Tag: exemption

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

City of San Diego Appropriately Relied on CEQA’s In-Fill Exemption in Approving Residential Development, Although Project Less Dense than Typically Required by the general plan, Fourth District Holds

In Holden v. City of San Diego (2019) 43 Cal.App.5th 404, the Fourth District Court of Appeal upheld the City of San Diego’s reliance on CEQA’s in-fill exemption for a seven unit residential project on environmentally sensitive land in the city’s North Park community. The court rejected plaintiff’s claim that the city erred in relying on the in-fill exemption because the project was less dense than the standards established in the city’s general plan. The court held that substantial evidence supported the city’s reliance on the exemption because the general plan, together with an applicable community plan, allowed the city to deviate from the density standards for projects in environmentally sensitive areas.

Background

In 2014, the developer applied to the city to demolish two houses and to construct seven new residential condos on a 0.517-acre site located on a canyon hillside. City staff initially informed the developer that the project did not comply with the minimum density standards for the site under the general plan and an applicable community plan. Specifically, staff determined Policy LU-C.4 of the general plan and the housing element of the community plan required a minimum of 16 dwelling units on the site. Later, however, city staff concluded that a reduced density of seven units was appropriate because the site is considered environmentally sensitive.

The city determined that the project was categorically exempt from CEQA under the infill exemption set forth in CEQA Guidelines section 15332. To qualify for this exemption, a project must be consistent with the general plan’s designations and policies. On April 18, 2017, at the planning commission’s recommendation, the city council unanimously voted to approve the project.

The petitioner filed a petition for writ of mandate challenging the city’s determination that the project is exempt from CEQA and the city’s approval of the project. The trial court denied the petition. The petitioner appealed.

The Court of Appeal’s Opinion

On appeal, petitioner contended that the city erred in finding the project is exempt from CEQA under the infill exemption because the project provides less residential density than is required by the general plan. In so arguing, petitioner relied primarily on a policy of the general plan to “‘[e]nsure efficient use of remaining land available for residential development … by requiring that new development meet the density minimums of appliable plan designations.’” The general plan recommended that residential areas designated “Medium High”—including the project site—provide multi-family housing with a density range of 30- to 44-dwelling units per acre. Because the project did not meet this standard, petitioner argued the project was inconsistent with the general plan, and, therefore, the city abused its discretion in relying on CEQA’s in-fill exemption.

The court rejected the petitioner’s argument as too rigid of an interpretation of the general plan. The court explained that the city’s determination that the project is consistent with the general plan is entitled to great weight because the city is in the best position to interpret it. The general plan consistency requirement does not require rigid conformity to the general plan. A project is consistent with the general plan if it will further the plan’s objectives and policies, and not obstruct their attainment.

Although the general plan’s density standards would ordinarily require 16 or more units on the site, the city council adopted extensive findings explaining why the project was consistent with the general plan, despite its lower density. In support of its findings, the city council cited a note in the community plan, which states that the residential density recommendations “‘may be subject to modification.’” Further, the community plan provided that modifications could be made to the recommended densities. The general plan provides that the community plans are integral components of the general plan; thus, the court held, the city appropriately considered these statements in the community plan as part of the general plan. The city council found that the project, at seven units, struck a reasonable balance of meeting the city’s housing goals, while also respecting the environmentally sensitive canyons. The city’s code limits development on steep hillsides, and the project proposed design was consistent with the city’s hillside development standards. Further, the project would provide infill residential housing, consistent with the city’s housing policies. As stated by the city council, the project’s “‘creation of seven new dwellings, where there existed two units, would assist the housing needs of the North Park area community.’”

The Court of Appeal concluded that the city’s extensive general plan consistency findings demonstrated that the city considered the general plan, the community plan, and the city’s steep hillside development regulations in approving the project and balanced the competing interest of those plans and regulations. Based on its review of the record, the court concluded that the city acted reasonably and did not abuse its discretion by balancing those competing policies and regulations to determine the project is consistent with the general plan. Accordingly, the court held that substantial evidence supported the city’s reliance on the in-fill exemption.

 

Laura Harris

The First District Court of Appeal Affirmed a Judgment Holding that CEQA Review Was Not Required for a Multifamily Residential Project Subject Only to Design Review

In a decision published on January 10, 2019, the First District Court of Appeal affirmed a judgment denying two local groups’ petition for writ of mandate seeking to overturn the City of St. Helena’s approval of a multifamily residential project. McCorkle Eastside Neighborhood Group, et al. v. City of St. Helena, et al. (2019) 31 Cal.App.5th 80. In this case, the city’s approval authority for the project was limited to design review under the local zoning ordinance. The court held that because the city lacked any discretion to address the project’s environmental effects, the city properly determined CEQA review was not required.

Between 2015 and 2016, the City of St. Helena amended its general plan and zoning ordinance to eliminate the requirement to obtain a conditional use permit for multifamily projects in High Density Residential (HDR) districts. Since this change, multifamily residential projects are a permitted use in HDR districts and require only design review approval. Real Party in Interest Joe McGrath applied for design review approval to construct an 8-unit residential project within an HDR district. McGrath also applied for a demolition permit to demolish an existing single family home on the site.

In October 2016, the city’s planning staff prepared a report that concluded (1) the project was exempt from CEQA under the Class 32 infill exemption (CEQA Guidelines § 15332); and (2) the project met the design review criteria. At the planning commission hearing for the project, several neighbors and community members opposed the project on various environmental grounds, including that the project site is contaminated, the street has inadequate drainage, the area lacks open space, and the project would cause cumulative impacts with another proposed development. Opponents of the project also contended that the project design was inconsistent with the design of the neighboring historical homes.

During the planning commission hearing, the city attorney advised the members of the commission that, under the city’s zoning ordinance, the commission was required to approve the project if it met the city’s design review criteria. The city attorney added that while he was confident the Class 32 infill exemption applied, CEQA also did not apply because it was a non-discretionary project. The planning commission approved the project, and adopted findings that the project was exempt from CEQA and would not cause any significant environmental effects.

At the city council appeal hearing, the city attorney similarly advised the members of the council that the project was exempt from CEQA under the Class 32 infill exemption, but at any rate their review was limited to the project design. The council voted 3-2 to deny the appeal and uphold the planning commission’s approval. The council adopted a resolution containing numerous detailed findings to support the design review approval. The council also found that the Class 32 infill exemption applied, but, even if some level of CEQA review was required, the city was limited to reviewing design-related issues and not the use-related environmental impacts the project opponents had raised.

The McCorkle Eastside Neighborhood Group and St. Helena Residents for an Equitable General Plan filed a petition for writ of mandate challenging the city council’s approval as a violation of CEQA and local zoning laws. The trial court denied the petition. The groups’ appeal followed.

The primary issue on appeal was whether the city abused its discretion by approving the project without requiring an environmental impact report (EIR). The appellants argued that the Class 32 infill exemption requires the city council to determine that the project would not result in any significant environmental effects relating to traffic, noise, air quality, and water quality. According to the appellants, the city council could not properly have done so because it reviewed only the project design.

The court disagreed and held that, irrespective of the Class 32 exemption, the city council correctly determined that the scope of its discretion was limited to design review and no CEQA review was required. As the court explained, under the city’s design review ordinance, the city council could not disapprove the project for non-design related reasons. In this case, the court found that substantial evidence supported the city council’s findings that the project met the design review criteria and would not result in any design-related impacts.

With regard to the Appellants’ design-related concerns, the court rejected the notion that CEQA review was required for those concerns alone, at least for the project at issue. Quoting from the First District’s decision in Bowman v. City of Berkeley (2004) 122 Cal.App.4th 572, 592 (Bowman), the court stated, “[W]e do not believe that our Legislature in enacting CEQA . . . intended to require an EIR where the sole environmental impact is aesthetic merit of a building in a highly developed area.” Furthermore, the court added, “[w]hile local laws do not preempt CEQA, ‘aesthetic issues like the one raised here are ordinarily the province of local design review, not CEQA.’ ‘Where a project must undergo design review under local law, that process itself can be found to mitigate purely aesthetic impacts to insignificance . . . .’” (Quoting Bowman at p. 594.) While the court recognized that St. Helena is not as urban as Berkeley, the location of the Bowman project, it nonetheless found that “the principles of that case apply to the design review in this case, which cannot be used to impose environmental conditions.”

The court next rejected the appellants’ argument that the mere fact the city had some discretionary authority in the design review process made the project subject to CEQA. According to the court, the rule that a project will be deemed discretionary for purposes of CEQA if it requires both discretionary and ministerial approvals “applies only when the discretionary component of the project gives the agency the authority to mitigate environmental impacts.”
Finally, the court found that it was unnecessary for the city to rely on the Class 32 infill exemption because the city lacked any discretion to address the project’s non-design related environmental effects. The court also found it was unnecessary to address the appellants’ argument that the Class 32 exemption did not apply based on the “unusual circumstances” exception. According to the court, “[b]ecause CEQA was limited in scope to design review whether or not the Class 32 exemption applied, any exception to the exemption was irrelevant.”

-Collin McCarthy

Fourth District Court of Appeal Holds City’s Use of Historical Baseline Legally Erroneous

In Bottini v. City of San Diego (2018) 27 Cal.App.5th 281* the Fourth District Court of Appeal upheld the trial court’s ruling ordering the City of San Diego to set aside its determination that the construction of a single-family home required full environmental review.
In February 2011, the Bottini family purchased Windemere Cottage (“Windemere”). At that time, Windemere’s designation as a historical resource was pending before the city’s historical resources board. Shortly thereafter, the board declined to grant historical status to Windemere. In November 2011, the city’s neighborhood code compliance division determined that Windemere constituted a public nuisance and ordered the Bottinis to demolish the structure. They complied. Then in August 2012, the Bottinis applied for a coastal development permit for the construction of a single-family home on the vacant lot. City staff determined that the project was categorically exempt from CEQA, but on an appeal of the determination, the city council ordered a fuller evaluation of the project using a January 2010 baseline, concluding that the demolition of Windemere was part of the project. The council further concluded that the project was not exempt because the unusual circumstances and historic resources exceptions to the exemption applied. In response to the city council’s decision, the Bottinis filed a petition for writ of administrative mandamus seeking to compel the city council to set aside its decision, as well as a complaint alleging constitutional causes of action. The trial court granted the CEQA petition finding that the demolition of Windemere was not a component of the project and therefore the city’s determination that the project is not categorically exempt lacked substantial evidentiary support. It granted summary judgment in favor of the city as to the constitutional claims. The Bottinis and the city cross-appealed.

CEQA
The court of appeal held that an environmental baseline that presumed the existence of the Windemere cottage, which in reality no longer existed at the time the project was proposed, did not accurately reflect the environmental conditions that would be affected by the project. The court dismissed the city’s allegations that the Bottinis “strong-armed” the city into making a public nuisance determination because there was no evidence to support such an allegation. Moreover, the court found that the public nuisance determination confirmed that the demolition permit served a purpose distinct from and not part of the single-family home under review. Thus, the court concluded that the demolition of the cottage could not properly be considered part of the project.

Using the appropriate baseline, the court held that city erred in concluding that the Class 3 exemption did not apply to the project. The construction of a single-family home on a vacant lot is typically categorically exempt. The court further determined that no exceptions to the exemption applied.

Constitutional Violations
The Bottinis alleged three causes of action for violation of the California Constitution’s takings, equal protection, and due process clauses. Regarding the takings claim, the court applied the test set forth in Penn Central Transportation Co. v. New York City (1978) 438 U.S. 104, 124, concluding that the Bottinis did not have a “reasonable investment-backed expectation” because there was no evidence they intended to demolish the cottage when they purchased the property. Even if they had articulated a distinct expectation to do so, there was no basis to conclude that they had a reasonable expectation that they could demolish the cottage to construct a new residence without undertaking any form of environmental review. The court further found that the Bottinis could not sustain a claim for due process because they did not identify any property interest or statutorily conferred benefit of which the city had deprived them. Finally, with respect to equal protection, the court held that the Bottinis did not meet their burden to show that the city’s decision was not rationally related to a legitimate government interest.

  • Review granted, December 19, 2018.

Second District Court of Appeal Applies Broad Definition of “Project” and Upholds Determination that Settlement Agreement Exempt as Part of Beach Restoration Project

The Second District Court of Appeal upheld the trial court’s determination that a beach restoration project, including incorporation of a settlement agreement entered into by the Broad Beach Geologic Hazard Abatement District (BBGHAD) and the City of Moorpark, constituted a single project that is statutorily exempt from CEQA review. The court also held that BBGHAD abdicated its police power in parts of the settlement agreement, rendering certain provisions void. (County of Ventura v. City of Moorpark (2018) 24 Cal.App.5th 377)

BBGHAD was formed to restore a 46-acre stretch of beach in Malibu. The restoration project, which was determined to be statutorily exempt from CEQA, required deposits of large quantities of sand at five-year intervals. Each deposit would generate 44,000 one-way truck trips over the course of three to five months. Moorpark officials were concerned that the haul trucks would negatively impact the city’s residents. Moorpark and BBGHAD ultimately entered into a settlement agreement to resolve these concerns. The settlement agreement contained restrictions on the haul routes that BBGHAD could use for the project.

The County of Ventura challenged the project. The trial court denied Ventura’s petition for writ of mandate and request for injunctive relief, and denied in part and granted in part the request for declaratory relief. This appeal followed.

CEQA Exemption Claim

Ventura argued that the settlement agreement was distinct from the beach restoration project, and was therefore not exempt from CEQA. The court disagreed, finding that the settlement agreement was part of the whole of the action because it was one piece of a single, coordinated endeavor to address erosion. The court applied CEQA’s broad definition of “project” in the context of the statutory exemption. The court considered the test for “separate projects” from Banning Ranch Conservancy v. City of Newport Beach (2012) 211 Cal.App.4th 1209: (i) both respondents were proponents of the settlement agreement; (ii) the agreement and beach restoration served a single purpose, to abate a geologic hazard; and (iii) even if the beach agreement could be completed without the agreement, the two became inextricably linked when the agreement was incorporated into the coastal development permit. Thus, the court found, the agreement was not a separate project under Banning Ranch.

The court also determined that the settlement agreement, as part of the restoration project, was exempt from CEQA as an “improvement” (Pub. Resources Code, § 26505) undertaken by a geologic hazard abatement district “necessary to prevent or mitigate an emergency” (Pub. Resources Code, § 26601). CEQA provides a statutory exemption for such actions. (Pub. Resources Code, § 21080, subd. (b)(4).) The court emphasized that statutory exemptions cannot necessarily be harmonized with CEQA’s general purpose of protecting the environment.

Preemption Claim

Ventura argued the settlement agreement was void because Vehicle Code section 21 preempts Moorpark’s ability to control project traffic. The court disagreed. The court explained that, under the state constitution, cities may only enact and enforce laws that do not conflict with state law. The court further explained that Vehicle Code section 21, subdivision (a), preempts local traffic control ordinances and resolutions. Applying the independent review standard, the court determined that the settlement agreement is an ordinance rather than a contract or resolution, and therefore Vehicle Code section 21 did not apply. Thus, the court found, there was no preemption problem with the settlement agreement.

Extraterritorial Regulation Claim

Ventura argued the settlement agreement was an unlawful attempt by Moorpark to exercise its regulatory powers outside of city limits. Again, the court disagreed. The court explained that the prohibition against extraterritorial regulation does not apply to a local authority’s contracting power. In addition, the court said, a city has authority to enter into contracts to enable it to carry out its necessary functions. Applying the independent review standard, the court explained that trucks’ use of roads can create a public nuisance, and Moorpark appropriately entered into the settlement agreement in an attempt to abate that nuisance.

Police Power Claim

Ventura argued BBGHAD abdicated its police power when it granted Moorpark the power to dictate sand hauling routes that BBGHAD’s contractors were required to use. Ventura also argued this rendered the settlement agreement void in its entirety. The court explained that BBGHAD is allowed under state law to exercise a portion of the state’s police power, but it may not contract away its right to exercise its police power in the future. The court explained that the determination of hauling routes is a police power, and therefore the portions of the settlement agreement that surrendered BBGHAD’s discretion to alter those routes in the future were void.

The court next considered whether the settlement agreement was invalid in its entirety. The court determined the settlement agreement had at least two purposes: (i) to determine permissible and prohibited sand hauling routes, and (ii) to describe the duration of and limited discretion to modify the route restrictions. Only the second purpose was unlawful, the court found, and because that could be extirpated from the agreement, the court determined the remainder of the agreement could remain in force. Thus, the court declined to find the agreement void in its entirety. (Elizabeth Pollock)

First District Rules that State Lands Commission’s Approval of a Land Exchange Agreement Not Exempt from CEQA; Exhaustion Requirement Did Not Apply.

The First District, in Defend Our Waterfront v. California State Lands Commission (Sept. 17, 2015) ___Cal.App.4th___, Case Nos. A1496 & 141697,  upheld the trial court’s grant of a petition for writ of mandate challenging a land exchange between the City and County of San Francisco and the project applicants for the 8 Washington Street Project.

The 8 Washington Street Project is a plan to develop waterfront land near the San Francisco Ferry Building. The project site includes the “Seawall Lot 351” parcel, which is currently owned by the City and County of San Francisco through its Port Commission (the City), subject to the public trust for uses benefiting the people of California. The public trust restriction on the use of the Seawall Lot 351 is inconsistent with the development proposed by the 8 Washington Project. To remove this inconsistency, the applicants and the City proposed to transfer Seawall Lot 351 out of the public trust and replace it with a different parcel of property pursuant to a land exchange agreement with the State Lands Commission (SLC). In August 2012, SLC approved the land exchange agreement, finding, among other things, that the agreement is a statutorily exempt activity under CEQA.

Defend Our Waterfront (DOW), argued that SLC abused its discretion in determining that the land exchange agreement was exempt from CEQA. SLC, the City, and the project applicants argued that DOW had not exhausted its administrative remedies on this issue. The trial court held the exhaustion requirement was inapplicable because there was no effective notice of a public hearing on a CEQA matter prior to the SLC ruling. The Court of Appeal affirmed. The appellate court explained that the only notice provided by the agenda for the SLC meeting was that the SLC was considering a land exchange agreement proposed by the City. The agenda made no reference to CEQA.

The applicants argued that although the agenda itself did not specify that staff considered the project exempt from CEQA, the staff report, which was available online through a link provided in the agenda, set forth this information. The Court of Appeal held, however, that the staff report did not provide legally sufficient public notice of SLC’s CEQA decision for two reasons. First, someone would have to take the additional step of clicking on the agenda’s link to the staff report to learn that a CEQA issue would be decided at the SLC meeting. Second, the hyperlink to the staff report was added after the 10-day notice requirement under Government Code section 11125, subdivision (a), so could not provide adequate notice.

The applicants alternatively argued that DOW had actual notice that the SLC was going to consider the CEQA exemption at the meeting. To support this argument, the applicants pointed to an e-mail from a member of DOW that referred to the staff report. The e-mail, however, did not mention CEQA, so the court refused to assume that the e-mail’s author had read the section of the staff report regarding the CEQA exemption. Furthermore, even if the e-mail’s author had read the entire report, the staff report still did not provide adequate notice because it was not provided until after the 10-day notice period, discussed above.

Moving to the CEQA issue, the Court of Appeal agreed with the trial court that the land exchange agreement was not exempt from CEQA review. SLC had found that land exchange agreement was statutorily exempt under Public Resources Code section 21080.11, which states: “This division shall not apply to settlements of title and boundary problems by the State Lands Commission and to exchanges or leases in connections with those or leases in connection with those settlements.” Applying principles of statutory construction, the Court of Appeal held that the statutory exemption for “settlements and title boundary problems” did not apply as a matter of law because there was neither a title or a boundary dispute nor settlement of any such dispute relating to Seawall Lot 351. Instead, the express purpose of the exchange is to further the 8 Washington Street Project. In reaching this conclusion, the Court of Appeal declined to defer to the public agencies’ interpretation of Public Resources Code section 21080.11.

RMM Attorneys Whit Manley, Chip Wilkins, and Chris Stiles represented Real Parties in Interest in the matter.

Fourth District Court of Appeal Holds Removal of Conservation Overlay on Land Is a Project and Is Not Exempt from CEQA

Paulek v. Western Riverside County (June 17, 2015) __ Cal.App.4th __, Case No. E059133

In a decision reversing the trial court, Division Two of the Fourth District held that the removal of a conservation overlay constituted a project under CEQA and that the project did not fall within the identified exemptions. The decision involves a Multiple Species Habitat Conservation Plan (HCP) to maintain open spaces in western Riverside County. The HCP identified a “criteria area” broken down into cells, each about 160 acres in size, that were to be evaluated to determine what portions of the criteria area should be included in the conservation area. Part of the criteria area included the Warm Springs Ranch owned by Anheuser-Bush; a conservation overlay had been placed upon the ranch.

In 2005, Anheuser submitted applications to develop the Ranch. The County informed Anheuser that all but 71 acres of the Ranch would be acquired for conservation under the HCP, and in 2011 the parties reached a settlement agreement whereby the Western Riverside County Regional Conservation Authority (the Agency) would purchase the Ranch from Anheuser. The property was to be purchased in 9 phases, and phase 9, which consisted of a 200-acre area, would cost $11 million. One of the purchasing conditions for the phase-9 property was that the conservation overlay would be removed.

Paulek asserted that the Agency should have considered whether removing the conservation overlay would have a significant environmental impact, and contended possible development on that area had the potential to affect wildlife by reducing habitat. The Agency contended that because, as part of the agreement with Anheuser, 1,064 acres would be acquired by the Agency and protected as open space, and because the phase-9 property was highly degraded habitat, the conservation transfer would result in more and better land being protected. Therefore, the Agency reasoned, the action was not a project under CEQA, and if even it was, it was exempt from CEQA.

The court rejected the Agency’s arguments, holding that the removal of the conservation overlay from the phase-9 property constituted a project under CEQA. Among other things, the court reasoned that removing the overlay was analogous to amending a general plan or changing a zoning ordinance, which are projects under CEQA. Removing the conservation overlay embodied a fundamental land use decision that had the potential to cause physical changes in the environment in that the land protected for conservation purposes would no longer be subject to such protections. Therefore, the Agency’s decision to remove the overlay was a project under CEQA.

The court was unpersuaded by the Agency’s arguments concerning the protection of 1,064 acres of more environmentally pristine land in exchange for the 200-acre phase-9 property. The court explained that the decision to remove the overlay was a separate decision from the decision to put 1,064 acres of other land in conservation. But even if the removal of the overlay and addition of overlay elsewhere was considered part of the same project, the fact remained that the 200 acres of the phase-9 property would no longer be protected by the conservation overlay. The court characterized the Agency’s argument as “essentially washing over any negative changes to the phase 9-property by highlighting the positive changes to the [other] properties.” For instance, noted the court, there are two species present on the phase-9 property that are not present on the 1,064 acres, so the land swap would not protect these two species.

The court also rejected the Agency’s argument that the project fell within certain exemptions from CEQA. The court held that a Class 7 exemption, which exempts projects that consist of actions taken by regulatory agencies to assure the maintenance, restoration, or enhancement of a natural resource, did not apply because a fair argument existed that removing the overlay could adversely affect certain species. Although the phase-9 property was not “prime” habitat for those species, there was no indication that it was so superfluous to those species that removing it from conservation would not adversely affect the species.

With respect to the Class 8 exemption, which is nearly identical to a Class 7 exemption except that it applies to the “environment” rather than natural resources, the court held that because there was uncertainty as to whether there would be a significant impact on the environment, the Class 8 exemption did not apply. Evidence in the administrative record demonstrated that the loss of the conservation overlay could affect the neighboring conservation area, and the effects could be significant such that there would need to be an attempt to lessen the effects.

The court also rejected the Agency’s claim that the project fell within the common sense exemption, which applies where it is certain that there is no possibility that an activity will have a significant effect on the environment. The change in designation of the phase-9 property from protected to unprotected had the potential for causing ultimate physical environmental changes, which was sufficient to take the project outside the purview of the exemption.

In addition to rejecting the Agency’s arguments on the merits, the court rejected various procedural arguments made by the Agency, holding that Paulek had standing, that Paulek’s action was timely, and that Paulek did not fail to join an indispensable party.

 

 

Fifth District Holds Interim Renewal Contracts for Central Valley Project Water are Exempt from CEQA

Even though the renewal contracts have expired, and thus the case was moot, the Court of Appeal nevertheless resolved the case, finding the renewal contracts both statutorily and categorically exempt from CEQA. In North Coast Rivers Alliance v. Westlands Water District, Case No. F067383 (July 3, 2014), the Fifth District Court of Appeal upheld the Westlands Water District’s interim renewal contracts with the United States Bureau of Reclamation, which continued the existing terms for water delivery from the Central Valley Project (CVP.) The court upheld the District’s findings that the interim contracts fell under the statutory exemption for ongoing pre-CEQA projects as well as the categorical exemption for the continued operation of existing facilities.

Westlands Water District and its related distribution districts serve more than 600,000 acres of farmland in San Joaquin Valley, and have a right to receive over one million acre-feet of water per year from the CVP, due to water service contracts that have been in place with the Bureau of Reclamation since the 1960s. In 2012, the Bureau and the water districts entered into two-year contracts to renew the districts’ contractual rights to receive CVP water, during which time the Bureau was set to complete the environmental review required for 25-year renewal contracts.

The water districts found that the renewals were statutorily and categorically exempt from CEQA because they involved ongoing receipt and delivery of water on identical terms as the prior water service contracts, with no expansion of service and no new facilities, and any changes related solely to minor administrative matters.

The court first rejected the water districts’ assertion that the renewal contracts were statutorily exempt under the statutory exemption for rate-setting activities under Public Resources Code section 21080, subdivision (b)(8). The court found no evidence that the renewal contracts involved any rate-setting activity.

But the court did uphold the water districts’ conclusion that the renewal contracts were statutorily exempt as ongoing projects approved before CEQA was enacted. (See CEQA Guidelines, § 15261 subd. (a).) The court found that the original contracts and construction of facilities predated CEQA’s enactment in November of 1970. Any assignment agreements and renewals entered into after CEQA’s enactment, the court found, did not result in an expansion or material modification of the underlying activity that was initially approved; rather, the agreements merely facilitated the districts’ ability to receive a stable and adequate water supply within the scope of the original project.

The court found that the renewal projects also came within the categorical exemption for operation of existing facilities. (CEQA Guidelines, § 15301.) Categorical exemptions, unlike statutory exemptions, are subject to exceptions. While the courts of appeal disagree on whether a fair argument standard or substantial evidence standard applies to exceptions, the court here found the disagreement irrelevant because it would reach the same conclusion under either standard.

Petitioners first argued that “unusual circumstances” exception applied. The court, however, agreed with the water districts that the project did not involve unusual circumstances because it was not uncommon for utility-type public agencies to have large-scale facilities operating at a large volume and to impact the environment to some extent simply by existing and functioning as utilities. The court noted that even if the large scale of the water diversion at issue constituted unusual circumstances, as petitioners argued, petitioners would still have to establish that there was a reasonable possibility the activity will have a significant effect on the environment due to such circumstances. Using the established levels of operations as the baseline, the court concluded there was insufficient evidence that there would be a substantial adverse change from the environmental baseline, and thus the exception did not apply. The court also rejected petitioners claim that the renewal contracts fell within cumulative impacts exception to the exemption. The court stated that the present litigation was not the proper time for petitioners to raise the cumulative-impact claim because the short-term interim renewal contracts did not constitute “successive projects of the same type” and therefore did not fit within the definition of the exception.

Second District Court of Appeal Finds Museum Remodel Exempt from CEQA

Highland Park Heritage Trust v. City of Los Angeles, Case No. B242930 (Feb. 18, 2014), unpublished

On February 18, 2014, in an unpublished decision, the Second District Court of Appeal denied petitioners’ request to set aside approval of the Autry Museum’s internal remodeling project. The court held the city of Los Angeles did not abuse its discretion in determining the project was exempt from CEQA.

In 2003, the Autry Museum merged with the Southwest Museum and thereafter discovered that the Southwest site was unsuitable for housing the museum collection. Autry decided to move the collection from the Southwest’s Arroyo Campus in Mount Washington to Autry’s Griffith Park Campus. At first, Autry intended to expansively extend the external footprint of its museum, but withdrew the plan after it was met with public controversy and delays. Autry replaced this proposal with a less ambitious plan to replace 18,000 square feet of the first floor of the museum. The City of Los Angeles approved this new project and determined it was categorically exempt from CEQA. The state later awarded Autry a $6.6 million grant to redesign the interior of the Griffith Park Museum.

Local residents and preservationists sought to set aside the approved collection relocation, claiming that the city had a duty to support the Southwest Museum as a cultural resource and preserve the Arroyo Campus location. Petitioners claimed that the project was not exempt under CEQA, and that the project was improperly piecemealed from a greater project. The trial court held for the city, and petitioners appealed.

The Court of Appeal held that whether the project could be considered a piecemealed section of a larger project was irrelevant where the project was exempt from CEQA. Under Class 1 exemptions, certain projects involving interior alterations to an existing facility are categorically exempt from CEQA, unless they fall under an exception whereby there are unusual circumstances creating a reasonable probability that the activity would have a significant impact on the environment. The court found no such exception here. The court held that moving the artifacts from the Southwest collection to the Autry Museum would not have a significant impact on the geographic environment of that museum or its surroundings, and the objects themselves were not site-specific to the Arroyo location. The court also held that the project was not inconsistent with the Northeast Los Angeles Community Plan because the plan’s goal to preserve and protect the Southwest museum pertained to the building itself rather than its contents. Thus, the city had not abused its discretion in approving the project.