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Development rights are not constitutionally protected property interests where significant discretion is involved

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In Contasti v. City of Solana Beach (Oct. 22, 2013) 2013 U.S. Dist. LEXIS 15760 (Case No. 09CV1371), the United States District Court for the Southern District of California held that landowners had no Fourteenth Amendment property right in the use of their land where a city had broad discretion to decide whether to grant a development permit. The landowners could not reasonably rely on the benefit of development where it was clearly within the city’s power to deny that benefit, and the city had acted within its discretion.

Background. Plaintiffs were the owners of two adjacent lots in the City of Solana Beach. They submitted applications to build one home on each lot. The city approved the first application but denied the second, which proposed a 4,387 square foot house. Plaintiffs sued over the denial, claiming that the city had violated their constitutional substantive due process rights by denying them a protected property interest—their right to develop.

District court decision.  The court rejected the claim, finding no protected property interest under Fourteenth Amendment.  The Supreme Court in Board of Regents of State Colleges v. Roth explained that to have a property interest in a benefit, one must have a legitimate claim of entitlement to that benefit under state law. Where government officials are given a large amount of discretion in conferring that benefit, the court reasoned there can be no reasonable expectation of entitlement.

The plaintiffs in Contasti argued that they were entitled to the requested development permit, and thus had a constitutionally protected property interest. However, the Solana Beach Municipal Code gave significant discretion to the city council to approve or disapprove development projects. The code required the city council to review each development proposal to determine whether it was compatible with existing and potential development in the project area. Given that plaintiffs’ proposed residence for the second lot was 2,700 square feet larger than the average existing residences, and 387 square feet larger than the maximum size of future residences in the area, the city had found that the development plan for plaintiffs’ second lot was not in harmony with the surrounding area as required by the municipal code.

The court held that the city council complied with all requirements of the local municipal code and had rendered a decision based on those criteria. Thus, plaintiffs could not claim a property entitlement in their development permit given the city’s discretionary review.

Court holds that only agency decisionmaking bodies may certify the project’s EIR

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In California Clean Energy Committee v. City of San Jose (2013) ___Cal.App.4th___ (Case No. CV212623), the city of San Jose prepared an environmental impact report for Envision San Jose, a comprehensive update of the city’s general plan. CCEC submitted a comment letter criticizing the project and the draft EIR’s analysis, arguing that the draft should be recirculated. The planning commission certified the EIR without recirculation. CCEC did not appeal the decision. CCEC subsequently submitted a letter to the city’s planning department but did not mention any deficiencies in the final EIR or the certification process. The city council thereafter independently reviewed, analyzed, and certified the final EIR. CCEC sued, the trial court granted the city’s motion for summary judgment, and CCEC appealed.

CCEC argued that the city planning commission’s certification of the final EIR was unlawful because the planning commission had no approval authority over the project.   The Court of Appeal agreed. The CEQA Guidelines prohibit the decisionmaking body of a public agency from delegating review of a final EIR to a nondecisionmaking body. The planning commission was not a decisionmaking body for the project because it could not to approve or disapprove the project. The court rejected the city’s contention that its certification process was bifurcated, since bifurcation would allow a decisionmaking body to be bound by a finding made by a nonelected, nondecisionmaking body. This process would skirt the purpose of CEQA by segregating environmental review of the EIR from project approval.  Because the planning commission did not have the authority to certify the EIR, the court held that CCEC did not need to take an administrative appeal against the commission in order to exhaust its administrative remedies. The court of appeal reversed the judgment of the trial court, effectively sending the matter back to the trial court to consider the merits of CCEC’s petition.

Supreme Court grants review in Orange Citizens

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On October 20, 2013, the California Supreme Court granted review of Orange Citizens for Parks & Recreation v. Superior Court (2013) 217 Cal.App.4th 1005. The opinion has therefore been depublished (Orange Citizens for Parks & Rec. v. Superior Court (Oct. 30, 2013) 2013 Cal. LEXIS 8768) and is no longer citable precedent.   The case involves a dispute over the interpretation of a city’s land use plan, and the degree of deference owed to a city in interpreting conflicting provisions of the city’s general plan.

The petitioner argued in its appeal that the decision below “turns California planning law upside-down” by holding that a land use designation in a city’s recently-adopted general plan can be trumped by a designation set forth in a resolution 40 years earlier.

In accepting review, the Court narrowed the scope of the review to the following issue: Is the proposed development project of low density housing at issue in this case consistent with the city’s general plan?

West Coast Government Leaders Announce Landmark Climate Policy Accord

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On Monday, October 28, 2013, California Governor Jerry Brown signed a landmark climate change agreement. Governor Brown met in San Francisco with the governors of Washington and Oregon and the Premier of British Columbia to announce the partnership. Also in attendance were British Columbia’s Minister of the Environment as well as business, labor, and environmental officials from the four jurisdictions. The deal is based on the contiguous geography and shared infrastructure of the West Coast and linked economies with a combined GDP of $2.8 trillion – collectively, the world’s fifth largest economy. A meeting with the leaders of provinces on the coast of China is scheduled for January 2014, at which point those provinces may join the current group.

The three states and Canadian province formally aligned their climate policies to collectively combat climate change and promote clean energy. Oregon and Washington will bring their efforts to reduce greenhouse gas emissions from vehicles and industrial sources closer to those of California and British Columbia. Oregon will set a price for carbon, and Washington will develop a cap-and-trade market. California and British Columbia will continue their current carbon-reducing pursuits, and the four jurisdictions will harmonize their 2050 greenhouse gas reduction targets. The plan also includes integrating regional electricity grids to provide greater access to renewable sources.

The agreement did not create the regional carbon market sought by California. However, the state is planning to open an emissions market with the Quebec province in 2014. In 2007, a group of western states and Canadian provinces came together in the Western Climate Initiative to create a regional market for greenhouse gas emissions. The group dispersed in 2011, as California and Canadian provinces pursued emissions trading, and the other states branched off to non-market-based strategies.

The accord originated from the Pacific Coast Collaborative, a group that, since 2008, has organized climate change and clean energy policies.

U.S. Supreme Court Takes Up the Issue of Greenhouse Gas Emissions Regulation in Coalition for Responsible Regulation v. EPA

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On October 15, 2013, the U.S. Supreme Court granted certiorari in Coalition for Responsible Regulation v. EPA (2012) 684 F.3d 102. It is regarded as the most important federal case involving greenhouse gas emissions after its predecessor, Massachusetts v. EPA (2007) 549 U.S. 497.

Background

The case below involved a number of the U.S. EPA’s Clean Air Act rules regulating greenhouse gas emissions from stationary sources, such as large industrial plants, refineries, and factories. A three-judge panel of the United States Court of Appeals for the D.C. Circuit unanimously upheld the EPA’s rules in June 2012. Specifically, the court upheld the EPA’s endangerment finding for greenhouse gases and the agency’s decision that the endangerment finding made greenhouse gases an “air pollutant” for purposes of the Prevention of Significant Deterioration (PSD) program. The court also held that plaintiffs lacked standing to challenge how the rule is phased in.

Various interest groups and states submitted a total of nine petitions for certiorari, seeking to overturn the D.C. Circuit’s decision. The Supreme Court accepted six of these petitions.

The Court will consider the narrow issue of whether the EPA acted within its authority in determining that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements for stationary sources under the Clean Air Act. This means that the Court will leave some of the lower court’s findings undisturbed, including the endangerment finding and the “tailpipe rule,” which sets emissions standards for automobiles.

Issues

The challenged Clean Air Act provisions are the “timing” and “tailoring” rules, which together exempt small stationary sources from the greenhouse gas regulations that would otherwise apply. As enacted, the Act regulates every “source” of greenhouse gases emitting 100 tons of a single pollutant, including homes, apartment buildings, and small businesses. The EPA determined that regulating every source at that emission level would be both impractical and politically unpopular, so it created the tailoring rule to confine application of the Act to new sources emitting at least 100,000 tons of greenhouse gases per year and modifications of existing sources that increase emissions by 75,000 tons.

The industries and states challenging the tailoring rule argue that the rule is unlawful, since it relieves sources emitting between 100 and 100,000 tons from regulation when the statute clearly says those sources must be regulated. They also argue that the PSD provisions of the Act under which the EPA is regulating the larger emitters do not apply to greenhouse gases. The challengers believe the PSD provisions only apply to those pollutants on the National Ambient Air Quality Standards’ criteria pollutants list, which does not include greenhouse gases.

The criteria pollutant list is selective; it contains only six air pollutants which have a demonstrable effect on human health, such as lead and carbon monoxide. However, after the Court held that greenhouse gases are air pollutants under the Clean Air Act in the 2007 case Massachusetts v. EPA, the EPA found six greenhouse gases that must be regulated due to their threat to public health and welfare. Thus, though greenhouse gases are not technically listed as a criteria air pollutant, they have been found to be dangerous to human health. In fact, the PSD already applies to non-criteria pollutants, albeit more obscure ones like sulfuric acid mist. Plus, the EPA’s interpretation of its own statutes will be accorded significant deference under Chevron, which makes the challengers’ position an uphill battle.

The lower court never reached the substance of the challengers’ arguments because it found that they did not have standing, reasoning that regulating larger businesses while exempting smaller ones did not injure the larger businesses. In fact, the Court found that the tailoring rule could even help states like Texas – one of the states challenging the rule – because it would lessen the state’s burden in administering the Clean Air Act permitting program.

A ruling on the statutory interpretation issues could help to clear some of the ambiguities plaguing the Clean Air Act, which has not been amended since 1990. With the increasing national and international focus on climate change, environmentalists and industry alike would benefit from more guidance on how the Act applies to greenhouse gases. The Court will hear arguments in early 2014 and is anticipated to issue a ruling by July.

Clean Water Act Jurisdiction Possibly on Tap for Isolated Wetlands, Small Streams, Ponds, Vernal Pools, Prairie Potholes and Other Water Bodies

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A new EPA draft report titled “Connectivity of Streams and Wetlands to Downstream Waters” is drawing attention across the country. When finalized, the document will provide the scientific basis for clarifying and possibly expanding Clean Water Act jurisdiction over isolated wetlands and other marginal waters. The process is expected to be controversial.

Federal officials increasingly have been at odds with public and private property owners, developers and project proponents over the jurisdiction of such waters in the wake of recent U.S. Supreme Court decisions, including Rapanos v. United States, 547 U.S. 715 (2006).  The EPA’s new report, released in September, synthesizes a large body of peer-reviewed literature on the topic. The report describes the effects that wetlands, ephemeral and intermittent streams, vernal pools, ponds, prairie potholes, and other “unidirectional” water bodies have on larger downstream waters, including lakes, rivers, oceans, and estuaries. The effects studied include not only hydrological connections to traditional downstream waters, but also biological, physical, chemical and ecological impacts.

The report will play a key role in the upcoming joint rulemaking by the U.S. Environmental Protection Agency and the Army Corps of Engineers to clarify which streams, wetlands and other waters fall under Clean Water Act jurisdiction as “waters of the United States.” The two agencies sent a draft rule to the federal Office of Management and Budget on Sept. 17 for interagency review. The draft rule has not yet been made public.

According to the EPA, the report contains three primary conclusions:

  • All streams, regardless of their size and flow rate, are connected to and have important effects on downstream waters, including providing habitat for species and transporting sediment and organic matter.
  • Wetlands and open-waters in the floodplains of streams and rivers and in riparian areas are integrated with streams and rivers. Such waters influence downstream waters by affecting flows, exchanging biological species, and trapping and reducing pollutants.
  • There is insufficient information to generalize about wetlands and open-waters that are located outside of riparian areas and their connectivity to downstream rivers, streams and oceans.

The draft “Connectivity” report is available here:

The EPA Science Advisory Board plans to hold a three-day public hearing Dec. 16–18, 2013, in Washington, D.C. to review the report.

Governor signs SB 743, the “Kings Arena” CEQA bill

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Signed by Governor Brown on September 27, 2013, Senate Bill (SB) 743 includes streamlining provisions to help expedite judicial review of the proposed downtown Sacramento Kings arena. The bill also affects judicial review of environmental leadership projects and procedural requirements for certain infill projects.

The bill lays out requirements for the proposed arena such as carbon-neutral operation which, if met, subject any CEQA challenges to a 270-day resolution timeframe and new rules of court. Snags may arise if the new court rules are not adopted by July 1, 2014, or if litigation precedes that date.

“Environmental leadership projects,” which are projects satisfying particular requirements related to state investment, job creation, and greenhouse gas emissions, qualify for the same 270-day resolution under the bill. SB 743 also extends by six months the period in which to obtain certification for one of these projects, so more projects may receive certification by the new deadline of December 30, 2015.

With SB 743, infill projects in transit priority areas – those near rail stations and other transportation terminals – will no longer have to account for aesthetic and parking impacts under CEQA when undergoing review, since such impacts are no longer considered significant, although any relevant local policies would still need to be considered. The Governor’s Office of Planning and Research is tasked with creating guidelines for assessing transportation impacts within priority areas.

Court of Appeal Rules Delayed Request for CEQA Hearing is Excusable Error

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CEQA litigators can breathe a small sigh of relief knowing that a calendaring error during otherwise vigorous advocacy should not prejudice their clients. The Second District Court of Appeal in Comunidad en Accion v. Los Angeles City Council, ___ Cal. App. 4th ___, Case No. B240554 (Sept. 20, 2013) found that requesting a CEQA hearing seven days past the 90-day deadline was excusable error deserving discretionary relief. Environmental justice advocates, however, will be disheartened by the court’s separate holding that a city’s local enforcement agency is not subject to the antidiscrimination statute that applies to state-funded activities.

Background

In May 2010, the Los Angeles City Council approved siting a new 104,000-square-foot solid waste transfer station, an expanded materials recycling facility, and an expanded green waste processing center at the Bradley Landfill site in Sun Valley, Los Angeles. Community organization Comunidad en Accion challenged the city’s decision, alleging the facility subjected the predominately Latino Sun Valley residents to a disproportionate amount of pollution.

Under CEQA, a petitioner must request a hearing within 90 days of filing its petition or be subject to dismissal on the court’s or another party’s motion. Comunidad’s counsel inadvertently omitted the 90-day deadline from his personal calendaring system, and thus was seven days late requesting a hearing. The trial court found this delay inexcusable and dismissed Comunidad’s CEQA claims.

CEQA holding

The court of appeal disagreed and held the trial court abused its discretion in denying Comunidad’s motion for relief from dismissal. The court laid out two competing public policies at play: a strong preference for trial on the merits versus the desire for expeditious CEQA review. Previous cases had afforded plaintiffs relief in CEQA actions where there was “excusable error,” which the court defined as a mistake anyone could have made, rather than conduct falling below a professional standard of care. A calendaring error, the court believed, was a “clerical type mistake, not one involving professional skill.”

The court analogized two cases that had found calendaring errors excusable under certain circumstances. The guiding principle in those cases was that unless inexcusable neglect is clear, the policy favoring trial on the merits prevails. The court also distinguished a case of inexcusable error where counsel made numerous missteps resulting in the absence of any opposition to a summary judgment. Comunidad counsel’s one-week delay in requesting a hearing, in contrast, was “an isolated mistake in an otherwise vigorous and thorough presentation” of the client’s claims. The court emphasized that counsel had diligently prosecuted the case up to that point. Furthermore, respondents had not suffered prejudice from the delay, since their preparation of the administrative record was not complete when Comunidad requested a hearing.

Supreme Court Upholds Marin County’s Plastic Bag Ban

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On October 2, 2013, the California Supreme Court followed the state’s growing trend of rulings favoring plastic bag bans when it unanimously denied review of the First District Court of Appeal’s decision upholding Marin County’s ordinance.

Since 2012, retail stores in unincorporated Marin County have been banned from offering single-use plastic bags at check-out, and paper bags carry a 5-cent fee. The purpose of the ordinance, according to the County, is to reduce land and water pollution from discarded bags. Nearly 50 other California cities and counties have implemented similar laws.

Plastic bag manufacturers claim that the measure is actually worse for the environment because it leads to greater use of paper bags, which they argue require more energy to produce and also take up more landfill space. However, the First District Court of Appeal found enough evidence to support the County’s assertion that the ordinance will protect the environment and thus did not require a review of possible negative impacts of the ban. Because the ban is limited to unincorporated areas, it only applies to 40 stores. The Court of Appeal opined that any increase in paper bag use at this small scale would have trivial environmental effects.

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