Tag: project description

In a Procedurally-Dense Opinion, First District Court of Appeal Clarifies that Real Parties in CEQA Cases Are Not Always Indispensable Parties

In Save Berkeley’s Neighborhoods v. Regents of the University of California (2021) 70 Cal.App.5th 705, the First District Court of Appeal upheld a trial court’s determination that the developer and operator of a proposed campus expansion project were not indispensable parties to a lawsuit challenging the Regents of the University of California’s (Regent’s) approval of that project. In doing so, the court held that Assembly Bill No. 320 (AB 320) (2011–2012 Reg. Sess.)—which amended CEQA to require agencies to identify the recipients of project approvals on a project’s notice of determination (NOD) and to require CEQA petitioners to name and serve those persons or entities listed on the NOD—did not alter the court’s analysis of whether a party is “indispensable” to the lawsuit under Code of Civil Procedure section 389, subdivision (b) (CCP section 389(b)).

Background

The Regents approved a project to demolish an existing parking structure, construct student housing above a new parking structure, and develop a new academic building adjacent to the new residential building (project). The Regents prepared and certified a supplemental environmental impact report (SEIR) for the project. On May 17, 2019, the Regents filed an NOD, which identified American Campus Communities (ACC) and Collegiate Housing Foundation (CHF) as the parties undertaking the project. ACC is the developer for the project, and CHF is the ground lessee and borrower for the housing component of the project.

On June 13, 2019, petitioner Save Berkeley’s Neighborhoods filed a petition for writ of mandate seeking to vacate the Regents’ certification of the SEIR on the ground that the Regents violated CEQA. The petition named the Regents as a respondent, but did not name ACC or CHF as parties. Nor did petitioner serve ACC and CHF. On September 18, 2019, petitioner filed a first amended petition, which added ACC and CHF as real parties in interest. The amended petition acknowledged that ACC and CHF were listed as parties undertaking the project in the NOD, and thus were being named pursuant to Public Resources Code section 21167.6.5, subdivision (a), which requires the entities identified as recipients of project approvals on an NOD to be named as real parties in interest.

ACC and CHF filed demurrers to the first amended petition, asserting that petitioner failed to name them as parties within the applicable statute of limitations and that they are necessary and indispensable parties to the litigation, so the entire action should be dismissed. The trial court sustained the demurrers without leave to amend, but did not dismiss the lawsuit. The court held that ACC and CHF should have been named as real parties because they were listed on the NOD as the parties undertaking the project. Because petitioner had failed to amend its petition to name them as parties within 30 days after the Regents filed the NOD, petitioner’s challenge against ACC and CHF was time-barred under Public Resources Code section 21167. The court held, however, that the failure to timely name ACC and CHF as real parties did not justify dismissing the case because ACC and CHF were not indispensable parties under CCP 389(b).

ACC and CHF appealed, arguing that the trial court erred in concluding they were not indispensable parties. Petitioner filed a cross-appeal, arguing that the trial court erred in applying CEQA’s 30-day statute of limitations to the lawsuit because, according to petitioner, the Regents’ NOD for the project – the filing of which triggered the 30-day statute of limitations – was defective. The Court of Appeal affirmed the trial court’s order sustaining the demurrer.

Discussion

Appealability

As a threshold matter, the appellate court considered whether the trial court’s order sustaining the demurrer was appealable. Petitioner argued that it was not because the appeal arose from an interlocutory (non-final) order and thus violated the “one final judgment” rule. Furthermore, petitioner argued, the issue of whether AOC and CHF are indispensable parties remained in the underlying action because that issue was also raised by the Regents, who remained a party to the action, so the court should not consider that issue yet. The court rejected these arguments. The court explained that in actions involving multiple parties, an order fully disposing all of the issues as to one party is appealable, even if those same issues remain as to the other parties. Accordingly, the appeal was proper.

Necessary and Indispensable Parties

The court next considered whether the trial court erred in determining that CHF and ACC were not indispensable parties. If CHF and ACC were indispensable parties, the lawsuit must be dismissed in full. If they were not indispensable, then petitioner’s lawsuit against the Regents could move forward. The Court of Appeal agreed with the trial court that CHF and ACC were not indispensable parties.

Assembly Bill 320 Did Not Alter a Court’s Analysis of Whether a Real Party is “Indispensable”

CEQA currently requires petitioners to name, as a real party in interest, any person or entity identified on an NOD as a recipient of the project’s approval. Prior to 2012, however, CEQA did not require the recipients of the project approvals to be identified on the NOD. CEQA did, however, require any recipient of a project approval to be named as a real party in interest. The phrase “any recipient of an approval” was not defined by the statute, leading to confusion in the courts.

In 2011, the Legislature passed AB 320, which amended CEQA to require agencies to identify the recipient of a project’s approval on the project’s NOD. (Pub. Resources Code, § 21108.) It also amended CEQA to require petitioners to name the entities identified on the NOD as real parties in interest and to serve the petition on those entities. (Pub. Resources Code, § 21167.6.5, subd. (a)). The AB 320 amendments also provided that the “failure to name potential persons, other than those real parties in interest described in Public Resources Code, § 21167.6.5, subdivision (a), is not a ground for dismissal pursuant to Section 389 of the Code of Civil Procedure.” (Pub. Resources Code, § 21167.6.5, subd. (d).)

ACC and CHF argued that AB 320 was intended to provide “finality and certainty” as to who must be joined in a CEQA action and, therefore, CCP 389(b), which provides an equitable balancing test for determining who constitutes an indispensable party, does not apply. The court rejected this argument, holding that the AB 320 did not alter judicial analysis of whether a party is indispensable.

ACC and CHF argued that the express language of Public Resources Code section 21167.6.5, as amended by AB 320, demonstrates that CCP 389(b) does not apply. Specially, subdivision (d) of that statute states: “Failure to name potential persons, other than those real parties in interests described in subdivision (a), is not grounds for dismissal pursuant to Section 389 of the Code of Civil Procedure.” (Italics added.) The court disagreed that this language indicates that CCP 389(b)’s equitable balancing test does not apply when the petition fails to name a real party. As the court explained, the statute does not explicitly state that CCP 389(b) cannot be applied in CEQA actions in which the real party has not been properly named and served. Rather, that statute only suggests that the failure to name a real party in interest may be grounds for dismissal, depending on the equitable factors set forth in CCP 389(b).

Turning to the Legislative intent, the court found that in enacting AB 320, the Legislature did not intend to prevent application of CCP 389(b). Rather, the bill was only meant to clarify who constitutes a real party in interest, as there had been confusion on that issue in the courts. Moreover, AB 320’s Legislative history suggests that rather than intending to limit CEQA actions, AB 320 was intended to “prevent the dismissal of important and meritorious CEQA cases.” Applying a blanket rule that the failure to timely name a real party in interest constitutes a ground for mandatory dismissal of a CEQA case would frustrate that intent.

Application of CCP 389(b)’s Equitable Factors

The court next considered whether the trial court erred in holding that ACC and HCF were not indispensable parties. Under CCP 389(b), if a necessary party cannot be joined, “the court shall determine whether in equity and good conscious the action should proceed among the parties before it, or should be dismissed without prejudice, the absent person being thus regarded as indispensable. The factors to be considered by the court include: (1) to what extent a judgment rendered in the person’s absence might be prejudicial to him or those already parties; (2) the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; (3) whether a judgment rendered in the person’s absence will be adequate; (4) whether the plaintiff or cross-complainant will have an adequate remedy if the action is dismissed for nonjoinder.” (Code Civ. Proc., § 389, subd. (b).)

Applying these factors, the trial court held that ACC and CHF were not indispensable parties. Among other things, ACC and CHF’s interests were closely aligned to that of Regents because ACC and CHF were undertaking the project for the Regents’ own use and benefit. Moreover, petitioner would have no way of challenging the SEIR if the case was dismissed. On the other hand, ACC and CHF were parties in a related case challenging the same SEIR and were thus unlikely to be harmed by a settlement.

On appeal, ACC and CHF argued that they had fundamentally different interests in the project than the Regents. The Regents’ interest was to add housing and academic space to the campus, whereas ACC and CHF’s interest was to develop and operate the project. The court disagreed, explaining that the Regents, like ACC and CHF, had a strong interest in moving forward with the project; the fact that the Regents might have different motivations for doing so was immaterial. Further, contrary to ACC and CHF’s assertion, the Regents had a strong economic interest in the project because the Regents would manage and operate the new parking structure and the new academic building and the Regents would regain ownerships of the project once the project’s debt was repaid. ACC and CHF had failed to cite any evidence that they had unique financial interests or would be more harmed by an adverse judgment than the Regents. Accordingly, the trial court properly concluded that ACC and CHF were not indispensable parties.

Petitioner’s Cross Appeal – Did the Trial Court Err in Applying CEQA’s 30-Day Statute of Limitations?

Turning to the cross appeal, the court held that the trial court properly applied CEQA’s 30-day statute of limitations to the first amended petition. Petitioner argued that the statute of limitations should not apply because the Regents’ NOD for the project failed to accurately describe the project. In particular, the NOD did not explain that the project would result in an increase in student enrollment. The court disagreed that such information was required, holding that an increase in student enrollment was not a material component of the project. To the contrary, the NOD and SEIR indicated that the project was intended to accommodate the existing student body and planned growth, not necessarily to increase enrollment. Although it is possible that the project could result in an increase in enrollment, the record did not suggest that increasing enrollment was a component of project. Therefore, the trial court correctly held that the Regents’ filing of the NOD triggered CEQA’s 30-day statute of limitations.

Implications

The Court of Appeal was unwilling to interpret AB 320’s amendments to CEQA as modifying judicial analysis of whether a party is indispensable in a CEQA case. Although Public Resources Code 21167.6.5, as amended, could be interpreted as implying that the failure to name a real party in interest is a ground for dismissal under CCP 389(b), as the court noted, the statute does not explicitly require such a result. Thus, where a CEQA petitioner fails to name all parties listed as approval recipients on an NOD (or a notice of exemption (NOE)), case law decided under the former statute is still relevant to the question of whether a party is indispensable. The case also clarifies that although a project might result in changes to the existing baseline (e.g., an increase in student enrollment), that change need not be described as a component of the proposed project in the NOD or NOE.

Second District Invalidates EIR’s Project Description For Failing to Provide Sufficient Detail and Certainty.

In Stopthemillenniumhollywood.com et al. v. City of Los Angeles et al. (2019) 39 Cal.App.5th 1, the Second District Court of Appeal affirmed the trial court’s conclusion that an EIR for a mixed-use development project proposed by Millennium Hollywood, LLC (Millennium) in the City of Los Angeles (City) violated CEQA as a matter of law, because it failed to provide an accurate, stable, and finite project description.

In 2008, Millennium filed an application—which the Court of Appeal described as detailed—with the City proposing a mixed-use development project (2008 Proposal) on 4.47 acres in multiple parcels straddling two sides of Vine Street, between Yucca Street and Hollywood Boulevard, in the Hollywood Community Plan area of the City. The 2008 Proposal described a mixed-use development with 492 residential units, a 200-unit hotel, 100,000 square feet of office space, a 35,000-square-foot sports club and spa, 11,000 square feet of commercial uses, and 34,000 square feet of food and beverage uses. In total, proposed square footage was 1,163,079. Two historic buildings on site, the Capital Records Tower and Gogerty Building, would be preserved. The development would consist of two low-rise buildings, one on each side of Vine Street, with three towers intended to “frame” the Capital Records Tower. The 2008 Proposal would have required a zone change to allow the sports club, as well as a variance to allow the proposed density. After the City informed Millennium that a variance from the General Plan Floor Area Ratio (FAR) requirement would also be necessary, the project was put on hold.

In 2011, Millennium filed a new application with a new project description for the same site (2011 Project). Millennium still proposed a mixed-use development with residential, hotel, and retail uses totaling 1,166,970 square feet and a FAR of 6:1. Though the same mix of uses were proposed, the 2011 Project was “designed to create an impact ‘envelope’ within which a range of development scenarios can occur.” Thus, the specific shape, size, location, use, and number of buildings to be constructed on the site were not described, other than that the existing historic buildings would be preserved. Instead, Millennium sought to enter into a development agreement with the City that would establish the permitted developable floor area, land uses, design guidelines, and development standards for the site. Additionally, the 2011 Project included a land use equivalency program (LUEP) allowing the transfer of floor area between parcels on the site. The EIR analyzed the maximum level of impacts that could occur under the development agreement, regardless of which of the several development scenarios was actually constructed in the future.

Commenters on the Draft EIR complained that the imprecise project description hindered meaningful public participation. Nevertheless, the City approved the development agreement, certified the EIR, adopted mitigation for the analyzed maximum level of impacts and adopted a statement of overriding considerations. Petitioners, Stopthemillenniumhollywood.com, Communities United for Reasonable Development, and George Abrahams (collectively, Petitioners) petitioned the Los Angeles Superior Court for a writ of mandate setting aside project approval and certification of the EIR. Petitioners alleged three causes of action relating to violations of CEQA. First, they alleged that the EIR failed to include an accurate, stable, and finite project description. The second cause of action asserted that the City abused its discretion by failing to study traffic impacts to the 101 freeway despite Caltran’s direction that the City do so. The third cause of action alleged that the City failed to consult with the California Geological Survey regarding potential seismic hazards on the site. The trial court granted the petition as to the first and second causes of action, but not the third.

On the first cause of action, the trial court found that the project description was not stable or finite, and that the use of the word “or” in a condition of approval allowed Millennium, or future developers, to choose any permitted use listed for the C2 zone in the LAMC for future development, not just the list of proposed uses in the development agreement. The trial court reasoned that, though there may be circumstances where a project description may disclose only the physical parameters and maximum potential environmental impacts, no such circumstances were present here. The trial court distinguished Citizens for a Sustainable Treasure Island v. City and County of San Francisco (2014) 227 Cal.App.4th 1036 (Treasure Island), on the grounds that that case dealt with a site contaminated by hazardous materials, and it was unknown when cleanup of the site would be completed. The trial court noted that the development in Treasure Island included both fixed elements (including the street grid) and conceptual elements that would “likely” be subject to supplemental CEQA review. The trial court concluded that neither element was present here.

The trial court also found that, by including an ambiguous project description, the EIR impermissibly deferred part of the analysis of environmental impacts. Specifically, the trial court found that, because no specific “concept” was analyzed, the EIR did not explain how exceedance of the maximum impacts would be avoided when the project was actually designed and built; nor was additional CEQA review contemplated by either the EIR or the development agreement. The trial court determined that, without knowing the “bona fide subject” of the EIR, it would be impossible for the public and decisionmakers to accurately weigh the “environmental price tag” of the proposal and decide if the benefits outweigh that price.

The City and Millennium appealed the trial court’s decision as to the first and second cause of action, while Petitioners appealed the decision on the third cause of action. The Court of appeal, after ruling on the first cause of action, determined that it need not reach the other issues raised by the parties.

In affirming the trial court, the Court of Appeal looked to County of Inyo v. City of Los Angeles (1977) 71 Cal.App.3d 185 (County of Inyo), and Washoe Meadows Community v. Department of Parks and Recreation (2017) 17 Cal.App.5th 277 (Washoe Meadows). The Court cited County of Inyo for the proposition that, even where an inaccurate project description does not render invalid the analysis of environmental effects, it may nevertheless violate CEQA by interfering with “intelligent public participation.” The Court found further support for this position in Washoe Meadows, where the First District held that a failure to select or identify a specific project in the Draft EIR interfered with the public’s right to participate in CEQA review.

In the case before it, the Court found that the project description “fail[ed] to describe the siting, size, mass, or appearance of any building proposed to be built at the project site” and that the proposed development regulations imposed only vague and ambiguous limits on future construction choices. The Court held that, even if the analysis of maximum impacts were adequate—despite the project description, “CEQA’s purposes go beyond an evaluation of theoretical environmental impacts.” The Court determined that the project description violated CEQA as a matter of law.

In reaching its decision, the Court distinguished South of Market Community Action Network v. City and County of San Francisco (2019) 33 Cal.App.5th 321 (South of Market), on two grounds. First, the Court found that the only “uncertainty” at issue in South of Market was that the project description presented a choice of either a predominately office use or a predominately residential use, but the EIR did not select one or the other. Second, the Court found that the EIR in South of Market “included ‘site plans, illustrative massing, building elevations, cross-sections and representative floor plans for both options.”’ Because the EIR before it did not include these “technical characteristics” of the project, the Court concluded that it failed to comply with CEQA’s mandates. The Court also largely agreed with basis for the trial court’s distinguishing of Treasure Island, supra, 227 Cal.App.4th 1036, finding that no unusual circumstances were present in this case, and that future planning and development of the project would not be subject to additional environmental review. Lastly, the Court found the violation to be prejudicial because it interfered with public participation.

As stated above, the Court determined that it need not address the other issues raised by the parties. The Court dismissed an argument that Public Resources Code section 21168.9 required them to rule on each issue raised in a CEQA appeal. The Court found that section applied only to the trial court’s order on remand, which is to address only those mandates from the Court of Appeal that are necessary to comply with CEQA. The Court found that the trial court’s judgment was correct on at least one ground, so it was affirmed.

Nathan George

First District Court of Appeal Upholds EIR for Mixed-Use Development Project

In the first published decision to apply the standard of review articulated by the Supreme Court in Sierra Club v. County of Fresno (Friant Ranch), the First District Court of Appeal affirmed the trial court’s decision upholding an EIR for a mixed-use development project in South of Market Community Action Network v. City and County of San Francisco (2019) 33 Cal.App.5th 321.

The project at issue is a mixed-use development that covers four acres of downtown San Francisco and seeks to provide office, retail, cultural, educational, and open-space uses for the property, to support the region’s technology industry and offer spaces for coworking, media, arts, and small-scale urban manufacturing. The city certified an EIR, which described two options for the project—an “office scheme” and a “residential scheme.” The office scheme had a larger building envelope and higher density than the residential scheme but all other project components were the same and the overall square footage was substantially similar. Several community organizations raised a variety of claims challenging the environmental review. The trial court denied relief and the petitioners appealed.

Applying the three “basic principles” set forth by the Supreme Court in Friant Ranch regarding the standard of review for the adequacy of an EIR, the First District held the EIR was legally adequate.

The court rejected the petitioners’ argument that the project description was inadequate because it presented multiple possible projects. The court found that the EIR described one project—a mixed use development involving retention or demolition of existing buildings and construction of new buildings—with two options for different allocations of residential and office units. The court also rejected petitioners’ argument that the final EIR adopted a “revised” project that was a variant of another alternative identified in the draft EIR—emphasizing that the CEQA reporting process is not designed to freeze the ultimate proposal in the precise mold of the initial project, but to allow consideration of other options that may be less harmful to the environment.

Petitioners alleged that the cumulative impacts analysis was flawed because the EIR used an outdated 2012 project list, developed during the “Great Recession,” which did not reflect a more recent increase in development. The court noted the petitioners did not point to any evidence to establish that the project list was defective or misleading or that the city had ignored foreseeable projects. Accordingly, the court held that the petitioners had not met their burden of proving the EIR’s cumulative impacts analysis was not supported by substantial evidence.

With respect to traffic, the petitioners argued the EIR was inadequate because it failed to (1) include all impacted intersections, (2) consider the impact of the Safer Market Street Plan (SMSP), and (3) adequately evaluate community-proposed mitigation measures and alternatives. The court rejected each argument in turn. First, the court found that the EIR’s explanation for selecting certain intersections and excluding others and the related analysis was supported by substantial evidence. The court further held that the city did not need to include the SMSP in the EIR because it was not reasonably foreseeable when the city initiated the EIR, nor was there evidence that the SMSP would have an adverse impact on traffic and circulation related to the project. Lastly, the court deferred to the city’s selection of alternatives because the petitioners had failed to meet their burden to show the nine alternatives evaluated in the EIR were “manifestly unreasonable.” Similarly, the court found the petitioners had failed to meet their burden to demonstrate their proposed alternatives were feasible and met most of the project objectives.

In addressing wind impacts, an argument petitioners failed to exhaust, the court found such impacts were appropriately addressed in the EIR. The court reasoned an alternative configuration was not required under the city’s comfort criterion for wind speed impacts because the exceedance of the comfort criterion did not establish significant impacts for CEQA purposes.

The court also rejected an argument that the project failed to provide onsite open space because the EIR explained that the project provided more space than the city code required and the impact related to demand on existing parks and open spaces would be less than significant.

The court further upheld the EIR’s shade and shadow analysis, finding no evidence in the record to support that sunlight on a park is not a “special and rare resource” warranting “special emphasis” under CEQA Guidelines section 15125.

The court also held that the city had made a good faith effort to discuss inconsistencies with the applicable general plans, noting that CEQA does not “mandate perfection.”

Finally, the petitioners claimed that the statement of overriding considerations was invalid because the city improperly considered the benefits of the project before considering feasible mitigation measures or alternatives. The court disagreed, emphasizing that the project was modified to substantially conform to the identified environmentally superior alternative and stating that the revised project would not have been adopted if there had been no consideration of mitigation measures or alternatives.