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First District Holds That Air District’s Adoption of Significance Thresholds for Greenhouse Gas Emissions Is Not a CEQA Project and Does Not Require an EIR

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In California Building Industry Association v. Bay Area Air Quality Management District (August 13, 2013, Case No. A136212) ___ Cal.App.4th ___, the First District Court of Appeal reversed a trial court’s decision striking down the Bay Area Air Quality Management District’s (BAAQMD’s) CEQA thresholds of significance for greenhouse gas emissions. The appellate court held that CEQA does not require BAAQMD to prepare an environment impact report (EIR) before adopting “thresholds of significance” to assist in the determination of whether air emissions of proposed projects might be deemed “significant.”

On June 2, 2010, BAAQMD adopted CEQA thresholds of significance for greenhouse gas emissions. The thresholds also set standards for impacts related to toxic air contaminants (TACs) and very small particulate matter (PM2.5). The thresholds were adopted pursuant to CEQA Guidelines section 15064.7, which encourages agencies to “develop and publish thresholds of significance” for “general use as part of the lead agency’s environmental review process.” The section further mandates that the thresholds be “adopted by ordinance, resolution, rule, or regulation, and developed through a public review process and be supported by substantial evidence.”

The California Building Industry Association (CBIA) filed a petition for writ of mandate challenging BAAQMD’s adoption of the thresholds. CBIA argued the issuance of the thresholds was a “project” under CEQA, and that BAAQMD had violated CEQA by not preparing an EIR before adopting the guidelines. CBIA claimed the thresholds were too stringent and would discourage developers from building desirable urban infill projects close to public transportation by making the CEQA review process more burdensome and expensive. This, in turn, would result in more housing being built in the suburbs, causing more commuter traffic and more traffic-related emissions. This increased pollution, CBIA argued, was an adverse impact mandating preparation of an EIR.

The Alameda County Superior Court agreed, ruling that the adoption of the thresholds was a project under CEQA and entered an order awarding the CBIA substantial attorney fees under Code Civil Procedure section 1021.5.

The First District Court of Appeal reversed, reasoning that (1) the district’s adoption of thresholds was not a “project” within the meaning of CEQA and (2) there were no reasonably foreseeable impacts associated with this action.

CEQA defines a project as any activity “which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.” (Pub. Res. Code, § 21065.) The appellate court concluded that the adoption of thresholds was not a project. BAAQMD relied on CEQA Guidelines section 15064.7 in promulgating the thresholds. The court explained that section 15064.7 establishes the procedures for adopting thresholds in some detail, and CEQA review is not part of that procedure. Section 15064.7, subdivision (b), provides that thresholds of significance must be formally adopted through a public review process and supported by substantial evidence if, as in this case, they are to be placed in general use. The agency accepted public comments and responded to comments. Striking an uncommon tone, the court concluded that this process was substantially similar to the EIR process and that requiring more would be a duplicative effort and a waste of tax dollars.

The court noted in any event, the action was not a “project” because the activity would not cause a direct physical change in the environment or a reasonably foreseeable indirect physical change. (Pub. Res. Code, § 21065; CEQA Guidelines, § 15378, subd. (a).) CBIA argued that impacts were reasonably foreseeable because the thresholds were more stringent than earlier thresholds and would require a more thorough environmental analysis; as a result, the CEQA process would become more burdensome, making urban development less desirable and leading to more suburban development with all its attendant impacts including traffic and air quality impacts.

The court was not persuaded, instead reasoning that the analysis posited by CBIA included many assumptions and a great deal of speculation because “the extent to which land development projects might be relocated to a more suburban location would require a prescience we cannot reasonably demand of the [BAAQMD].” The court, therefore, concluded that no CEQA review was required before BAAQMD promulgated the thresholds.

In its petition for writ of mandate, CBIA raised several challenges to the substance of the thresholds that were not decided by the trial court. Though CBIA failed to cross-appeal, the appellate court agreed to consider the other two issues. First, CBIA argued that the standards were inappropriate in any event because they evaluated the effects of the environment on sensitive receptors as part of the project; this is contrary, it argued to the purpose of CEQA, which is to protect the environment from proposed projects, not protect the proposed projects from the existing environment. The court cited a long line of cases for this proposition, including the recent Ballona Wetlands Land Trust v. City of Los Angeles (2011) 201 Cal.App.4th 455. The court did not address whether Ballona, et al., were correctly decided, or whether, as a general rule, an EIR may be required solely because the existing environment may adversely affect future occupants of a project. Instead, finding CBIA’s claim that the receptor thresholds were unauthorized by CEQA analogous to a claim a statute or regulation is unconstitutional on its face, the court held that the regulations were not facially invalid because they were relevant for purposes other than determining the effects of the environment on the project. The court also suggested that continuing vitality of Ballona, et al., was better reserved for a case in which the receptor thresholds were actually applied to a project.

As to the second CBIA challenge not ruled on by the trial court, the First District concluded that BAAQMD’s TAC Single-Source and Cumulative Thresholds were supported by substantial evidence and upheld them.

In reversing the trial court’s judgment in CBIA’s favor and declining to grant the relief CBIA sought on the issues not resolved by the trial court, the court of appeal also reversed the substantial attorney’s fees award, concluding the industry association was no longer the successful party under Code of Civil Procedure Section 1021.5.

The California Supreme Court Upholds Certification of EIR for Light-Rail Project Even Though the Majority Determined the EIR Should Have Analyzed the Project’s Impacts Against a Baseline of Existing Conditions Instead of Using a Future Conditions Baseline

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In Neighbors for Smart Rail v. Exposition Metro Line Construction Authority (2013) __Cal.4th__ (Case No. S202828) (slip op., August 5, 2013), a majority of the California Supreme Court held that a lead agency only has the discretion to completely omit analysis of the project impacts on existing conditions if it can justify its decision to exclusively use a future conditions baseline by showing an existing conditions analysis would be misleading or without informational value. On this basis, the majority found a light-rail project’s EIR deficient for exclusively using year-2030 conditions as the baseline and for failing to provide an existing conditions analysis. Although the lead opinion by Justice Werdeger and the concurrence by Justice Baxter provided different rationales for upholding the EIR, the six justices joining in these two opinions did agree to affirm the appellate court’s judgment that upheld the EIR and denied the petition for writ of mandate.

Facts and Procedural Background

In 2007, the Exposition Metro Line Construction Authority (Expo Authority) issued a notice of preparation for an EIR for the Exposition Corridor Transit Project (Expo Phase 2), which would construct a light-rail transit line running from a station in Culver City to a terminus in Santa Monica. The Expo Phase 2 project was designed to provide high-capacity transit service between the Westside area of Los Angeles and Santa Monica, creating an alternative to the area’s congested roadways. The Expo Authority certified a final EIR and approved the Expo Phase 2 project in 2010.

Subsequently, Neighbors for Smart Rail filed a petition for writ of mandate alleging that the approval of Expo Phase 2 violated CEQA. The superior court denied the petition, and the Court of Appeal affirmed. The Neighbors filed a petition for review with the California Supreme Court, raising two issues: (1) the propriety of the EIR’s exclusive use of a future conditions baseline for assessment of likely impacts on traffic congestion and air quality, and (2) the adequacy of mitigation measures for potentially significant spillover parking effects in areas near planned transit stations.

California Supreme Court’s Decision

The Court issued one lead opinion and two concurring and dissenting opinions. Justice Werdeger, joined by Justices Kennard and Corrigan, wrote the Court’s lead opinion. Justice Baxter, joined by Chief Justice Cantil-Sakauye and Justice Chin, wrote a concurrence and dissent that differed from the lead opinion on the baseline issue. Justice Liu wrote a separate concurrence and dissent that differed from the lead opinion on the question of whether the EIR’s failure to use existing conditions as the baseline was prejudicial. All justices agreed that the Neighbors’ contentions regarding mitigation for spillover parking effects should be rejected. Otherwise, the Court split along different lines on both the baseline and prejudice analyses. Nonetheless, there was a majority of four justices on every issue except the prejudice question, and six justices agreed the EIR should be upheld.

Justice Werdeger’s lead opinion tackled the baseline issue first. In an overview of leading CEQA cases that discuss the use of a future conditions baseline, the lead opinion paid special attention to Communities for a Better Environment v. South Coast Air Quality Management District (2010) 48 Cal.4th 310, and Sunnyvale West Neighborhood Association v. City of Sunnyvale City Council (2010) 190 Cal.App.4th 1351. Expressing the majority’s view, the lead opinion concluded that unusual aspects of a project or surrounding conditions can justify a departure from the “default” use of an existing conditions baseline that CEQA Guidelines section 15125, subdivision (a), prescribes. In other words, the Court held that while lead agencies have the discretion to “omit an analysis of the project’s significant impacts on existing environmental conditions and substitute a baseline consisting of environmental conditions projected to exist in the future, the agency must justify its decision by showing an existing conditions analysis would be misleading or without informational value.” The Court explicitly disapproved Sunnyvale West Neighborhood Association, supra, 190 Cal.App.4th 1351, and Madera Oversight Coalition v. County of Madera (2011) 199 Cal.App.4th 48, insofar as they hold the exclusive use of a future conditions baseline may never be employed.

Having established the appropriate standard for analyzing the baseline issue, the Court proceeded to conduct a factual assessment of the Expo Authority’s use of projected conditions in the year 2030 as a baseline. After a brief review of the EIR’s discussion of traffic congestion, air pollution, and baseline choice, the Court found that the administrative record did not contain substantial evidence to support the Expo Authority’s decision to omit an analysis of project impacts on existing conditions. This conclusion was joined by Justice Liu and represents the majority view.

Nonetheless, the three justices in the lead opinion proceeded to find that the EIR’s failure to use an existing conditions baseline did not have a prejudicial effect and did not deprive decision makers or the public of substantial information relevant to the project’s potential impacts. In part II.B.5, the lead opinion provides its prejudice analysis and explains how the EIR’s extensive analysis of year 2030 project impacts demonstrated “the lack of grounds to suppose the same analysis performed against existing . . . conditions would have produced any substantially different information.” But Justice Werdeger’s opinion is carefully worded to limit the lead opinion’s conclusion– that the EIR’s failure to analyze the project’s effects on existing traffic and air quality conditions had no prejudicial effect– to “these particular factual circumstances.” As footnote 2 explains, the prejudice analysis in part II.B.5 does not represent the view of the majority. In fact, Justice Liu based his dissent on the prejudice issue, and Justice Baxter’s concurrence brings up Justice Werdegar’s prejudice analysis only to support the assertion that the EIR’s assessment of Expo Phase 2’s impacts did adequately inform decision makers and the public.

The lead opinion closes with a short discussion of the adequacy of mitigation measures for spillover parking effects. The Expo Authority and Metropolitan Transportation Authority (Metro) had adopted a series of measures proposed by the EIR, including: monitoring of on-street parking, Metro’s financial and administrative assistance with appropriate permit parking programs, and Metro’s commitment to work with local jurisdictions to decide on other options (time-restricted, metered, or shared parking arrangements) if necessary. The Court rejected Neighbors’ reliance on Federation of Hillside & Canyon Associations v. City of Los Angeles (2000) 83 Cal.App.4th 1252, 1260-62, finding that case to be factually distinguishable. While acknowledging that the Expo Authority and Metro “cannot guarantee local governments will cooperate to implement permit parking programs or other parking restrictions,” the Court found that the record supported the conclusion that local municipalities can and should cooperate. This portion of the opinion is the only part that enjoys the support of all seven justices.

Justice Baxter’s concurring and dissenting opinion disagreed with the lead opinion’s baseline analysis. Rejecting the new standard articulated by the majority, Baxter’s opinion proposed a new rule in which “an agency retains discretion to omit an analysis of a project’s likely impacts with an existing conditions baseline, so long as the selected alternative of a projected future conditions baseline is supported by substantial evidence and results in a realistic impacts analysis that allows for informed decisionmaking and public participation.” Using this alternative rule, Baxter’s opinion concluded that the agency “did not abuse its discretion in forgoing an existing conditions baseline in favor of a 2030 baseline” because substantial evidence did support the 2030 baseline as a realistic baseline for analyzing the project’s impacts. According to Baxter’s opinion, the EIR should be upheld because it was not deficient and, therefore, there was no need to address the question of whether the alleged baseline error was prejudicial. Finally, Baxter’s opinion asserts two main criticisms of the majority’s analysis: (1) the majority’s restrictions are not supported by CEQA or CEQA Guidelines, (2) the majority’s analysis creates uncertainties regarding CEQA compliance, increasing project costs and delays.

[RMM Partner Tiffany K. Wright and Associate Amanda R. Berlin represented Real Parties in Interest Los Angeles County Metropolitan Transportation Authority]

First District Finds EIR Deficient for Failing to Consider the Use of Agricultural Conservation Easements and In-Lieu Fees as Mitigation for the Project’s Conversion of Farmland to Nonagricultural Use

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In Masonite Corporation v. County of Mendocino (2013) __Cal.4th__ (Case No. A134896), a partially-published opinion filed July 25, 2013, the First District Court of Appeal held that an EIR must evaluate the economic feasibility of using an agricultural conservation easement (ACE) and in-lieu fees as mitigation for the Project’s conversion of farmland to nonagricultural use. This is required even when the Project will only result in the direct loss of farmland associated with the Project and will not put development pressure on surrounding farmland.

Background and Procedural History

In 2008, Granite Construction Company applied to the Mendocino County Planning Commission for a conditional use permit to develop a sand and gravel quarry on 65.3 acres approximately one mile north of Ukiah. The Department of Conservation classified 45 of the site’s 65 acres as “prime farmland.” Although most of the site was cultivated as a vineyard when the application was submitted, the site has been zoned for industrial use since 1982. Granite proposed reclaiming most of the area as open space after the mining operations had ceased, but reclaiming the land for agriculture was impossible.

The EIR identified this permanent loss of prime farmland as a significant and unavoidable project impact. The County Planning Commission certified the EIR and adopted a statement of overriding considerations. Masonite filed a petition for writ of mandate challenging the County’s compliance with CEQA. The Mendocino County Superior Court denied the petition for writ of mandate, and Masonite appealed.

Court of Appeal’s Decision

In the EIR, the County determined that no mitigation was possible to offset the loss of 45 acres of prime farmland. Masonite argued that the impact could have been mitigated by the acquisition of ACEs on offsite properties or by payment of “in-lieu” fees to fund such acquisitions.

The County believed that an ACE was not legally feasible in this case because a conservation easement only addresses the indirect and cumulative effects of farmland conversion and does not replace on-site resources. According to the County, indirect and cumulative impacts of farmland conversion occur when a Project affects neighboring agricultural uses by increasing the speculative land value and farming costs due to land use incompatibilities and nuisance issues. Through the so called “domino effect,” this would lead to development pressure on agricultural lands. The County felt that the domino effect was unlikely here because the nearest active agricultural operation was across the Russian River (a natural barrier); therefore, a conservation easement as mitigation was not appropriate in this case.

The state Department of Conservation (DOC) disagreed, submitting comments on the Draft EIR asserting that the loss of agricultural lands from this project (the 45 acres that would be mined) could have been minimized by the acquisition of ACEs on comparable land of at least equal size. According to the DOC, because the loss of farmland is felt beyond just the surrounding area, comparable replacement land could be found regionally or even statewide.

In developing the standard of review for the County’s finding of infeasibility, the court noted that this was an issue of law that the court should review de novo since the County had determined it would be legally infeasible to use ACEs as a mitigation measure. According to the court, an agency’s conclusion that mitigation was infeasible is only entitled to deference under the substantial evidence standard if infeasibility is based on economic, environmental, social, and technological factors. In this case, “[b]ecause the County decided that ACEs were not a legally feasible means to mitigate the loss of farmland at the Project site, it never investigated whether ACEs were economically feasible, and there is no evidence to review.”

The court looked to multiple sources to determine if ACEs were legally feasible for mitigating direct effects, as opposed to cumulative or indirect effects. It noted that if agricultural lands were preserved through conservation easements at a 1:1 ratio, then at least half the agricultural land in the region would be preserved. Furthermore, the court concluded that this preservation of substitute resources would comport with the CEQA Guidelines’ definition of “mitigation” in section 15370, subdivision (e), which specifically mentions substitute resources. Case law on the use of conservation easements as mitigation for biological resources, the common usage of ACEs as mitigation by local governments, and the Legislature’s policy to preserve agricultural land also influenced the court’s decision. Based on this analysis, the court held that ACEs are legally feasible mitigation measures, and the County must explore the economic feasibility of ACEs in a supplemental EIR.

Additionally, the court required the County to consider the economic feasibility of in-lieu fees as an alternative to a conservation easement. The County had rejected the idea in the EIR as legally infeasible because the County’s lack of a comprehensive farmland mitigation program legally precluded it from accepting in-lieu fees. The court found this fact immaterial because there were third parties that could accept the in-lieu fees for conservation programs.

First District Court of Appeal Upholds County’s Determination that Local Ordinance Banning Plastic Bags was Categorically Exempt from CEQA

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The First District Court of Appeal considered a legal challenge brought against an ordinance enacted by the Marin County Board of Supervisors in Save the Plastic Bags Coalition v. County of Marin (2013) __Cal.App.4th __ (Case No. A133868). The ordinance prohibited certain retail establishments from providing single-use plastic bags and imposed a minimum fee for the distribution of single-use paper bags. The County determined the ordinance was categorically exempt from CEQA because it was a regulatory action designed to assure the maintenance, restoration, enhancement, or protection of natural resources and the environment. Both the trial court and Court of Appeal upheld the County’s determination.

Facts and Procedural Background

The Marin County Board of Supervisors adopted the challenged ordinance in 2011. This ordinance was intended to encourage retail customers to bring reusable bags for their shopping and applied to approximately 40 retail stores within the unincorporated county selling food or perishable items. The ordinance excluded restaurants and other establishments selling prepared foods.

The ordinance was proposed by the county’s agricultural commissioner who provided analysis to the Board of Supervisors which showed that single-use plastic and paper carryout bags have adverse environmental impacts throughout the state. According to the agricultural commissioner’s analysis, a shift to reusable bags would conserve resources, reduce the amount of greenhouse gas emissions associated with the production of single-use bags, reduce waste and marine pollution, protect water resources and water quality, and enhance the quality of life for county residents, visitors, and wildlife.

Among other things, the commissioner relied on a master environmental assessment prepared by Green Cities California in which it was reported that a ban on single-use plastic bags combined with a five-cent charge for single-use paper bags in the District of Columbia had caused as many as two-thirds of consumers to shift from single-use to reusable bags. From this information, the commissioner concluded that a ban on plastic bags combined with a minimum charge on paper bags would rebut any claim that the ordinance would simply shift consumer’s habit from one environmental impact to another (single-use plastic to single-use paper). Based on this finding, the county concluded that the ordinance was categorically exempt from CEQA “by demonstrating and achieving a result that is environmentally superior: moving people to reusable bags and reducing waste from all single-use products.” The county did not identify which categorical exemption it was relying on under CEQA.

During the hearing process on the ordinance, the Plastic Bag Coalition submitted numerous objections. The Coalition primarily argued that adoption of the proposed ordinance required preparation of an EIR because alternatives (paper bags and reusable bags) are worse for the environment than plastic bags. Despite the Coalition’s objections, the County Board of Supervisors adopted the ordinance.

Plaintiff filed a petition for writ of mandate in the Marin County Superior Court. The trial court denied the petition and determined that substantial evidence supported the County’s reliance on the categorical exemptions contained in CEQA Guidelines sections 15307 and 15308. The Coalition appealed.

The Court of Appeal’s Decision

The Court of Appeal first described the standard of review applicable to its review of this case. Where an agency concludes a project is categorically exempt from CEQA, that conclusion will be upheld if supported by substantial evidence in the administrative record. Once an agency has established that the project falls within an exemption, the burden falls to the party challenging the exemption to prove that the project is not exempt because it falls within one of the exceptions listed in CEQA Guidelines, section 15300.2. The court noted that, currently, a split of authority exists on the appropriate standard of review (substantial evidence vs. “fair argument”) to apply to a question of fact regarding any exceptions that would kick a project out of exempt status. The court declined to grapple with this split, as it determined the outcome in the case before it would be the same either way.

The Court of Appeal also drew on the California Supreme Court’s decision in Save the Plastic Bag Coalition v. City of Manhattan Beach. The Court of Appeal noted that the Manhattan Beach case involved preparation of a negative declaration for a plastic bag ban ordinance rather than an exemption, but it still found the Supreme Court’s analysis instructive. In Manhattan Beach, the Supreme Court focused on the distinction between local impacts created by a proposed project and impacts that would occur outside the public agency’s geographic boundary. The Supreme Court noted that there might be circumstances when more comprehensive environmental review will be required if it can be shown that a plastic bag ban will result in a significant increase in paper bag use, but that wasn’t the case in Marin County. Marin County’s ordinance applied to roughly 40 stores, compared to over 200 stores affected by Manhattan Beach’s ordinance. The Supreme Court had noted the description of the broader impacts of increased paper bag use in Manhattan Beach to be insubstantial, and the First District Court found the impacts in Marin County to be even more trivial. Here, there were significantly fewer retailers and a fee would be charged for paper bags, thereby increasing the incentive for consumers to bring reusable bags when shopping. No such fee was required by the Manhattan Beach ordinance.

The Court of Appeal then considered the Coalition’s primary argument that the county could not rely on the categorical exemption under CEQA Guidelines sections 15307 and 15308 [Class 7 and 8] because such exemptions are available only to “regulatory agencies implementing regulations authorized by a preexisting state law or ordinance.”  As an initial matter, the Court found that, though the Coalition had not raised the claim during the administrative process, the claim was not barred by a failure to exhaust. Citing another California Supreme Court Case, Tomlinson v. County of Alameda, the court noted that exhaustion is required so long as the public agency gives notice of the grounds for its exemption determination and holds a public hearing where members of the public have the opportunity to weigh in. In this case, county counsel did not identify the basis for the claimed exemptions until a continued hearing on the project.

On the merits, the Coalition argued (without citation to authority, as noted by the court) that legislative actions, such as the enactment of an ordinance, are never exempt from CEQA under Class 7 and 8 because these exemptions apply only to regulatory agencies. But the court acknowledged that the county’s adoption of the ordinance was an exercise of regulatory power provided to it by the California Constitution. The court stated that the “ordinance constitutes a regulation enacted for the purpose of protecting natural resources and the environment.” Having found the county could properly rely on the Class 7 and Class 8 exemptions, the court concluded the Coalition failed to address the substantial evidence relied upon by the County to support its determination that the exemption applied. The Coalition therefore failed to meet its burden to demonstrate that the exemption was not supported by substantial evidence or that an exception would apply to invalidate the exemption. The Court of Appeal affirmed the trial court’s judgment upholding the County’s adoption of the ordinance banning single-use plastic bags.

Supreme Court Holds GIS-Formatted Database is a Public Record that Must be Produced under the California Public Records Act

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In Sierra Club v. Superior Court (2013) __Cal.4th__ (Case No. S194708), the California Supreme Court held that Orange County cannot charge a licensing fee for GIS file format records requested by the public. Under the California Public Records Act, this information must be produced upon request at the actual cost of duplication. A database meets the definition of a public record when it can be disclosed without any accompanying software.

Background and Procedural History

Orange County maintains a large database of information about land parcels in a geographic information system (GIS) file format.  With this database, called the “OC Landbase,” a user with appropriate software can create a layered digital map containing information for over 640,000 specific parcels of land in Orange County, including geographic boundaries, assessor parcel numbers, street addresses, and links to additional information on the parcel owners.  In June 2007, Sierra Club sent a letter to Orange County requesting a copy of the OC Landbase pursuant to the California Public Records Act (PRA).  Sierra Club planned to use the information to determine the status of large areas of open space in Orange County, including whether each area is protected from development by conservation easements or public ownerships or is threatened by a proposed development. Sierra Club’s request began a lengthy exchange between the two parties concerning the public record status of the OC Landbase.

In 2009, the County agreed to produce records containing  the information underlying the OC Landbase, including assessment rolls, parcel maps, tract maps, survey records, lot line adjustments, and transfer deeds, but only in Adobe PDF electronic format or as printed paper copies. The County took the position that the PRA did not require it to disclose the same records in a GIS file format and that it would provide the records in that format only if Sierra Club paid a licensing fee and agreed to the license’s restrictions on disclosure and distribution.  The County claimed that the licensing agreement enabled it to recoup a portion of the substantial costs it incurs to develop and maintain the OC Landbase.

Sierra Club sought a writ of mandate from the superior court to compel the County to provide the OC Landbase in a GIS file format as a public record for a fee covering only the direct cost of duplication, with no requirement that Sierra Club comply with the licensing agreement.  The County claimed that the OC Landbase was excluded from the PRA’s definition of a public record because it fell within the statutory exemption for “computer software,” a term that includes “computer mapping systems” under Government Code section 6254.9. Sierra Club pointed out that 47 of the state’s 58 counties provide access to GIS-formatted parcel base maps as public records, and argued that the request was for electronically-stored data, not software. Sierra Club would have to use its own GIS software to access the data.

The superior court issued an order denying the petition for writ of mandate, holding that the OC Landbase in a GIS file format was part of a “computer mapping system” and thus exempt from the PRA’s general rules of disclosure.   The court of appeal affirmed, finding that while the statutory language ambiguous, the legislative history supported the County’s argument.  The Supreme Court granted review and reversed.

Supreme Court’s Decision

The court began its opinion by emphasizing “the strong public policy of the people’s right to information concerning the people’s business (Gov. Code §6250) and the constitutional mandate to construe statutes limiting the right of access narrowly (Cal. Const. art. I, § 3, subd. (b)(2)).” Because of this, “all public records are subject to disclosure unless the Legislature has expressly provided to the contrary.”

After reviewing the statutory language and legislative history, the court found that it was ambiguous whether the terms “software” and “computer mapping systems” referred to information similar to the OC Landbase in GIS file format. When drafting the bill that created the exemption, the Legislature had amended the bill to specifically remove a reference to “computer readable data bases” in the definition of “software.” But in another statute written 9 months prior to Government Code section 6254.9, the Legislature used the term “computer software” to mean not only a program or sequence of instruction, but also related data. The fact that software has evolved significantly since 1988 when the term was used in the statute created a challenge for the court in determining legislative intent. More recently in 2004, the Legislature defined “computer software” as “a sequence of instructions written in any programming language that is executed on a computer.” The court also noted that the ordinary meaning of “computer mapping system” is the mapping software, not the database.

Moreover, Government Code section 6253.9 subdivision (a)(1) mandates that “the agency shall make the information available in any electronic format in which it holds the information.” The court noted that almost all data that is stored in computers is formatted to be used with application software. The court did not believe that the Legislature, given this mandate to produce information in an electronic format, would have intended to exclude large categories of computer databases merely because the files they are formatted to be read and manipulated by mapping and graphics software.

Because the legislative intent was ambiguous, the court chose to broadly construe the PRA in a way that promotes access to information as required by the California Constitution and Government Code. The court noted that a narrow interpretation of “computer mapping systems” would be consistent with a 2005 opinion letter issued by the Attorney General, which explained that the term in the PRA applied to computer programs but not compiled data. Since the County did not have any additional reasons why the information should be exempt from the PRA, the court held that the County must produce the OC Landbase in response to Sierra Club’s request in any electronic format in which it holds the information at a cost not to exceed the direct cost of duplication.

Fifth District Court of Appeal Strikes Down State Air Resources Board’s Approval of Nation’s First “Low Carbon Fuel Standard,” but Allows Program to Continue Operating While CEQA Violations Are Cured

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In POET, LLC v. State Air Resources Board (2013) __Cal.App.4th__ (Case No. F064045) (POET), the Fifth District Court of Appeal held that the California Air Resources Board (CARB) committed procedural violations of the California Environmental Quality Act (CEQA) when it approved regulations for the nation’s first “Low Carbon Fuel Standard” program. The court ruled that CARB must set aside its approval of the regulations and take proper actions to comply with CEQA, but that the regulations should remain operative in the meantime in the interest of protecting the environment.

Facts and Procedural Background

The Low Carbon Fuel Standard regulations took effect in 2011 as part of the California Global Solutions Act of 2006 (Assembly Bill 32). The Act established the first comprehensive greenhouse gas regulatory program in the United States. The regulations at issue in POET were designed to reduce the carbon content of transportation fuels used in California.

On April 23, 2009, at the close of the public comment period, CARB passed a resolution that approved the proposed regulations for adoption. The resolution designated the board’s executive officer as the “decision maker” assigned to respond to certain remaining environmental issues. The board gave the executive officer authority to modify and adopt the regulations, but he did not have the option of declining to implement them.

The plaintiffs in the case included POET, LLC, which produces corn ethanol in the Midwest. POET challenged the regulations, claiming CARB violated CEQA during the adoption process. The Fresno County Superior Court denied the plaintiffs’ petition for a writ of mandate and entered judgment in favor of CARB. The Fifth District Court of Appeal reversed the judgment and remanded the matter for further proceedings.

The Court of Appeal’s Analysis

As a threshold matter in its 95-page opinion, the Court of Appeal concluded CARB’s actions were subject to CEQA. CARB contended that because it operated a certified regulatory program, it was required to follow only the procedures set out in its specific regulatory program. The court disagreed. Certified regulatory programs are exempt from CEQA’s procedural requirements regarding preparation of negative declarations and EIRs under Public Resources Code section 21080.5, which provides that a state agency’s preparation of environmental documents under its own regulatory program may serve as the functional equivalent of an EIR. The court noted, however, that this exemption is narrow and such regulatory programs remain subject to “CEQA’s broad policy goals and substantive standards,” including the timing of environmental review and approval of projects.

In its analysis of the CEQA claims, the court first determined that approval of the project under CEQA occurred when the CARB’s decision-making board (Board) approved the regulations for adoption in April 2009. CARB argued approval did not occur until the executive officer took final action on the regulations the following year. The court applied Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116 (Save Tara), calling it “the leading case regarding the application of the definition of ‘approval’ under CEQA Guidelines section 15352.” The Supreme Court in Save Tara articulated a general test for determining the point at which agency action on a proposed project necessitates CEQA review. The Fifth District quoted Save Tara in noting the determination must take into account the terms of the resolution as well as “the surrounding circumstances to determine whether, as a practical matter, the agency has committed itself to the project . . . so as to effectively preclude any alternatives or mitigation measures that CEQA would otherwise require . . . .”

Save Tara involved a private project and a post-approval CEQA EIR compliance condition in an agreement to convey property. The Fifth District extended the Save Tara principles regarding project approval to “projects undertaken by public agencies under certified regulatory programs.” The court held that the Board’s 2009 approval of the Low Carbon Fuel Standard regulations constituted “approval,” based on the clear language in numerous Board documents, as well as the practical effects of the action.

From there, the court concluded CARB violated CEQA because its environmental review under its certified regulatory program was not completed before the regulations were approved. The court noted that this “premature approval” decided a controversial issue involving carbon intensity values related to land use changes for ethanol produced from corn. This was because CARB, in delegating subsequent environmental review authority to the executive director, expressly denied the executive director the authority to modify this aspect of the regulations.

The court also held the CARB “violated a fundamental policy of CEQA” by improperly delegating responsibility for completing the environmental review process to its executive director. Under CEQA Guidelines section 15025, subdivision (b) and case law, a public agency’s decisionmaking body may not delegate the review and consideration of a final EIR or approval of a negative declaration prior to approval of a project. “For an environmental review document to serve CEQA’s basic purpose of informing governmental decision makers about environmental issues, that document must be reviewed and considered by the same person or group of persons who make the decision to approve or disapprove the project at issue.” The court stated that this purpose “applies with equal force whether the environmental review document is an EIR or documentation is prepared under a certified regulatory program.”

The Court of Appeal further held that the CARB violated CEQA when it deferred formulating mitigation measures for NOx emissions from biodiesel fuel. Courts have recognized an exception to the general rule prohibiting the deferral of the formulation of mitigation measures under CEQA Guidelines section 15126.4, subdivision (a)(1)(B). The court stated that under this exception, an agency must commit to “specific performance criteria for evaluating the efficacy of the measures implemented.” In this case, the court held that CARB’s statement that future rules would “establish specifications to ensure there is no increase in NOx” failed to constitute the objective performance criteria required for the exception.

The Remedy

The court remanded the case, directing the trial court to issue a writ of mandate compelling CARB to set aside its approval of the Low Carbon Fuel Standard regulations while allowing the Low Carbon Fuel Standard program to remain in place “as long as [the Air Resources Board] is diligent in taking the action necessary” to comply with CEQA. The court concluded that “the environment will be given greater protection” if the status quo is preserved. The court noted this was a rare outcome. More commonly, the courts have set aside rules, ordinances or other types of written requirements governing third party action when CEQA has been violated. But the court determined that such a remedy was appropriate under power authorized it by Public Resources Code, section 21168.9.

Sixth District Finds CEQA Action Barred by 30-Day Statute of Limitations in Government Code Section 65457, Which Prevails Over an Earlier-Enacted and Less-Specific Statute of Limitations in CEQA That May Conflict

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In May v. City of Milpitas (2013) __Cal.App.4th__ (Case No. H038338), a California Environmental Quality Act (CEQA) challenge was found time-barred by a 30-day statute of limitations in the Government Code even though appellants argued that a 35-day statute of limitations in CEQA should control.  The Sixth District Court of Appeal affirmed the trial court’s decision to sustain the city’s demurrer on the basis that the later-enacted and more-specific statute of limitations in Government Code section 65457, which provided an exemption applicable to the residential development project, must prevail over a statute of limitations in CEQA that may conflict.

Facts and Procedural Background

The City of Milpitas certified a programmatic Environmental Impact Report (EIR) for the Transit Area Specific Plan on June 3, 2008.  Three years later, a 732-unit condominium project was proposed within the area covered by the Transit Area Specific Plan.  On November 1, 2011, the city adopted a resolution approving amendments to permits and a tentative map for the residential development project.  The city’s resolution also found the project to be exempt from CEQA review because it was consistent with the 2008 specific plan and did not have any significant effects on the environment.  On November 3, 2011, the city filed a Notice of Exemption (NOE) for the project.  Both the resolution and the NOE expressly reference CEQA Guidelines section 15168, subdivision (c)(2), and section 15061, subdivision (b)(3).

On December 7, 2011, petitioners Michael May and Carpenters’ Local Union No. 405 filed a CEQA challenge to the city’s approval of the resolution on November 1, 2011. The city and real parties in interest demurred on the ground that the action was time-barred by the 30-day statute of limitations under Government Code section 65457, subdivision (b), and CEQA Guidelines section 15182. The petitioners argued that the action was not time-barred because the filing of the NOE triggered the 35-day statute of limitations in Public Resources Code section 21167, subdivision (d), and CEQA Guidelines sections 15112 and 15062 instead. The trial court sustained the demurrer, finding that Government Code section 65457 governed, and the November 1, 2011 approval had triggered the 30-day limitation period in section 65457.

Court of Appeal’s Decision

The court began its discussion with an overview of CEQA, the application of exemptions to projects, and the “usual limitations periods for CEQA challenges” provided by Public Resources Code section 21167.  In particular, the court emphasized that even meritorious lawsuits may be time-barred because the legislative intent behind CEQA and section 21167 was to ensure “extremely prompt resolution” of legal challenges brought under CEQA.

Proceeding to the merits, first the court explained why the 30-day statute of limitations in Government Code section 65457 controls. Enacted in 1984 as part of the Planning and Zoning Law, Government Code section 65457 provides an exemption from CEQA for residential development projects that are consistent with a specific plan for which an EIR was certified after January 1, 1980.  Section 65457 only provides a qualified exemption, however, because a supplemental EIR for the specific plan must be prepared if any event listed in Public Resources Code section 21166 occurs.  Therefore, if substantial changes to the specific plan occur, or substantial changes to the circumstances surrounding the specific plan occur, or new information that could not have been known at the time the specific plan’s EIR was certified becomes available and major revisions to the EIR are required, then a supplemental EIR for the specific plan must be certified before section 65457’s exemption may be used for the residential development project.

Under subdivision (b) of Government Code section 65457, where a public agency approves a project using the exemption in section 65457, a legal challenge alleging that a supplemental EIR for the relevant specific plan was required must be filed within 30 days of the agency’s decision to “carry out or approve the project.”  This limitations period is mirrored in CEQA Guidelines section 15182, subdivision (e).

The court found that the City’s resolution factually invoked Government Code section 65457’s exemption and that the petition essentially alleged that a supplemental EIR for the 2008 specific plan is required because substantial changes to the circumstances have occurred and new information has come to light.  Although neither the resolution nor the NOE explicitly references section 65457, the court concluded that the resolution invoked section 65457’s exemption because it stated that the project was “consistent with the certified EIR for the Transit Area Specific Plan.”  The court also found that the resolution’s reference to CEQA Guidelines section 15168, subdivision (c)(2), implied that the City had concluded no events listed in Public Resources Code section 21166 had occurred.  Similarly, the court found that the resolution’s reference to CEQA Guidelines section 15061, subdivision (b)(3), reflected the City’s conclusion that the residential development project would not cause any new environmental effects.

Having established that Government Code section 65457 applied, the court found that the 30-day statute of limitations under subdivision (b) of section 65457 had started running upon the City’s decision to approve the project on November 1, 2011. Consequently, the trial court properly sustained the demurrer because the action filed on December 7, 2011 was time-barred.

Then, the court turned to the reasons why it rejected appellants’ arguments.  The court noted that appellants’ argument that they are requesting a “free-standing EIR” or a mitigated negative declaration (MND) for the development project, not a supplemental EIR for the 2008 specific plan, was in conflict with their petition’s factual allegations and ignored the appropriate use of tiering allowed by CEQA.  To support its conclusion, the court provided a brief examination of the legislative history of Government Code section 65457 and its predecessor former section 65453 to establish that the purpose of section 65457 is to excuse residential development projects from having to do a “free-standing EIR” or MND if they are consistent with a prior-approved specific plan.

The court also set forth reasons why Public Resources Code section 21167, and CEQA Guidelines sections 15062 and 15112 do not apply.  Public Resources Code section 21167, subdivision (d), provides a 35-day statute of limitations that runs from the filing of a NOE in actions alleging that a public agency has improperly determined that a project is not subject to CEQA pursuant to section 21080.  The court found section 21167 did not apply because the exemptions listed in section 21080 do not include Government Code section 65457.  In particular, the court noted that the exemption applied in this case was not one of the 33 categorical exemptions designated pursuant to of Public Resources Code section 21084 and specifically referenced by section 21080, subdivision (b)(9).  Therefore, the 35-day statute of limitations in section 21167 could not be controlling.

Regarding CEQA Guidelines section 15062, which provides a 35-day statute of limitations triggered by the filing of a NOE where a public agency finds a project exempt pursuant to section 15061, the court similarly concluded that section 15062 did not apply because Government Code section 65457 does not fall within the scope of exemptions described by CEQA Guidelines section 15061.  Concluding that section 15062 did not apply, the court also rejected the argument that the 35-day limitations period in CEQA Guidelines section 15112, subdivision (c)(2), applied because section 15112, subdivision (c)(2), only applies to situations where a NOE is filed in compliance with section 15062.

Finally, the court held that, to the extent any conflict existed between the statute of limitations in Government Code section 65457 and statutes of limitations in CEQA, the later-enacted and more specific statute of limitations controls.  Since Government Code section 65457 and Public Resources Code section 21167 both apply to CEQA challenges, they are equally specific to CEQA claims.  Therefore, because Government Code section 65457 was enacted after Public Resources Code section 21167, the statute of limitations in the former must prevail.

First District Court of Appeal Strikes Portion of Local Ordinance for Conflict with State Density Bonus Law

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On July 11, 2013, in Latinos Unidos Del Valle De Napa Y Solano v. County of Napa (2013) __Cal.App.4th__ (Case No. A135094), the First District Court of Appeal issued a partially published opinion addressing the County of Napa’s local density bonus ordinance. The appellate court determined that a provision of the County’s local ordinance conflicted with the State Density Bonus Law and was invalid.

The state Density Bonus Law (Cal. Gov. Code, § 65915) provides incentives to encourage development of low, very-low income, and senior citizen housing developments. These incentives are generally granted in the form of density bonuses for qualifying projects. To ensure compliance, local governments are required to adopt ordinances establishing procedures for implementing the statute.

Napa County amended its density bonus zoning ordinance in 2010. The amended ordinance indicated that density bonuses described in Section 65915 would be granted at the request of the applicant if the applicant also met the local ordinance’s new “inclusionary requirement.” This new ordinance required up to 20 percent of new dwellings within a residential development project be made available at prices affordable to moderate-income households.

Plaintiffs argued this new local ordinance required developers to include a higher percentage of affordable units than section 65915 requires to obtain a density bonus. The ordinance did so by excluding from the target units necessary to qualify for the density bonus those units necessary to satisfy the county’s inclusionary requirement. Thus, for example, under the wording of the county’s ordinance, a developer would only qualify for a density bonus if it restricted 22% of the project units to lower-income households. Under the state law, a density bonus is available if a developer agrees to restrict at least 10% of the project’s units to lower-income households. The court agreed that the county ordinance impermissibly placed a greater burden on developers than is permissible under the state law.

The court cited Friends of Lagoon Valley v. City of Vacaville (2007) 154 Cal.App.4th 807, where the court had previously determined that Section 65915 sets forth the maximum density bonus a city is required to provide (35 percent), but not the maximum amount a developer can ever obtain. The court noted in Friends of Lagoon Valley that because the aim of Section 65915 is to provide incentives to developers to construct low income housing, a local government could exercise its discretion to award density bonuses greater than those described in Section 65915. In this case, however, the requirements of the county’s ordinance represented the opposite situation. The county argued that the language of Section 65915 implied the county had discretion to set the (higher) minimum requirements to quality for a density bonus. The court disagreed and found that neither the language of the statute nor its legislative history supported such an interpretation. The court found that allowing local governments to increase the minimum number of affordable units required for a density bonus would directly conflict with Section 65915, subdivision (f), which bases the amount of density bonus on the percentage of affordable housing units in the project. The appellate court concluded that the provision in the county’s ordinance stating that units satisfying the inclusionary requirement do not count towards the number of units necessary to qualify for the density bonus was invalid due to this conflict with state law. The court directed that a writ of mandate be issued striking down this requirement in the ordinance.

Fifth District Court of Appeal Holds “Common-Interest” Doctrine Cannot Apply to Protect Disclosures Between a Lead Agency and a Developer before Project Approval

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Citizens for Ceres v. Superior Court of Stanislaus County (2013) __Cal.App.4th__ (Case No. F065690) involved a petition for writ relief from an order of the superior court. The Fifth District Court of Appeal’s order upheld claims by the city and developer that hundreds of documents could be excluded from the administrative record under protection by the attorney-client privilege or the attorney work-product doctrine. The court ruled that CEQA does not abrogate the attorney-client or attorney work-product privileges, but that the common-interest doctrine does not protect otherwise privileged communications disclosed by a developer to the city, or vice versa, prior to the approval of a project.

Background

On Sept. 12, 2011 the City of Ceres certified an EIR for a project by real parties in interest, Wal-Mart Stores, Inc. and Wal-Mart Real Estate Trust. Citizens for Ceres (Citizens) challenged the EIR alleging that the city failed to comply with CEQA. Citizens also challenged the city’s decision to exclude all communications between itself and the developer from the administrative record. Citizens argued that under CEQA (Public Resources Code, § 21167.6, subd. (e)) communications between the city and developer, as well as the city’s internal communications, are required to be included in the record. Further, Citizens alleged that no privileges applied because Section 21167.6 states that it applies “notwithstanding any other provision of law.”

The city argued that that the communications were protected by attorney-client privilege, work-product privilege, or other privileges and protections, including the common-interest doctrine. The city and the developer deliberately structured their communications to be based on privilege, realizing the project would be controversial. The city provided a privilege log, but maintained there was no obligation to do so.

After production of the privilege log and multiple hearings, however, the parties had not reduced the number of documents in dispute and Citizens were still contesting several hundred documents. The trial court upheld all the privilege claims on the basis that Citizens had not met its burden to prove the privilege asserted for the documents was inapplicable.

Court of Appeal’s Decision

On appeal, Citizens argued that Section 21167.6 renders all privileges inapplicable, or alternatively that the City never made the necessary showing of facts to establish that the privileges applied to the documents.

The court began by reviewing attorney-client privilege, the attorney work-product privilege, and the purposes of both. The court noted that the party claiming a privilege has the burden of establishing facts necessary to support the prima facie claim. This establishes a presumption the relevant communication was made in confidence, shifting the burden of proof to the opponent to establish that the communication was either not confidential or that the claimed privilege does not apply. According to the court, the “purpose of the attorney-client privilege is to enhance the effectiveness of our adversarial legal system by encouraging full and candid communication between lawyers and clients.” The purpose of the work-product privilege is to protect attorneys’ privacy to encourage thorough trial preparation, which includes analysis of unfavorable aspects of cases.

The court, however, rejected Citizens’ argument that the phrase “notwithstanding any other provision of law” in section 21167.6 abrogates the attorney-client privilege or the attorney work-product privilege. The court noted that Evidence Code section 911(b) forbids courts from creating privileges or exceptions through case-by-case decision making. The court found, however, that knowing this constraint, “the Legislature did not likely intend to make CEQA administrative records a privilege-free zone by the indirect means of placing the phrase ‘notwithstanding any other provision of law’ at the beginning of section 21167.6, four subdivisions away from the administrative-record provisions in subdivision (e).” The court noted that public policy and the public interest support granting privilege to public agencies, despite competing concerns for open government. In light of the similar considerations that apply to the attorney work-product doctrine, the court stated it believed that if the Legislature had intended to abrogate all privileges for the purposes of compiling CEQA administrative records, it would have expressly stated such intent.

With respect to the application of the common-interest doctrine to communications between an agency and a developer for the purposes of CEQA, the court found that the doctrine does not protect agency-applicant disclosures made before project approval. The common-interest doctrine is derived from Evidence Code sections 912 and 952 and a Law Revision Commission comment on Evidence Code 952 which remarks about extending the attorney-client privilege to communications between two parties’ attorneys regarding matters of “joint concern.” In general, the doctrine permits disclosure between parties with a common interest, without waiving privileges, when the disclosure is necessary to accomplish the purpose for which the parties sought legal advice. The court found, however, that prior to completion of environmental review and project approval, an agency and developer cannot have an interest protected by the common interest doctrine. The court noted that the applicant’s primary interest is that the agency produces a legally defensible EIR that is favorable to the project. Yet, a lead agency is presumptively neutral and objective in its interests during the environmental review and project approval process. Therefore, before a lead agency has approved a project, it cannot have a biased interest in producing an EIR that supports the applicant’s proposal. While both parties have an interest in producing a legally adequate EIR, the court determined that “the agency cannot share the applicant’s interest in an EIR that supports the project as proposed until the environmental review process is complete.” Thus, the court found that the lead agency and developer interests are “fundamentally at odds” such that they waive privileges associated with any communications they disclose to each other before the project’s approval.

The court recognized that its holding may conflict with the holding by the Third District Court of Appeal in California Oak Foundation v. County of Tehama. There the court upheld the application of the common-interest doctrine as preventing waiver in the county’s disclosure of certain document to counsel for the developer. The Third District found that the purpose of achieving compliance with CEQA includes producing an EIR what will withstand a legal challenge for noncompliance and, therefore, disclosing “advice to a codefendant in the subsequent joint endeavor to defend the EIR” falls under the common-interest doctrine. The court of appeal in Citizens for Ceres argued that italicized language from California Oak impliedly referred to a disclosure occurring after the project’s approval. The City and Developer argued that the Third District’s remarks in California Oak referred to all privileged communications, including those related to the production of a legally defensible EIR (i.e., occurring prior to project approval). The court disagreed and declined to follow California Oak if that was the case.

The court further found that, while San Bernardino Valley Audubon Society, Inc. v. County of San Bernardino (1984) 155 Cal.App.3d 738 supports the view that an agency and applicant may have a common interest in ensuring an EIR is compliant with CEQA, it does not establish a common interest for the purposes of the common-interest doctrine. Furthermore, the court rejected the city and developer’s contentions that the court’s holding conflicted with the proposition that the applicability of the common-interest doctrine does not depend on the commencement of litigation. The court noted the attorney-client privilege and attorney work-product doctrine apply in many situations not yet involving litigation and that, in this case, the time of project approval, rather than commencement of litigation, was the crucial point in time.

Thus, the court of appeal concluded the city and developer waived attorney-client and attorney work-product privileges for all communications disclosed before the city approved the project. Therefore, communications under the scope of Section 21167.6, subdivision (e) must be included in the administrative record. The common-interest doctrine still applies to communications protected by privilege disclosed after project approval.

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