Tag: NOD

Sixth District Holds City’s Failure to Send Notice of Determination Did Not Excuse Plaintiff’s Failure to Name Indispensable Party Within Limitations Period

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The Sixth District Court of Appeal in Organizacion Comunidad de Alviso v. City of San Jose (Feb. 9, 2021) 60 Cal.App.5th 783, held that the City of San Jose’s failure to send a Notice of Determination to a member of the petitioner organization, in violation of Public Resources Code section 21167, subdivision (f), did not excuse the petitioner’s failure to name an indispensable party in a CEQA action before the statute of limitations expired.

BACKGROUND

A light industrial center project was planned for construction on a primarily fallow farmland site in San Jose. Mark Espinoza, a member of the petitioner organization, Organizacion Comunidad de Alviso, requested that the City’s environmental project manager place him on the list to receive the Notice of Determination (NOD) for the Project.
Later that month, Microsoft Corporation purchased land from the original owner and took over as the project applicant. The San Jose City Council initially approved the project and associated EIR at an October 2017 meeting. The meeting agenda incorrectly referenced the previous landowner instead of Microsoft. Microsoft was, however, correctly referred to as the project applicant at the hearing. A second meeting was held to reconsider the project approval and EIR in December 2017. The notice for that hearing correctly identified Microsoft as the property owner, but the resolution approving the project incorrectly referenced the previous owners.

The City filed two NODs for the project. The first NOD, which was sent to Espinoza, listed the wrong project applicant. The City later realized the mistake and issued a second NOD that correctly listed Microsoft as the applicant. The City did not send Espinoza the second NOD.

The petitioner filed a petition for writ of mandate within 30 days of the first NOD, alleging violations of CEQA and the Planning and Zoning Law. The petition named the previous property owners as real party in interest, based on the information in the first NOD. Two weeks after the 30-day statute of limitations for the CEQA cause of action expired, the previous owners’ attorney notified the petitioner’s counsel that Microsoft had acquired the property and was named as the applicant in the second NOD. A month after receiving this notice—and well after the 30-day limitations period had run—the petitioner filed an amended petition naming Microsoft as a real party in interest.

Microsoft and the City demurred to the CEQA action in the amended petition, arguing that it was time-barred because petitioner failed to name Microsoft as the real party in interest before the limitations period expired. The trial court determined that the initial petition was defective for failing to join Microsoft, and consequently dismissed the CEQA cause of action as untimely.

COURT OF APPEAL’S DECISION

Failure to Name Applicant in NOD as Real Party in Interest
Under Public Resources Code section 21167.6.5, subdivision (a), in addition to naming as a defendant the agency that approved the project, a petitioner must name as a real party in interest the “person or persons identified by the public agency” in the NOD. Here, the petitioner did not dispute that Microsoft was a necessary and indispensable party under CEQA because it was named as the applicant in the NOD. Instead, the petitioner argued that its failure to name Microsoft should be excused because the NOD sent by the City named the wrong party and the City did not resend the new NOD after the error was corrected. The court disagreed.

Although the court acknowledged the City violated Public Resources Code section 21167, subdivision (f), by failing to send the second, corrected NOD to Espinoza, it concluded that CEQA contains no relief for the City’s violation. The court ruled that the City’s violation could not excuse or cure the amended petition’s untimeliness because Public Resources Code section 21167, subdivision (f), itself provides that the “date upon which [the NOD] is mailed shall not affect” the statute of limitations. The court also cited the Supreme Court’s emphasis that potential CEQA litigants must pay close attention to NOD filings before initiating litigation.

Additionally, the court reasoned that the second NOD was properly filed with the county clerk, posted at the county clerk’s office, and made available for review by all potential litigants—thereby providing constructive notice of the correct parties to name in a potential action. The court further noted that petitioner had actual notice of Microsoft’s status as the applicant because it had participated in the public hearings at which Microsoft was identified and the public notice for the City’s re-approval hearing listed Microsoft as the owner.

Because the petitioner failed to name Microsoft within the 30-day statute of limitation period after the corrected NOD was filed, the court held that the trial court’s dismissal was appropriate.

Material Defect
The petitioner also argued that the 30-day statute of limitations was not triggered because the NOD was materially defective, and therefore, the 180-day limitations period should apply. The court easily rejected this argument because the petitioner did not claim that the second NOD was insufficient or incorrect. The petitioner only claimed that the posting of two contradictory NODs essentially amounted to an NOD defect. The court disagreed, determining that the second NOD contained all required information and was therefore not defective.

Relation-Back Doctrine
The court also disagreed with the petitioner’s argument that the relation back doctrine under Code of Civil Procedure section 474 should apply. The court determined the petitioner’s ignorance of Microsoft’s status as the project applicant was unreasonable because the second NOD was correct and provided constructive notice of Microsoft’s identity. Additionally, the petitioner had received actual notice of the second NOD from the former owners’ attorney and still proceeded to wait two months to file its amended petition—a delay, which the court pointed out, was longer than even the initial limitations period.

Estoppel
Finally, the court rejected the petitioner’s argument that the City and Microsoft should have been equitably estopped from asserting the statute of limitations defense. It concluded that even if the City’s failure to send Espinoza the second NOD was intentional, the petitioner’s reliance on that failure would be unreasonable. Again, the City’s timely filing of the second NOD with the county clerk’s office gave all potential litigants constructive notice of the correct parties to name in a CEQA action.

– Veronika Morrison

Second District Court of Appeal Upholds Dismissal of CEQA Action as Untimely

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On April 2, 2020, the Court of Appeal for the Second Appellate District in Coalition for an Equitable Westlake/Macarthur Park v. City of Los Angeles (2020) 7 Cal.App.5th 368 affirmed the trial court’s decision sustaining a demurrer without leave to amend because the petitioner’s claims were barred by the famously short statute of limitations for actions brought under CEQA. (Pub. Resources Code, § 21000 et seq.)

On March 3, 2017, after holding a public hearing, the advisory agency for the City of Los Angeles approved a vesting tentative tract map for the Lake on Wilshire Project, a mixed-use project consisting of a hotel, a residential tower, and a multi-purpose center with a theater. Prior to approving the tentative map, the advisory agency adopted a mitigated negative declaration. The city filed a notice of determination (NOD) on March 15, 2017.

Subsequently, on October 12, 2017, the planning commission approved conditional use permits for the project—finding that no subsequent review was required. Two tenants of an existing building on the project site appealed the planning commission’s decision. The city council denied the appeals on January 31, 2018, and further adopted a resolution approving general plan amendments in connection with the project.

On March 2, 2018, the petitioner filed a petition for writ of mandamus challenging the approval of the MND as violating CEQA. The city and real parties in interest filed a demurrer. The trial court sustained the demurrer without leave to amend on the grounds that the petitioner’s claims were time-barred under CEQA for failure to seek relief within 30 days after the NOD was filed on March 15, 2017.

In holding that the petitioner’s suit was untimely, the court found that application of the statute of limitations bar to the petitioner’s challenge was straightforward. The petitioner did not bring the CEQA action until March 2, 2018, nearly a year after the city approved the tentative map and posted the NOD. The court explained that there were only two situations where the filing of a NOD would not trigger CEQA’s statute of limitations—if the NOD is invalid on its face because the information required by the CEQA Guidelines is missing or incorrect, or where the NOD is filed before a decision-making body has approved the project. The court found neither of those circumstances existed.

Rather, the petitioner had attacked the validity of the NOD based on the advisory agency’s authority to make CEQA finding, including that: (1) the planning commission (not the advisory agency) was responsible for initial project approval and CEQA review; (2) the advisory agency lacked authority under the municipal code to make CEQA findings; (3) the advisory agency’s CEQA decisions were not properly appealable to an elected body; and (4) the authority to approve the project was improperly bifurcated from the authority for CEQA approval. In rejecting this argument, the court, quoting the California Supreme Court’s decision in Stockton Citizens for Sensible Planning v. City of Stockton (2010) 48 Cal.4th 481, 499, stated that the petitioner ‘confuses the timeliness of a lawsuit with its merits.’” To the extent a petitioner wished to challenge the advisory agency’s authority to make the initial project approval or adopt the MND, the court held that those arguments needed to be made within the applicable statute of limitations period. Because they were not, the petitioner was precluded from raising such arguments.

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

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In Citizens for a Responsible Caltrans Decision v. Department of Transportation (2020) 46 Cal.App.5th 1103, 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