Fifth District Court of Appeal Finds CEQA Required a County to Consider Environmental Effects of Surface Mining Project on Federal Land, Not Just the Effects of the Project’s Reclamation Plan under Local Jurisdiction

Nelson v. County of Kern (2010) __Cal.App.4th__ (Case No. F05932)

On November 19, 2010, the First District Court of Appeal concluded the County of Kern, as lead agency, had violated the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.; CEQA) and the Surface Mining and Reclamation Act of 1975 (§§ 2710 et seq.; SMARA) when approving a mitigated negative declaration and reclamation plan for a mining project located on federal land. The court held the County erred in failing to issue a permit for the mining operation under SMARA and in failing to consider the impacts of the surface mining project in its environmental review. The Court also held that because a fair argument could be made that the mining project may have a significant effect on the environment, CEQA required the county to prepare an EIR for the mining project and reclamation plan.

In 2005, the mining applicant’s predecessor filed an application for a proposed mine plan of operations and reclamation plan with the Bureau of Land Management (BLM) and with Kern County. The application proposed surface mining of calcite marble on a 40-acre parcel of federal land located within Kern County over a 30-year period, followed by implementation of a reclamation plan. The county limited its environmental review to the reclamation plan and did not consider the potential effects of the proposed mining operations. The county took this approach because the mining would take place on federal land and therefore BLM was sole permitting agency for purposes of mining operations and responsible to perform its own environmental review under NEPA. After BLM undertook NEPA review of the surface mining operations, the county separately considered the reclamation plan. The county adopted an initial study and negative declaration and approved the reclamation plan.

Petitioners sought a writ of mandate to set aside the county’s approvals on the ground that the county failed to review the entire project as required by CEQA. The trial court disagreed, holding the county was correct in limiting its environmental review to the reclamation plan because BLM had sole authority of the mining operations, and BLM had granted approval of the mining operation before the county acted on the reclamation plan. The court of appeal reversed.

The court of appeal first considered whether SMARA and CEQA permitted the county to limit its review to the reclamation plan and concluded they did not. In reaching this conclusion, the court considered whether the county was lead agency for the mining project under SMARA and CEQA. The court explained that at the time the county approved the reclamation plan, SMARA defined a “lead agency” as the “city, county … or the board which has the principal responsibility for approving a surface mining operation or reclamation plan.” (Pub. Resources Code, § 2728.) SMARA also requires every lead agency to adopt ordinances to establish procedures for the review and approval of reclamation plans, financial assurances, and mining permits. In this case, the county’s ordinance provides: “[N]o surface mining operations may be undertaken anywhere in unincorporated Kern County unless a surface mining permit and a reclamation plan has been submitted to and approved by the Planning Commission…” In light of these responsibilities, the court concluded the county was the lead agency under SMARA because it was the local agency responsible for approving the reclamation plan and was the designated local agency to implement SMARA pursuant to its own ordinance.

The court reached the same result with respect to CEQA’s lead agency requirements. The court explained that CEQA defines a “lead agency” as “the public agency which has principal responsibility for carrying out or approving a project which may have a significant effect on the environment.” (Pub. Resources Code, § 21067.) The court explained that under this definition, the lead agency must be a state agency and, as such, BLM could not be the lead agency for the mining project. The court concluded that in view of the county’s responsibilities under SMARA and the fact that a federal agency cannot be a CEQA lead agency, the county was the lead agency under CEQA.

Having determined that the county was the CEQA lead agency, the court considered whether the county had impermissibly “piecemealed” the project in evaluating only the reclamation plan and not the surface mining activities. The court explained that the CEQA Guidelines specify that a “project” means “the whole of an action….” (CEQA Guidelines, § 15378, subd. (a).) Further, the CEQA Guidelines clarify that the term “project” refers to “the activity which is being approved and which may be subject to several discretionary approvals by governmental agencies. The term ‘project’ does not mean each separate governmental approval. (CEQA Guidelines, § 15378, subd. (c).) These requirements ensure that a lead agency does not impermissibly “piecemeal” environmental review by chopping a single project into smaller parts for environmental consideration.

Based on these requirements, the court concluded the mining project included both the mining operations and the reclamation plan. The court explained both aspects were integrally related; the reclamation plan was simply the final phase of the overall usage of land proposed. Further, the two aspects were closely related by the fact that a reclamation plan is legally required for any proposal to engage in surface mining operations in California. The court concluded that because the mining activities and the reclamation plan were both part of the same “project” under CEQA, the county had abused its discretion in only evaluating the environmental effects of the reclamation plan.

In reaching this conclusion, the court distinguished the cases of El Dorado County Taxpayers for Quality Growth v. County of El Dorado (2004) 122 Cal.App.4th 1591 and City of Ukiah v. County of Mendocino (1987) 196 Cal.App.3d 47 on the grounds that both cases involved on-going mining operations for which the applicants had vested rights to continuing mining without a permit. The Court noted that in both cases the applicants did not need additional governmental approvals – other than reclamation plans –and therefore the agencies were justified in limiting their CEQA review to the reclamation plans. In contrast, in this case, the project involved new mining operations in addition to the reclamation plan and the applicant had no vested right in continuing mining operations at the project site. Although BLM had exclusive approval power over the surface mining aspect of the project, this did not excuse the county from considering the whole of the project in conducting its CEQA review.

Having determined that the project was both the surface mining activity and the reclamation plan, the court concluded CEQA required the county to prepare an EIR for the project. In so holding, the court applied the “fair argument” standard, which provides that with certain limited exceptions, an agency must prepare an EIR “whenever substantial evidence supports a fair argument that a proposed project may have a significant effect on the environment.” In this case, substantial evidence in the record demonstrated the surface mining component of the project may result in significant air quality impacts associated with extensive and daily use of heavy-duty diesel trucks to and from the mine and impacts to water and biological resources. Therefore, the court concluded the fair argument standard had been met and the county should have prepared an EIR analyzing the entire project.