Fourth District Court of Appeal Finds Adverse Effects of Preexisting Environmental Conditions on Residents of Future Developments Do Not Trigger Requirement to Complete an EIR

On June 30, 2011, the Fourth District Court of Appeal in South Orange County Wastewater Authority v. City of Dana Point (2011) __Cal.App.4th__, affirmed a decision denying a petition for writ of mandate under CEQA. The court found that the City of Dana Point (City) had properly adopted a Mitigated Negative Declaration (MND), and an Environmental Impact Report (EIR) was not required in order to address the impact of odor from an existing sewage treatment plant on residents of future developments. The court concluded that the CEQA objections were precluded by the legislative intent and statutory language of CEQA because the petition sought to challenge the project on the basis of preexisting environmental conditions and not the project’s adverse effects on the environment.

In 2007, Makar Properties applied to the City to change the City’s general plan and zoning code so that a nine-acre site eventually could be developed for mixed residential and commercial use. The South Orange County Wastewater Authority (SOCWA) operated a sewage treatment plant adjacent to the Makar site. In 2008, the City issued a MND, concluding that any environmental effects could be made less than significant with mitigation. SOCWA objected on the basis of noise and odor issues, recommending the developer pay millions of dollars to cover the sewage plant’s aeration tanks so that future residents of the Makar site would not be subjected to bad smells. In 2009, the City approved an amendment to the general plan creating a new “Residential/Commercial” land-use designation, added a new zoning category, rezoned the Makar site, and adopted the MND. The City recommended a buffer zone and other minor odor-related measures, but rejected several of SOCWA’s more onerous recommendations. SOCWA petitioned for a writ of mandate seeking to require an EIR, but the trial court denied the petition, finding that an EIR was not required in order to address odor issues and that the new zone was consistent with the general plan. SOCWA, having dropped its noise-related arguments, appealed to the Fourth District Court of Appeal primarily on the issue of bad odors.

The court started by reviewing the legislative intent and statutory language of CEQA. Noting that the purpose of CEQA is to protect the environmental quality of the state from adverse changes caused by proposed projects, the court found that SOCWA’s objections would turn CEQA upside down because it sought to protect a proposed project from the existing environment. Furthermore, the court commented that SOCWA appeared to have ulterior motives of protecting itself from nuisance complaints by future neighbors and of requiring the developer to pay for expensive upgrades to SOCWA’s sewage plant.

The court found persuasive the holding in Baird v. County of Contra Costa (1995) 32 Cal.App.4th 1464, which involved a CEQA challenge to the expansion of an addiction treatment facility on the basis that the site was already contaminated with oil, mercury and sewage and not because the project would adversely affect the environment. In Baird, the First District Court of Appeal dismissed arguments that the contaminated site would harm future residents and concluded that expanding CEQA to cover challenges based on preexisting environmental conditions was prohibited because it would impose a requirement beyond those explicitly stated in the statute or its guidelines. The Fourth District here followed Baird’s holding and rejected SOCWA’s reliance on Appendix G and section 15126.2 of the CEQA Guidelines as support for extending the EIR requirement to such situations. Significantly, the court stated that CEQA Guidelines section 15126.2, subdivision (a), which recommended that an EIR evaluate potentially significant effects of locating development in areas prone to earthquakes, floods, or other hazardous conditions, appeared to be inconsistent with controlling law because it did not involve environmental effects caused by development. Finding that the odors from the sewage plant were not an adverse change caused by the project, the court held that the City was not required to do an EIR to address the impact of these odors on the proposed project.

Lastly, the court addressed SOCWA’s arguments regarding the internal inconsistency of the general plan. The court stated that it was not clear exactly what SOCWA was arguing, and proceeded to reject all three potential objections. First, the court found that the new land-use designation did not make the general plan internally inconsistent, and that amendments to a general plan were not required to provide any mechanism for insuring compatibility with surrounding land uses. Second, the court found that the zoning ordinance was not inconsistent with the general plan, and any such inconsistency would not render the general plan itself inconsistent. Third, the court found that rezoning the Makar site was not a part of the general plan, and thus could not create an internal inconsistency in the general plan.