: Mitigation Measure GHG-1, which called for upgrades to LED lighting, and “Lease Measure” (LM) GHG-1, which would establish a Greenhouse Gas (GHG) Emissions Fund under which China Shipping would contribute $250,000 annually for eight years to support Port-sanctioned emissions reduction projects or to buy CARB-approved credits. This $2 million total from China Shipping was intended to offset the anticipated excess GHG emissions by 2030, valued according to the carbon credit market rates of 2019.

Petitioner National Resources Defense Council criticized LM GHG-1 for not sufficiently addressing the long-term GHG emissions from the terminal and for the lack of constraints on purchasing offsets. The Port defended LM GHG-1 as a lease-specific initiative, arguing it was not designed as a mitigation measure for the terminal’s significant environmental impacts, and was thus not subject to CEQA’s rigorous standards for mitigation.

The Court of Appeal held that, despite the Port’s claim, LM GHG-1 is a mitigation measure. Indeed, the SEIR’s wording implied that the Port itself views LM GHG-1 as a form of mitigation, with the SEIR repeatedly mentioning that LM GHG-1 would “mitigate” GHG impacts.

More fundamentally, the 2019 SEIR failed to sufficiently inform the public and decisionmakers about why LM GHG-1 is a lease measure rather than a mitigation measure. In defense of this position, the SEIR stated only that LM GHG-1 could not be a mitigation measure because it was not possible to quantify the measure’s effectiveness. The court found that such an assertion, without a reasoned explanation, is insufficient under CEQA.

The court was also skeptical of the Port’s claim that it quantifying the GHG Fund’s effectiveness was not possible. The court emphasized that the CEQA Guidelines expressly allow for carbon offsets as a form of GHG mitigation when they adhere to specific criteria, including proper evidence and monitoring for fee-based, off-site mitigation efforts. Further, the SEIR included details on China Shipping’s payments to the GHG Fund based on projected excess GHG emissions and the prevailing market value of carbon, suggesting that quantification is possible.

Responses to Comments Suggesting a Third-Party Mitigation Compliance Monitor

Comments on the Draft SEIR requested that the Port appoint an independent third-party monitor to oversee compliance with the SEIR’s mitigation measures. In response, the Final SEIR explained that such a requirement would be beyond the scope of the SEIR and was not required by CEQA. The Court of Appeal upheld this response.

The court explained that the CEQA Guidelines provide that agencies must address significant environmental issues raised in comments, especially when an agency’s position varies from the comments. Here, the Port’s response to the comments requesting an independent mitigation monitor provided a legal rationale for rejecting that proposal, consistent with CEQA. The Port’s response was legally correct in that Port-wide independent oversight would be beyond the SEIR’s purview. CEQA did not require further response on this topic.

The court also observed that although the petitioners framed their argument as challenging the legal sufficiency of the response, their primary concern seemed to be the Port’s choice to monitor its own mitigation compliance. The court noted that, although the Port had historically failed to adequately enforce mitigation at the terminal, the Port’s decision to retain control over mitigation monitoring is allowed under CEQA.

Removal of Mitigation Measure MM AQ-20, Requiring Exclusive Use of Liquefied Natural Gas in Drayage Trucks

The 2008 EIR included mitigation measure MM AQ-20, which mandated a gradual shift away from diesel-powered drayage trucks to liquefied natural gas-powered trucks at the terminal, eventually requiring all trucks to use liquefied natural gas.

The Port retained an environmental consulting firm, Ramboll Environ, to study the feasibility of requiring the use of alternative-technology drayage trucks at container terminals. Ramboll prepared a report that evaluated the viability of imposing an alternative-fuel-only policy at a singular terminal. The report considered various strategies: engaging with trucking companies to exclusively use liquefied natural gas/zero-emission trucks; establishing a terminal-operated drayage service; or denying entry to trucks not powered by liquefied natural gas or zero-emission technologies at the terminal gates. The report concluded that none of these strategies was viable, citing the drayage industry’s structure, the technical challenges associated with liquefied natural gas-powered trucks, and the competitive disadvantage this would impose on a single terminal.

Petitioner SCAQMD argued that the Ramboll report failed to evaluate the economic feasibility of the Port purchasing new liquefied natural gas-powered trucks or promoting their use through subsidies or other financial incentives. The court found this argument mischaracterized the Ramboll report, which had concluded that a terminal-specific mandate for liquefied natural gas-powered trucks was not viable without broader industry-wide changes. The Ramboll report demonstrated that a requirement that one terminal use liquefied natural gas-powered trucks was infeasible, regardless of who would be responsible for purchasing the trucks.

Replacement Measure for Mitigation Measures MM AQ-20.

SCAQMD also argued that the Port violated CEQA by failing to adopt an alternative mitigation measure to Mitigation Measure MM AQ-20 (discussed above). SCAQMD contended that even if liquefied natural gas technology had not advanced since the 2008 EIR, other zero or near-zero emission truck technologies have progressed and have been successfully piloted at the Port. The court found substantial evidence supported the Port’s determination that there are no feasible replacement measures for MM AQ-20.

Firstly, the Ramboll report, which constitutes substantial evidence, concluded that implementing a drayage truck mitigation measure specific to one terminal, rather than an industry-wide approach, was infeasible. Secondly, the SEIR reviewed ongoing trials of zero and near-zero emission trucks and found significant operational and infrastructural hurdles existed. Finally, the 2017 Clean Air Action Plan developed by the Ports of Los Angeles and Long Beach found that the majority of zero and near-zero emission technologies required further development to achieve commercial viability. These reports and findings constituted substantial evidence in support of the Port’s conclusion that no feasible replacement measures for MM AQ-20 exist.

SCAQMD criticized the Port for only considering technologies that are already extensively deployed, accusing it of interpreting “feasible” as something achievable immediately rather than within a reasonable future timeframe. The court disagreed, finding that the SEIR did not impose an “immediacy” criterion for feasible mitigation measures. Instead, the SEIR evaluated the current and future states of the drayage truck industry, including technological progress, operational realities, and economic considerations, particularly the implications of enforcing a truck-type requirement at a single terminal. The Port’s decision, informed by these factors, did not constitute an abuse of discretion.

The Port’s Decision to Reduce Vessel Speed Compliance Target in Mitigation Measure MM AQ-10

Mitigation Measure MM AQ-10 from the 2008 EIR required that, by 2009, 100 percent of ships visiting the China Shipping terminal adhere to the Port’s Vessel Speed Reduction Program (VSRP). Introduced in 2001, the VSRP is a voluntary program to reduce emissions by decreasing ship speeds near the Port. Financial rewards were introduced to the program in 2005 to boost adherence within specific nautical mile zones. The 2019 SEIR concluded that achieving 100 percent compliance with the VRSP was infeasible, mandating instead a compliance target of 95 percent.

The Court of Appeal agreed with SCAQMD that the Port lacked substantial evidence and sufficient reason for modifying the compliance target. The court explained that the SEIR cited operational challenges as the rationale for the change, but failed to support that claim with specific evidence or data. Instead, the SEIR’s claim of infeasibility appeared to be largely based on statements from China Shipping, without substantiation.

In defense of its determination that a 100 percent compliance target is infeasible, the Port cited the 2017 Clean Air Action Plan which aimed for a 95 percent compliance level based on the achievements of the voluntary program. This reasoning, however, failed to consider the voluntary nature of the VSRP and that existing data did not necessarily indicate the outcomes of a mandatory scheme. The court also observed that the China Shipping terminal had surpassed the 95 percent compliance rate, further undermining the Port’s position.

The court also rejected the Port’s argument that lowering the compliance target from 100 percent to 95 percent would result in minimal environmental benefits. The court observed that the Port’s own figures demonstrated a considerable difference in emissions, especially nitrogen oxides, between the two compliance levels. For this same reason, the court rejected the Port’s argument that the difference between 95 percent compliance and 100 percent compliance would not affect potential health impacts.

Remedy

The court next considered the petitioners’ claim that the trial court had misapplied CEQA’s remedy provisions. The trial court had held that none of the mitigation measures in the 2019 SEIR was enforceable, a CEQA violation the trial court deemed “profound.” Nonetheless, the trial court only ordered the Port to rescind the SEIR, without ordering the Port to stop terminal operations or set a deadline to redress the CEQA violations.

The Court of Appeal agreed with the petitioners that the trial court misunderstood its remedial authority under Public Resources Code, section 21168.9 (“Section 21168.9”). The court reasoned that subdivision (c) of Section 21168.9 clarifies that courts retain equitable powers to remedy legal violations, albeit without prescribing how agencies should exercise their discretions. Moreover, subdivision (a) of that statute empowers the trial court to mandate measures that ensure compliance with CEQA, such as halting environmentally harmful project activities until regulatory compliance is secured. The trial court misinterpreted Section 21168.9 by not considering these broader corrective options.

The Court of Appeal stressed that the trial court in this case has a variety of interventions at its disposal, such as imposing a strict schedule for a revised SEIR or halting terminal operations until certain mitigation steps are taken. Additionally, the court observed, China Shipping is bound by the lease agreement to adhere to mitigation measures detailed in any officially approved environmental documentation.

The court remanded the case back to the trial court to exercise its discretion to remedy the CEQA violations based on the full remedial authority vested in the trial court under Section 21168.9.

Conclusions and Implications

This case affirms the principle that public agencies are permitted to revise previously adopted mitigation measures if there is substantial evidence demonstrating that the original measures are infeasible. Notably, however, the court rejected the perceived attempt by the Port to circumvent CEQA’s requirements for effective mitigation by categorizing a measure as a “lease measure” rather than a true mitigation measure. Emphasizing substance over labels, the court observed that the SEIR essentially treated the lease measure as a mitigation measures, as evidenced by its repeated assertions that the measure would help reduce and mitigate GHG impacts. The court also stressed the Port’s lack of a convincing rationale for not designating the lease measure as a mitigation measure.

This case also highlights the broad and flexible authority granted to trial courts in deciding on an appropriate remedy for CEQA violations. The court’s decision to send the case back to the trial court for reconsideration of a wider array of remedies underscores the critical role of judicial oversight in CEQA, especially in cases involving substantial environmental impacts from major operations like the Port of Los Angeles.

SECOND DISTRICT COURT OF APPEAL FINDS CEQA PETITION BARRED BY STATUTE OF LIMITATIONS

General Posted by Chris Stiles

In Delia Guerrero v. City of Los Angeles (2024) ___ Cal.App.5th ___, the Second District Court of Appeal reversed the trial court, finding the petition for writ of mandate untimely under CEQA.

Background

Real estate developers submitted an application to the City of Los Angeles to subdivide a parcel and build 42 single-family homes in Northeast Los Angeles. The City prepared an Initial Study/Mitigated Negative Declaration (MND) in June 2016. The applicants later redesigned the project, and the revised project required zoning changes and approvals for retaining walls. The City updated the MND to reflect the changes.

In March, 2017, after a noticed public hearing, the Department of City Planning adopted the MND and approved a vesting tentative tract map for the project. The Department issued a 30-page letter of determination which summarized the applicable conditions. The City filed a Notice of Determination (NOD) on March 25, 2020.

Two months later, on May 13, 2020, the East Los Angeles Area Planning Commission adopted the MND and made zoning determinations and adjustments necessary for the applicant to construct retaining walls. The Planning Commission also recommended that the City Council adopt the necessary zone change. The Commission issued a letter of determination and filed a second NOD on February 4, 2021.

On June 8, 2021, the City Council adopted the MND and the zone change. The City filed a third NOD on June 18, 2021.

The Trial Court’s Ruling

Delia Guerrero filed a petition for writ of mandate on July 16, 2021, and a first amended petition on August 13, 2021, alleging violations of CEQA, Planning and Zoning Law, and the Subdivision Map Act. The City and the project applicants demurred. The trial court sustained the demurrer as to the Planning and Zoning Law and Subdivision Map Act causes of action. As to the CEQA cause of action, the trial court concluded that the petition was timely because it was filed within thirty days of the final, June 18, 2021, NOD, and overruled the demurrer. After a hearing on the merits of the CEQA claim, the trial court granted the petition. The City and the applicants appealed.

The Court of Appeal’s Decision

The Court of Appeal reversed, holding the CEQA claims were also untimely. According to the court, the petitioners were required to challenge the MND within 30 days of the first NOD, which was filed on March 25, 2020.

The court raised four key points in reaching its conclusion. First, the court said, CEQA requires public agencies to conduct environmental review as early as feasible. The City did that here when it prepared and adopted the MND prior to the initial March 2020 approval. Second, for projects that are subject to multiple discretionary approvals, the first approval triggers the statute of limitations and later approvals do not restart the clock. Here, the first approval occurred in March of 2020, which triggered the statute of limitations. Third, the purpose of a NOD is to trigger the statute of limitations. Fourth, the petitioners did not identify any changes to the project that might have triggered a requirement for subsequent or supplemental review.

Because Ms. Guerrero filed the petition over a year after the City filed the first NOD, the court dismissed the lawsuit as untimely.

SIXTH DISTRICT HOLDS SPECIFIC PLAN EIR WAS NOT REQUIRED TO ANALYZE POTENTIAL IMPACTS ARISING FROM EXPANSION OF EXISTING SCHOOL FACILITIES

General Posted by Chris Stiles

In Santa Rita Union School Dist. v. City of Salinas (2023) 94 Cal.App.5th 298, the Sixth District Court of Appeal found indirect impacts resulting from inadequate funding to construct new schools included in specific plan to be speculative and therefore did not need to be evaluated under CEQA.

Background

The project at issue was a specific plan for a 797-acre site in Salinas. The project included 4,340 housing units with up to 15,928 residents at full buildout, and was anticipated to occur over 20 to 30 years.

The City of Salinas prepared an EIR for the specific plan, which provided a very high level of design detail for certain project components. Where sufficient detail was available, the EIR also provided a full project-level analysis. The EIR stated that the design of school facilities and other public facilities was not known at the time of EIR preparation and so could not be analyzed at the project-level.

The EIR disclosed that the project was expected to generate between approximately 1,927 and 2,354 additional students in the neighborhood. To accommodate these new students, the project included three elementary schools, one of which was already operational, and one middle school, all located within the Santa Rita Union School District, and one high school which was already under construction in the Salinas Union High School District. Throughout the administrative proceedings, the two school districts sent comment letters raising concerns that sufficient funding may not be available for construction of the new schools. The districts argued that the EIR was therefore required to consider the possibility that the districts would need to accommodate the new students at existing schools and evaluate the associated environmental effects. In responses to comments, the city concluded that the information provided by the districts was “too speculative, uncertain, and vague” to give rise to meaningful environmental evaluation, and the city declined to conduct any additional analysis.

In December 2019, the city council approved the specific plan. The districts filed a petition for writ of mandate on the grounds that the EIR was inadequate because it did not evaluate the project’s impacts associated with enrolling new students at existing school sites. The districts also alleged the city failed to provide adequate responses to the districts’ comments.

The trial court granted the petition, finding the EIR inadequate for failing to address potential impacts arising from expansion of existing school facilities and concluding the city failed to adequately respond to the districts’ comments. The trial court delineated between indirect off-site impacts related to modification of existing facilities and direct impacts on those facilities.

On June 23, 2021, the trial court entered a written order ruling on the merits. On August 24, 2021, the trial court entered a stipulated order staying entry of judgment to allow time for settlement discussions and indicating that any appeal would be from the later judgment and not the June 23, 2021 written order. On December 27, 2021, the trial court held a hearing to clarify the judgment and orders. At the hearing, the trial court found that severance of portions of the project under Public Resources Code section 21168.9, whereby the court did not set aside project approvals and only required narrow relief related specifically to the analysis of impacts on schools, was appropriate. The court entered judgment on January 18, 2022. Real parties, but not the city, filed a notice of appeal on February 8, 2022.

Court of Appeal’s Decision

Appealability

Initially, the court held that real parties’ appeal was not moot even though the city chose not to appeal and instead comply with the trial court’s judgment. Compliance by the lead agency does not eliminate real parties’ right to appeal where that party is exposed to an award of attorney fees.

Next, the court considered whether the appeal was timely. Specifically, the court considered whether the June 23, 2021, order constituted an appealable final judgment. The court explained that an order is final where it disposes of all issues and does not contemplate any further action. In contrast, where further judicial action is essential to a final determination of the rights of the parties, an order is interlocutory. As applied to this matter, the court concluded that the January 2022 judgment began the appeal period because not only did the earlier merits order contemplate and direct later preparation of a judgment and a separate writ, but that order also did not articulate the narrow statutory remedies the court ultimately directed in granting the petition.

School Facilities and Funding under CEQA

Reaching the merits of the case, the court explained that pursuant to the Government Code, including Senate Bill (SB 50), and relevant case law, payment of school impact fees “provide[s] full and complete mitigation” under CEQA for a project’s impacts on school facilities due to increased student enrollment. A project’s indirect impacts on the non-school physical environment and reasonably foreseeable impacts on the environment due to construction necessary to accommodate increased enrollment, however, must still be considered. Nevertheless, the court underscored that for an EIR to be required to analyze such indirect impacts, those impacts must be reasonably foreseeable.

Here, the court observed, the parties did not dispute that the EIR complied with CEQA in providing project-level mitigation measures for non-school physical impacts from construction of school facilities, and the city imposed the required developer impact fees.

The parties disagreed, though, regarding whether the city was required to conduct additional environmental review based on the districts’ assertion that there might be insufficient funding in the future to construct new schools. The court held that under CEQA, the city was not required to: (1) ensure additional school-funding mechanisms beyond school impact fees; (2) resolve the districts’ concerns regarding insufficient funding; or (3) analyze speculative, vague scenarios to accommodate increased enrollment at existing school sites as an alternative to the project.

Responses to Comments

The court characterized the districts’ comments as “non-specific, uncertain, and vague” information that identified only generally potential indirect and off-site impacts related to existing school facilities. The comments were based on decisions the districts might make in the future, and did not describe reasonably foreseeable indirect impacts that the EIR was required to analyze. The city’s response that the analysis requested by the districts was speculative, the court held, was therefore adequate under CEQA.

First District Court of Appeal Upholds University of California’s EIR for Development at UC San Francisco’s Parnassus Heights Campus

General Posted by Louisa Rogers

In Yerba Buena Neighborhood Consortium, LLC v. Regents of the University of California (2023) 95 Cal.App.5th 779, the First District Court of Appeal affirmed the trial court’s judgment upholding the University of California Regents’ EIR for the Comprehensive Parnassus Heights Plan (Plan) against multiple CEQA challenges.

The Plan sparked neighborhood opposition because it calls for substantially more intensive development at the Parnassus Heights campus than what was previously envisioned in the Regents’ recent long-range development plan. Central to the Plan is the construction of two new facilities—a new large hospital and an eight-story research and academic building. To make room for these buildings, the Plan would require demolition of historic structures, including a historic hospital building. The extensive redevelopment aims to maintain UC San Francisco’s reputation as a top-tier medical, research, and educational institution.

In the published portion of the Opinion, the Court of Appeal held: (i) CEQA did not require the EIR to include an alternative off-campus location for the proposed new hospital; (ii) although the Regents’ EIR violated CEQA by not analyzing impacts on public transit, this error was not prejudicial; (iii) substantial evidence supported the Regents’ conclusion that avoiding demolition of several historic structures is infeasible; (iv) the Regents were not required to treat visual impacts as environmental impacts under CEQA; and (v) the EIR’s mitigation measures for wind impacts were not improperly deferred.

Alternatives Analysis

The petitioners argued that the EIR failed to include a reasonable range of alternatives to the project because it did not include an alternative that would locate the new hospital off campus. The court rejected this contention, explaining that the range of alternatives already included in the EIR represented a reasonable range. The Regents properly rejected an off-campus location for the new hospital because substantial evidence supported the Regents’ conclusion that maintaining the new hospital in close proximity to the Parnassus campus was crucial to meeting the project’s basic objectives to promote clinical, research, and educational collaboration.

Impacts on Public Transit

The EIR did not evaluate impacts on transit ridership, capacity, and delays based on the Regents’ mistaken belief that such impacts are outside the scope of CEQA. The EIR did, however, include an appendix that provided information on transit “for informational purposes.” The court held that the Regents were legally mistaken in concluding that impacts on transit need not be evaluated in the EIR. The court declined to overturn the EIR, however, because the EIR, including the transportation appendix, provided sufficient information on the topic of public transit impacts to allow for informed public participation and informed decision-making. In support of this conclusion, the court emphasized that the project is an infill development near major transit stops and the Regents had agreed to donate $30 million to the local public transit provider.

Demolition of Historic Buildings

The Plan necessitates the demolition of several historic buildings, an impact the EIR identified as significant but unavoidable. The petitioners contended that it is feasible to preserve these buildings, citing the recent long-range development plan, which had proposed their retention, suggesting the buildings were repairable. The court determined that the petitioners’ argument took too narrow a view on the concept of “feasibility.” The petitioners overlooked the fact that the demolition of the historic structures was integral to the Plan’s aim to create space for new developments. The Plan represents a distinct initiative from the long-range development plan, with distinct goals and components. Maintaining the historic buildings would mean scrapping essential parts of the Plan that involve their removal. It was within the Regents’ discretion to deem alternatives infeasible if they are impractical or misaligned with policy objectives.

Aesthetic Impacts

The petitioners claimed that the EIR inadequately assessed visual impacts, neglecting perspectives from nearby residential areas and incorrectly deeming the visual impacts of the new hospital insignificant. The court concluded, however, that these issues did not require consideration because, under section 21099 of the Public Resources Code, the aesthetic effects of the Plan are not recognized as environmental impacts, as the Plan calls for infill development of an employment center in a transit priority area.

The petitioners contended that section 21099 was inapplicable, arguing that the Plan does not fit the definition of a “residential, mixed-use residential, or employment-center project,” as the campus site is not zoned commercial. The court rejected this argument, explaining that the campus is not governed by standard zoning regulations and is designated as “P-Public” in the City’s zoning code. This classification gives the university discretion over land use decisions on the site. Consequently, the university has sanctioned commercial development in the areas targeted by the Plan, effectively aligning the property with zoning that permits “commercial use.” Therefore, section 21099 applied and the EIR was not required to address aesthetic impacts.

Wind Mitigation

The EIR’s significance thresholds for wind impacts were based on the City of San Francisco’s wind ordinances, which define a “wind hazard criterion” as winds reaching 26 miles per hour sustained over an hour. The EIR concluded that, in certain locations, the new hospital might generate winds surpassing this limit. To mitigate this, the Regents adopted mitigation measures requiring wind-tunnel testing for new buildings over 80 feet tall, under conditions mirroring those expected after the Plan’s implementation. If testing reveals an increase in either the duration of hazardous wind conditions or the number of locations affected compared to current conditions, the university is required to collaborate with wind consultants to identify viable mitigation strategies. These may include design modifications such as building setbacks, rounded or chamfered corners, or stepped facades, aimed at minimizing wind hazards as much as possible. Should the university find these strategies infeasible because “‘they would unduly restrict the proposed building’s space program, result in operational deficiencies, and/or [impose] substantially higher costs, the building(s) may nonetheless be approved provided that the project incorporates wind-speed reduction strategies to the maximum feasible extent, as determined by [the university] in consultation with the wind consultant. Wind speed reduction strategies could also include features such as landscaping, localized installation of porous/solid screens, installation of canopies along building frontages, and the like.’”

The petitioners contended that wind-tunnel testing should have been completed before the final EIR. The court rejected this argument because the EIR made it clear that the new hospital’s design was still evolving and would necessitate a subsequent, more detailed project-level EIR. Given the ongoing development of the hospital’s specific design at the time of the final EIR, the petitioners’ argument was baseless.

The petitioners also argued that the wind mitigation lacked sufficiently specific performance standards. The court disagreed, finding the requirement to “reduce wind hazards to the maximum feasible extent” as sufficiently specific, particularly given the EIR’s acknowledgement that wind impacts may be significant and unavoidable. Further, the measure’s definition of feasibility took into account factors like the proposed building’s functionality, potential operational inefficiencies, or significant cost increases, which provided sufficiently specific direction on when the university may properly reject wind minimization strategies.

In upholding the wind mitigation measures, the court distinguished East Oakland Stadium Alliance v. City of Oakland (2023) 89 Cal.App.5th 1226, in which the court invalidated a wind mitigation measure that required the project sponsor to work with a wind consultant to identify feasible mitigation strategies, including design changes, to reduce wind hazards as to the extent feasible “without unduly restricting development potential.” The East Oakland court found this standard insufficient as it provided too much discretion to the overseeing agency in determining what constituted “undue” development potential, and the EIR failed to clarify the concept of “development potential.” In contrast, in the present case, while reducing the building size is the primary method to mitigate wind impacts, such a reduction could potentially compromise the project’s objectives as outlined in the EIR. Therefore, the mitigation measure provided adequate direction.

– Laura Harris Middleton

Third District Upholds the Department of Water Resources’ Long-Term Extensions of State Water Project Contracts under CEQA, the Delta Reform Act, and the Public Trust Doctrine

General Posted by Veronika Morrison

In Planning and Conservation League v. Department of Water Resources (Cal. Ct. App., Jan. 5, 2024, No. C096304), the Third District Court of Appeal upheld an EIR prepared by the Department of Water Resources (DWR) for DWR’s approval of amendments to long-term water supply contracts with local water agencies receiving State Water Project (SWP) water. These contract amendments extended the terms of the SWP water supply contracts to 2085 and expanded DWR’s ability to use revenue bonds. In a victory for DWR and the SWP water contractors, the court upheld DWR’s EIR against an array of CEQA challenges. The court also rejected the petitioners’ claims that the amendments violated other legal requirements, including the Delta Reform Act, the Public Trust Doctrine, and the Burns-Porter Act.

By way of background, in the 1960s, DWR and 29 local government contractors entered into long-term (75-year) contracts granting the contractors rights to a portion of water from the SWP in exchange for the local agencies’ financial obligations. Each contract includes a table, “Table A,” that specifies the maximum annual water allocation, although full delivery is not guaranteed and often amounts to about half the Table A amount.

The contracts include an “evergreen clause” that allows the contractors to opt for continued service beyond the contract’s expiration by giving advanced notice. Several contractors exercised this option, leading to negotiations for long-term extensions of the contracts. The negotiations aimed to address the “debt compression problem,” where the impending contract termination limited bond maturity to 17 years, increasing the repayment costs. DWR and the contractors reached an agreement in principle to extend the contracts to 2085, which would allow for longer-term bond funding for essential capital upgrades and repairs. They also agreed to a revenue bond amendment that updates the definition of water system facilities to include post-1987 repairs and approved capital projects.

DWR prepared an EIR for the proposed amendments. The EIR concluded that the amendments would not cause environmental impacts because they would not alter the existing authority to build or modify SWP facilities, change water allocations, or create new water management measures.

After certifying the EIR, DWR filed a validation action to validate the amendments. Thereafter, several conservation groups and public agencies brought legal challenges the EIR and the validation action. The trial court ruled in favor of DWR and the petitioners appealed.

CEQA

DWR properly assumed the existence of the current contracts in the EIR’s environmental baseline.

The petitioners argued that the EIR’s impact analysis was based on an improper baseline because the baseline included the current water contracts. The court explained that to determine whether a project’s environmental impacts are significant, the agency must compare the project against existing environmental conditions—the baseline. When a project involves ongoing activities or the extension of past activities, the current levels of use and their physical impacts are part of the baseline.

The court explained that this rule is applicable to renewing permits or approvals for existing facilities, even if those facilities had not been previously assessed under CEQA. Accordingly, the court held that DWR appropriately included the existing contract conditions in the environmental baseline. DWR was not required to use a hypothetical baseline “that imagines a world” without the contracts.

DWR did not improperly piecemeal the Project in excluding a Delta conveyance facility from the project definition.

The petitioners argued that the EIR’s analysis was inadequate because it failed to consider related projects – including a future Delta conveyance facility, such as the previously proposed “California WaterFix” project – as part of the proposal, leading to an overly narrow project description and improper piecemealing.

The court explained that CEQA requires an environmental analysis to consider the whole of an action affecting the environment. An agency may not divide a larger project into smaller segments, which might individually have minimal environmental impacts but could collectively result in significant environmental damage. Further, as held in Laurel Heights Improvement Assn. v. Regents of University of California (1988) 47 Cal.3d 376 (Laurel Heights I), an EIR must analyze the environmental effects of any future expansions or actions that are a foreseeable consequence of the initial project and might alter its scope or environmental effects.

The petitioners argued that the trial court relied too heavily on the Laurel Heights I criteria, asserting that a broader “related to” test should apply and that actions that are close in time and location must be considered part of a larger project. The court rejected the petitioners’ argument, explaining that later opinions have confined such reasonings to situations in which a project legally necessitates or assumes the completion of another action, a situation that was not present here.

The court next explained that the courts have interpreted Laurel Heights I variously, with some concluding that a project is part of a larger project under CEQA if it is a “crucial element” of a larger project, such as when one project cannot proceed without the other. Other courts have held that there may be piecemealing when the project at issue is a first step or a catalyst toward another project. On the other hand, there is no piecemealing when the projects can be implemented independently.

Here, DWR properly treated the contract amendments as a stand-alone project, distinct from a future Delta conveyance facility. The record demonstrated that the amendments have separate, independent purposes from a Delta conveyance, such as addressing the bond compression issue. While the amendments may possibly aid in financing a conveyance facility, they serve broader purposes and address other challenges. Moreover, the record showed that there is considerable uncertainty as to whether a Delta conveyance facility would ever be approved or constructed. In light of these factors, DWR was not required to treat a potential, uncertain Delta conveyance as part of the same project as the contract amendments.

DWR did not need to assess the direct, indirect, and cumulative effects of projects that would benefit from the amendments’ bond funding.

The petitioners argued that the EIR should have evaluated the direct and indirect impacts of enabling a Delta conveyance project. The court found that this argument suffered from the same flaws as the petitioners’ piecemealing argument: the possibility of a Delta conveyance in the future is too speculative in terms of both its timing and scale. Lead agencies are not required to speculate about potential impacts.

The petitioners also argued that DWR should have evaluated the impacts of other capital projects financed by the amendments, such as the Oroville hydroelectric license project. Petitioners, however, failed to properly present this argument by failing to discuss these other projects or explain why their effects should be considered impacts of the amendments. Moreover, the argument was baseless. The EIR clarified that the amendments would support a variety of long-term capital projects. According to the petitioners’ logic, DWR would be obligated to predict the impacts of all of these projects in the EIR for the amendments, an expectation that is unreasonable. Further, the court noted, projects that are merely governmental funding mechanisms or fiscal activities that do not commit to any specific project that could have environmental effects are not subject to CEQA. Although these capital projects may be part of DWR’s overall plans for the SWP, their connections to the amendments is too tenuous: the amendments do not commit DWR to these projects and do not authorize revenue bonds for any of them (which would require a separate approval).

The EIR’s project description complied with CEQA and was not misleading or inconsistent.

The petitioners asserted – and the court rejected – three arguments regarding the EIR’s project description. First, the petitioners argued that depicting the Delta conveyance facility as a separate project in the EIR conflicted with statements made in earlier environmental review documents. The petitioners cited various documents to support this assertion, but failed to explain how these documents substantiated their position. Moreover, the court’s examination of the cited documents did not reveal any inconsistencies.

Second, the petitioners argued that identifying the 2085 extension date in the EIR was misleading and inaccurate because the EIR did not reveal DWR’s expectation of successive contract extensions under the existing contracts’ evergreen clauses. But petitioners failed to support this argument with any analysis or authority. Furthermore, the record demonstrated that there are clear differences between applying the evergreen clause to individual contracts and achieving a long-term extension for all contractors.

Third, the petitioners argued that the EIR incorrectly stated that the amendments would not change the authority under the current contracts to construct new or modify existing facilities. They argued that the amendments would remove limitations on revenue bond eligibility for new facilities, potentially financing new or expanded facilities. The court rejected this argument as inconsistent with the EIR’s project description, which made these facts plain by explaining that the amendments would offer enhanced funding mechanism that could fund new or expanded facilities.

The petitioners failed to show that the EIR’s range of alternatives was unreasonable.

CEQA requires an EIR to identify and evaluate a reasonable range of alternatives that could achieve most of the project’s basic objectives while avoiding or significantly reducing its adverse environmental effects. DWR’s objectives for the amendments included financing the SWP past 2035, maintaining funding reserves, simplifying the billing process, and improving financial coordination between DWR and the contractors. In addition to a no-project alternative, the EIR analyzed seven alternatives, including different contract extension lengths with or without financial amendments, bond sales extending beyond the current contract expiration, and a scenario where not all contractors agreed to the amendments. Two additional alternatives were considered, but rejected from further consideration in the EIR: reducing the “Table A” amounts and implementing new water conservation provisions.

The petitioners argued that DWR’s selection of alternatives violated CEQA in three ways. First, in a single-sentence argument, the petitioners asserted that the alternatives were not sufficiently different to constitute a reasonable range. The court summarily rejected this argument because the petitioners failed to provide any authority or analysis to support it. It was incumbent on the petitioners to show that the range of alternatives were manifestly unreasonable or identify evidence of a least one potentially feasible alternative that would meet most of the basic objectives while reducing the project’s impacts. The petitioners’ one-sentence statement did not satisfy this burden.

Second, the petitioners argued that the revenue bond amendment creates financial risk and that the EIR should have analyzed an alternative that excludes that amendment. The court rejected this argument, explaining that CEQA is not a statute for economic protection, and economic impacts alone do not qualify as significant environmental impacts. Moreover, the no-project and the extension-only alternative evaluated in the EIR sufficiently covered the exclusion of the revenue bond amendment.

Third, the petitioners challenged DWR’s rejection of alternatives to reduce Table A amounts and to implement new water conservation measures, arguing that these alternatives would reduce environmental effects and would align with other state laws and policies. The court rejected this argument, explaining that agencies are not required to analyze alternatives that would solve broader problems or add complex issues that the agencies had chosen not to address. Here, DWR deliberately limited the EIR’s scope to financial issues related to the SWP contracts and made a reasoned decision to exclude Table A amounts from the project’s scope. DWR was not required to analyze alternatives that address bigger issues than the problems DRW is trying to address.

DWR properly defined the no-project alternative as the water contracts proceeding without the amendments, rather than termination of the contracts.

An EIR is required to evaluate a “no project” alternative; the purpose of this requirement is to compare the environmental impacts of not approving the project with those that would occur if the project is approved. Here, the EIR’s no-project alternative assumed that operations and financing of the SWP would continue under existing contracts until December 31, 2035, with contract terms potentially extended beyond this date through the evergreen clause. Under this scenario, water services would continue beyond 2035 in line current financial terms, no bonds would be sold with maturity dates past 2035, and the debt compression issue would worsen. The EIR concluded that this alternative, like the amendments, would not lead to direct physical environmental impacts because it would not introduce new water management measures, change DWR’s authority to build or modify facilities, or alter water allocation in the existing contracts.

The petitioners argued that DWR should have considered, as the no-project alternative, a scenario in which the contracts are allowed to expire. According to the petitioners, relying on the evergreen clause as part of the no-project alternative is inappropriate because: (i) application of the evergreen clause might itself be a project; (ii) the evergreen clause does not guarantee an extension of all contract provisions; and (iii) the evergreen clause does not account for other future changes to the SWP that DWR has acknowledged. The petitioners further asserted that DWR’s analysis blurred the distinction between the no-project scenario and the amendments, thereby failing to provide a clear and factual analysis of maintaining the status quo.

The court rejected these arguments. The court explained that the analysis of the no-project alternative must consider current conditions and what can reasonably be expected in the foreseeable future if the project is not approved. In reviewing a no-project alternative, the court’s focus narrowly on whether the EIR adequately describes existing condition and offers a plausible vision of the foreseeable future. Here, DWR’s no-project met these standards. Given the long history of the SWP and its critical role in supplying water to the state, as well as the long-term investments of the contractors in the SWP, DWR was not required to treat termination of the contracts as the no-project alternative.

Petitioners failed to demonstrate that recirculation of the EIR was required.

CEQA requires a lead agency to recirculate an EIR for further public review and comments when the agency introduces “significant new information” to the EIR before its certification. The court held that petitioners failed to meet that burden by failing to provide any facts or analysis of the information added to the EIR was “significant” within the meaning of CEQA.

The petitioners further claimed that recirculation was required because DWR added additional information regarding the rejected “Table A amount reduction” alternative in the final EIR. The court explained, however, that the added discussion was not “significant” because it did not reveal any new environmental impact or an increase in the severity of an impact, and did not deprive the public of a meaningful opportunity to comment on a substantial adverse effect or a feasible mitigation measure or alternative that the project’s proponents declined to implement. Rather, the additional information added to the final EIR served only to clarify and amplify the conclusions of the draft EIR, and therefore did not trigger recirculation.

Delta Reform Act

Under the Delta Reform Act, any state agency planning to undertake a “covered action” must first certify in writing that the action is consistent with the Delta Plan. This certification, including detailed findings, must be submitted to the Delta Stewardship Council before the covered action is implemented. (Water Code, § 85225.) A “covered action” is defined in Water Code section 85075.5 as a plan, program, or project that meets certain criteria and is not exempt.

Here, DWR determined that the amendments were not a covered action and therefore did not prepare a certification of consistency with the Delta Plan. The petitioners, in contrast, asserted that the amendments constituted a covered action. The court agreed with DWR that the amendments were not a covered action.

The court observed that, viewing the Delta Reform Act holistically, several points stand out. First, the Act primarily targets “future developments,” rather than existing ones. Second, a covered action is defined as an action occurring within the Delta or Suisun Marsh boundaries. Third, such actions must significantly impact California’s water supply reliability or the Delta ecosystem. Fourth, routine maintenance and operation of the SWP are not included as covered actions. While the court did not delve into the exact meaning of “routine maintenance and operation,” it found it fair to say that the existing SWP is generally exempt from being a covered action.

Applying these insights, the court held that the amendments do not qualify as a covered action. The amendments merely extend existing contracts with SWP contractors and enhance DWR’s ability to finance improvements and new facilities for the SWP using revenue bonds, subject to certain approvals. They do not physically take place in the Delta, nor do they modify the developed uses of the SWP. Therefore, the DWR’s decision not to prepare a certification of consistency with the Delta Plan was not erroneous.

Public Trust Doctrine

The petitioners argued that, under the California Supreme Court’s decision in National Audubon Society v. Superior Court (1983) 33 Cal.3d 419 (National Audubon), DWR had an affirmative duty to take the public trust into account in approving the amendments. The court disagreed, reasoning that a closer reading of National Audubon indicates that the high court was specifically concerned about the approval of water diversions. This distinction is significant because DWR does not approve water diversions—that task is performed by the State Water Resources Control Board.

Furthermore, the court found that the record supported DWR’s conclusion that the amendments do not impact a public trust resource. The water rights at issue were granted by the State Water Board in 1967 and have been amended by that board several times. The contracts giving the contractors interest in those water rights “were executed in the 1960s and allow the contractors to extend their interests indefinitely.” Under this framework, it was reasonable for DWR to conclude that extending the terms of the contracts to 2085 would not have impacts on resources held in the public trust.

The court also rejected the petitioners’ argument that, under National Audubon, DWR has a “‘continuing duty to supervise’” the taking and use of the appropriated water. The court explained that petitioners took the statements in National Audubon out of context in that, in National Audubon, no agency had ever considered the public trust in relation to the challenged water diversions and their harm to Mono Lake. The court in the present case declined to translate the “continuing duty of supervision” described in National Audubon as imposing a continued duty on DWR to supervise the water rights with which it operates the SWP. In this context, DWR’s duty under the public trust doctrine is only triggered when DWR is taking an action with an impact on public trust uses. Since there is no such impact here, the duties to weigh the public trust interests or consider additional protections do not apply.

Remaining Arguments Against Validation of the Amendments

Finally, the court rejected several other arguments raised by the petitioners challenging the amendments’ validation.

The Validation Action Was Not Premature

The petitioners argued that DWR’s validation action was premature. The Court of Appeal rejected this contention, explaining that the 60-day limitation period for bringing a validation action and the public policy of a speedy determination of a public agency’s action undermined the petitioners’ claim of prematurity. Furthermore, the petitioners failed to cite any authority to support the position that prematurity is a valid defense against a validation action.

The Amendments Are Consistent with the Burns-Porter Act

Under the Burns-Porter Act, any income from the sale, delivery, or use of SWP water or power must be placed into a special fund. This fund is then used for various purposes, following a strict order of priority established by the Act. The highest priority is for funding the annual maintenance and operation costs of the SWP, including replacing any parts of the SWP as needed. The petitioners argued that the amendments – specifically the extension amendment and the revenue bond amendment – were inconsistent with this first priority requirement. The court disagreed, finding that nothing in the amendments disrupts or contravenes the established priority order for the use of funds as set forth in the Burns-Porter Act.

DWR Complied with Water Code Section 147.5

Water Code section 147.5 outlines the procedures DWR must follow when renewing or extending long-term water supply contracts. Specifically, that statute requires DWR to present details of the contract terms at an informational hearing before the Legislature at least 60 days before final approval of the contract.

The petitioners claimed that DWR failed to meet these requirements because it submitted only draft amendments, not the final version, to the Legislature. The court rejected this argument, finding that Water Code 147.5 only mandates a presentation to the Legislature 60 days before contract approval and does not specify that the contract must be in its final form at this stage. The informational hearing could lead to further amendments, and the statute not require another hearing for such changes. Moreover, the purpose of Water Code Section 147.5 is to ensure high-level oversight of the renewal or extension of SWP long-term contracts, not to involve the Legislature in overseeing the details of finalizing these contracts.

The Petitioners failed to support their argument that the amendments are unconscionable.

The petitioners argued that it was unconscionable for DWR to reauthorize the terms of the existing contracts regarding water delivery amounts because those terms are impossible or impractical to fulfill. The Court of Appeal, like the trial court before it, declined to consider this argument because the petitioners failed to offer any legal authority to support it.

DWR acted within its authority in approving the amendments.

Lastly, the petitioners argued that validating the amendments is improper because, according to the petitioners, the amendments provide DWR “absolute power” to enter into “unbounded” contracts. The petitioners, however, failed to demonstrate how validating the amendments would give DWR absolute and unrestricted contracting authority, particularly given that the validation action is limited to contracts tied to or directly related to DWR bonds. Validating the amendments does not give DWR a “free pass” to base its decisionmaking on “paper water.”

Conclusions and Implications

At bottom, the petitioners’ CEQA arguments in this case rested on two mistaken assumptions: first, that the amendment would transform the SWP, possibly leading to expanded SWP operations and a Delta conveyance project; and second, that without the amendments, the existing SWP contracts would terminate. The court rejected these assumptions. Although future capital improvement projects within the SWP may benefit from bond funding under the amendments, such future projects are speculative and not a reasonably foreseeable consequence of the amendments. Furthermore, the court found that it is reasonable for DWR to assume that the terms of the existing contracts will continue, regardless of these particular amendments. The contracts’ evergreen provision authorizes the contractors to request the same amount of continued water service indefinitely and several contractors had already exercised that option. Furthermore, California’s residents and farms depend on continued delivery of SWP water, and the contractors have invested enormous sums in the SWP. The court agreed with DWR’s pragmatic view that it is more plausible to anticipate contract extensions than their termination.

Having rejected the underlying premises of the petitioners’ claims, the court applied straightforward analyses to the petitioners’ CEQA claims. Case law firmly establishes that when a project proposes the continuation of existing activities, the baseline includes those activities. Therefore, DWR properly included the current contracts, including current operation of the SWP, as part of the baseline. Impacts caused by the current operation of the SWP are not impacts of the proposed amendments.

The law is also clear that projects with independent utility need not be treated as part of a larger project under CEQA. Here, the amendments have utility independent of future improvements to the SWP, including a potential Delta conveyance project. Moreover, such future projects are not a consequence of the amendments, since such projects could proceed with or without the amendments. In addition, CEQA does not requires agencies to speculate about the consequences of future, uncertain activities.

– Laura M. Harris

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