Posts Tagged ‘Supreme Court’


In Banning Ranch Conservancy v. City of Newport Beach (2017) 2 Cal.5th 918, the California Supreme Court held that CEQA requires an EIR for a project located within a coastal zone to identify which areas in a project site might qualify as “environmentally sensitive habitat areas” (ESHA) under the California Coastal Act and account for those areas in its analysis of project alternatives and mitigation measures.

Background

Banning Ranch is a privately owned 400-acre tract of land. A small portion of the site is within the City of Newport Beach; the remainder is in unincorporated Orange County, within the City’s Sphere of Influence. The City’s general plan sets forth two options for the site. The preferred option is community open space. The second option would allow construction of up to 1,375 residential units, 75,000 square feet of retail facilities, and 75 hotel rooms. The City was unable to raise funds to buy Banning Ranch for open space. So in 2008, Real Party in Interest Newport Banning Ranch, LLC (NBR) submitted a proposal for development consistent with the second option for the site outlined in the general plan.

The Banning Ranch site is in a designated coastal zone under the Coastal Act. Under the Coastal Act, local governments within the coastal zone must submit a local coastal program for Coastal Commission approval. The program consists of a coastal land use plan (CLUP) and implementing regulations. The City has not yet adopted the regulatory component of its local coastal program, so the Coastal Commission exercises permitting authority over the Banning Ranch development. Further, the Banning Ranch site is not included in the City’s CLUP.

Because the site is within a coastal zone, the Costal Act places limits on what can be developed on the site. The Coastal Act specifies that ESHA “shall be protected against any significant disruption of habitat values, and only uses dependent on those resources shall be allowed within those areas.” (Pub. Resources Code, § 30240, subd. (a).) ESHA is defined as an area in which plant or animal life or their habitats are either are or especially valuable because of their special nature or role in an ecosystem and which could be easily disturbed or degraded by human activities and developments. (Pub. Resources Code, § 30107.5.) In order to issue a coastal development permit for the project, the Coastal Commission must determine whether the project violates the ESHA requirements of the Coastal Act.

The City prepared an EIR for the Banning Ranch project. Although the EIR contained an extensive analysis of biological impacts, it did not identify potential ESHA or discuss the subject in substantive detail. Rather, it noted that the project would require a permit from the Coastal Commission, which would determine whether the site contained ESHA.

Comments on the draft EIR criticized the EIR for omitting an analysis of ESHA. The Coastal Commission submitted 15 pages of staff comments, suggesting that the EIR should address whether the proposed development was consistent with the policies of the City’s CLUP and the Coastal Act. The letter pointed out that the development must avoid impacts to ESHA and recommended that the EIR use the CLUP, which includes criteria for the determination of ESHA, to evaluate sensitive habitat areas and appropriate buffer zones. The letter concluded that based on its preliminary analysis, Coastal Commission staff had found the project to be inconsistent with the ESHA requirements of the Coastal Act. Commission staff requested that the EIR more fully consider alternatives that would avoid ESHA impacts.

In the final EIR, the City responded to comments, but maintained that it was not required to reach a legal determination as to whether Banning Ranch contained ESHA. The responses to comments explained that this determination would be made by the Coastal Commission at the time the applicant applies for a coastal development permit. The responses stated: “no conclusions of ESHA can and will be made by the City at this time as part of the EIR process that would in any way bind the Coastal Commission or elucidate on the Coastal Commission’s ultimate conclusions…. Rather, as appropriate under CEQA, the City has analyzed the impacts of the project, and concluded that they can be reduced to a less-than-significant level or avoided with appropriate measures.” In response to the Coastal Commission staff’s comments, the final EIR explained:

The purpose of the Draft EIR is to analyze a proposed project’s impact on the physical environment. It is not, in and of itself, a policy consistency analysis, except to the extent that such inconsistencies reveal impacts that otherwise are not discussed. … [T]he Draft EIR analyzes the proposed Project’s impact on biological resources, including federal and State listed endangered and threatened species, sensitive plant and animal species, and specific habitats such as wetlands and vernal pools. All impacts to these resources would be mitigated or avoided with the Mitigation Program. … The Draft EIR acknowledges that the Coastal Commission makes the determination as to whether any or all of these constitute ESHA under the Coastal Act, and application of the policies of the Coastal Act to the existing conditions on the Project site would be undertaken as part of the Coastal Commission’s Costal Development Permit process.

The City certified the final EIR in 2012 and approved the project. Petitioner Banning Ranch Conservancy (BRC) filed a petition for writ of mandate, contending that the EIR did not adequately analyze environmental impacts and mitigation measures with respect to ESHA, instead deferring this critical analysis to the Coastal Commission. BRC also alleged that the City had violated the requirement under the City’s general plan to coordinate with and work with the Coastal Commission to identify habitats for preservation, restoration, and development. The trial court denied the petition as to Petitioner’s CEQA claims, but granted the petition as to the General Plan claim. The Court of Appeal reversed, holding that the City complied with its General Plan. The Court of Appeal agreed with the trial court that the EIR complied with CEQA. With respect to BRC’s ESHA arguments, the Court of Appeal held that “CEQA does not require the City to prognosticate as to the likelihood of ESHA determinations and coastal development permit approvals.”

The California Supreme Court’s Opinion

The Supreme Court reviewed the City’s decision not to identify ESHA in the EIR under the “de novo” standard of review. The Court reasoned that “whether an EIR has omitted essential information is a procedural question” to which the court owes no deference to the agency.

Having established that the de novo standard of review applies, the Court rejected the City’s argument that CEQA imposes no duty on the City to reach conclusions as to whether the Project site includes ESHA. The Court explained that “CEQA sets out a fundamental policy requiring local agencies to ‘integrate the requirements of [CEQA] with planning and environmental review procedures otherwise required by law or by local practice so that all those procedures, to the maximum feasible extent, run concurrently, rather than consecutively.” (Slip Op. pp. 18–19, quoting Pub. Resource Code, § 21003, subd. (a).) Likewise, the CEQA Guidelines state that “‘[t]o the extent possible, the EIR process should be combined with the existing planning, review, and project approval process used by each public agency.”’ (Slip Op. p. 19, quoting CEQA Guidelines, § 15080.) Additionally, agencies are encouraged to consult with responsible agencies in preparing EIRs “‘so that the document will meet the needs of all the agencies which will use it.’” (Slip Op. p. 19, quoting CEQA Guidelines, § 15006, subd. (g).) Here, concluded the Court, the City ignored its duty to integrate CEQA review with the requirements of the Coastal Act, and “gave little consideration to the Coastal Commission’s needs.”

Further, reasoned the Court, the CEQA Guidelines require an agency to consider related regulatory regimes, such as the Coastal Act, when discussing project alternatives. In particular, an EIR must “‘describe a range of reasonable alternatives to the project,’ or to its location, that would ‘feasibly attain’ most of its basic objectives but ‘avoid or substantially lessen’ its significant effects.” (Slip Op. p. 19, quoting CEQA Guidelines, § 15126.6, subd. (a).) Among the factors that may be taken into account when addressing the feasibility of alternatives is whether there are “other plans or regulatory limitations [and] jurisdictional boundaries (projects with a regionally significant impact should consider the regional context).”’ (Slip Op., quoting CEQA Guidelines, § 15126.6, subd. (f)(1).) Projects with substantial impacts in coastal zones are, by definition, “regionally significant.” (Slip Op. pp. 19–20, citing CEQA Guidelines, § 15206, subd. (b)(4)(C).) Accordingly, “the regulatory limitations imposed by the Coastal Act’s ESHA provisions should have been central to the Banning Ranch EIR’s analysis of feasible alternatives.” (Slip Op., p. 20.)

The City and amicus curiae League of California Cities argued that lead agencies under CEQA are not required to make legal determinations that are within the sole jurisdiction of another agency. The League of Cities voiced a concern that ESHA identifications in EIRs might be subject to de novo judicial review. The Court rejected these arguments, reasoning that “a lead agency is not required to make a ‘legal’ ESHA determination in an EIR. Rather, it must discuss potential ESHA and their ramifications for mitigation measures and alternatives when there is credible evidence that ESHA might be present on a project site.”  (Slip Op., p. 21.) Such discussions would only be reviewed by the courts for “sufficiency.” (Ibid.)

The City further contended that the identification of potential ESHA would be merely speculative. The Court rejected this argument because, on the record before it, there had been positive identifications of ESHA on the Project site by Coastal Commission, and the applicant’s own consultant had identified areas of potential ESHA. The Coastal Commission staff had also offered the City assistance in identifying ESHA. Thus, the City had “ample bases” for an informed ESHA analysis. Further, the City routinely identified ESHA in EIRs for projects within the City’s CLUP. The fact that Banning Ranch is not in the CLUP did not excuse the City from identifying ESHA in the Banning Ranch EIR.

The Court also rejected the City’s argument that ESHA would be fully considered during the coastal development permitting phase of the project. The Court explained that such a delay “is inconsistent with CEQA’s policy of integrated review.” (Slip Op., p. 23, citing Pub. Resources Code, § 21003, subd. (a).) Further, the City’s position was inconsistent with CEQA’s requirement that lead agency’s “consider related regulations and matters of regional significance when weighing [the feasibility of] project alternatives.” (Slip Op., p. 23, citing CEQA Guidelines, § 15126.6.) Moreover, lead agencies “must take a comprehensive view in an EIR.” (Slip Op., p. 23, italics added by Court, citing Pub. Resources Code, § 21002.1, subd. (d).)

Finally, the Court rejected the City’s supposition that if the City were required to identify ESHA in the EIR, it would have to accept the Coastal Commission staff’s opinions about what constitutes ESHA and what mitigation measures are required. The Court noted that CEQA does not require a lead agency to agree with the opinions of other agencies. But to serve the public and decisionmakers, the EIR must lay out competing views. Although the Coastal Commission makes the final ESHA determination, the public and the members of the Coastal Commission are “entitled to understand the disagreement between commission staff and the City on the subject of ESHA.” (Slip Op., p. 25.)

Because the Court determined the Banning Ranch EIR violated CEQA for failing to identify ESHA and account for ESHA in its discussion of alternatives and mitigation measures, the Court declined to address the general plan issues.

Whit Manley, of counsel at Remy Moose Manley, LLP, represented Respondent City of Newport Beach in the case.

In Orange Citizens for Parks and Recreation et al. v. Superior Court of Orange County (2016) 2 Cal.5th 141, the City of Orange approved a proposed 39-unit residential development on a former golf course. The project was controversial because the private development would replace open space. Nevertheless, the city approved the project’s proposed general plan amendment to allow residential development on the property. In response, petitioners Orange Citizens for Parks and Recreation et al. challenged the city’s amendment to the general plan by referendum. The city then changed its position, claiming that there was no need to amend its general plan for the development project in the first place, since a resolution from 1973 allowed residential development on the property. The city thus concluded that whatever the outcome of the referendum, it would have no effect on the development. In November 2012, a majority of voters rejected the project’s general plan amendment. The Supreme Court’s decision honored the voters’ intent, holding that the city abused its discretion in determining that the project was consistent with the city’s general plan.

Background

The case has a complicated—and, it is hoped, unique—factual background. Orange Park Acres, the property at issue in the case, is located in the foothills of the Santa Ana Mountains. In 1973, the city established an Orange Park Acres development committee to resolve disputes about what to do with the land. After several weeks of outreach, the development committee adopted the Orange Park Acres Specific Plan (OPA Plan). The OPA Plan designated the property at issue for use as a golf course, or should that prove economically infeasible, for recreation and open space.

The city planning commission considered the OPA Plan, and after hearing, in November 1973, adopted a resolution recommending the city council to adopt the OPA Plan, but with a significant amendment: the OPA Plan should designate the property for open space and low density (1 acre) instead of open space. The City Council adopted the OPA Plan on December 26, 1973. Curiously, however, neither the city council resolution approving the OPA Plan, nor the OPA Plan itself, described the planning commission’s proposed amendments to the OPA Plan.

In 1977, the city council passed a resolution that would allow low-density development in Oak Park Acres, and to update the land use map to reflect this change. Again, for reasons that are unclear, the city never made these changes. Neither the text of the OPA Plan, nor its attached land use policy map, were updated to designate the property low-density residential.

The city again revised its general plan in 1989. The intent of the 1989 General Plan was to establish “definitive land use and development policy to guide the City into the next century.” The 1989 land use policy map, which the general plan described as the “most important” feature of the land use element, designated the property for open space/golf. The 1989 General Plan also incorporated the OPA Plan under the heading “Area Plans”— but the version of the OPA Plan that was publically available designated the property as open space.

In view of these facts, in 2007, when the developer for the residential project at issue submitted its development application, the developer requested a general plan amendment to change the property’s land use designation from “open space” to “estate residential.” In 2009, while the city was still processing the application, the developer’s counsel discovered the 1973 resolution that recommended the OPA Plan designate the property for open space and low-density residential. The developer’s counsel promptly conveyed the resolution to the city attorney, prompting the city to conduct a comprehensive review of its planning documents concerning the property. Based on this investigation, the city attorney concluded: (1) 1973 OPA Plan is part of the general plan; and (2) the OPA Plan designates the property as “Other Open Space and Low Density (1 acre).”

Around that same time, the city was again in the process of revising its general plan. A final version of the general plan was approved in March 2010. The 2010 General Plan identifies the project site as “open space.” But it also references the OPA Plan and states that development must be consistent with the OPA Plan.

On June 14, 2011, the city council certified a final EIR for the project. The final EIR explained that the OPA Plan was part of the general plan, and that at the time the OPA Plan was adopted, the city council intended the project site to be designated for one-acre residential development. Due to a clerical oversight, however, this designation did not make it into the plan itself. The final EIR further reported that the project’s proposed general plan amendment would remove any uncertainty pertaining to the project site’s land use designation and honor the city council’s original intent for the project site.

The city council approved the project, including the project’s proposed general plan amendment. A few days later, the petitioners circulated a referendum petition challenging the city’s general plan amendment. The city council thereafter approved the project’s proposed zone change, concluding that the zone change was consistent with the 2010 General Plan.

Around that same time, the developer’s counsel wrote the city attorney with an “elegant solution” to the referendum: to take the position that the 1973 Planning Commission resolution designated the property for low-density residential, and the clerical error of not recording the designation did not alter the site’s true designation. The city attorney adopted this position, and prepared a report explaining that the project would remain consistent with the general plan regardless of the outcome of the referendum.

In November 2012, the voters rejected the project’s general plan amendment.

The Supreme Court’s Decision

The trial court and the Court of Appeal sided with the city and the developer, holding that the project was consistent with the 2010 General Plan because the 1973 designations applied to the project site, and the clerical failing to record the designations did not alter this fact. The Supreme Court reversed.

In the opinion, authored by Justice Liu, the court first explained that a local agency’s determination of whether a project is consistent with a general plan is a quasi-adjudicative, rather than a quasi-legislative determination. As such, the question before the court was whether the city abused its discretion in finding the project consistent with the 2010 General Plan. The court explained that reviewing courts “must defer to a procedurally proper consistency finding unless no reasonable person could have reached the same conclusion.” (Italics added.) The court determined that under the facts before it, no reasonable person could conclude the residential project was consistent with the city’s 2010 General Plan.

In reaching this conclusion, the court was especially swayed by the fact that members of the public, seeking to review the General Plan, would have no way of knowing that General Plan designated the project site for low-density residential. To the contrary, based on the publically available 2010 General Plan, members of the public would have thought the OPA Plan was consistent with the general plan map designating the property as open space. Indeed, even the city and the developer believed this to be the case—as evidence by the fact that the project proposed a general plan amendment.

The developer argued that the city should not be bound by a clerical error because doing so, in the developer’s view, would give greater power to staff than to the city council. But, explained the court, a city official cannot exercise a “power” that is by definition inadvertently exercised. Nor was there any evidence that staff purposely failed to carry out the intent of the 1973 resolution. And, in any event, the city council could have made it clear that the site was designated for low-density residential when it adopted the 2010 General Plan, but it did not.

Adding to the unreasonableness of the city’s conclusion that the project was consistent with the 2010 general plan was the fact that voters had rejected the project’s general amendment via referendum. As eloquently stated by Justice Liu:

The open space designation for the Property in the 2010 General Plan did not inform the public that the Property would be subject to residential development. The City’s proposed general plan amendment puts its citizenry on notice that such development would be possible. In response, Orange Citizens successfully conducted a referendum campaign against the amendment. If “legislative bodies cannot nullify [the referendum] power by voting to enact a law identical to a recently rejected referendum measure,” then the City cannot now do the same by means of an unreasonable “administrative correction” to its general plan undertaken “’with the intent to evade the effect of the referendum petition.’” [Citation.]

Conclusion

Although there is no specific format a general plan must take, a general plan must still comprise an integrated, internally consistent, and compatible statement of policies for future development. In this case, anyone reviewing the city’s general plan would have concluded that the project site was designated to remain in open space. While one can easily imagine the glee the developer and its attorney must have felt upon discovering the 1973 resolution designating the property low-density residential, in the view of the court, it was too little, too late. If the site was designated low-density residential, the planning documents should have reflected this. After voters expressed their intent not to have the site designated low-density residential, the city should have respected that intent, rather than attempting to re-write 35 years of planning documents. The opinion seems to affirm, however, that in general, the courts must defer to a city or county’s conclusion that a project is consistent with the general plan. Only where—as in this case—no reasonable person could conclude that the project is consistent with the general plan should the courts interfere with the city or county’s determination of general plan consistency.

On August 19, the Supreme Court granted a petition for review in Banning Ranch Conservancy v. Superior Court (2015) 236 Cal.App.4th 1341 (Sup. Ct. Case No. S227473). The high court will consider the following three issues:

  1. Did the City of Newport Beach’s approval of the Banning Ranch project comport with the directives of the City’s General Plan to “coordinate with” and “work with” the California Coastal Commission to identify habitats for preservation, restoration, or development prior to project approval?
  2. What standard of review should apply to a city’s interpretation of its general plan? and
  3. Was the City required to identify environmentally sensitive habitat areas – as defined in the California Coastal Act of 1976 (Pub. Resources Code, § 3000, et seq.) – in the EIR prepared by the City for the project?

A summary of the Court of Appeal’s decision, which is no longer citable precedent, is available here. Whit Manley, of RMM, represents the Respondent City of Newport Beach in the matter.

 

In a loss for the building industry, the California Supreme Court upheld local jurisdictions’ police power to adopt inclusionary housing ordinances, which are laws that encourage or require developers to set aside a certain percentage of housing units in new projects for low- or moderate-income housing.  The court, in a unanimous decision (with concurring opinions by Justice Werdegar and Justice Chin) rejected the California Building Industry Association’s (CBIA’s) challenge to San Jose’s affordable housing law.

The City of San Jose’s ordinance requires developers creating at least 20 new homes to make 15% of those residences available for purchase by lower-income households, or else pay an in-lieu fee or dedicate land. As an apparent incentive to encourage developers to choose on-site inclusionary units, where the developer chooses one of the off-site options, the required low-income housing percentage rises to 20%. As an additional incentive to encourage developers to comply with the ordinance by providing affordable units on site, the ordinance permits a developer who provides all of the required affordable units on the same site as the market rate units to apply for and obtain a variety of economic benefits, including a density bonus, a reduction in the required-number of parking spaces, a reduction in minimum set-back requirements, and financial subsidies and assistance from the city in the sale of the affordable units.

CBIA filed a lawsuit seeking invalidation of the ordinance. The complaint alleged that the ordinance constituted a facially invalid exaction, in violation of the state or federal constitutions. The trial court agreed with CBIA’s legal position, concluding that the city had failed to show that there was evidence in the record demonstrating the constitutionally required reasonable relationships between the deleterious impacts of new residential development and the new requirements to build and dedicate the affordable housing or pay in-lieu fees.

The Court of Appeal reversed. The appellate court agreed with the City of San Jose that the ordinance’s inclusionary housing requirements must properly be evaluated under the deferential standard ordinarily applicable to general, legislatively imposed land use regulations—i.e., whether the ordinance’s requirements bear a real and substantial relation to the public welfare. CBIA petitioned for review before the California Supreme Court and the court granted the petition.

The Supreme Court affirmed the Court of Appeal’s judgment. The court held that San Jose’s ordinance does not constitute an exaction. Instead, the ordinance only regulates the uses to which property owners may put their lands. Cities and counties have broad authority, under their police powers, to regulate the development and use of real property within their jurisdictions to promote the public welfare and the courts must uphold such regulations provided the bear a reasonable relationship to the public welfare. With regard to the in-lieu fee payment component of the ordinance, the court held that as long as the ordinance provides property owners with at least one alternative means of satisfying the condition, the fee does not constitute an unconstitutional taking.

As noted by the Supreme Court, more than 170 localities in California already have some version of an inclusionary housing ordinance. The decision will make it much more difficult for developers to succeed in challenges to affordable housing requirements in that the decision makes clear that a local agency’s adoption of an inclusionary housing ordinance represents an appropriate exercise of the agency’s police powers, provided that the ordinance bears a reasonable relationship to the public welfare.

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.

Plaintiffs Friends of the Eel River and Californians for Alternatives to Toxics are currently seeking California Supreme Court review of the First District Court of Appeal’s recent opinion in Friends of the Eel River v. North Coast Railroad Authority (2014) 230 Cal.App.4th 85. Plaintiffs filed their petition for review with the Supreme Court on November 7, 2014. In Friends of the Eel River v. North Coast Railroad Authority, the First District upheld the trial court’s decision rejecting plaintiffs’ challenge to North Coast Railroad Authority’s certification of an EIR. The appellate court found that the federal Interstate Commerce Commission Termination Act preempted the local agency’s CEQA review of rail operations, which fell within the exclusive jurisdiction of the federal Surface Transportation Board. The court also held that the rail line’s previous agreement with Caltrans to prepare an EIR for the project did not estop the line from later asserting preemption. At the earliest, the Supreme Court is expected to decide whether to grant certification by early January 2015.

On November 26, 2013, the California Supreme Court granted review of California Building Industry Association v. Bay Area Air Quality Management District (“CBIA v. BAAQMD”) to settle the following issue: Under what circumstances, if any, does CEQA require an analysis of how existing environmental conditions will impact future residents or users (receptors) of a proposed project?

Prior to the CBIA case, this issue most recently arose in Ballona Wetlands Land Trust v. City of Los Angeles (2011) 201 Cal.App.4th 455. There, the petitioner argued that the EIR for a real estate development project failed to address the impacts that future sea level rise could have on the project. The court disagreed that the EIR needed to address this issue, stating that “the purpose of an EIR is to identify the significant effects of a project on the environment, not the significant effects of the environment on the project.” The court concluded that identifying the effects on a project and its users of locating the project in a particular environmental setting was neither required by CEQA nor consistent with the statute’s legislative purpose. The court found that Guidelines section 15126.2, which encourages such analysis, was unauthorized by the CEQA statute and therefore invalid. Section 15126.2 would require analysis of the seismic hazard to future occupants of a subdivision astride an active fault line, or the effect of locating development in a floodplain or on a coastline.

In CBIA v. BAAQMD, the California Building Industry Association challenged the Bay Area Air Quality Management District’s significance thresholds for receptors affected by certain air pollutants as unauthorized by CEQA. These thresholds establish significance levels for certain air pollutants for both new sources (projects) and new receptors (residents and workers brought into the area as a result of the project). CBIA argued that the receptor thresholds were invalid under Ballona because the thresholds could require an EIR based solely on the effects of the existing environment on a proposed project and its occupants. The District argued that it made “no sense to require analysis of the health risks to residents if a freeway is built next to them, but not to require analysis of the exact same risks if new homes are built next to an existing freeway.” The District also argued that disregarding the effect of the environment on people who will occupy a new development is contrary to CEQA’s purpose of providing “a decent home and suitable living environment for every Californian.”

The court considered CBIA’s challenge a facial one, and held that BAAQMD’s thresholds were not invalid on their face because case law did not bar their application in all or even most cases. The court stated that it did not need to decide whether Ballona had been correctly decided because the thresholds could be used to determine not just the effect of a project on project receptors, but also could be used to evaluate the increase in pollutants from a project itself.

The parties will file their opening briefs with the Supreme Court in early 2014.

[Case No. S213478]

Supreme Court grants review in Orange Citizens

November 5th, 2013 by Gwynne Hunter

On October 20, 2013, the California Supreme Court granted review of Orange Citizens for Parks & Recreation v. Superior Court (2013) 217 Cal.App.4th 1005. The opinion has therefore been depublished (Orange Citizens for Parks & Rec. v. Superior Court (Oct. 30, 2013) 2013 Cal. LEXIS 8768) and is no longer citable precedent.   The case involves a dispute over the interpretation of a city’s land use plan, and the degree of deference owed to a city in interpreting conflicting provisions of the city’s general plan.

The petitioner argued in its appeal that the decision below “turns California planning law upside-down” by holding that a land use designation in a city’s recently-adopted general plan can be trumped by a designation set forth in a resolution 40 years earlier.

In accepting review, the Court narrowed the scope of the review to the following issue: Is the proposed development project of low density housing at issue in this case consistent with the city’s general plan?

On October 15, 2013, the U.S. Supreme Court granted certiorari in Coalition for Responsible Regulation v. EPA (2012) 684 F.3d 102. It is regarded as the most important federal case involving greenhouse gas emissions after its predecessor, Massachusetts v. EPA (2007) 549 U.S. 497.

Background

The case below involved a number of the U.S. EPA’s Clean Air Act rules regulating greenhouse gas emissions from stationary sources, such as large industrial plants, refineries, and factories. A three-judge panel of the United States Court of Appeals for the D.C. Circuit unanimously upheld the EPA’s rules in June 2012. Specifically, the court upheld the EPA’s endangerment finding for greenhouse gases and the agency’s decision that the endangerment finding made greenhouse gases an “air pollutant” for purposes of the Prevention of Significant Deterioration (PSD) program. The court also held that plaintiffs lacked standing to challenge how the rule is phased in.

Various interest groups and states submitted a total of nine petitions for certiorari, seeking to overturn the D.C. Circuit’s decision. The Supreme Court accepted six of these petitions.

The Court will consider the narrow issue of whether the EPA acted within its authority in determining that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements for stationary sources under the Clean Air Act. This means that the Court will leave some of the lower court’s findings undisturbed, including the endangerment finding and the “tailpipe rule,” which sets emissions standards for automobiles.

Issues

The challenged Clean Air Act provisions are the “timing” and “tailoring” rules, which together exempt small stationary sources from the greenhouse gas regulations that would otherwise apply. As enacted, the Act regulates every “source” of greenhouse gases emitting 100 tons of a single pollutant, including homes, apartment buildings, and small businesses. The EPA determined that regulating every source at that emission level would be both impractical and politically unpopular, so it created the tailoring rule to confine application of the Act to new sources emitting at least 100,000 tons of greenhouse gases per year and modifications of existing sources that increase emissions by 75,000 tons.

The industries and states challenging the tailoring rule argue that the rule is unlawful, since it relieves sources emitting between 100 and 100,000 tons from regulation when the statute clearly says those sources must be regulated. They also argue that the PSD provisions of the Act under which the EPA is regulating the larger emitters do not apply to greenhouse gases. The challengers believe the PSD provisions only apply to those pollutants on the National Ambient Air Quality Standards’ criteria pollutants list, which does not include greenhouse gases.

The criteria pollutant list is selective; it contains only six air pollutants which have a demonstrable effect on human health, such as lead and carbon monoxide. However, after the Court held that greenhouse gases are air pollutants under the Clean Air Act in the 2007 case Massachusetts v. EPA, the EPA found six greenhouse gases that must be regulated due to their threat to public health and welfare. Thus, though greenhouse gases are not technically listed as a criteria air pollutant, they have been found to be dangerous to human health. In fact, the PSD already applies to non-criteria pollutants, albeit more obscure ones like sulfuric acid mist. Plus, the EPA’s interpretation of its own statutes will be accorded significant deference under Chevron, which makes the challengers’ position an uphill battle.

The lower court never reached the substance of the challengers’ arguments because it found that they did not have standing, reasoning that regulating larger businesses while exempting smaller ones did not injure the larger businesses. In fact, the Court found that the tailoring rule could even help states like Texas – one of the states challenging the rule – because it would lessen the state’s burden in administering the Clean Air Act permitting program.

A ruling on the statutory interpretation issues could help to clear some of the ambiguities plaguing the Clean Air Act, which has not been amended since 1990. With the increasing national and international focus on climate change, environmentalists and industry alike would benefit from more guidance on how the Act applies to greenhouse gases. The Court will hear arguments in early 2014 and is anticipated to issue a ruling by July.

On June 14, 2012, the California Supreme Court decided Tomlinson v. County of Alameda (Case No. S188161), holding 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.

In its decision the Court carefully considered conflicting holdings in Azusa Land Reclamation Co. v. Main San Gabriel Basin Watermaster (1997) 52 Cal.App.4th 1165 and Hines v. California Coastal Commission (2010) 186 Cal.App.4th 830.

Azusa held that section 21177’s exhaustion requirement does not apply to a challenge to a public agency’s decision that a project is categorically exempt from CEQA compliance, whereas Hines held to the contrary.

Procedurally, the issue is that while section 21777 requires that petitioners exhaust their administrative remedies during the public comment period or during a public hearing on the project before issuance of a notice of determination, CEQA does not provide for a public comment period prior to an agency’s determination of a categorical exemption. Further, no public hearing typically precedes the agency’s notice of determination in this situation, because a notice of determination is not generally filed for a categorical exemption.

Under Hines, an exhaustion provision does apply for categorical exemptions, where there was ample notice of a public hearing. The Court followed Hines rather than Azusa because it found that in this case, as in Hines, the agency did hold public hearings on the project which gave interested parties the opportunity to raise objections to the project before the agency’s exemption finding.

The Supreme 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.” In Tomlinson, the County did not quote the full language in CEQA Guidelines section 15332 in any of its notices and staff reports. Instead, it substituted “in an established urban area” for the exemption’s language “within city limits” in all of its summaries of the exemption criteria 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 issues at public hearings were sufficient to satisfy the exhaustion requirement.

The Court remanded the case to the 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 a categorical exemption excuses the petitioner’s duty to exhaust on that issue.

This case continues to have important precedential value: it is still important to resolve whether an agency must provide full and accurate information in order to successfully assert the affirmative defense of failure to exhaust administrative remedies in CEQA litigation. The Tomlinson petitioners were represented by RMM partner Sabrina V. Teller.