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California Supreme Court Grants Review of Unpublished First District CEQA Opinion

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On January 15, 2014, the California Supreme Court granted review of Friends of the College of San Mateo Gardens v. San Mateo County Community College District (Case No. S214061). The case was previously heard in Division One of the First Appellate District, which issued an unpublished opinion in favor of the petitioner group on September 26, 2013.

The action arose when petitioner Friends challenged the San Mateo County Community College District’s decision to demolish a building complex on the district’s College of San Mateo campus to make room for a new parking lot. The District’s decision was supported by an addendum to a six-year-old previously adopted negative declaration covering campus-wide renovation plans. Friends argued the demolition project violated CEQA and sought to compel the district to prepare an EIR for the demolition and parking lot project as a “new project”, rather than a change to the previously adopted campus renovation plans under CEQA. The trial court granted Friends’ petition. The Court of Appeal affirmed, opining that, as a matter of law, the demolition project was a “new” project, thereby requiring environmental review beyond an addendum.

In its petition for review, the District requested the Supreme Court clarify the appropriate level of judicial deference due to agencies in subsequent environmental review situations. The District presented the following issue to the court: “[i]f a lead agency approves modifications to a previously reviewed and approved project through an addendum, may a court disregard the substantial evidence underlying the agency’s decision to treat the proposed action as a change to a project rather than a new project, and go on to decide as a matter of law that the agency in fact approved a ‘new’ project rather than a modification to a previously approved project, even though this ‘new project’ test is nowhere described in CEQA or the Guidelines?”

Although CEQA sets a relatively low threshold for requiring the preparation of an EIR for a project of first impression, the District noted, Public Resources Code section 21166 establishes a presumption against subsequent review; a later EIR is not required unless new or substantially worse environmental impacts would occur as a result of the changes to the previously-reviewed project. The inquiry was thus whether the District’s project changes would require major revisions of the previous negative declaration “due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects.” The District argued that the project changes were appropriately presented in the addendum, which showed there would be no more severe environmental impacts due to these changes—in fact, less total building area would be demolished than was originally planned in 2007, due to the District’s interim decisions to renovate, rather than demolish as originally planned, a couple of other buildings on the campus.

The District argued that the Court of Appeal had relied on a heavily criticized outlier case, Save Our Neighborhood v. Lishman, in reaching its decision, furthering a split among the appellate districts regarding the appropriate standard of review to apply to an agency’s conclusions under section 21166. In Lishman, the Third Appellate District announced a new standard whereby it could decide for itself as a threshold matter of law whether a challenged action constituted a change to a previously reviewed and approved project or a new project altogether. The District, in its petition, discouraged the use of Lishman’s “new project” standard, which affords no deference to agencies, does not derive from CEQA or the Guidelines, and does not provide workable guidance to agencies in understanding what factors should be taken into consideration in the “changed project” versus “new project” determination. Instead, the District urged that courts should follow case law holding substantial evidence applies to review of an agency’s determination that section 21166 applies to proposed actions, including a decision to prepare an addendum to a previously reviewed document.

The District also noted that the Court of Appeal failed to identify any flaws in the analysis presented in the addendum and thus no prejudicial error committed by the District. In doing so, the District argued, the appellate court had prioritized form over substance and created needless expense for the district and state taxpayers in requiring that a new initial study be prepared.

RMM attorneys, James G. Moose and Sabrina V. Teller, partners in the firm, and John T. Wheat, associate, represent the San Mateo County Community College District in the litigation.

The docket for the case is available here.

Governor Brown Declares a Drought State of Emergency

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California Governor Jerry Brown has declared a drought state of emergency and called for statewide water conservation. Brown directed the state to manage water for drought conditions and asked that asked that all Californians conserve water wherever possible.

This has been the driest year in California’s recorded history. The state’s snowpack is at only 20 percent of water content typical for this time of year. Rivers and reservoirs are below record lows.

These water shortfalls can be disastrous for farms, communities, and fire-prone areas. Brown directed state officials to assist economically impacted farmers and ensure adequate drinking water supply. The governor also directed state agencies to use less water and hire more firefighters.

In May 2013, Brown issued an executive order directing state water officials to expedite review and processing of voluntary transfers of water and water rights. In December 2013, Brown formed a Drought Task Force.

Details on Brown’s public awareness campaign can be found at saveourh2o.org.

Court of Appeal Upholds Spot Zoning to Allow for Senior Housing

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In Foothill Communities Coalition v. County of Orange, the Fourth District Court of Appeal held that the Orange County Board of Supervisors’ spot zoning to allow senior citizen housing was permissible, reversing the decision below. Community groups and area homeowners had challenged the board’s creation and application of a new zoning definition for senior residential housing. The court upheld the board’s actions as consistent with the local general plan and the specific plan.

The Roman Catholic Diocese of Orange and Kisco Senior Living, LLC wanted to build a senior living community on a parcel of unincorporated land owned by the diocese. Under the North Tustin Specific Plan, the site was zoned as single-family residential. The Board of Supervisors amended the plan to create a new zoning district – the senior residential housing land use district – which it applied to the site. Foothill sought to prevent this development, and the trial court ruled in their favor.

The Court of Appeal reviewed the findings of plan consistency with deference to the board. The court concluded that although the board’s actions did constitute spot zoning, such zoning was permissible here. Spot zoning occurs where a small parcel of property is subject to either more or less restrictive zoning than the surrounding properties. Once a court has determined that spot zoning has occurred, it must then assess whether the zoning is in the public interest.

The court found the zoning amendment to be consistent with the state’s priority of developing senior citizen housing. The California Legislature encouraged senior housing by creating a density bonus for such projects. Furthermore, in Orange County there were 702,919 seniors in 2010, comprising nearly 22% of the county’s population. That figure is expected to increase to 945,081 by 2020 – an 86% increase in ten years. The county found that thousands of these citizens were living alone, dependent on fixed incomes and living with disabilities. Combined with the premise that specific plans “may be amended as often as deemed necessary by the legislative body” and that a project must merely be in agreement or harmony – not in rigid conformity – with a specific plan, the court found substantial evidence supported the board’s actions.

The court also disagreed with the petitioners’ argument that the project violated the Establishment Clause simply because the applicant was a religious organization. Applying the test for government entanglement in religion set forth in Lemon v. Kurtzman (1971) 403 U.S. 602, the court concluded that the zoning change and project approval had a secular legislative purpose: to provide needed housing alternatives for senior citizens in the county. The primary effect of the zoning change was not to advance religion, but rather, to create a senior residential facility. Finally, the zoning change did not create entanglement between government and religion just because the landowner was a religious organization.

The court remanded the matter to the trial court for further consideration of CEQA issues.

USFWS Extends Eagle Take Permits to 30 Years

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The U.S. Fish and Wildlife Service extended the maximum term for programmatic “take” permits under the Bald and Golden Eagle Protection Act to 30 years. This means that renewable energy project developers – particularly wind project developers – can apply for permits that authorize recurring “take” (i.e., disturbance or killing) of eagles that is unavoidable even with mitigation. The rule eclipses the five-year limit on programmatic take permits instituted in 2009.

The act prohibits the “take” of bald and golden eagles, their nests, or eggs, unless allowed by permit; specifically, one cannot “pursue, shoot at, poison, wound, kill, capture, trap, collect, molest or disturb” the eagles without permission. Wind energy projects can result in accidental takes when eagles fly into the windmill blades. While most project developers implement measures to direct eagles away from the blades, such as by attracting the birds to reflective material above the blades and locating the projects in less-populated zones, some takes are unavoidable even with such mitigation.

Until now, many developers opted not to apply for programmatic take permits, given the inefficiency of the permit’s five-year duration compared to the decades-long timeframe of renewable energy project operations. Instead, developers would either apply for standard permits, which authorize individual takes, or not apply for any permits. The new regulations do not change the fact that project developers are not legally required to apply for take permits before proceeding with their projects. The downside to this approach, however, is that a developer faces civil and criminal penalties for unpermitted takes done “knowingly” or with “wanton disregard.”

Although the permits can now extend up to 30 years, the length of each permit will depend on the characteristics of the projects, such as the project’s duration and the projected impacts to eagles. Additionally, permits issued for longer than a five-year period will undergo evaluations every five years to assess fatality rates, conservation and mitigation effectiveness, and eagle population levels. Applicants for these longer permits are also required to commit to adaptive management, which involves system monitoring with the goal of continually understanding and improving a project’s effect on eagles.

The issuance of a take permit is a federal action requiring compliance with the National Environmental Policy Act, meaning applicants must prepare an environmental assessment or an environmental impact statement in order to obtain a permit. The rule went into effect on January 8, 2014.

Will Cap-and-Trade Money Fund the High Speed Rail?

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Governor Jerry Brown would like to fund a portion of California’s high-speed rail project with proceeds from cap-and-trade fees. Brown plans to propose directing millions of dollars garnered from carbon producers’ fees toward the $68 billion project. The governor would allocate hundreds of millions of dollars in 2014 alone.

California has already acquired $3.4 billion in federal funding to start constructing the rail. Project opponents, however, have challenged complementary state bond funding in court, creating a potential funding gap. In High Speed Rail Authority v. All Persons Interested, the Sacramento Superior Court declined to validate High Speed Rail Authority’s attempt to issue more than eight billion dollars in bonds to start construction. Construction, however, is still slated to begin early this year.

Governor Brown’s proposal will likely be included as part of his annual budget plan that will be released Friday, January 10, 2014.

First District Publishes Decision Upholding San Francisco’s Expansion of Plastic Bag Restrictions

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On January 3, 2014, the First District Court of Appeal ordered publication of Save the Plastic Bag Coalition v. City and County of San Francisco. We previously wrote about the case here.

The League of California Cities and the California State Association of Counties jointly submitted a request for publication. In support of this request, the groups pointed out that: no other published decision has applied the rules of preemption to single-use plastic bag bans; the opinion suggests that if environmentally beneficial components are an integral aspect of a project from its inception, they may be considered when determining that a categorical exemption from CEQA applies to the project; the opinion clarifies that local agencies can use the Class 7 and Class 8 categorical exemptions and operate in a regulatory capacity; and the opinion provides helpful guidance regarding what qualifies as substantial evidence under the fair argument standard. The court did not state which, if any, of these arguments influenced its decision to publish the opinion.

Court of Appeal Rules City of Berkeley Did Not Need EIR for Downtown Construction Project

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Parker Shattuck Neighbors v. Berkeley City Council (2013) ___ Cal. App. 4th. ___ (Dec. 4, 2013).

In the last published CEQA case of 2013, the First District Court of Appeal upheld the City of Berkeley’s decision not to prepare an EIR for a mixed-use and residential project where petitioners failed to show that the project would have a significant effect on the environment.

The Parker Place Project is a three-parcel mixed-use and residential development that will replace a Honda dealership at the intersection of Parker and Shattuck streets in downtown Berkeley. Three environmental site-assessment reports revealed that the lots had contained underground gasoline storage tanks, as well as volatile organic compounds (VOC) in the soil and water samples. However, VOC levels did not exceed contaminant thresholds established by the San Francisco Regional Water Quality Control Board, and the studies concluded that contamination would not likely require cleanup and at least some chemicals were naturally occurring. All storage tanks underlying the property were removed.

Two years after removal of the last tank, developer CityCentric applied to begin constructing the project. The city council approved it, and petitioner Parker Shattuck Neighbors challenged the approval. The trial court ordered the city to vacate its approval for failure to hold a public hearing after modifying the project. The city conducted a second round of administrative proceedings and ultimately proposed a mitigated negative declaration (MND) after finding that mitigation could reduce any potential environmental impacts to less-than-significant levels. Parker Shattuck sought to set aside approval of the MND and to compel the city to prepare an EIR. The group was primarily concerned that the site’s soil contamination was a significant environmental impact, which the MND failed to adequately mitigate.

A lead agency must prepare an EIR whenever substantial evidence supports a fair argument that a proposed project may have a significant effect on the environment. It is the petitioner’s burden to demonstrate a “fair argument” for environmental harm. The Court of Appeal held that Parker Shattuck failed to identify substantial evidence supporting a fair argument that potential health risks to workers and future residents might constitute a significant environmental impact. It did not consider whether the MND contained adequate mitigation measures because insignificant effects do not require mitigation.

The court declined to address whether CEQA required assessment of the effects of the environment on a project (in addition to the effects of a project on the environment) because it found that here, petitioner was arguing that the project would physically change the environment by disturbing contaminated soil. However, the court rejected the notion that the existence of toxic soil contamination at a project site is itself necessarily a significant impact requiring CEQA review and mitigation. The court also found that the site’s appearance on a list of hazardous locations merely meant it was not categorically exempt from CEQA review; it did not mean the project required an EIR.

The court did not decide whether adverse effects confined only those who build or reside in a project can ever render the effects of a physical change significant, given that CEQA generally does not regulate environmental changes that do not affect the public at large. Here, Parker Shattuck did not identify evidence sufficient to support a fair argument of significance even if there were health risks to the project’s workers and future residents. A scientific expert’s suggestion to investigate further, the court added, was not substantial evidence of an adverse impact.

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