Fourth District Reverses Dismissal, Holds Streets and Highway Code Does Not Exempt Caltrans Project from CEQA Review, and Petition Adequately Pled Equitable Estoppel

In Citizens for a Responsible Caltrans Decision v. Department of Transportation (March 24, 2020, D074374) __Cal.App.5th__, the Fourth District Court of Appeal overturned the San Diego County Superior Court’s judgment sustaining the California Department of Transportation’s (Caltrans) demurrer and dismissal of Citizens for a Responsible Caltrans Decision’s (CRCD) petition for writ of mandate. The petition claimed Caltrans improperly exempted a highway interchange project from CEQA review and engaged in misconduct that precluded Petitioner from timely filing the action. The Court of Appeal found that Streets and Highway Code section 103 did not exempt the project from CEQA review, and the petition sufficiently plead facts about Caltrans’ misrepresentation of the review process to establish a factual dispute about whether Caltrans was equitably estopped from asserting the 35-day statute of limitations defense.

Background

In 2005, Caltrans filed a notice of preparation (NOP) for an EIR analyzing construction of two freeway interchange ramps that would connect the I-5 and SR 56 highways in San Diego (the I-5/SR56 Project). The I-5/SR56 Project was part of the larger North Coastal Corridor (NCC) project — a multi-project effort proposed by Caltrans and the San Diego Association of Governments (SANDAG) to improve transportation in the La Jolla and Oceanside area.

Streets and Highway Code section 103 went into effect in January 2012. The section provides the California Coastal Commission with integrated regulatory review of a “public works plan” (PWP) for NCC projects, rather than traditional project-by-project review and approval. Four months later, Caltrans circulated a Draft EIR for the I-5/SR56 Project. The Draft EIR explained that “following circulation of the FEIR, if the decision is made to approve the Project, a Notice of Determination (NOD) will be published for compliance with CEQA and a Record of Decision will be published for compliance with the National Environmental Policy Act (NEPA).”

In October 2013, Caltrans issued an FEIR for a separate NCC highway-widening project. The report explained that section 103 did not eliminate project-specific CEQA or NEPA review—rather, it provided the Coastal Commission with streamlined review. In 2014, Caltrans and SANDAG issued, and the Coastal Commission approved, the PWP for the 40-year NCC project. The PWP explained that it did not supplant CEQA, NEPA, or other regulatory review schemes for individual projects proposed under the NCC.

In June 2017, Caltrans released a Final EIR for the I-5/SR56 Project. The report reiterated that, if it approves the Project, the agency will publish a NOD to comply with CEQA and a Record of Decision to comply with NEPA. However, in contradiction to the language above, the Final EIR also added that the passage of section 103, together with Public Resources Code section 21080.5, “mandate that instead of being analyzed under CEQA, the [NCC Project] and all of the projects included therein, shall be addressed under the CCC’s review per its certified regulatory program.” The FEIR reasoned that because the I-5/SR56 Project was identified in the PWP, and the Coastal Commission approved it in 2013, CEQA review was no longer required.

Though Caltrans concluded CEQA no longer applied to the I-5/SR56 Project, it maintained that public disclosure of the Project’s impacts was “still desirable.” Therefore, it released the Final EIR to satisfy CEQA’s analytical and disclosure requirements, and provided the public with a 30-day review and comment period from July 14, 2017 to August 14, 2017. However, before this period commenced, Caltrans approved a “project report” for the I-5/SR56 Project on June 30, 2017, and filed a Notice of Exemption (NOE) on July 12, 2017. The NOE concluded that the Project was exempt from CEQA and its impacts were analyzed pursuant to the Coastal Commission’s certified regulatory program.

CRCD’s counsel first became aware of the NOE on September 28, 2017. After Caltrans refused CRCD’s request to rescind the NOE or agree to a 180-day statute of limitations, CRCD filed a petition for writ of mandate and declaratory relief 35 days later on November 1, 2017. Caltrans filed a demurrer to the petition and the trial court sustained it without leave to amend. The trial court entered a judgment dismissing the petition with prejudice. CRCD appealed.

The Court of Appeal’s Decision

The Fourth District reviewed the trial court’s decision denying CRCD leave to amend and sustaining Caltrans’ demurrer de novo, and considered: (1) whether Streets and Highway Code section 103 exempts the I-5/SR56 Project from CEQA review; and (2) whether CRCD’s petition sufficiently alleged facts showing Caltrans was equitably estopped from raising the 35-day statute of limitations. The Court treated Caltrans’ demurrer as having admitted all of the properly pled material facts in the petition. The Court stated that a demurrer brought on statute of limitations grounds will be overruled if the relevant facts do not clearly establish that the action is time-barred.

Section 103 Does Not Exempt Caltrans from Conducting CEQA Review of the I-5/SR56 Project

First, the Court applied traditional rules of statutory construction to interpret section 103 as a matter of first impression. The Court held that the section did not statutorily exempt Caltrans from conducting CEQA review of the I-5/SR56 Project because it only exempted the Coastal Commission’s approval of the PWP. The Court reasoned that the Legislature intended the PWP to function as a “long range development plan” that could be approved under a certified regulatory program, pursuant to Public Resources Code sections 21080.09 and 21080.5. This certified regulatory program only provided the Coastal Commission with approval authority. Further, section 103 only authorizes the Coastal Commission to prepare substitute documents when certifying or approving the PWP; it did not exempt Caltrans from conducting project-level CEQA review and preparing an EIR for the I-5/SR56 Project.

Finally, the Court rejected Caltrans’ argument that the Coastal Commission’s approval of the PWP implicitly approved the I-5/SR56 Project. The Court explained that the PWP included numerous alternative projects for the NCC, but did not include the I-5/SR56 Project, as defined in the Final EIR. Had the Legislature intended to exempt Caltrans from preparing an EIR for the Project, or provide Caltrans with a certified regulatory program, it would have expressly done so. Because the plain language of section 103 does not provide for such exemptions, Caltrans was required to conduct individual, project-level CEQA review of the Project.

Petitioner Alleged Sufficient Facts Showing Caltrans Was Equitably Estopped from Relying on the Statute of Limitations Defense to Overcome Caltrans’ Demurrer

The Court’s independent review of the petition indicated that CRCD pled facts that sufficiently showed Caltrans was equitably estopped from relying on the 35-day statute of limitations for actions challenging notices of exemptions. A government agency may be estopped from asserting a statute of limitations defense if the petition indicates that the agency’s fraudulent or misrepresentative conduct prevented a reasonably prudent person from timely seeking legal advice or commencing litigation. Here, Caltrans informed the public in its Draft and Final EIRs that Caltrans would file a NOD if it decided to approve the I-5/SR56 Project. However, Caltrans did not inform the public, commenters, or interested parties about its decision to file a NOE instead of a NOD. Caltrans’ statements and conduct further suggested that it would not approve the Project until mid-August 2017, after the public comment and review period closed. The Court held that there was, at minimum, a disputed question of fact whether, by approving the Project in early July after repeatedly stating that project approval would follow the announced Final EIR circulation and review period, Caltrans misled CRCD about facts Caltrans intended to be acted on. CRCD’s petition adequately pled that CRCD was ignorant of the true state of facts, which precluded CRCD from commencing the instant action before the 35-day statute of limitations period expired.

For these reasons, the Court held that Caltrans’ demurrer must be overruled and the trial court’s judgment dismissing CRCD’s petition must be reversed and vacated.

Bridget K. McDonald