On September 1, 2010, the Ninth Circuit Court of Appeal held in Western Watersheds Project v. Kraayenbrink (Sept. 1, 2010, No. 08-35359) that the U.S. Bureau of Land Management violated the National Environmental Policy Act and the Endangered Species Act when it adopted amendments to its grazing regulations. The court also held the district court erred in failing to consider plaintiffs’ claim based on the Federal Land Policy and Management Act (FLPMA) under the framework established in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (1984) 467 U.S. 837 (Chevron).

On July 12, 2006, the Secretary of the Interior proposed eighteen amendments to the BLM’s grazing regulations and issued a Record of Decision. In March 2006, the BLM had issued a Final Environmental Impact Statement in connection with the proposed amendments. In the Final Rule, the BLM concluded the regulations would have no effect on endangered or threatened species or their critical habitat. For this reason, the BLM did not consult with the U.S. Fish and Wildlife Service.

The stated purpose of the proposed amendments was to improve the working relationships with ranchers to protect the health of rangelands and to increase the effectiveness of the BLM grazing management program. The proposed amendments, however, also would decrease public involvement and oversight in federal grazing management, allow the BLM additional time to take corrective action for violations of BLM standards and guidance, put new limitations on the BLM’s enforcement powers, and cede ownership rights to permanent rangeland and structures and water from the United States to private ranchers.

Plaintiffs, a non-profit conservation group advocating science-based management and conservation of BLM’s public land, filed suit, challenged the proposed amendments as violating NEPA, the ESA, and FLPMA. Two organizations representing ranchers, the Public Lands Council and the American Farm Bureau Federation, intervened on behalf of the BLM. In June 2007, the district court enjoined enforcement of the proposed amendments. The BLM and the intervenors separately appealed. The BLM subsequently dismissed its appeal, while the intervenors maintained their appeal. In addition to the substantive claims, both parties challenge the other’s standing on appeal.

Before addressing plaintiffs’ substantive claims, the court addressed the standing issues. The court concluded the plaintiffs had established standing. The proposed amendments posed an imminent harm to plaintiffs’ members’ aesthetic enjoyment of the rangeland and their involvement in public land grazing management. The plaintiffs’ NEPA and FLPMA claims also fell within the statutes’ respective zones of interest—a requirement for suits brought under the APA for a violation of NEPA or FLPMA—because they had a direct interest in seeing the BLM consider the environmental consequences of its actions. The court also concluded the intervenors had established standing under Article III of the U.S. Constitution because the individual members of the intervenor organizations would have standing to pursue the appeal in their own right as each member suffered a concrete injury related to their individual agreements with the BLM, among other reasons. The court also held the dispute over the regulations at issue in this case was ripe for review.

The plaintiffs first argued the BLM violated NEPA by failing to take the required “hard look” at the environmental consequences of the regulations. NEPA establishes “action-forcing” procedures that require agencies considering major federal actions to provide a full and fair discussion in an EIS of the significant environmental impacts of the proposed action. Here, the court agreed with the plaintiffs, concluding the BLM failed to consider “objectively and in good faith” the concerns raised by its own experts, FWS, EPA, and state agencies. The court also concluded the Final EIS downplayed the environmental impacts of the regulations. Significantly, the BLM’s experts concluded, among other things, that the reduction in public oversight proposed by the amendments would give ranchers greater access to the BLM’s decision-making process at the expense of advocates for wildlife resources, resulting in long-term adverse impacts to wildlife. The proposed regulations would essentially shut out non-rancher members of the public from BLM’s decision-making process. The court also found the BLM failed to address concerns by the FWS and state agencies that the regulations would weaken the ability to manage rangelands in a timely fashion and that the Final EIS failed to address consequences of privatizing water rights on public land. The court further held the BLM failed to consider the combined effects of the proposed amendments and that the Final EIS gave no reasoned explanation for the BLM’s change in policy from the prior regulations before decreasing its regulatory authority as well as public participation. In short, the court found the changes were “discordant with the lessons learned from the history of rangeland management in the west, which has been moving towards multiple use management and increased public participation.”

The plaintiffs next argued the BLM violated the ESA by failing to consult with FWS before approving the regulations. The court agreed with the plaintiffs, holding the BLM’s no effect finding and failure to consult with FWS were arbitrary and capricious in violation of the ESA. The court noted that the minimum threshold for an agency action to trigger consultation with the FWS was low. With that in mind, the court questioned the BLM’s conclusion that the regulations, which would affect approximately 160 million acres of public lands in the West, would not affect so much as one of the 300 special status species identified in the Final EIS. The court found it significant that the FWS, an agency that is tasked with protecting endangered species, concluded the regulations would affect special status species and their habitats. The court also based its conclusion on the declarations of the BLM’s own scientists who advised that an ESA section 7 consultation was necessary.

In the plaintiffs’ final claim, they alleged the BLM violated the mandate of the FLPMA in approving the regulations. The FLPMA requires the BLM to provide avenues for public input in the planning and management of public lands. In response to the plaintiffs’ contention, the intervenors argued that it is not clear whether the BLM’s proposed amendments were in direct and unreasonable disregard of the FLPMA’s mandate when it approved the amendments. The intervenors argued the regulations did not eliminate public participation, but that they merely changed the circumstances of public participation. Thus, the intervenors argued, the district court was required to afford the deference established in Chevron to the BLM’s interpretation of its authority and obligations under the FLPMA as expressed in the proposed amendments.

Under Chevron, where a statute is ambiguous, and where Congress has not directly spoken on the matter at issue, the court must determine whether the agency’s interpretation of the statute is permissible. Here, the court concluded that the district court failed to apply the principles in Chevron to answer whether the limitation of public participation in the proposed amendments was in disregard of the FLPMA, or alternatively, whether the FLPMA’s public participation requirement was ambiguous and the BLM’s interpretation reasonable. With regard to these questions, the court of appeal remanded the FLPMA claim to the district court for further consideration.

On August 31, 2010, the California Senate rejected Assembly Bill 1998, which would have placed a ban on plastic shopping bags. The bill called for the ban to take effect in supermarkets and large retail stores in 2012 and in smaller stores by 2013. The cost of recycled grocery bags, which is approximately 6 to 10 cents per bag, is currently absorbed by retailers. With this bill, however, larger retailers would be allowed to charge consumers for recycled paper bags starting in 2012. Lawmakers rejected the ban by a vote of 20 to 14.

Opponents of the bill called it a “job killer” and argued that it would be an extra financial burden on consumers and businesses. Lawmakers also debated whether the State would be going too far in regulating personal choice if they passed the bill. On the other hand, supporters noted that the approximately 19 billion plastic bags used by Californians per year harms the environment and costs the State $25 million annually to collect and transport to landfills.

Some cities in California already ban plastic shopping bags, including San Francisco, Palo Alto, Malibu, and Fairfax. Assembly Bill 1998 proposed the first statewide ban on plastic shopping bags, however.

Read more at: http://www.sacbee.com/2010/08/31/2995819/calif-bill-seeks-to-ban-plastic.html

Suisun Alliance v. Suisun City* (Aug. 20, 2010, A125042)
*The opinion has not been certified for publication.

In an unpublished decision, the First District Court of Appeal denied a petition for writ of mandate and complaint for injunctive relief against Suisun City for failure to comply with the State Aeronautics Act (SAA) and CEQA when it approved a proposed commercial development known as the Walters Road West Project. The project consists of 227,019 square-feet of retail development, including a Wal-Mart Supercenter, restaurant, and a gas station. The project site is located in Suisun City, near Travis Air Force Base.

In 2007, the City released a nearly 1,600-page draft EIR for the project. Pursuant to the SAA, the draft EIR also analyzed the project’s consistency with the Travis Air Force Base Land Use Compatibility Plan (TALUCP). The TALUCP established criteria for noise, public safety, and airspace protection in the vicinity of the airport. The TALUCP also established the maximum population site usage intensity for development in the project area. In response to data provided by the City, the Solano County Airport Land Use Commission (ALUC) staff recommended the ALUC find the project was consistent with the TALUCP. The ALUC rejected the recommendation and found the project was partially inconsistent with the TALUCP’s safety criteria.

The City released a final EIR (FEIR) in 2008, for the project. The City also released an addendum to the FEIR to respond to late comments. The City Council overruled the ALUC’s determination, certified the FEIR, and approved the project. To support its decision to overrule the ALUC, the City prepared a resolution of decision and findings, stating the project was consistent with the TALUCP and the public interest purposes of the SAA pursuant to Public Utilities Code section 21670. Suisun Alliance filed suit. The trial court ruled in favor of the City, and Suisun Alliance subsequently filed an appeal.

Suisun Alliance’s first major claim was that the City’s violated the SAA because the project was inconsistent with the purposes and procedural mandates of the SAA in addition to the TALUCP’s population density restrictions. The court disagreed with Suisun Alliance. The City found the project would not pose any unacceptable safety risk from aviation activities at Travis because aircraft do not regularly fly over the project site. Over the past 57 years, there were only five aviation mishaps, none of which occurred in airspace over the project site. The court found these facts to be relevant.

Suisun Alliance also argued that the City’s findings failed to explain how project approval was consistent with the SAA purpose of protecting the public health, safety, and welfare by ensuring the orderly expansion of Travis over the next 20 years. Looking at the City’s findings, the court concluded the City adequately supported its finding that the project was consistent with the stated SAA purpose. The City stated that it would apply the City’s zoning code to regulate airport flight obstruction areas and limit the number of people and development within any aircraft flight pattern. The court also found that the zoning code and general plan included provisions to protect runway approaches and the future development of Travis.

Suisun Alliance next argued that the City violated the SAA’s review and comment procedures because the final resolution of decision and findings included content that was not included in the proposed decision and findings. Generally, the City is required to provide the ALUC and Caltrans’s Division of Aeronautics the proposed decision and findings 45 days before the City’s decision to overrule the ALUC. The ALUC and Caltrans may then provide the City with comments. The City must respond to these comments and include the responses in the final decision. The court concluded that the law does not prohibit the City from revising or expanding its proposed findings and the City was not required to provide another 45-day notice and comment period.

With respect to the City’s finding that the project was consistent with the TALUCP, Suisun Alliance argued the City used an incorrect method to estimate the number of people likely to use the facilities at the project site. The court disagreed with Suisun Alliance and concluded the TALUCP did not mandate the use of any particular methodology. The court held the City adequately supported its rationale for selecting the methodology that it used. Furthermore, the court noted that although the City concluded that its methodology was more appropriate, the City found the project was consistent with the TALUCP under either methodology. The court found that substantial evidence supported this determination.

After addressing the SAA claims, the court turned to Suisun Alliance’s CEQA claims. First, Suisun Alliance argued the City violated CEQA by failing to revise and recirculate the DEIR to include significant new information discovered during the public comment period concerning the presence of an underground jet fuel pipeline beneath a right-of-way north of the project site. The court held the City’s conclusion that the project would not have significant impacts on the pipeline to be supported by substantial evidence. No jet fuel pipelines were actually on the project site and a title search did not reveal any pipeline easements. The City also stated that any construction near the pipeline north of the site would comply with all regulations.

Second, Suisun Alliance argued the City did a “bait-and-switch” with regard to its position on riparian habitat on the project site. By doing so, Suisun Alliance alleged the City violated CEQA’s public participation and informed decision-making mandates. The DEIR stated the project site contained a drainage ditch with vegetative cover for wildlife and classified the ditch as a perennial wetland. The FEIR, however, explained the DEIR incorrectly characterized the ditch and that biological evaluations revealed the low quality vegetation did not qualify as riparian habitat. Nonetheless, the FEIR stated that the loss of the drainage ditch would be mitigated by applying wetland mitigation measures. The Regional Water Quality Control Board submitted letters on the DEIR and FEIR, stating the ditch provided riparian habitat. The court disagreed with Suisun Alliance and concluded the City did not violate the mandates of CEQA because the public still had notice of the loss of the drainage ditch as stated in the FEIR. The court also concluded the City was not required to recirculate a revised EIR. The alleged “new information” that would otherwise require recirculation, i.e., the ditch was more accurately characterized as a wetland rather than riparian habitat, was not truly “new information” or a substantial increase in the severity of an impact.

Finally, Suisun Alliance argued the City’s conclusion that the project will have no economic impacts that may result in urban decay is unsupported. In particular, Suisun Alliance contended the project would adversely impact a Rite Aid store in the city and a Food Maxx store in the City of Fairfield, such that urban decay would result. With respect to the Rite Aid store, the court disagreed. The court found the City’s conclusions were supported in part by the fact that the Rite Aid store was the most convenient general merchandise store for many residents. The shopping center where Rite Aid was located was also well-maintained making it less likely that potential closure of the Rite Aid would lead to urban decay. The court also disagreed with Suisun Alliance’s contention regarding the Food Maxx store. In view of the entire record, the court concluded that the City considered the cumulative impacts of the Wal-Mart Supercenter in Fairfield and the project on Fairfield retailers, including the Food Maxx. Any business closures would be short term and would not result in an urban decay impact.

Officials in San Francisco are currently racing to acquire an exemption from CEQA in time to submit a proposal in 6 weeks to host the next America’s Cup. The Cup would be held in either 2013 or 2014. Being selected would require the city to construct shoreside facilities, which would require a discretionary approval subject to CEQA. San Francisco hopes to secure a one-time exemption from the State in lieu of preparing an EIR. The exemption, however, faces potential opposition from environmental groups, including the Planning and Conservation League. Environmental groups are particularly wary of the exemption in light of the Legislature’s recent approval in 2009 of a one-time exemption for a developer to build a football stadium in Los Angeles County. Environmental groups caution the approval of a one-time exemption for the Cup could set a dangerous precedent for other discretionary approvals requiring CEQA review. In addition to the 2009 exemption for the football stadium, the Legislature has enacted similar one-time exemptions in the past for other sporting and special events, such as CEQA Guidelines section 15272, a partial exemption for the Olympic Games.

Hosting the America’s Cup would reportedly bring in approximately $1.4 billion in economic stimulus and almost 9,000 jobs—a boon for the San Francisco Bay Area. Spain and Italy are also submitting proposals, while San Francisco is the only U.S. city vying to be the next host.

Additional details are available in the San Francisco Chronicle at: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/08/19/MNJD1EUS0G.DTL

In Ebbetts Pass Forest Watch et al. v. California Dept. of Forestry & Fire Protection (2010) 187Cal.App.4th 376, the Fifth District Court of Appeal was asked to determine whether the petitioners should obtain attorney fees pursuant to Code of Civil Procedure section 1021.5 for a CEQA case that resulted in a published California Supreme Court decision: Ebbetts Pass Forest Watch v. California Dept. of Forestry & Fire Protection (2008) 43 Cal.4th 936. In the 2008 Supreme Court decision, the Court upheld the trial court’s denial of the petition for writ of mandate; however, the opinion demonstrated that the California Dept. of Forestry & Fire Protection reached three legally flawed conclusions in approving the otherwise adequate timber harvest plans. Petitioners argued that the Court’s clarifications regarding the agency’s statutory authority and responsibilities conferred a significant public benefit justifying attorney fees under section 1021.5. The trial court found that petitioners were not entitled to attorney fees. In a plurality opinion, the appellate court reviewed the trial court decision for an abuse of discretion and upheld the ruling.

In rejecting the petitioners’ request for attorney fees, the Fifth District Court of Appeal acknowledged that to obtain attorney fees a favorable final judgment is not always necessary and the critical factor is the impact of the decision. (Graham v. Daimler Chrysler Corp. (2004) 34 Cal.4th 553, 565.) The court explained, however, that mere vindication of a statutory violation is not sufficient to be considered a substantial benefit by itself. (Concerned Citizens of La Habra v. City of La Habra (2005) 131 Cal.App.4th 329, 335.) In determining whether the petitioners were “successful” pursuant to section 1021.5, the court critically analyzed the surrounding circumstances of the litigation and pragmatically assessed the gains achieved by the action.

After conducting this analysis, the court concluded the petitioners lost on their primary contention, and the litigation did not result in the vindication of an important right affecting the public interest. As explained by the court, “[t]he real problem is that regardless of the expansion of the law, they did not have a factually meritorious lawsuit and, when the dust settled, their only victory was in a statement of law that when applied to the record clarified why they should lose.” In other words, the court found that to obtain attorney fees under section 1021.5 a petitioner not only “must have a well defined legal basis in order to give rise to a claim of right but . . . must also prevail on factual conclusions that support the claim of right.”

Judge Dawson dissented from the majority, explaining that a petitioner should be entitled to attorney fees where they prevail on an important legal issue but obtain no actual relief. In his dissent, Judge Dawson stated that the litigation would impact all future timber harvest plans, clarified the agency’s authority, and advanced CEQA’s goal of informed self-government. Therefore, Judge Dawson concluded the petitioners prevailed on important legal issues and should be awarded attorney fees.

In addition to disagreeing with the majority on the significance of the legal issues addressed in the published Supreme Court decision, Judge Dawson expressed an interesting concern regarding the practical impact of the majority’s holding:

I am concerned that the majority’s decision will have the unintended consequence of incentivizing plaintiffs in environmental litigation to specifically plead every foundational issue underlying their claims and perhaps include a request for declaratory relief on each of those issues. In my view, environmental litigation under California’s statutes is complex enough without applying the benefit-sought aspect of the private attorney general doctrine in a manner that incentivizes plaintiffs to increase the complexity of that litigation.

The California Air Resources Board (ARB) will conduct a public meeting on September 23, 2010, to consider the adoption of proposed regional greenhouse gas (GHG) emission reduction targets for automobiles and light trucks. Copies of the staff report for this meeting and its associated CEQA Functional Equivalent Document may be obtained from ARB’s office or via the web at: http://www.arb.ca.gov/cc/sb375/sb375.htm. Interested members of the public may make oral or written comments. Written comments must be received by noon on September 22, 2010.

Senate Bill 375 requires ARB to set regional targets for 2020 and 2035 to reduce GHG emissions from passenger vehicles. According to Senate Bill 375, ARB must adopt final targets by September 30, 2010. These targets will apply to the regions in the State covered by the 18 metropolitan planning organizations. New projects in regions meeting these targets can be relieved of certain review requirements under CEQA.

For more information about the upcoming public meeting, please visit: http://www.arb.ca.gov/lispub/comm/bclist.php

Assembly Bill 2329, currently pending in the State Senate, would establish coordinated climate change efforts among state agencies through two main provisions. The first would require the California Natural Resources Agency to issue and periodically update a Climate Vulnerability and Adaptation Plan, which would cover strategies for responding to the effects of climate change. The second provision would codify certain responsibilities for the Climate Action Team (CAT), a group made up of representatives from several state agencies. AB 2329 would make the CAT an official central hub for climate change policy in California.

In June 2005, the secretary of the California Environmental Protection Agency (Cal EPA) created CAT to help achieve greenhouse gas emission reduction targets. After California passed AB 32 the following year, the CAT acquired a central role in coordinating efforts to reach that law’s goal of reducing the state’s GHG emissions to 1990 levels by 2020. In 2008, the CAT was further tasked with helping to develop a strategy for responding to the effects of climate change. However, also in 2008, the governor vetoed Senate Bill 1760. This bill codified the CAT, but it also directed the CAT to conduct strategic research, and to release a climate change impact adaptation and protection plan every two years. In his veto message, the governor stated that the CAT’s focus should remain on activities such as implementing AB 32, and that it would frustrate this focus to add such a substantial research mandate.

AB 2329 contains two main provisions, the first being the California Climate Vulnerability and Adaptation Plan of 2010. As the name suggests, this would require the Resources Agency to prepare a Climate Vulnerability and Adaptation Plan. This plan would be created in coordination with other agencies for the purpose of identifying and prioritizing research, policies, planning, best management practices, and anything else that would help the state adapt to the unavoidable impacts of climate change. Beyond a mere policy paper, the plan would further serve as California’s climate change adaptation planning document as required by any federal law that makes federal funding contingent on such a plan. The first plan would be due to the governor on or before June 1, 2012, and a revised plan would be due every three years thereafter.

AB 2329’s second provision, the State Climate Change Action Team Act of 2010, would codify the CAT and delineate its official makeup and responsibilities. The CAT would be chaired by the secretary of Cal EPA and would consist of members from several other entities in the state government, such as the Resources Agency and ARB. The CAT’s purposes would be to coordinate state efforts to meet the GHG reduction targets in AB 32, and to serve as the central organization for developing state climate policy more generally. To achieve these purposes, AB 2329 directs the CAT to identify and review relevant activities and programs; recommend policies, investment strategies, and priorities; and provide information to local governments and regional groups.

Debate on AB 2329 does not appear focused on whether climate change poses a danger to California, but on the best mechanisms for responding to that danger. Critics have claimed that codifying coordination roles in a statute will only make the state’s approach to climate change policy less flexible, more costly, and more confusing. Rather than codifying the CAT, and thereby creating a new permanent body, some people advocate relying on an existing legislative committee to coordinate state action. This committee could “keep abreast of agency actions, hosting informational hearings and passing specific legislation to reorganize government if necessary to align staff and leadership around important state issues.”

Proponents contend that the scope of the problem renders the current system inadequate. As the Coalition for Clean Air has stated in support of AB 2329, responding to climate change requires a “tremendous collaborative, multi-stakeholder effort.” As one of the bill’s author’s argues, nothing in existing law requires climate change policy to be coordinated across agencies, and there is no requirement to develop strategies for dealing with climate change impacts. AB 2329 would change that, putting greater weight behind the State’s response.

With rising sea levels as a logical outcome of global climate change, the California Legislature is considering Assembly Bill 2598, which would require each local trustee of public trust land to prepare a sea level rise action plan. This plan would evaluate the potential impacts of a rising ocean on both public trust land and improvements on that land, and it would outline potential strategies to deal with those impacts.

Under the public trust doctrine, California holds title to tidelands, submerged lands, and beds of navigable waterways for public purposes. These purposes include commerce, navigation, fisheries, and preserving land in its natural state. The state has granted title to certain public trust lands to more than 80 local trustees, including cities, counties, public districts, and agencies such as the Department of Water Resources.

Many of these public trust lands are on or near California’s coastline, and thus directly affected by rising sea levels resulting from global climate change. The potential impact on the state from rising sea levels is considerable. Approximately 80% of California’s population lives within 50 kilometers of the Pacific Ocean, and the coastal economy contributes more than $50 billion annually to the state. Even when limited to activities at California’s ports, this sector of the economy produces roughly $7 billion annually in state and local revenues and employs over five hundred thousand Californians.

AB 2598 was introduced by Assemblywoman Julia Brownley (D-Woodland Hills), and it is currently pending in the State Senate. The core of the bill is a requirement that each local trustee “shall give management priority to, and take all reasonable actions that are necessary for, the preparation of a sea level action plan” for public trust lands over which it has been granted title. This plan must be submitted by July 1, 2011, to the Natural Resources Agency, the Governor’s Office of Planning and Research, and the State Lands Commission. Among other required content, each plan must map areas that may be affected by sea level rise in 2050 and 2100; estimate the financial effect of sea level rise on public trust lands and improvements on those lands; explain strategies to prevent or mitigate damage to existing development, infrastructure, and critical habitat; and design standards to avoid impacts on new development and infrastructure.

Under the bill, a local trustee may be exempt from preparing a plan, or may submit a modified plan, if none of its public trust lands is subject to sea level rise by 2100, or if the cost of preparing the plan “substantially outweighs” the beneficial information the plan would provide. A local trustee may also be exempt from preparing a plan if revenues from its public trust lands and assets from sources such as the Ocean Protection Council are insufficient to fund the plan’s production.

First District Court of Appeal Finds Sonoma County Properly Approved a Coastal Permit and Use Permit for a Residential Project Despite a Reduced Setback

In Hines v. California Coastal Commission, Board of Supervisors of Sonoma County, et al. (2010) 186 Cal.App.4th 830, the First District Court of Appeal held the Sonoma County Board of Supervisors’ (Board) approval of a residential project and the California Coastal Commission’s refusal to exercise jurisdiction over appellants’ appeal did not violate the Coastal Act (Pub. Resources Code, § 30000 et seq.). The court also held the project opponents failed to exhaust their administrative remedies, thus barring their CEQA claims. Regardless, the court found the County properly applied a categorical exemption under CEQA.

On July 31, 2006, Steven and Carol Star filed their application for a coastal permit and use permit for the construction of a residential home and garage. The project was to be constructed near riparian vegetation. The application sought a 50-foot setback instead of the 100-foot setback required by the Local Coastal Plan to protect riparian habitats. The Sonoma County Board of Zoning Adjustments approved the application on December 13, 2007.

The opponents appealed this decision to the Board. The Board denied the appeal and found the 50-foot setback was adequate to protect the resources in the riparian habitat. The Board also concluded the project was categorically exempt from CEQA as a single-family residence under CEQA Guidelines section 15303, subdivision (a). The opponents subsequently appealed the Board’s action to the Coastal Commission. The Coastal Commission dismissed the appeal, determining that it did not give rise to a “substantial issue” under the Coastal Act. The opponents sued. The trial court denied the writ petition.

The appellate court upheld the trial court’s decision. The court rejected the appellants’ argument that their appeal presented substantial issues, which required the Coastal Commission’s review of the appeal. The court found that evidence in the record strongly supported the findings of both the Board and Coastal Commission to approve the reduced setback. The appellants presented no substantial issue regarding the project’s conformance with the Local Coastal Plan. The court also determined that the Board did not abuse its discretion in approving the coastal permit and use permit for the project.

Turning to the alleged CEQA violations, the court rejected the appellants’ argument that the County and the Coastal Commission violated CEQA in approving the project. The court first explained that the Coastal Commission did not “approve” the project when it rejected the appeal. The practical effect of the Coastal Commission’s decision was to leave the County’s decision intact.

The court also found that appellants failed to exhaust their administrative remedies with respect to their claim that the CEQA categorical exemption asserted by the County was inapplicable. In coming to this conclusion, the court recognized the general rule that the exhaustion requirement does not apply when there is no opportunity for the public to raise objections before project approval. In this case, however, the County’s public hearings held on the coastal use permit also included consideration of the categorical exemption under CEQA. Discussion of the project’s environmental review at the public hearings triggered the duty to raise all subsequently litigated arguments. The appellants submitted comments at the public hearings, but none of these comments addressed the applicability of the categorical exemption or even related to CEQA at all. Thus, the court concluded the appellants’ CEQA claim was barred.

In any event, the court found that the categorical exemption applied to the project. The appellants argued an exception to the categorical exemption applied, contending the cumulative impact of future projects of the same type in the same project area would be significant. The court found that claim to be entirely speculative, however, and unsupported by substantial evidence. Because of the failure to exhaust administrative remedies and to produce substantial evidence of alleged significant adverse impacts, the court did not address whether the County and the Coastal Commission failed to address alternatives or incorporate mitigation measures for alleged significant adverse impacts.