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FIRST DISTRICT HOLDS EIR FOR UC BERKELEY’S LONG RANGE DEVELOPMENT PLAN AND STUDENT HOUSING PROJECT INADEQUATE

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In Make UC a Good Neighbor v. Regents of University of California (2023) 88 Cal.App.5th 656, the First District Court of Appeal found the EIR for the UC Berkeley long range development plan (LRDP) and a student housing project inadequate. While the court rejected most of the petitioners’ claims, it held that the EIR failed to consider alternative locations for the housing project, and it did not analyze potential noise impacts caused by students in residential neighborhoods near campus.

Background

In 2021, UC Berkeley adopted the LRDP to guide the university’s development decisions through the 2036-2037 academic year. The LRDP estimated future enrollment levels for planning purposes, but did not establish any enrollment levels. In part, the LRDP provides a strategy to increase housing in response to both a decades-long housing crisis in the region and a projected future increase in the campus population.

Consistent with the LRDP, the UC Regents began planning two student housing projects. One of those projects is located at People’s Park, a historically significant landmark associated with social and political activism in Berkeley. People’s Park is now occasionally used as a venue for special events, but is predominantly used “by transient and unhoused people in multiple encampments” and “is afflicted with crime.”

The Regents certified a hybrid EIR including a program-level review of the approval and implementation of the LRDP as well as a project-level review of the two housing projects.

Petitioners Make UC a Good Neighbor and The People’s Park Historic District Advocacy Group filed a petition for writ of mandate alleging the EIR violated CEQA. The trial court denied the petition. Petitioners appealed.

Court of Appeal’s Decision

The court rejected petitioners’ arguments that (1) the EIR’s analysis of alternatives to the LRDP was insufficient, (2) the EIR improperly restricted the LRDP’s geographical scope to the campus, and (3) the EIR’s treatment of impacts related to population growth and displacement of existing residents was flawed. However, the court agreed with petitioners that the EIR’s failure to consider alternative locations for the People’s Park housing project was not adequately justified. Additionally, the court concluded that the EIR did not adequately consider potential noise impacts from student parties on nearby residential neighborhoods.

LRDP Alternatives

The court concluded that the Regents did not violate CEQA by omitting an alternative to the LRDP that would limit student enrollment. The court explained that, because the complicated process for determining enrollment levels is separate from the LRDP process, any alternative requiring a cap in future enrollment levels would change the nature and scope of the plan. Given the constrained purpose of the LRDP to “guide future development regardless of the actual amount of future enrollment,” the EIR did not need to include a capped enrollment alternative.

Scope of LRDP

The court also rejected petitioners’ argument that the Regents improperly segmented the LRDP by focusing only on the campus and neighboring properties and excluding more distant locations. While petitioners argued that the LRDP arbitrarily omitted more remote properties, the court reasoned that it was “perfectly rational” for the Regents to focus primarily on the campus and adjacent properties in the LRDP and develop separate plans for more distant locations.

Population Growth and Displacement

Rejecting a third argument by petitioners, the court concluded that the EIR sufficiently addressed impacts from population growth and displacement of existing residents. The EIR found that the LRDP would induce unplanned population growth, but concluded that this impact could be mitigated to a less-than-significant level by ensuring that the Regents provide local and regional planning entities with annual information about university-driven population growth. Despite petitioners’ assertion otherwise, the court declined to assume that these planning entities would fail to plan for the population growth projected in the LRDP.

Additionally, the court rejected petitioners’ argument that the EIR’s treatment of displacement impacts was inadequate. The court concluded that the EIR properly analyzed these impacts and that petitioners failed to produce sufficient evidence to demonstrate that displacement caused by the project would exacerbate homelessness and in turn lead to environmental impacts.

Site Alternatives to People’s Park

While the court found that the EIR sufficiently analyzed alternatives to the LRDP, it agreed with petitioners that the EIR failed to consider a reasonable range of alternative locations for the housing development at People’s Park. The EIR determined that the housing project would have a significant impact on historical resources, due to the demolition of People’s Park and construction of new housing that would be incompatible with other nearby historical resources. Nevertheless, the EIR did not contain an in-depth analysis of any alternative locations for the housing project.

The court concluded that the EIR’s reasons for declining to consider alternatives were insufficient. The EIR explained that an alternative location might reduce the amount of new housing or require the university to acquire new properties, and that many potential alternative sites were smaller than People’s Park or were close to historical resources. According to the court, these reasons were vague and unequivocal, and did not demonstrate that no feasible alternatives existed.

The Regents argued that developing another site would fail to meet one of the project’s primary objectives—to revitalize the People’s Park site—and the record demonstrated that this was one of the project’s main purposes. The court, however, noted that the cited objective referred generally to “a UC Berkeley property” and not to People’s Park, specifically. The court also determined that the Regent’s arguments for rejecting other locations, even if potentially valid, were not reflected in the EIR.  Similarly, the court concluded that the EIR did not support the Regents’ argument that all of the proposed housing sites would need to be developed to achieve the EIR’s objectives. Moreover, observing that these explanations differed from those in the EIR, the court concluded that the Regents “hid the ball” and failed to adequately inform the public about the project.

Noise impacts

Finally, the court held that the EIR was deficient because it did not analyze potential noise impacts from student parties. In doing so, it determined that substantial evidence in the record supported a fair argument that the LRDP and the housing projects might result in a significant noise impact.

The court acknowledged that “stereotypes, prejudice, and biased assumptions about people served by a CEQA project” cannot constitute substantial evidence for a CEQA claim; however, it rejected the Regents’ argument that concerns about noise impacts from student parties relied merely on improper stereotypes about “loud and unruly drunk college students.”

The court explained that the record revealed noise from student parties to be “a longstanding problem” in the residential neighborhoods near UC Berkeley’s campus. Among other things, the City of Berkeley had previously declared such parties to be a public nuisance and restricted high-density student housing in private homes, neighborhood groups pointed to hundreds of noise citations related to student parties, and the university itself had collaborated with various community groups to address complaints about noisy parties. Given the evidence demonstrating that student party noise was already a problem, the court concluded that there was a reasonable possibility that “adding thousands more students to these same residential neighborhoods would make the problem worse.”

Louisa Rogers

FOURTH DISTRICT HOLDS SUPPLEMENTAL EIR MAY BE REQUIRED FOR PROPOSED OFFICE COMPLEX BECAUSE GHG EMISSIONS WERE NOT WITHIN THE SCOPE OF EARLIER PROGRAM EIR; DUE TO UNUSUAL CIRCUMSTANCES, PROJECT DID NOT QUALIFY FOR INFILL EXEMPTION

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In IBC Business Owners for Sensible Development v. City of Irvine (2023) 88 Cal.App.5th 100, the Fourth District Court of Appeal held that the City of Irvine improperly relied on a CEQA addendum in approving a new office complex – the Gemdale project – on a site that is part of a larger, previously approved business complex. The court found the City’s conclusion that the project would not cause a new or substantially more severe impact related to greenhouse gas emissions than previously identified in a 2010 program EIR (PEIR) prepared for the business complex was not supported by substantial evidence. Additionally, the court held that the unusual circumstances exception precluded the application of the Class 32 Infill Exemption.

Background

The Irvine Business Park was originally developed in the 1970s. It primarily includes office uses, but also includes substantial industrial and warehouse uses and some residential uses. In 2010, the City adopted a Vision Plan for the business park, amending the City’s general plan to establish a development guide for creating a mixed-use community within the park.

The City prepared the 2010 PEIR to assess the environmental effects of the Vision Plan. The 2010 PEIR included an analysis of the buildout of the entire Vision Plan and anticipated that, so long as future site-specific development projects within the business complex would not result in new environmental effects or require additional mitigation measures, the City would approve the future project without additional environmental review. Any future projects not consistent with the assumptions made in the 2010 PEIR’s analysis, however, would potentially require additional environmental review.

In July 2019, real party in interest, Gemdale 2400 Barranca Holdings, LLC (Gemdale), applied to the City to develop an over-five-story, 275,000-square-foot office complex on a site within the Irvine Business Complex currently developed with a two-story, 70,000 square-foot office complex. Although the 2010 PEIR had assumed the project site would not be developed further, the City determined the project was within the scope of the 2010 PEIR. The City prepared an addendum to the 2010 PEIR, concluding that the potentially significant impacts of the Gemdale project had been adequately analyzed in the 2010 PEIR and that those impacts would be avoided or mitigated pursuant to mitigation measures adopted for the Vision Plan. City staff also opined that the project might be exempt from CEQA, but the City did not expressly determine that the project was exempt and did not file a notice of exemption.

The City approved the project in 2020. Petitioner sued. The trial court found in favor of petitioner and issued a writ of mandate directing the City to set aside the project approvals. The City and Gemdale appealed.

Court of Appeal’s Decision

Consistency with the 2010 PEIR

The court first considered whether the City correctly determined that the Gemdale project was consistent with the scope of the 2010 PEIR’s impact analysis, thereby avoiding the need for further environmental review. The court held that the City correctly determined that the project would not cause any new significant traffic impacts, but lacked substantial evidence to support the conclusion that the Gemdale project’s GHG emissions would not be greater than what was assumed in the 2010 PEIR.

Regarding traffic impacts, the addendum concluded that the project would not cause any new impacts because the project would not significantly increase vehicle delays – as measured by the level of service (LOS) methodology that the 2010 PEIR employed – at any of the intersections or roadway segments analyzed in the addendum traffic study. An analysis of the project’s vehicle miles traveled (VMT) was not conducted.

The petitioner argued that section 15064.3 of the CEQA Guidelines, which was added to the CEQA Guidelines in 2018, required the City to conduct a VMT analysis for the project. That Guideline section provides that VMT is the most appropriate measure of transportation impacts and that LOS impacts shall no longer be considered environmental impacts. The court concluded, however, that CEQA Guidelines section 15064.3 did not apply to the addendum. The Guidelines expressly state that agencies need not comply with section 15064.3 until July 1, 2020. Although the City approved the Gemdale project and the addendum on July 14, 2020, the City began preparing the addendum in 2019, well before the effective date of Guidelines section 15064.3.

Regarding GHG emissions, the addendum explained that the project would incorporate all of the climate change mitigation measures included in the 2010 PEIR, and would thus achieve the 2010 PEIR’s “net zero” emissions goal. Further, according to the addendum, the project would not change the overall development intensity for the Irvine Business Complex anticipated in the 2010 PEIR and would therefore not increase GHG emissions beyond what was assumed in the 2010 PEIR. When the City approved the Vision Plan, it granted each parcel within the Irvine Business Complex a “development intensity budget” and allowed parcels to transfer part of this budget to other parcels. Here, the project obtained the necessary development intensity budget from other parcels within the Irvine Business Complex. The City determined that a mere shift in the development intensity from one site in the complex to another would not result in a substantial increase in GHG emissions.

The court disagreed with the City. It explained that the City’s conclusion assumed, without substantial evidence, that transferring development intensity would merely change the source of GHG emissions without changing the total amount of emissions. But neither the 2010 PEIR nor the addendum analyzed the effect of such a transfer on the 2010 PEIR’s net zero emissions goal.  For this reason, the court concluded that substantial evidence did not support the City’s finding that the project’s emissions would be less than significant.

Additionally, the court observed that the City had prepared a draft GHG emissions analysis that indicated that the project might have significant emissions that could not be mitigated to a less-than-significant level. While the City did not ultimately include the analysis in the addendum, the court concluded that the draft analysis constituted record evidence that contradicted the City’s significance finding.

Categorical Exemption

The court rejected the City’s alternative argument that the project was exempt from CEQA review as an infill development project. Without analyzing the elements of the exemption itself, the court held that the project did not qualify for the exemption because the “unusual circumstances” exception applied to the project.

The court explained that the City’s failure to make an express finding as to whether the unusual circumstance exception applied to the project constrained the court’s ability to affirm the City’s conclusion that the project is exempt. Citing Respect Life South San Francisco v. City of South San Francisco (2017) 15 Cal.App.5th 449, the court explained that, to affirm an implied finding, a court must “assume that the entity found that the project involved unusual circumstances and then conclude that the record contains no substantial evidence to support either (1) a finding that any unusual circumstances exist … or (2) a fair argument of a reasonable possibility that any purported unusual circumstances identified by the petitioner will have a significant effect on the environment.” The court declined to affirm under either option.

First, the court concluded that there was substantial evidence to support a finding of unusual circumstances. The court explained that the project was disproportionately large in comparison to the neighboring buildings, required a massive increase in its development intensity budget, and would more than double the amount of office space originally allocated to its parcel despite occupying only a fifth of the parcel.

Second, the court determined that there was a reasonable possibility that the project would have significant environmental impacts. The court pointed to the evidence in the record that the project might have significant GHG emissions that could not be mitigated to a less-than-significant level. The court determined that this impact might be attributed to the unusual size and density of the project. Thus, according to the court, the project fell into the “unusual circumstances” exception and was not categorically exempt from CEQA review.

By Louisa I. Rogers[/vc_column_text][/vc_column][/vc_row]

THIRD DISTRICT HOLDS CAPITOL BUILDING ANNEX EIR FAILED TO ADEQUATELY DESCRIBE ANNEX DESIGN, ANALYZE IMPACTS TO HISTORIC CAPITOL BUILDING, AND CONSIDER REASONABLE PROJECT ALTERNATIVES

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In Save Our Capitol! v. Department of General Services (2023) 87 Cal.App.5th 655, the Third District Court of Appeal held that an EIR prepared by the Department of General Services and the Joint Committee on Rules of the California State Senate and Assembly (collectively, DGS) for the demolition and replacement of the State Capitol Building Annex in Sacramento (project) did not comply with CEQA. In particular, the court found that the EIR’s project description, analyses of aesthetics and historical resources, and analysis of alternatives were deficient.

Background

The Legislature enacted the State Capitol Building Annex Act of 2016 authorizing renovation or reconstruction of the Annex and streamlining CEQA review for the project. Pursuant to the Act, the project sought to demolish the existing Annex and construct a new Annex, underground visitor center, and underground parking structure.

In the draft EIR, DGS explained that the project would follow an accelerated design and construction process in which the initial project concept would evolve and become more refined as the process moved forward. After circulating the draft EIR for public comment, DGS redesigned the visitor center and recirculated the draft EIR.

After recirculating the draft EIR, DGS continued to develop and modify the project design. The final EIR included more modifications from the draft EIR. It changed the location and capacity of the underground parking garage and clarified the project’s impacts on trees and landscaping. Additionally, for the first time, the final EIR disclosed the exterior design of the new Annex. DGS concluded that none of the modifications in the final EIR constituted significant new information that would require recirculation, certified the EIR, and approved the modified project.

Save Our Capitol! and Save the Capitol, Save the Trees filed petitions for writ of mandate challenging the EIR’s compliance with CEQA. The trial court denied the petitions, and the cases were consolidated on appeal.

Court of Appeal’s Decision

Project Description

While the court rejected most of petitioner’s arguments, it agreed that DGS’s failure to disclose the exterior design of the Annex before preparing the final EIR rendered the project description inadequate.

The key inquiry in the court’s analysis was whether the changes in the project description “thwarted the public’s ability to participate in the process and comment meaningfully on the EIR.” The court emphasized that the EIR was required to consider the project’s aesthetic impacts on an important historical resource, the Capitol Building, and reasoned that without the description of the Annex design, neither the draft EIR nor the public could consider those impacts before the final EIR was prepared.

The court explained that while the draft EIR stated that the new Annex would be aesthetically “consistent” with the Capitol Building and would create a “one-building” feel, the final EIR described the Annex as aesthetically “compatible” with the Capitol Building and clarified that the “one-building” feel referred to the interior consistencies between the Annex and the Capitol Building. The court also found that the glass exterior, proposed in the final EIR design, was highly relevant to the analysis of impacts, including impacts to the historical Annex building.  The court concluded that the discrepancies between the draft and final EIR, and the important information disclosed in the final EIR, could have misled the public about the design and hindered the opportunity for meaningful public comment about the project’s impacts. Thus, the court determined, the EIR’s description of the Annex’s exterior design deprived the public of an opportunity to comment on environmental impacts and did not satisfy CEQA’s project description requirements.

Analysis of Impacts

The court found that substantial evidence supported much of the EIR’s analysis of impacts; however, it agreed with petitioners that the EIR did not adequately analyze the project’s impacts on historical resources and aesthetics.

First, the court found that the EIR’s analysis of impacts to historical resources was deficient. Because the exterior design of the Annex was never circulated for public comment, DGS did not receive public comments concerning the project’s aesthetic impacts on the historic Capitol Building. Thus, the final EIR did not include written responses to concerns about these impacts. Recognizing that public comments and responses are an essential part of an EIR’s analysis, the court concluded that the analysis of impacts to historical resources did not comply with CEQA.

Second, the court found that the EIR did not adequately analyze the project’s impacts on the scenic vista of the Capitol Building from the west. While the court acknowledged that “CEQA does not expressly require visual simulations,” it nevertheless concluded that the EIR was required to include a visual representation or rendering of the east-facing vista. The court reasoned that the importance of the view of the west façade of the Capitol “[could] not be overstated,” given the significance of the Capitol’s historic role as “the seat of state government” and the Legislature’s development of various programs for the beautification of the area. The court concluded that, without a visual depiction, the EIR did not allow either DGS or the public to meaningfully consider the project’s intrusion on the scenic vista. Thus, the court held, the EIR’s analysis of this aesthetic impact did not comply with CEQA.

Analysis of Alternatives

The court explained that CEQA requires an EIR to describe a range of reasonable alternatives that would both attain most of the project’s objectives and avoid or lessen the project’s environmental impacts. It concluded that DGS failed to meet this standard by selecting clearly inferior alternatives that would be easily eliminated—either by failing to obtain the project objectives or causing a greater environmental impact than the project.

Additionally, while the court concluded that DGS meaningfully considered and rejected alternatives involving Annex renovation instead of demolition, it disagreed with the EIR’s conclusion that a proposed alternative would not lessen any significant impacts and found the alternative would also meet the project’s objectives. Thus, because it deprived the public of the opportunity to participate in the evaluation of reasonable alternatives, the court concluded that the omission of this alternative violated CEQA.

Remedy

On rehearing, the court concluded that the deficient portions of the EIR were severable from the portions of the EIR that addressed the impacts of Annex demolition and the Annex renovation alternatives. Thus, recognizing that any new exterior Annex design will require demolition of the existing Annex, the court concluded that demolition activities could proceed during remand. However, the court prohibited DGS from proceeding with any project activities that would prejudice DGS’s ability to revise the new Annex design based on new analysis.

Accordingly, the court directed the trial court to issue a peremptory writ of mandate directing DGS to partially decertify the EIR and revise and recirculate the deficient portions before recertifying.

Concurring and Dissenting Opinion

Justice Mauro filed a separate opinion concurring with the majority, but dissenting with respect to the conclusion that the EIR did not adequately analyze the project’s aesthetic impacts. The dissent concluded that CEQA did not require the EIR to include additional visual renderings of the project’s impacts on the view of the Capitol Building from the west.

The dissent noted that the EIR discussed the extent to which the new structures west of the Capitol Building would obstruct the view. Additionally, the dissent pointed to visual depictions of the proposed structures from above and cross-sections of the proposed structures from the south of the project site contained in the EIR. The dissent emphasized that the manner of discussion of the project’s aesthetic impacts was left to DGS’s discretion. While DGS could have provided more or different details about the impact, the dissent concluded that the impact discussion and visual schematics, considered together, sufficiently notified the public and decisionmakers about the extent of the aesthetic impact to the east-facing view.

By Louisa I. Rogers

Administrative Appeal Does Not Toll CEQA’s Statute of Limitations Where the Administrative Appeal Process Does Not Cover CEQA Issues

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In American Chemistry Council v. Department of Toxic Substances Control (2022) 86 Cal.App.5th 146, the Department of Toxic Substances Control (DTSC) adopted a regulation listing spray polyurethane foam systems as a priority product of concern under California’s “Green Chemistry” law and the Safer Consumer Products regulations. The Fifth District Court of Appeal held that petitioners’ CEQA challenge to the listing decision was untimely. The court also held that the listing decision complied with the Administrative Procedure Act (APA) and was within the scope of DTSC’s authority.

Background

Spray foam systems are a popular type of spray-applied insulation. Since 2014, DTSC has identified spray foam systems as a potential priority product under its Safer Consumer Products program and the Green Chemical law. After preparing several technical studies, in March 2018, DTSC submitted a final regulatory package for the listing regulation to the Office of Administrative Law. At that time, DTSC also issued a notice of exemption under CEQA for the listing regulation. The Office of Administrative Law approved the listing on April 26, 2018.

On May 30, 2018, petitioner American Chemistry Council submitted an informal dispute resolution request to have the department withdraw the listing. This dispute resolution process was authorized by the Safer Consumer Products regulations. DTSC ultimately rejected the request and associated administrative appeal on February 25, 2019.

On August 9, 2019, the American Chemistry Council and General Coatings Manufacturing Corporation filed a petition for writ of mandate and complaint challenging the listing regulation under the APA and CEQA. The trial court rejected petitioners’ APA claims, but found that the department had violated CEQA. Both sides appealed.

The Court of Appeal’s Decision

DTSC argued that petitioners’ CEQA claim was time-barred under CEQA’s 180-day statute of limitations because petitioners did not file their lawsuit until more than a year after DTSC made its listing decision. Petitioners claimed that DTSC’s listing decision was not final until the informal dispute resolution and appeal process was complete, so the statute of limitations did not begin to run until that time. The Court of Appeal agreed with DTSC, holding petitioners’ CEQA claim was time-barred.

The Court of Appeal first explained that the Safer Consumer Products’ regulatory structure for administrative appeals does not cover CEQA issues. The court observed that the dispute resolution and appeal process set forth in the Safer Consumer Products regulations is limited to a subset of disputes arising out of those same regulations. Nothing in the dispute resolution regulations suggests that CEQA issues may be resolved as part of that process. Accordingly, petitioners were under no duty to exhaust their administrative remedies under CEQA through that dispute resolution process.

Petitioners argued that, even if they were not required to exhaust their administrative remedies on their CEQA claims through the Safer Consumer Product’s dispute resolution process, the statute of limitations under CEQA did not begin to run until the administrative appeal process was completed because there was no final agency action until that process was resolved. The court rejected this argument, explaining that CEQA’s limitations period begins to run on the date the project is approved by the public agency. That period is not retriggered on each subsequent date that the public agency takes some action toward implementing the project, such as DTSC’s decision to deny the administrative appeal.

Here, by the time the Office of Administrative Law approved and filed the regulatory packet on April 26, 2018, DTSC had publicly voiced its intent to list spray foam systems as a priority product, taken and responded to public comments on that decision, issued a notice of exemption under CEQA, and released a final statement of reasons for the action. At that point, DTSC had made a firm commitment to the listing. Thus, the court determined, the statute of limitations on the CEQA claim began to run no later than April 26, 2018, when the Office of Administrative Law approved the listing. Because petitioners did not file their lawsuit within 180 days of that date, the CEQA claim was time-barred.

The court also held that DTSC did not exceed its authority under the Green Chemistry law or violate the APA in listing spray foam systems as a priority product. Contrary to petitioners’ arguments, DTSC was not required to establish a set exposure level for the chemical in question because the Green Chemistry law focuses on potential for exposure, not the extent of exposure. Further, the record supported DTSC’s conclusion that even a miniscule exposure could harm certain individuals. Additionally, DTSC substantially complied with applicable requirements governing the listing’s economic-impact analysis. And DTSC had a rational basis for rejecting voluntary alternatives to the listing decision.

–Laura Harris

SECOND DISTRICT HOLDS 90-DAY LIMITATIONS PERIOD FOR ACTIONS TO “ATTACK, REVIEW, SET ASIDE, VOID, OR ANNUL” LAND USE DECISIONS, RATHER THAN 4-YEAR PERIOD PROVIDED BY POLITICAL REFORM ACT, APPLIED TO ACTION CHALLENGING ALLEGEDLY CORRUPT PERMITTING DECISIONS

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In AIDS Healthcare Foundation v. City of Los Angeles (2022) 86 Cal.App.5th 322, the Second District Court of Appeal held that the 90-day statute of limitations in Government Code section 65009, for actions to “attack, review, set aside, void, or annul” certain land use decisions, barred challenges to land use decisions made by City officials alleged to be involved in an extensive bribery scheme.

Background

The Los Angeles City Council planning and land use management (PLUM) committee has various roles, including reviewing and recommending proposed real estate development projects. In 2020, one former member of the PLUM committee was arrested, and another was indicted, for allegedly accepting bribes and engaging in other corrupt behaviors in relation to PLUM committee work. Both members left the PLUM committee in the fall of 2018.

In August 2020, AIDS Healthcare Foundation (AHF) filed suit against the City, alleging that an “ongoing corruption scandal regarding the approval of real estate projects” violated the Political Reform Act of 1974 (PRA or Act). AHF sought an order restraining all building permits granted by the City while the corrupt former members served on the PLUM committee, as well as an order restraining the City from supporting any of the affected projects with taxpayer money.

The City demurred to AHF’s complaint, arguing that the claims were time-barred. The superior court sustained the demurrer, concluding that the action had not been brought within the applicable 90-day statute of limitations. AHF appealed.

Court of Appeal’s Decision

Applicable Statute of Limitations

In the trial court, AHF argued that the PRA provided the applicable statute of limitations. The PRA permits suits for injunctive relief where public officials are alleged to have used their official position to influence government actions for their own personal financial interests. Relevant here, the PRA permits courts to set aside official actions tainted by violations of the Act. The PRA includes a four-year statute of limitations for civil actions brought under the Act.

On appeal, AHF argued instead that the three-year “catch-all” statute of limitations for statutorily-created liability in Code of Civil Procedure section 338, subdivision (a) applied to the action. The City consistently argued that the 90-day limitations period provided by Government Code section 65009 for actions “to attack, review, set aside, void, or annul” various land use and zoning decisions applied to the action.

The Second District agreed with the City that the 90-day statute of limitations barred the action. Citing Ching v. San Francisco Bd. of Permit Appeals (1998) 60 Cal.App.4th 888 (Ching), which addressed a similar question, the court reasoned that the plain language of section 65009 encompassed AHF’s action. The Ching court noted that section 65009 had no exceptions for actions brought under the PRA. Additionally, the Ching court explained that “specific statutes control general ones” and thus held that the more specific 90-day statute of limitations in section 65009 applied to the type of challenge at issue, rather than the general limitations period provided by the PRA. After reviewing Ching and other similar opinions, the court concluded that section 65009 provided the applicable limitations period for AHF’s action.

Gravamen of the Complaint

Seeking to avoid the 90-day limitations period, AHF argued that the gravamen of its action was a challenge to corruption by City officials, even if the ultimate relief sought was the invalidation of improperly-issued permits.

The court rejected AHF’s argument, explaining that AHF could not escape the short limitations period by characterizing its claim as “necessarily dependent on a finding of a violation of the PRA,” rather than a challenge of project approvals by the PLUM committee.

Constitutional Considerations

Acknowledging that the California Constitution generally limits the Legislature’s power to amend or repeal initiative statutes, the court nevertheless rejected AHF’s argument that applying the limitations period in section 65009 to the action constituted “an unconstitutional legislative amendment to a duly-enacted voter initiative” for several reasons.

First, the court noted that the PRA contained express provisions allowing amendments to the Act by the Legislature, and that AHF failed to address these provisions in its briefing. Second, recognizing that the limitations period in section 65009 pre-dated the PRA by almost 10 years, the court remarked that the Legislature could not have intended to limit or amend the PRA in enacting section 65009. Third, the court explained that the four-year limitations period in the PRA was added by a later legislative amendment, not by voter initiative. Thus, the limitations period in the PRA was not enacted by voter initiative, as AHF claimed. Finally, even if the electorate had enacted the PRA’s four-year limitations period through an initiative, the court reasoned that the electorate did nothing to expressly abrogate other existing and potentially applicable statutes of limitations when it passed the PRA. For these reasons, the court held that the application of the pre-existing 90-day limitations period provided in section 65009 to the PRA action did not conflict with or amend the original PRA.

Policy Arguments

While AHF urged that important policy reasons justified the application of a longer limitations period to “discover and ferret out corruption,” the court declined to consider the policy goals underlying both the PRA and section 65009. The court explained that the statutory language of 65009 contained no ambiguity, and thus, it was required to apply the 90-day limitations period contained therein to AHF’s action.

— Louisa Rogers

FIRST DISTRICT UPHOLDS LESS THAN SIGNIFICANT IMPACT DETERMINATION FOR BIOLOGICAL RESOURCES BASED ON SURVEY THAT PREDATES THE NOP, AND ON PUBLIC SAFETY BASED ON CITY STAFF EXPERTISE

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In Save North Petaluma River and Wetlands v. City of Petaluma (2022), 86 Cal.App.5th 207, the First District Court of Appeal upheld an EIR’s analysis of an apartment complex’s impacts on biological resources and public safety. The court concluded that the EIR’s reliance on a special status species survey conducted several years before the NOP was issued, as well as review of more recent databases, was sufficient to support its conclusion that the Project would have a less than significant impact. It also concluded that the City’s reliance on its staff’s expertise was sufficient to support its conclusion that the Project would not have a significant impact on public safety related to emergency evacuation.

Background

In 2007, the City published a Notice of Preparation (NOP) for a 312-unit apartment complex in the City of Petaluma. In May 2008, the applicant submitted an application for a smaller 278-unit complex to comport with the City’s newly adopted 2025 General Plan. In March 2018, the City published a draft EIR for the complex, which included a 2004 consultant report on special status species in the Project area. In October 2019, the City issued a final EIR for the Project, concluding that the changes made in the reduced-scale version of the complex eliminated or reduced several of the potentially significant impacts identified in the Draft EIR. The Planning Commission recommended that the City Council certify the final EIR, but did not recommend approving the necessary zoning amendments.

In January 2020, in response to public comment and input from public agencies, the applicant submitted a second reduced version of the Project with 180 units (hereinafter, the Project), reducing the building footprint and increasing the setback from the Petaluma River, preserving two wetlands near the river and avoiding development in the River Plan Corridor, and preserving additional trees with a flood terrace design adjustment. A City staff report determined that this second revised version of the Project reduced impacts and addressed the Planning Commission’s concerns regarding the zoning amendments, and concluded that the second revised Project was within the reasonable range of alternatives addressed in the EIR and would not result in new or more substantial impacts compared to prior versions. The City certified the EIR and overturned the Planning Commission’s denial of zoning amendments. In February 2020, the City approved the zoning amendments by ordinance.

Save North Petaluma River and Wetlands and Beverly Alexander (Petitioners) field a petition for writ of mandate challenging the adequacy of the EIR on several grounds. The trial court denied the petition and Petitioners appealed.

Court of Appeal’s Decision

Special Status Species Impact Analysis

The court rejected Petitioners’ argument that the EIR’s impact analysis of special status species was deficient.

It explained that the EIR did not fail to investigate the project’s baseline conditions as of 2007 when the NOP was published because the 2004 special status species survey was based on current data at the time, and the EIR included database reviews from more recent years—as recent as 2017. The court further explained that there is no authority suggesting that CEQA is violated where an EIR’s analysis is drawn from site visits, studies, and habitat evaluations undertaken both before and after the NOP. Further, the court noted that Petitioners did not cite any evidence that the biological conditions at the Project site differed from 2004 to 2007, or in later years when updated databases were consulted.

Moreover, the court reasoned that Petitioners failed to challenge the EIR’s description of existing conditions and habitats on the undeveloped Project site, and that there is no evidence that the EIR omitted or inaccurately described the material aspects of the biological conditions on or near the Project site. The court distinguished this case from a string of cases where an EIR purported to measure impacts based on conditions that did not exist on the Project site or on conditions that were forecasted to exist at some point in the distant future. (See, e.g., Madera Oversight Coalition, Inc. v. County of Madera (2011) 199 Cal.App.4th 48.)

The court held that the EIR’s references to studies and site visits constitute substantial evidence supporting its special status species analysis because factual information in the EIR itself may constitute substantial evidence in the record to support the agency’s action on the project. (CEQA Guidelines, § 15121, subd. (c).) The court explained that it is appropriate to cite, but not include such documents in the EIR.

Therefore, the court held that the EIR’s analysis and information upon which it relied regarding the Project’s impacts on special status species was sufficient, and accordingly rejected Petitioners’ further contend that the EIR failed to offer recommendations that would adequately mitigate the Projects impacts on these species.

Emergency Evacuation & Public Safety Impact Analysis

The court also rejected Petitioners’ argument that the EIR was deficient because it omitted an analysis of egress and evacuation safety based on public comment documenting flooding and grass fires in the area. The court instead held that the EIR’s conclusion that the Project would not impair implementation of, or physically interfere with, an adopted emergency response plan or emergency evacuation plan was supported by substantial evidence, noting thde EIR’s adoption of the 2013 California Fire Code, consultation with the Petaluma Fire Department, and incorporation of additional recommendations and approval from the City Fire Marshal.

The court also explained that an agency may rely on the expertise of its staff to determine that a project will not have a significant impact, and that the City therefore appropriately relied on a City staff memorandum corroborating the public safety analysis in the EIR and reflecting information from the City’s Assistant Fire Chief confirming that the Fire Department does not have significant flood or fire access or egress concerns with development above the 100-year floodplain at the site. Additionally, the court rejected Petitioners’ claim that the City staff memorandum is improper post-EIR analysis, distinguishing this case from Sierra Watch v. County of Placer (2021) 69 Cal.App.5th 86.

–Veronika Morrison

FIRST DISTRICT HOLDS THAT A HIGH SCHOOL’S INSTALLATION OF FOUR 90-FOOT LIGHT TOWERS FOR ATHLETIC STADIUM IS NOT CATEGORICALLY EXEMPT FROM CEQA

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In Saint Ignatius Neighborhood Association v. City and County of San Francisco (2022) 85 Cal.App.5th 1063, the First District Court of Appeal held that the installation of four 90-foot light towers in a high school’s athletic stadium is not exempt from CEQA under the class 1 and class 3 categorical exemptions.

Background

Saint Ignatius College Preparatory High School is located in the City of San Francisco’s “Outer Sunset District.” The school has an athletic stadium with a 2,008-person capacity, situated across the from several two-story, single-family homes. In February 2018, the school applied for approval of the installation of four permanent 90-foot-tall outdoor light towers on its athletic field. In June 2020, the City’s planning department determined that the project was categorically exempt from CEQA under the class 1 exemption for existing facilities and the class 3 exemption for new construction or conversion of small structures. (See CEQA Guidelines, §§ 15301, 15303.)

In July 2020, the Planning Commission upheld the exemption determinations and approved a conditional use permit for the project with several conditions, including that the lights be used no more than 150 nights per year, as well as other various time and event size restrictions. The Planning Commission also required close communication with neighbors about events and the distribution of a large-event management plan and code of conduct for event attendees. The Board of Supervisors affirmed the planning department’s exemption determination and approved the conditional use authorization with additional and stricter conditions related to time restrictions, event size restrictions, required use reporting by the school, off-site parking accommodations, and the addition of trees to serve as a light screen for neighboring homes.

The Saint Ignatius Neighborhood Association filed suit, alleging that the City erred in exempting the project from CEQA, and that its approval was inconsistent with its planning code and General Plan. The trial court denied the petition. Petitioner appealed.

Court of Appeal’s Decision

Class 1 “Existing Facilities” Exemption

The class 1 exemption applies to “the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of the existing or former use.” (CEQA Guidelines, § 15301.)

While the court agreed with the City’s findings that the project will not increase the overall capacity and use of the stadium, it concluded that the project will significantly expand the nighttime use of the stadium. The court pointed to the “undisputed” fact that nighttime use, during which temporary lighting is used, will significantly expand from the current 40 to 50 nights per year, to potentially 150 nights. The court also noted petitioner’s assertion that the current use of temporary lighting is unauthorized. Accordingly, the court found that the class 1 exemption for “existing facilities” did not apply.

Class 3 “Small Structures” Exemption

The class 3 exemption applies to “construction and location of limited numbers of new, small facilities or structures; installation of small new equipment and facilities in small structures; and the conversion of existing small structures from one use to another where only minor modifications are made in the exterior of the structure.” (CEQA Guidelines, § 15303.) To determine what constitutes a “small” structure pursuant to the class 3 exemption the court looked to the examples listed in the exemption. While acknowledging that this list is not exhaustive, the court stated that “the examples do provide an indication of the type of projects to which the exemption applies.”

The court found that “[t]he light standards are fundamentally dissimilar from all of the examples,” which primarily include residential and commercial structures below certain unit and square footage maximums, utility structures, and accessory structures such as garages and fences. The court decided that looking at only the square footage of the base of the light towers was inapposite. It explained that commercial and residential structures were subject to applicable zoning requirements that ensure their height will be consistent with the surrounding neighborhood, whereas here, the 90-foot-tall light towers will be “significantly taller than any other structure in the neighborhood,” where homes are typically 20 to 25 feet tall with a zoning limitation of 40-feet. Consequently, the court determined that “a 90-foot tall light standard does not qualify as ‘small’ within the meaning of the exemption.”

The court also distinguished the instant case from a string of cases allowing the class 3 exemption to apply to several telecommunication projects, including a cell tower (Don’t Cell Our Parks v. City of San Diego (2018) 21 Cal.App.5th 338) and cell transmitters on utility poles (Aptos Residents Assn. v. County of Santa Cruz (2018) 20 Cal.App.5th 1039), by highlighting that the light towers, unlike a 35-foot-tall cell tower to be situated amongst tall trees or the installation of transmitter boxes on existing utility poles, will be 90-feet tall and “by far the tallest structure in the surrounding area.” Accordingly, the court held that “the light standards cannot fairly be considered small structures within the meaning of the class 3 exemption.”

Unusual Circumstances Exception & General Plan Consistency

Because the court found against the use of both exemptions based on its interpretation of exemption language and the evidence in the record, it declined to address petitioner’s alternative argument that “unusual circumstances preclude application of the exemptions” or the claim that the City violated its code and General Plan.

By Casey Shorrock

IN A REVERSAL, SECOND DISTRICT FINDS CITY’S FAILURE TO INCLUDE CEQA EXEMPTION ON MEETING AGENDA VIOLATED THE BROWN ACT

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In G.I. Industries v. City of Thousand Oaks (2022) __ Cal.App.5th __ (Case No. B317201), the Second District Court of Appeal determined that the City of Thousand Oaks violated the Brown Act when it voted to adopt a CEQA exemption for a new waste-hauling Franchise Agreement without including the exemption on the meeting agenda at least 72 hours before the meeting.

Background

In 2020, the City of Thousand Oaks considered entering into a 15-year franchise agreement with Arakelian Enterprises, Inc., doing business as Athens Services, to provide solid waste management for the City. On March 4, 2021, the City posted an agenda for a March 9, 2021, City Council meeting, with an item to consider staff’s recommendation to approve the Athens franchise agreement. There was no indication on the agenda that the City also would consider finding the agreement exempt from CEQA.

On the day of the March 9th meeting, the City posted a supplemental agenda item and information packet with staff’s recommendation that the City find the agreement categorically exempt from CEQA under the Class 1 exemption for existing facilities, the Class 7 exemption for actions by regulatory agencies for the protection of the natural resources, and the so-called “common sense” exemption. At the meeting, the City attorney recommended adopting staff’s finding supporting the CEQA exemption. The City Council then moved to adopt a motion to approve the franchise agreement. At the suggestion of the Mayor, the Council amended the motion to also include the corresponding CEQA exemptions. The meeting minutes indicated that council took separate actions in approving the agreement and finding it exempt from CEQA.

The City filed a notice of exemption (NOE) on March 15, 2021. Thereafter, Waste Management sent a “cure and correct” letter asserting the City violated the Brown Act by voting to “adopt” the NOE before approving the franchise agreement. The City did not respond to the letter within 30 days, thus was deemed to not have cured or corrected the challenged action pursuant to Brown Act section 54960.1(c)(3). Waste Management filed a petition challenging the approval of the franchise agreement and exemption determination. Respondents filed a demurrer, which the trial court sustained without leave to amend. And, although it agreed with Waste Management that the CEQA exemption determination and franchise agreement approval were separate items of business, ruled that CEQA does not require a public hearing for an exemption determination, therefore, the Brown Act did not apply. Waste Management appealed.

Court of Appeal’s Decision

The Court of Appeal first held that the factual allegations in Waste Management’s petition were sufficient to state a Brown Act claim. Under the Brown Act, at least 72 hours prior to a regular meeting, the legislative body of a local agency must post an agenda containing a brief general description of each item of business to be transacted. (See Gov. Code § 54954.2, subd. (a)(1).) The agenda must provide the public with an opportunity to address the legislative body on any item of interest, effectively barring the agency from acting on any item that does not appear on the agenda.

The City argued that the CEQA exemption did not need to be on the agena because it was not a separate item of business was not a separate item of business within the meaning of the Brown Act. Rather, the City argued, it adopted the CEQA exemption only as a component of the agenda item awarding the franchise agreement to Athens. The court rejected this argument and cited San Joaquin Raptor Rescue Center v. County of Merced (2013) 216 Cal.App.4th 1167, which, although involving the adoption of a mitigated negative declaration (MND), the court determined applied here. The court reasoned that, because members of the public are entitled to have notice of, and an opportunity to participate in, a local agency’s determination that an MND should be issued, they are also entitled to participate when an agency determines a project is exempt from CEQA.

The Second District noted that applying the Brown Act’s notice requirements do not alter an agency’s existing obligations under CEQA, which does not require public noticing of exemptions to CEQA. Rather, the Act requires only that the exemption, if it is to be discussed at a meeting of a local legislative body, must be placed on the meeting agenda so that the public be provided an opportunity for comment.

The City had argued that applying the Brown Act to a CEQA exemption determination would place an intolerable burden on local agencies. The court disagreed. According to the court, where an agency’s legislative body intends to vote on or discuss a CEQA exemption at a regular meeting, “it will require minimal effort to include it as an agenda item.” And while the agency may delegate some responsibility to staff before rendering a decision, the court cautioned that agencies cannot delegate its entire duty as the final decisionmaker on a project—i.e., approving an exemption—to avoid its Brown Act obligations. Accordingly, the court concluded that “[t]he addition of words to the agenda indicating the local agency is considering a project subject to staff determination of CEQA exemption will not unduly tax a local agency’s resources.”

The Second District also rejected the City’s claim that Waste Management’s “cure and correct” letter, pursuant to Brown Act section 54960.1(b)), was deficient because it stated the City “adopted,” rather than “filed,” an NOE. Section 54960.1(b) requires a prospective litigant to state, in writing, the nature of the alleged violation. The court determined that Waste Management’s letter satisfied this obligation because it informed the City that it violated section 54954.2 by considering the CEQA exemption without describing the action in the agenda for at least 72 hours before the meeting. That the letter stated the City had “adopted” an NOE, versus using the proper term filing, was immaterial—the letter adequately stated the substantive point in regards to the Brown Act violation. The court reiterated that the purpose of the section is to notify the local agency of its alleged violation so that it can cure it to avoid litigation; its purpose is “not to allow a local agency to avoid the consequences of Brown Act violations by launching nit-picking technical attacks on the language use in the cure and correct letter.”

By Bridget McDonald

*RMM represented Petitioner G.I. Industries (aka, Waste Management) in this litigation.

California Supreme Court Holds that CEQA is Not Preempted by the Federal Power Act When Used to Make Decisions that are Outside Federal Jurisdiction or Compatible with the Federal Government’s Licensing Authority

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In County of Butte v. Department of Water Resources (2022) 13 Cal.5th 612, the California Supreme Court partially reversed an opinion from the Third District Court of Appeal that CEQA is completely preempted by the Federal Power Act (FPA), finding instead that CEQA is only partly preempted. Specifically, the Supreme Court held the FPA preempts an agency’s application of CEQA to the extent that it interferes with the federally established licensing process, but not when CEQA is used to make decisions concerning matters outside federal jurisdiction or those compatible with the federal government’s exclusive licensing authority.

Background

This consolidated litigation addresses a license renewal for the Oroville Facilities, a collection of public works projects, including hydroelectric facilities, in Butte County. As part of the renewal process, the California Department of Water Resources (DWR) engaged the alternative licensing process (ALP) authorized by the Federal Energy Regulatory Commission (FERC) prior to applying for relicensing. The ALP process allowed DWR to engage with stakeholders and develop a settlement agreement addressing their concerns, which effectively functions as a first draft of the FERC license. Following five years of negotiations, all but two of the stakeholders signed on to the settlement agreement, which DWR submitted to FERC. The Counties of Butte and Plumas did not sign the agreement. Following submission of the settlement agreement and licensing application by DWR, FERC prepared an Environmental Impact Statement (EIS) pursuant to NEPA, which considered several alternatives, including a “staff alternative” with modifications from the FERC staff. The EIS concluded the “staff alternative” was the preferred alternative.

Also following submittal of the relicensing application, DWR prepared an EIR pursuant to CEQA, analyzing implementation of the settlement agreement and continued operation of the Oroville Facilities as the “project” under CEQA and the same alternatives considered by FERC. DWR prepared the EIR to comply with additional permitting requirements under the Clean Water Act, for which the State Water Resources Control Board was the lead agency, and to help DWR determine whether to accept a license containing the original terms or the “staff alternative.”

Procedural History

Butte County and Plumas County separately filed petitions for writ of mandate, each challenging DWR’s compliance with CEQA in connection with the relicensing of Oroville Facilities. The cases were later consolidated.

The trial court found DWR’s EIR adequate, and the Counties appealed. On appeal, the Third District declined to reach the merits of the case, holding that the Counties’ CEQA claims were entirely preempted by the FPA, the purpose of which is to “facilitate the development of the nation’s hydropower resources” by centralizing regulatory authority over dams, reservoirs, and hydroelectric power plants in the federal government. The California Supreme Court granted the Counties’ petition for review but subsequently transferred the matter back to the Court of Appeal for reconsideration in light of Friends of the Eel River v. North Coast Railroad Authority (2017) 3 Cal.5th 677 (Friends), which held that the Interstate Commerce Commission Termination Act (ICCTA) does not necessarily preempt a State agency’ compliance with CEQA for a new railroad project, and that State, as a railroad operator, could voluntarily subject itself to compliance with CEQA without conflicting with the ICCTA. On remand, the Third District affirmed its earlier holding that CEQA was preempted by the FPA.

The California Supreme Court again granted the Counties’ petition for review to determine whether the FPA preempts CEQA when the state is acting on its own behalf and exercising discretion in relicensing a hydroelectric dam.

The California Supreme Court’s Decision on Preemption

A five justice majority of the California Supreme Court held that CEQA claims are preempted insofar as they conflict with the FPA’s licensing scheme, but not where CEQA is used to make decisions concerning matters outside federal jurisdiction or those compatible with the federal government’s exclusive licensing authority. Specifically, the court determined that any CEQA challenge to the ALP and the terms of the settlement agreement and license being considered by FERC were preempted by the FPA. However, because DWR’s compliance with CEQA was not limited to the FERC relicensing, the Counties’ broader challenges to the adequacy of DWR’s EIR were not preempted. The Court concluded that DWR could use the environmental conclusions reached through the CEQA process to aid its decision whether to accept FERC’s “staff alternative” or request modification to the terms of the license issued by FERC, which the FPA allows.

The Court discussed the federal and state law principles applicable to the case before it, including the presumption against preemption for a state-owned, or state-operated project. The FPA does not include an “express” preemption clause, so the issue was whether “conflict” or “field” preemption applied. The Court concluded that the distinction between the two types of preemption was not meaningful here, particularly considering the presumption that, absent a clear statement of Congressional intent that state regulation is preempted, federal law will not be interpreted as interfering with state-owned or state-operated projects. The Court also found federal caselaw applying “field” preemption to state regulatory schemes related to the FPA distinguishable because those cases addressed state attempts to regulate private actors seeking licensing under the FPA. The Court stated that CEQA, in the context of a state agency applying for a federal license, constitutes “self-governance” rather than traditional state regulation of private actors that has been held preempted in the past.

The Court acknowledged that state courts could not require a CEQA remedy inconsistent with federal law, including the FPA, but noted that the Counties had dropped their previous request to enjoin FERC’s licensing process pending DWR’s compliance with CEQA. The Court reasoned, however, that DWR’s compliance with both CEQA and the FPA was possible without creating any conflict. Specifically, DWR used CEQA analysis, in part, to determine whether it should accept a license from FERC containing the proposed terms or those modified by FERC staff. Similarly, the FPA allows applicants to amend their licensing applications or request that FERC modify the terms of the license. DWR could thus use the environmental conclusions reached in the CEQA process to make its own decisions and then make appropriate requests to FERC without intruding on FERC’s jurisdiction. Just as FERC was not required to issue a license wholly consistent with the terms of the settlement agreement, FERC retained jurisdiction to consider, but in no way be bound by, any subsequent requests from DWR. For these reason, environmental review at both levels of government did not overlap to invoke conflict preemption.

The Court also concluded that any preemption issues related to DWR’s adoption of specific mitigation measures demanded by the Counties were premature, as no court had ruled that any additional mitigation was required. The question before the Court was whether any CEQA challenge to DWR’s EIR was preempted by the FPA, the Court ruled such a challenge, in the abstract, was not inherently preempted. Additionally, the Court noted that it may be possible for DWR to adopt mitigation measures that are either outside of FERC’s jurisdiction or compatible with FERC’s licensing authority. Again, FERC could simply deny any request from DWR that conflicted with the FPA or FERC’s licensing authority.

In sum, where the Counties’ CEQA challenges seek to undermine a FERC license or associated terms, they are preempted by the federal government’s exclusive licensing authority under the FPA. However, Counties’ CEQA claims which implicate the sufficiency of an EIR to inform state self-governance and decision-making are not preempted.

The Concurring and Dissenting Opinion

Notably, the Chief Justice, and author of the Friends decision, filed a concurring and dissenting opinion. The Chief Justice agreed that any CEQA challenge to FERC’s licensing process including the settlement agreement was preempted but disagreed that broader CEQA challenges were not similarly preempted. The dissent reasoned that, in addition to “field” and “conflict” preemption, state law that constitutes an “obstacle” to the purposes and objectives of federal law would be similarly preempted. Here, given the history of federal caselaw concluding that state regulation of hydroelectric facilities is preempted by the FPA, and the express “savings clause” in the FPA reserving regulation of water rights to the states, the Chief Justice concluded that CEQA is an “obstacle” to the objectives and purpose of the FPA, particularly where the FPA licensing process included multiple equivalents of CEQA through the ALP and FERC’s compliance with NEPA and does not contemplate delays caused by state court review of CEQA compliance.

The dissent also concluded that CEQA was subject to “field” preemption because CEQA did not involve state regulation of water rights. The Chief Justice also noted that, while none of the federal FPA preemption cases addressed state-operated projects, the concept of “field” preemption (i.e., where Congress truly intends to “occupy the field”) is broad enough to preempt all state regulation, regardless of who the operator is.

Turning to Friends, the Chief Justice characterized her decision in that case as concluding that CEQA is exempt from preemption under the ICCTA as an example of “self-governance” by the State. Given the purpose of the ICCTA was to deregulate railroads, and thereby allow greater “self-governance” by railroad operators, the State’s voluntary compliance with CEQA was not preempted. In contrast, the dissent concluded that the FPA’s purpose and objectives is to vest exclusive regulation of hydroelectric facilities in FERC and to exclude all state regulation, with the exception of water rights. The Chief Justice concluded that, unlike the ICCTA, the FPA (including the federal caselaw interpreting the FPA) made it “unmistakably clear” that all state regulation of hydroelectricity facilities, except regulation of water rights, is preempted.

Lastly, the dissent concluded that finding CEQA only partially preempted was unworkable because a ruling that DWR’s CEQA compliance deficient would not impact FERC’s decision on whether to issue the license. Forcing DWR to perform additional analysis or consider additional mitigation or alternatives would be an exercise in generating paper, without any practical effect. As the Majority Opinion acknowledges, FERC has complete discretion to deny any request to alter the terms of the license, regardless of whether DWR believes such changes to be necessary to comply with CEQA. The dissent also found that requiring CEQA compliance in this case, where multiple environmental studies have been prepared for FERC’s consideration during the licensing process, would be redundant and have little practical benefit.

By Jordan Wright and Nathan George

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