In Tomlinson v. County of Alameda (2010)189 Cal.App.4th 1029, the First District Court of Appeal examined a determination by Alameda County that a particular project qualified as in-fill, and was therefore exempt from CEQA review. While the project’s location could be described as an “urbanized area,” the court found that an in-fill exemption was inappropriate because the relevant parcel was not within the boundaries of a municipality.

The project in question was the construction of single-family homes in an unincorporated area of Alameda County that was zoned for that use, and that already contained other single-family homes. The County determined that the project was categorically exempt from CEQA review under CEQA Guidelines section 15332, which allows for in-fill development. Fred and D’Arcy Tomlinson challenged this determination. While the Tomlinsons raised several objections during the administrative process, where they were not represented by legal counsel, their central argument in court focused on section 15332, subdivision (b). This provision limits the scope of the exemptionto projects “within city limits,” and the Tomlinsons therefore contended that a project on unincorporated land could not qualify as in-fill. The County responded with two main counterarguments. First, it stated that the Tomlinsons had not exhausted their administrative remedies. Second, it argued that the phrase “within city limits” should be construed to mean within urbanized areas, including those located in unincorporated areas.

On the question of exhaustion, the court relied on Azusa Land Reclamation Co. v. Main San Gabriel Basin Watermaster (1997) 52 Cal.App.4th 1165 (Azusa). Azusa stated that the exhaustion requirement only applies “where (1) CEQA provides a public comment period, or (2) there is a public hearing before a notice of determination is issued.” (Id. at p. 1210.) Using this as its standard, the court, citing two reasons, found that exhaustion did not apply to an exemption determination. First, there is no comment period before an agency issues an exemption finding. Second, there could be no “public hearing before a notice of determination is issued” because such a notice is not filed when an agency declares an exemption. (See Pub. Resources Code, § 21177, subd. (a) (limiting petitioners in CEQA cases to issues presented to an agency “during the comment period . . . or prior to the close of the public hearing on the project before the issuance of the notice of determination”).) For lack of opportunity, therefore, the Tomlinsons were not required to exhaust their argument at the administrative level.

Turning to the substantive issue of interpreting section 15332, the court agreed with the Tomlinsons, finding that the plain meaning of the phrase “within city limits” requires a project to occur within the boundaries of a municipality (city). It was not sufficient for a project to be “within an urbanized area” if such an area is outside a city. The court noted that the term “urbanized area” is defined and used in the Guidelines to explain other categorical exemptions, so the use of the phrase “within city limits,” rather than “within an urbanized area,” suggested a different meaning for the former term.

The court was not persuaded by the County’s contention that the policy behind section 15332 required a less “inflexible” interpretation of “within city limits.” As the court stated, the exemptions listed in the Guidelines reflect a determination by the Secretary for Resources that “particular classes of projects generally do not have a significant effect on the environment.” Given the plain meaning of “within city limits,” the court therefore viewed the County’s point, not as a statement of what in-fill does include, but as an argument that in-fill should include urbanized areas. The court found this to be a policy question beyond its prerogative.

In City of Santee v. County of San Diego (2010) 186 Cal.App.4th 55, the Fourth District Court of Appeal has ruled that, in approving a “siting agreement” for a reentry facility, San Diego County and the California Department of Corrections and Rehabilitation had not “approved” a “project” under CEQA.

The County and Corrections entered into the “siting agreement” in September 2008. The County agreed to identify up to three potential sites in the County to locate a reentry facility, where state prisoners would receive assistance as they transition back into society. The agreement included an exhibit showing two potential sites: one at a County jail in the City of Santee, and another on State-owned land at the existing Donovan prison in Otay Mesa. Under the agreement, if Corrections selects one of the sites identified by the County, the State would provide the County with preferential access to $100 million in financial assistance to help construct county jails, and the County would cooperate with the planning and construction of the re-entry facility. Corrections would be responsible for performing CEQA review of the reentry facility.

The City of Santee sued, alleging CEQA analysis should have been performed because the siting agreement was a “project.” In particular, Santee alleged the approval of the siting agreement committed the County and Corrections to expanding the existing County jail located in Santee to house the reentry facility. The County and Corrections demurred. The trial court sustained the demurrer. Santee appealed.

The Court applied the test established by Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116, and found the approval of the siting agreement was not a “project”:

• The siting agreement did not select a location for the reentry facility.
• The agreement did not reference expansion of the existing jail in Santee.
• The agreement did not commit Corrections to select any of the locations identified by the County for the reentry facility.
• Financial assistance would be provided only if Corrections ended up selecting a site.
• The County’s commitment to convey county-owned land was conditional, because that obligation would arise only if Corrections selected a county-owned site.
• The agreement had no direct impact on the contemporaneous County proposal to expand the County jail in Santee.
• Preliminary infrastructure studies at the State-owned Otay Mesa site reflected Corrections’ efforts to determine the feasibility of the site, not a commitment to approve a project there.
• The County had not impermissibly “segmented” its review of the siting agreement, the reentry facility, and the Santee jail expansion.

“In sum, because nothing in this record suggests the siting agreement has from a practical perspective foreclosed consideration of alternatives to any project or mitigation measures for those projects, the trial court properly sustained the [C]ounty’s demurrer to Santee’s petition.” The trial court did not err in declining to provide Santee with leave in amend.

Comment: When the Supreme Court issued its decision in Save Tara, there was concern among agencies that, because the Supreme Court did not adopt a “bright line” test, petitioners would be encouraged to challenge under CEQA all manner of preliminary agency actions. There was also concern that, because the Save Tara Court did not adopt a “bright line” test, agencies would enter into such agreements at their peril. The first concern was warranted; the issue of what constitutes “approval” of a “project” continues to be fodder for petitioners. But most of the courts applying the Save Tara test have upheld agency action, so long as the agency’s preliminary agreements or understandings do not foreclose later consideration of mitigation measures or alternatives. The City of Santee decision is the latest example of this trend.

In Torrey Hills Community Coalition v. City of San Diego (2010) 186 Cal.App.4th 429 (Torrey Hills), the Fourth District Court of Appeal upheld the dismissal of a CEQA Petition due to the Petitioners’ (1) failure to serve a summons within 90 days of project approval as required by Government Code section 66499.37, and (2) failure to make a written request for a hearing within 90 days of filing the action as required by Public Resources Code section 21167.4, subdivision (a). In reaching the holding, the court affirmed that the holdings in Friends of Riverside’s Hills v. City of Riverside (2008) 168 Cal.App.4th 743, 748 (Friends) and County of Sacramento v. Superior Court (2009) 180 Cal.App.4th 943, 953 (County of Sacramento) apply retroactively.

The Petitioners challenged the City of San Diego’s approval of a condominium development project based on several alleged violations of CEQA. The City filed a Motion to Dismiss alleging that the case must be dismissed for two procedural reasons. First, the City alleged that the Petitioners violated the Subdivision Map Act (SMA) by failing to serve a summons within 90 days of the City’s approval of the project, as required pursuant to Government Code section 66499.37. Second, the City alleged that the Petitioners failed to comply with CEQA because the Petitioners did not file a written request for a hearing within 90 days of filing the writ petition, as required pursuant to Public Resources Code section 21167.4, subdivision (a). The trial court granted the motion to dismiss.

In arguing that the trial court’s decision should be reversed, the Petitioners did not contest the trial court’s determination that all the CEQA claims were within the scope of the SMA. Therefore, the question before the court was not whether Government Code section 66499.37 applied, but only whether compliance with the section “was impossible, impracticable, or futile due to causes beyond the plaintiff’s control.” The court found that, after Friends was published, the Petitioners made no effort to obtain a summons before the 90-day deadline expired. The court explained further that the normal remedy of a party aggrieved by an act or omission of the clerk is to apply to the court for an order directed to the clerk. The court thus found that Petitioners’ failure to serve a summons within 90 days of project approval required dismissal.

Although the Petitioners’ failure to comply with Government Code section 66499.37 was dispositive, the court chose to exercise its discretion to address the City’s claim under Public Resources Code section 21167.4, subdivision (a). The Petitioners argued that they had complied with Public Resources Code section 21167.4, subdivision (a), by making an oral request for a hearing. The court in County of Sacramento had addressed this exact issue, holding that a written request is required under this provision, and declaring that its holding should apply retroactively. (County of Sacramento, supra, 180 Cal.App.4th at page 953.) The Torrey Hills court agreed with the holding in County of Sacramento. The court explained further that while section 21167.4, subdivision (a), does not expressly require CEQA petitioners to make a written request, the plain language of other subdivisions in the section establish that the request must be in writing. Therefore, the court found that the Petitioners’ failure to make a written request was not excusable, and provided additional support for the trial court’s granting of the Motion to Dismiss.

The State Senate Committee on Local Government has released the first draft of its annual memo summarizing bills that the Committee reviewed during the legislative year. The 2010 edition includes measures reducing the population threshold for counties to regulate fire companies and creating the Future Sustainable Communities Pilot Project. It does not contain any significant adjustments to CEQA. The final version of the memois scheduled be released in early October, after Governor Schwarzenegger has had a chance to act on bills that are still pending. The full text of the memo’s first draft can be found at the Committee’s website: http://senweb03.senate.ca.gov/committee/standing/LOCAL_GOV/GREATESTHITS2010.htm

On May 5, 2010, the US Environmental Protection Agency (EPA) published a final rule (see 75 FR 24409) that, among other things, officially reclassified the Sacramento Metro (Metro) area with respect to its non-attainment status in relation to the 1997 8-hour ozone national ambient air quality standard (NAAQS). While the area previously had been designated “serious,” it is now “severe-15” as of June 4, 2010. As a result of this reclassification, by June 4, 2011, the Metro portion of the California State Implementation Plan (SIP) must be revised to make it consistent with New Source Review requirements for 8-hour ozone in “severe-15” areas. This revision will cover the Sacramento Metropolitan Air Quality Management District (AQMD), the Placer County Air Pollution Control District, and the Feather River AQMD. EPA deferred setting a deadline for revising the Metro section of the California SIP to meet the provisions of Clean Air Act section 185, which deals with enforcement against “severe” ozone non-attainment. The final rule required no other SIP revisions.

This action by EPA is part of a long-term effort to bring the Metro area into attainment of 8-hour ozone NAAQS “as expeditiously as practicable, but not later than” June 15, 2019. The rule’s more immediate impact is on general conformity applicability thresholds. For projects that involve federal funding or approval, and that are subject to review under either the California Environmental Quality Act (CEQA) or the National Environmental Policy Act (NEPA), the thresholds for both nitrogen oxides and reactive organic gases are lowered from 50 tons per year to 25 tons per year. In addition, the Metro area’s new non-attainment designation will need to be included in the description of existing air quality conditions in environmental documents.

The Vision California project, an effort funded by the California High-Speed Rail Authority in partnership with the California Strategic Growth Council, released its first report entitled “Charting Our Future” on June 23, 2010. The report discusses how changes in land use and infrastructure decisions can result in positive benefits for the State, its economy, and the environment.

The report compares “Business as Usual” and “Growing Smart” future scenarios. The Business as Usual scenario combines the trend in past land use decisions with assumptions about modest improvements in energy and water efficiency. On the other hand, the Growing Smart scenario paints a future of increased urban infill and compact growth. The report concludes that the Growing Smart scenario has a higher positive impact on the environment and our wallets, noting that the Growing Smart future reduces annual household costs for gas, auto maintenance and household utility bills by 45% in 2050.

The Vision California project seeks to explore the role of land use and transportation investments in meeting the environmental, fiscal, and public health challenges facing California over the coming decades. One of the major goals of the project is to clearly link land use and infrastructure priorities to the mandated targets set by AB 32, SB 375, and the California Air Resources Board.

A copy of “Changing Our Future” can be found at: www.visioncalifornia.org

In San Diego Navy Broadway Complex Coalition v. City of San Diego (June 17, 2010, Case No. D055699 ) 185 Cal.App.4th 924, the Court of Appeal, Fourth Appellate District, held that the City of San Diego was not required to prepare a subsequent or supplemental EIR to address a redevelopment project’s potential impact on global climate change. The court based its ruling on a finding that the approving agency lacked the discretion to address this particular issue, even though it had limited discretion over aesthetic issues.

The City of San Diego certified an EIR in 1992 for the Navy Broadway Complex Project, the redevelopment of a U.S. Navy administration site in the downtown area and, at the same time, entered into a development agreement for the project. The agreement established a development plan and design guidelines; it further provided that the developer must submit its construction documents to the City for a determination of consistency with the aesthetic criteria in the development plan and urban design guidelines. Later, in 2007, the City reviewed the developer’s plans, found they were consistent, and concluded that no further environmental review was necessary under CEQA. San Diego Navy Broadway Complex Coalition filed a petition for writ of mandate, claiming that the City was required to update the project’s EIR to address various impacts, including global climate change.

The court rejected this claim. It began by pointing out that once an EIR has been certified for a project, CEQA contains a “strong presumption” against further review. When additional discretionary actions are undertaken in the future with respect to the project, additional environmental review is required only when the circumstances set out in Public Resources Code section 21166 are present.

The most important part of the court’s holding dealt with the scope of potential review under section 21166. In evaluating whether there are changed circumstances warranting further review, the court held that the analysis should be informed by the scope of the agency discretion.

The court pointed to a line of case law starting with Friends of Westwood, Inc. v. City of Los Angeles (1987) 191 Cal.App.3d 259, holding that CEQA’s review was limited to discretionary projects, as opposed to ministerial projects. The Supreme Court embraced this line of reasoning in Mountain Lion Foundation v. Fish & Game Com. (1997) 16 Cal.4th 105, 117, wherein the Court explained that the limitation of CEQA to discretionary projects “implicitly recognizes that unless a public agency can shape the project in a way that would respond to concerns raised in an EIR… environmental review would be a meaningless exercise.” Thus, under Friends of Westwood cases following it, the discretion that triggers CEQA review must be of a kind that allowed an agency to deny or condition a project to address environmental issues. But Friends of Westwood and Mountain Lion Foundation dealt with whether a project was subject to CEQA in the first instance, not the scope of subsequent or supplemental review under Public Resources Code section 21166.

The court in San Diego Navy Broadway Complex Coalition extended the reasoning of Friends of Westwood and Mountain Lion Foundation to the context of 21166 to hold that, essentially, there must be a nexus between the scope of the agency’s remaining discretion over the project and the changed circumstances that might otherwise trigger environmental review. In this context, the court held: “The exercise of discretion does not automatically qualify an agency action as a project subject to CEQA. To trigger CEQA compliance, the discretion must be of a certain kind; it must provide the agency with the ability and authority to ‘mitigate environmental damage to some degree.’” Thus, in making a determination under section 21166 regarding the extent of the subsequent review that should be prepared, if any, petitioners may no longer be heard to argue that (1) there is a discretionary action and (2) there are changed circumstances, now go forth and study those changed circumstances in a new environmental document. Rather, in order to mandate further environmental review under CEQA section 21166, the San Diego Navy Broadway Complex Coalition case provides that there must be a nexus between those two factors.

In this case, where the scope of the City’s discretionary action was limited to aesthetic concerns, the court held that the City was not required to engage in further environmental review to evaluate the changed circumstances related to global warming in as much as there was no established nexus between the City’s discretion and the stated changed circumstances; while the City may have discretion as to aesthetic issues, this does not “establish that [the City] exercised any discretionary authority to mitigate the Project’s impact on global climate change.”

The Coalition has not argued on appeal that in exercising discretion in determining whether [the project was] consistent with the design plan and … design guidelines, the [City] could consider the impact of the Project on global climate change, and we see no basis for such an argument. Absent such a showing, there is no basis for requiring the City to conduct environmental review of an issue as to which it would have no authority to respond.

The court concluded that, under these circumstances, environmental review of global climate change would be a “meaningless exercise.”

The California Secretary of State has qualified an initiative for the November ballot that would delay enforcement of the Global Warming Solutions Act, more commonly known as AB 32, until certain prosperous economic conditions are observed. In substance, AB 32 requires the state to reduce emissions of certain greenhouse gases to 1990 levels by 2020 and charges various agencies with achieving that goal through various means. The initiative would suspend AB 32 until California’s unemployment rate drops to 5.5% or less for four consecutive quarters. The initiative specifies that, during the suspension, state agencies would be prohibited from implementing AB 32, and all regulations previously adopted under AB 32’s aegis would be void and unenforceable. Initiative proponents argue that AB 32 would increase energy costs and hurt businesses, something that will lead to lost jobs at a time when California’s unemployment rate is already above 12%. Opponents argue that the initiative is a boon to oil companies and an obstacle to developing a clean energy industry and that the initiative is funded largely by out-of-state interests, including out-of-state oil interests.

As a practical matter, it should be noted that the economic conditions that are cited in this initiative have rarely occurred in California’s history. The last time that the unemployment rate in California was below 5.5% was in 2007. According to the California Employment Development Department, there have been three periods since 1976 when unemployment in the state remained below 5.5% for four or more quarters:
• January 1988 through December 1989
• October 1999 through June 2001
• October 2005 through June 2007

Thus, the initiative if passed could arguably be described as an attempt to permanently defeat AB 32 rather than merely suspending it.

In Butte Environmental Council v. United States Army Corps of Engineers (9th Cir. 2010) 607 F.3d 570, Butte Environmental Council sued the Army Corps of Engineers, the Fish and Wildlife Service, and the City of Redding over their decisions to permit a proposed business park in Redding that would destroy 234.5 acres of critical habitat along Stillwater Creek in Redding. Specifically, the Council challenged the Corps’ decision under the Administrative Procedure Act to issue a Clean Water Act section 404 permit for the project and the FWS’s biological opinion that the project would not adversely modify critical habitat for endangered and threatened species.

Endangered Species Act Challenges. The Ninth Circuit, like the district court, upheld the FWS’s determination that the project would not result in the “adverse modification” of critical habitat. The Court first rejected the Council’s argument that the FWS applied an improper definition of “adverse modification” and thus failed to account for “recovery needs” of the affected species as required by Gifford Pinchot Task Force v. U.S. Fish & Wildlife Service (9th Cir. 2004) 378 F.3d 1059.). Gifford Pinchot found fatally flawed a critical habitat analysis that relied on an unlawful regulatory definition of “adverse modification” set out in 50 C.F.R. 402.02. (See Gifford Pinchot, 378 F.3d at p. 1070 [taking issue only with the use of “and” instead of “or” in the regulatory definition of “adverse modification”].) In rejecting the Council’s argument, the Court pointed to the FWS’s statement in the biological opinion that it did not rely on the flawed definition of “adverse modification” of critical habitat set out in 50 C.F.R. 402.02, but instead, relied upon the statute and the decision in Gifford Pinchot for its analysis with respect to critical habitat. In reaching this conclusion, the Court noted that nothing in the biological opinion suggested otherwise.

In perhaps the most significant ruling in the case, the Court explained that Gifford Pinchot did not alter the rule that “‘adverse modification’ occurs only when there is ‘a direct or indirect alteration that appreciably diminishes the value of critical habitat.’” The Court explained that “critical habitat can be destroyed without appreciably diminishing the value of the species’ critical habitat overall.” Therefore, the Court held that FWS’s determination that, while critical habitat would be destroyed, no “adverse modification” would occur because only a very small percentage of the total critical habitat for the affected species would be eliminated. FWS in the biological opinion explained that the affected 234.5 acres of critical habitat along Stillwater Creek in Redding, California would amount to only 0.04% of the vernal pool fairy shrimp’s 597,821 acres of total critical habitat nationwide and only 0.10% of the vernal pool tadpole shrimp’s 228,785 acres of total critical habitat nationwide.

Clean Water Act Challenges. The Court also held that the Corps decision to issue a 404 permit for the project was neither arbitrary nor capricious. First, the Court concluded that the Corps properly applied 40 C.F.R. § 230.10(a)(3), the regulation that applies to non-water dependent activities. That regulation states that, where a proposed activity is not water dependent, “practicable alternatives that do not involve special aquatic sites are presumed to be available, unless clearly demonstrated otherwise.” The Court held that the Corps applied the proper presumption and found that it was rebutted under the appropriate standard. The Corps’ had determined that the project was not water dependent, but that, based on a review of over a dozen alternative sites, the City had “clearly demonstrated that there are no practicable alternative sites available.”

Second, the Court rejected the Council’s argument that the Corp’s decision to issue the permit was inconsistent with its earlier criticisms of the project in an Environmental Impact Statement. The Court concluded that the Council’s argument ignored evidence in the record that the City modified the project to address the Corps’ early criticisms. The Court also stated that agencies are entitled to change their minds and that it had no “trouble discerning the path of the agency’s reasoning over time.”

Third, the Court rejected the Council’s claim that the Corps “simply deferred” to the City’s judgment rather than making an independent determination of the business park’s purpose. The Court disagreed, pointing out that the Corps’ initial project criticisms, which resulted in project changes. Only after the City modified the project did the Corps agree with the City’s point of view. Noting that the Corps has a duty to consider an applicant’s purposes when they are “genuine and legitimate,” the Court found the Corps’ action to be reasonable on this point.