(2012) 54 Cal.4th 281

The California Supreme Court held that the requirement for exhaustion of administrative remedies found in Public Resources Code section 21177, subdivision (a) of the California Environmental Quality Act (CEQA) applies to an agency’s decision that a project is categorically exempt from compliance with CEQA, so long as the public agency gives notice of the grounds for its exemption determination, and that determination is preceded by a public hearing at which members of the public had the opportunity to raise objections to the project.

The petitioners had participated in Alameda County’s administrative process to challenge the approval of an 11-unit subdivision in the unincorporated portion of the County near Hayward. The County Board of Supervisors determined that the infill exemption found at CEQA Guidelines section 15332 applied and approved the project after hearing the petitioners’ appeal from the planning commission.

The Court did not reach the petitioners’ arguments that the public agency’s description of the requirements for the infill exemption was misleading, where the county omitted any mention of the infill exemption’s criterion requiring that the project be located “within city limits.” The county did not quote the full language of the exemption in any of its notices and staff reports. Instead, it summarized the criteria and substituted “in an established urban area” for the proper phrase “within city limits” in the exemption in all explanations of the exemption in project materials. Petitioners asserted that this substitution misled and prevented them from raising the specific issue of whether the “city limits” restriction disqualified the project from using the infill exemption. The Court also did not address the argument that the petitioner’s extensive objections to the project on multiple grounds at public hearings, including a dispute about the project site’s characterization as an “urban area”, were sufficient to satisfy the exhaustion requirement.

The Court remanded the case to the First District Court of Appeal to determine whether the claims the petitioners raised were adequate to put the County on notice that the infill exemption did not apply, and whether the County’s omission of key criteria for the exemption excused the petitioner’s failure to exhaust on the specific issue of the city limits criterion. [The petitioners were represented by RMM partner Sabrina V. Teller.]