Archive for March, 2015


The City of San Diego appealed a judgment granting CREED-21’s petition for injunctive and other relief for CEQA violations relating to emergency storm drainage repair and revegetation projects in La Jolla. The court held in favor of the City, finding it had used the correct baseline and had properly issued an exemption for the revegetation project. Furthermore, CREED had not been denied its due process right to a fair hearing. The court affirmed the judgment below to the extent it declared the City’s appeal fee assessment invalid and set it aside. The opinion, filed January 29, was certified for publication on February 18. CREED-21 v. City of San Diego (Feb. 18, 2015) ___ Cal.App.4th ___, Case No. D064186.

In 2010, the City issued an emergency permit for storm drainage repair work, and a notice of exemption from CEQA for the work. The emergency permit was conditioned on seeking a permanent permit and implementing a revegetation plan. The City found the revegetation plan to be exempt from CEQA relying on the “common sense” exemption and two categorical exemptions. CREED filed a lawsuit challenging the revegetation plan, and the work performed under the emergency permit. CREED argued that in reviewing the revegetation plan, the City was required to consider the physical setting of the area prior to the emergency storm drainage work, rather than after when the revegetation work commenced. The court refused to set the baseline earlier. The court similarly held that CREED did not have standing to challenge the 2010 emergency exemption, as it had missed the statute of limitations to challenge that project.

CREED argued that the 2010 emergency exemption was merely for temporary work, and that CEQA required the City to conduct at least a preliminary review, if not an initial study and EIR, to determine whether the already completed repair work might have a significant effect on the environment. The court disagreed, noting that any argument about the temporary status of the emergency work performed by the City in 2010 was based solely on the San Diego Municipal Code and not on CEQA or the Guidelines.

The court found that the City properly relied on the common sense exemption to find the revegetation project exempt from CEQA under Guidelines section 15061, subdivision (b)(3). That exemption applies where there is no possibility that the activity in question may have a significant effect on the environment. Because the revegetation plan would indisputably improve the site’s physical conditions—consisting primarily of bare dirt—the plan would not cause an adverse change so as to constitute a significant effect on the environment. The court added that the revegetation plan would also be exempt under the Class 1 exemption for existing facilities, which encompasses repair to existing topographical features. CREED failed to satisfy its burden of showing that the unusual circumstances exception applied to override the exemption.

The court also found CREED was not denied due process of law when the City did not timely disclose a document requested under the California Public Records Act. The City Council heard and denied CREED’s appeal of the City’s exemption determination, but did not provide CREED with a copy of the initial study until after that hearing. This omission did not deny CREED its right to due process and a fair hearing. CREED had received reasonable notice of the hearing and a reasonable opportunity to be heard.

Finally, the Fourth District held that the trial court had not abused its discretion by denying the City’s request for judicial notice of an ordinance and by finding that an appeal fee was unauthorized. There was no evidence in the record authorizing the $100 appeal fee. CREED alleged there was also no provision in the Municipal Code authorizing the City to charge a fee for an administrative appeal. The City argued there was an ordinance authorizing such fees, and requested the court take judicial notice of the ordinance. The court found the City had not given CREED sufficient notice of its request for judicial notice to allow for preparation of an opposition, and the request’s lack of an attachment listing specific fees rendered the document insufficient for the court to take notice.

The California Supreme Court reversed the First District Court of Appeal’s decision that the “unusual circumstances” exception in CEQA Guidelines section 15300.2, subdivision (c), precluded the City of Berkeley’s finding that a single-family residence qualified for a categorical exemption. That section provides that a categorical exemption “shall not be used for an activity where there is a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances.” The Supreme Court established a two-part test for determining whether the “unusual circumstances” exception applies. Berkeley Hillside Preservation, et al. v. City of Berkeley, et al. (March 2, 2015) __ Cal.4th __, Case No. S201116.

Homeowners in the Berkeley hills applied to demolish their house, and to construct a new, two–floor, 6,478 square-foot house with an attached 3,394 square-foot ten-car garage on a steep lot in a heavily wooded area. The City concluded the proposed project fell within the Class 3 (new construction of small structures) and Class 32 (infill) categorical exemptions. Project opponents hired an engineer who submitted letters stating the grading required would result in unstable conditions and could cause landslides during an earthquake. The homeowners’ engineer submitted a report stating the opponents’ engineer had misread the plans. The City eventually approved the proposed project, relying on the categorical exemptions.

The Court of Appeal concluded that the “unusual circumstances” exception under CEQA Guidelines section 15300.2, subdivision (c), applied. According to the court, if there is a fair argument the project may result a significant impact, then by definition the circumstances are “unusual.” Finding substantial evidence of a fair argument that the proposed residential project may have a significant environmental effect, the court held the proposed project was not categorically exempt. The Court of Appeal ordered the trial court to issue a writ of mandate directing the City to set aside the project approval and its finding of a categorical exemption, and to order preparation of a full EIR. Thereafter, Respondents filed a petition for review in the Supreme Court, which the Court granted on May 23, 2012.

The Supreme Court reversed the Court of Appeal. In the majority opinion, authored by Justice Chin, the Court laid out a two-part test for determining whether the unusual circumstances exception applies. Under the first part of the test, the lead agency must determine whether there are “unusual circumstances,” which the court reviews under the “substantial evidence” standard of review.

Under the second part of the test, if the lead agency determines in the first instance that unusual circumstances exist, the lead agency then considers whether there is a fair argument that the proposed activity may have a significant environmental effect.

In coming to its decision, the Court relied, in part, on the rules governing statutory interpretation requiring that every phrase in a statute (and regulation) be given meaning. The Court turned to the plain text of section 15300.2, subdivision (c), and concluded that the phrase “due to unusual circumstances” has meaning and cannot be read out of the regulation. Thus, the Court of Appeal incorrectly held that a proposed project may have a significant effect on the environment is itself an unusual circumstance rendering the categorical exemption inapplicable.

Justice Liu authored the concurring opinion in which Justice Werdegar joined. The concurring opinion agreed with the Court’s reversal and remand of the appellate court’s decision. Parting ways with the majority, however, Justice Liu disagreed with the Court’s reading of CEQA Guidelines section 15300.2, subdivision (c). The concurring opinion advocated for a one-part test, observing that “‘unusual circumstances’ and ‘significant effects’ have invariably traveled together.” According to the concurring opinion, the phrase “unusual circumstances” in section 15300.2, subdivision (c), “simply describes the nature of a project that, while belonging to a class of projects that typically have no significant environmental effects, nonetheless may have such effects.” Justice Liu thus concluded that the standard of review is limited to whether substantial evidence supports a fair argument that the project will have significant environmental effects.

The majority acknowledged that evidence that the project will have a significant effect does tend to prove that some circumstance of the project is unusual. The majority also explained that in considering the first part of the test, the lead agency has “discretion to consider conditions in the vicinity of the proposed project.” The Court stated that the appellate court had erred in determining that the unusual circumstances inquiry excludes consideration of typical circumstances in a particular neighborhood. Beyond that, though, the Court provided little guidance on the legal test for what constitutes “unusual circumstances.”

The Court also addressed the proper remedy on remand. Relying on Public Resources Code section 21168.9, the Court stated that on remand the Court of Appeal could order preparation of an EIR only if it found that neither of the categorical exemptions applied and if the City lacked discretion to apply another exemption or to issue a negative declaration.

 

Note: The opinion was modified on May 27, 2015. These changes do not affect the result of the case.

The First District Court of Appeal has held the California Air Resources Board (CARB) did not exceed its authority under the California Global Warming Solutions Act of 2006 (2006 Act) in implementing the Compliance Offset Protocols and the early action offset provision of its Cap-and-Trade program. Our Children’s Earth Foundation v. California Air Resources Board, Case No. A138830 (Feb. 23, 2015).

Under the 2006 Act, CARB is required to adopt regulations specifying GHG emission limits and emission reduction measures in furtherance of achieving the statewide GHG emissions limit. The 2006 Act expressly authorizes CARB to adopt regulations establishing market-based compliance mechanisms to reduce GHG emissions. Every CARB regulation adopting GHG emission limits and measures must ensure that GHG emissions reductions are “real, permanent, quantifiable, verifiable, and enforceable” by CARB. (Health & Saf. Code, § 38562, subd. (d)(1).) Those regulations must also ensure that the emissions reduction “is in addition to any greenhouse gas emission reduction otherwise required by law or regulation, and any other greenhouse gas emission reduction that otherwise would occur.” (Health & Saf. Code, § 38562, subd. (d)(2), italics added.) This latter provision is known as the “additionality” requirement.

Pursuant to its authority under the 2006 Act, CARB implemented in January 2012 a Cap-and-Trade program regulation, a market-based compliance mechanism for achieving reductions in GHG emissions. The Cap-and-Trade program imposes a cap on the aggregate GHG emissions that covered entities may emit during the annual compliance period. Covered entities include industries who have previously reported exceedances of emissions above CARB’s threshold established for that industry. CARB enforces the cap by issuing a limited number of compliance instruments known as “allowances,” the total value of which is equal to the cap amount. Subject to limitations, participants can buy, bank, or sell allowances which are used by the covered entities to comply with their compliance obligations.

In March 2012, Appellant Our Children’s Earth Foundation (OCEF) (and another organization who is not a party on appeal) filed a petition for writ of mandate and complaint for declaratory and injunctive relief against CARB. OCEF claimed that CARB’s Compliance Offset Protocols and early offset credit provision violated the additionality requirement of the 2006 Act because they did not ensure the offsets would be truly additional to any GHG reductions that would otherwise occur.

The First District Court of Appeal affirmed the lower court’s denial of the petition. On appeal, OCEF first claimed that CARB exceeded its authority by adopting a market-based compliance mechanism that fails to ensure offset credits are additional to “any” GHG emissions reductions “that otherwise would occur.” The 2006 Act does not define “additional” or “otherwise would occur.” But the 2006 Act does define “market-based compliance mechanism” as including GHG emissions exchanges, banking, credits, and other transactions, governed by rules and protocols to be established by CARB. Within this authority delegated to CARB by the Legislature, the court concluded that CARB appropriately established rules and protocols that ensure additionality with respect to offset credits accepted under the Cap-and-Trade program.

The court also found it problematic that OCEF failed to articulate how a project operator could prove the GHG reduction would not otherwise occur or how CARB could provide the certainty that OCEF claims the 2006 Act demands. Whether a project would have been implemented without the offset incentive can never be proven with absolute certainty. The court found OCEF’s interpretation unworkable and, in practice, would preclude CARB from implementing market-based compliance mechanisms. That result is not what the Legislature intended, the court believed.

The court also rejected OCEF’s claim related to the early offset credit program. OCEF claimed that CARB exceeded its statutory authority by allowing offset credits for projects that were already occurring. According to the court, however, OCEF incorrectly assumed that a project that began before the Cap-and-Trade program was adopted could never satisfy the additionality requirement. That assumption was not supported by the provisions of the 2006 Act itself, which reflected the Legislature’s intention that there could be incentives for voluntary early reductions even before the Act was passed for which CARB could give credit.

Finally, the court considered OCEF’s challenge to the effectiveness of specific measures included in several of the Compliance Offset Protocols. As to this claim, the court made it clear that it would not substitute its judgment for that of the agency regarding CARB’s factual and policy considerations supporting the regulation. Pointing to the record, the court found that evidence substantially supported CARB’s policy decisions in formulating the protocols.

The Third District Court of Appeal held that the City did not prematurely commit to the arena project by entering into a nonbinding term sheet with the Sacramento Kings or by engaging in land acquisition through eminent domain before the EIR process was complete. The court further determined that the EIR included an appropriate range of alternatives and adequately analyzed traffic and safety impacts. Saltonstall v. City of Sacramento (Feb. 18, 2015) ___ Cal.App.4th ___, Case No. C077772.

The case involves a challenge to the certification of an EIR and approval of a new entertainment and sports arena in downtown Sacramento that will eventually house the Sacramento Kings. To facilitate the timely opening of the new downtown arena, the Legislature modified several deadlines under CEQA by adding section 21168.6.6 to the Public Resources Code.

The City certified the EIR and approved the project in May 2014. Opponents of the project immediately filed a lawsuit against the City and sought a preliminary injunction to stay construction. The trial court denied the preliminary injunction, and the Court of Appeal affirmed that decision. The appellate court ruled that petitioners failed to satisfy the requirements for a preliminary injunction and held that section 21168.6.6 was not unconstitutional. (Saltonstall v. City of Sacramento (2014) 231 Cal.App.4th 837.) The trial court subsequently rejected the lawsuit in its entirety. Petitioners appealed.

In the appeal, petitioners argued (1) the City violated CEQA by committing itself to the downtown arena project before completing the EIR process, (2) the City’s EIR failed to consider remodeling the current Sleep Train Arena as a feasible alternative to building a new downtown arena, (3) the EIR did not properly study the effects of the project on interstate traffic traveling on the nearby section of Interstate Highway 5, and (4) the City did not account for large outdoor crowds expected to congregate outside the downtown arena during events. Petitioners also argued that the trial court erred in denying their motion to augment the record and in denying their Public Records Act request to the City to produce e-mail communications with the NBA. The Court of Appeal rejected all of petitioners’ claims.

The Third District first dismissed the claim that the City prematurely committed itself to approving the project. Petitioners claimed the City violated CEQA by engaging in land acquisition for its preferred site and entering into a preliminary term sheet with Sacramento Basketball Holdings LLC before finishing the EIR. Rejecting this argument, the Court held that the City was allowed to engage in land acquisition for its preferred site before finishing its EIR under CEQA Guidelines section 15004 and Public Resources Code section 21168.6.6. Guidelines section 15004, subdivision (b)(2)(a), expressly provides that “agencies may designate a preferred site for CEQA review and may enter into land acquisition agreements when the agency has conditioned the agency’s future use of the site on CEQA compliance.” Moreover, Public Resources Code section 21168.6.6 expressly allowed the City to exercise its eminent domain power to acquire the 600 block of K Street as the site of the arena before finishing the EIR. Finally, the court held that the preliminary term sheet did not improperly commit the City to approving the arena as proposed. The preliminary nonbinding term sheet constituted an agreement to negotiate regarding the project and did not foreclose environmental review, mitigation, or even rejection of the project.

Turning to petitioners’ claim that the alternatives analysis was inadequate, the court held that the City was not required to study remodeling the current Sleep Train Arena as a project alternative in the EIR. The City studied a “no project” alternative involving continued use of the Sleep Train Arena and an alternative that involved building a new arena next to the current arena in Natomas. Both the no project and new Natomas arena alternatives failed to meet most of the City’s objectives for the project to revitalize its downtown area. The remodel alternative suggested by petitioners would have suffered the same problems of location that caused the City to reject the two Natomas-based alternatives. Noting that “infeasible alternatives that do not meet project objectives need not be studied[,]” the court held the Sleep Train Arena remodel alternative did not need to be analyzed.

The court next addressed petitioners’ claim that the EIR’s traffic analysis was defective for failure to adequately analyze interstate traffic on I–5. The EIR studied and disclosed existing problems with the nearby section of I–5 at peak traffic times as well as how the downtown arena project would worsen traffic congestion. The EIR reached the conclusion that levels of service would—at times—reach the worst rating given by Caltrans for traffic flow. Even with proposed mitigation measures, the City acknowledged the adverse impact of the project on I–5 traffic would be significant and unavoidable. While petitioners acknowledged the City did study local I–5 traffic congestion, they argued the study was inadequate for not considering “mainline” I–5 traffic ranging from Canada to Mexico. Rejecting this argument, the court explained that the City was not required to separately study the effect on interstate motorists who will be impacted in the same way as other, local motorists sharing the same section of I–5. The court also noted the EIR did account for mainline traffic because it used the sampling data of mainline freeway traffic collected by Caltrans.

Petitioners also argued the City’s traffic study was deficient because the EIR understated the number of persons who would surround the downtown arena. The court again was not persuaded. The City’s review of crowd size included a national survey of similar entertainment and sports facilities as well as review of crowd sizes during the Sleep Train Arena’s history. The court held that the City did not err “in declining to speculate that the same games played a few miles away would suddenly and inexplicably draw large crowds of persons who would not watch the game but simply mill about in the winter nighttime.”

Addressing petitioners’ final CEQA claim, the court held that petitioners’ contention regarding failure to study post-event crowd safety and potential for violence did not implicate CEQA because petitioners failed to show any potential for environmental impacts. Petitioners argued the EIR both understated the number of persons who can be expected to congregate around the downtown arena as well as their proclivities toward drunken violence. The court ruled that the argument focused on a social issue for which no environmental effect was described.

Finally, regarding petitioners’ attempt to augment the administrative record, the court held that their challenge to the trial court’s denial of their Public Records Act request seeking over 62,000 emails related to communications between the City and the NBA was not properly before the court. Denial of such a request is reviewed only by petition for writ of mandate, not direct appeal. The court also held that petitioners forfeited their argument regarding the introduction of certain additional materials because they failed to offer any meaningful analysis on the issue.