Archive for September, 2014


In this case, the Third Appellate District concluded that the Governor, as an individual, is not a “public agency” for the purposes of CEQA. Therefore, the Governor’s act of concurring with the Secretary of the Interior’s findings under the Indian Gaming Regulatory Act is not a project subject to state environmental review. Picayune Rancheria of Chukchansi Indians v. Brown (Sept. 24, 2014) Case No. C074506.

The Indian Gaming Regulatory Act generally prohibits casino gambling on tribal lands acquired by the Secretary of the Interior after 1988. But the law identifies exceptions to this general prohibition. One exception requires the Secretary of the Interior to reach a determination that siting a gambling establishment on newly acquired lands would not be detrimental to the surrounding community. The governor of the applicable state must concur with the determination. In 2011, the Secretary of the Interior made this determination for a gambling establishment proposed by the North Fork Rancheria of Mono Indians (North Fork Tribe) on newly acquired land in Madera County, adjacent to SR 99. Governor Brown issued his concurrence on August 30, 2012, without preparing or considering whether to prepare an EIR.

The Picayune Tribe filed a petition seeking a writ of mandate ordering the Governor to set aside his concurrence and comply with CEQA. The Tribe argued that the Governor’s act of issuing his concurrence was equivalent to the approval of a project under CEQA. The Governor demurred, arguing that the Governor is not a “public agency” for CEQA purposes. The trial court sustained the demurrers without leave to amend, and the Picayune Tribe appealed.

The appellate court agreed with the trial court, citing the CEQA statute and the Supreme Court’s decision in Muzzy Ranch Co. v. Solano County Airport Land Use Com. (2007) 41 Cal.4th 372. In Muzzy Ranch Co., the Supreme Court stated that the CEQA process ensures that public agencies make informed decisions with environmental considerations. CEQA defines public agencies as including any state agency, board, or commission, or any local government or other political subdivision. The court noted that the list described in section 21063 is limited to governmental bodies. The governor, in contrast, is a governmental official. Additionally, the Indian Gaming Regulatory Act grants the authority to issue the concurrence to the governor of the relevant state. Therefore, in this case, Governor Brown acted and issued the concurrence as an individual. Since the Governor was acting in his capacity as chief executive officer of the State, he was not required to comply with CEQA before issuing his concurrence.

This case establishes that the Governor, when acting as an individual, is exempt from CEQA. The case touched on the issue of whether the Office of the Governor is subject to CEQA, but did not reach an answer. In this case, the federal act explicitly vested concurrence authority in the governor, as chief executive officer of the state.

Following a joint effort, the U.S. Department of the Interior and the California Natural Resources Agency released the draft Desert Renewable Energy Conservation Plan (DRECP) for public comment on September 26, 2014. This plan is intended to facilitate streamlined permitting of renewable energy projects on federal and non-federal land while ensuring the conservation of sensitive ecologic desert resources on over 22 million acres of California desert. The Plan emphasizes a “landscape” level approach to planning for renewable resource development, as opposed to project-by-project and species-by-species level review.

The DRECP addresses numerous renewable resources, including solar (photovoltaic and thermal), wind, and geothermal. In addition, the plan covers a broad scope of activities associated with the development of renewable resources, such as construction, operation, maintenance, and decommissioning of projects, as well as activities related to transmission lines in the covered areas. Further, the plan identifies numerous proposed “covered species.” These plant and animal species will be the subject of a long-term “take” permit for projects that proceed in a manner consistent with the DRECP.

Currently, the draft DRECP identifies six alternative approaches for meeting renewable energy and conservation goals through 2040. Key components of the plan include designation of renewable energy development areas by BLM, a general conservation plan allowing streamlined permitting by FWS, and a natural community conservation plan developed by the California DFW, which will identify regional or area-wide protections for plants and animals while allowing compatible economic activity.

Public comment on the draft will run through January 9, 2015. More information is available at the official website for the DRECP: <www.drecp.org>

In this case, the Fourth Appellate District allowed the County of San Diego to recover over $37,000 in costs for preparing an administrative record, including costs for reasonably necessary paralegal and attorney labor. Otay Ranch, L.P. et al., v. County of San Diego (Sept. 29, 2014), Case No. D064809.

The controversy in this case originates with the County of San Diego’s approval of a mitigated negative declaration for a remediation project at the former Otay Skeet and Trap Shooting Range (the project). Former owners of the shooting range, Otay Ranch, Sky Communities, and Sky Vista, filed a petition for writ of mandate challenging the county’s remediation project. The plaintiffs argued that an EIR was necessary and that the county’s remediation plan did not comply with the Health and Safety Code.

Petitioners elected to prepare the administrative record in this case. After a number of delays, petitioners and the County met to discuss the proposed CEQA record. The County indicated that the record, in its current state, was woefully inadequate. The record improperly included numerous files not related to the project while omitting many necessary, project-specific files. After this conference, the petitioners voluntarily dismissed their CEQA cause of action. They then filed an amended petition and continued to pursue their Health and Safety Code cause of action. But petitioners never filed an administrative record, so the County reclaimed responsibility for preparing the administrative record.

The County did not have the resources available to prepare the administrative record in the limited time available. It therefore employed the help of the outside law firm representing it in the litigation to prepare the record. County’s outside counsel and paralegals worked extended hours to prepare the record in time to file with the County’s opposition briefing. This work included 74 hours of attorney time and 67 hours of paralegal time. The final record included over 300 documents and 18,000 pages, spanning many years of project history—all for a challenged MND. Surprisingly, the day after the county filed and served the administrative record, petitioners dismissed their entire action.

The County subsequently filed a memorandum of costs seeking recovery of approximately $66,000 for preparation of the administrative record. Petitioners moved to tax the majority of these costs. They argued that attorney and paralegal hours could not be included in the cost award for preparation of the administrative record. The County responded that the costs represented the reasonably necessary labor costs of “persons with specialized knowledge,” which is a recoverable record cost. Both the trial court and appellate court agreed.

The County submitted compelling declarations that it was necessary for the attorney and paralegal to be actively involved in reviewing and organizing the record. The documents proposed to be included in the record were technically complex and resulted from a complicated and long procedural history. Specific knowledge and understanding of the project was necessary for the individuals recreating the record. Therefore, the hours spent by the attorney and paralegal were reasonably necessary to the preparation of an adequate administrative record. The trial court awarded $37,528 for record preparation costs, representing the County’s costs incurred after the date the County decided to prepare the administrative record itself. The appellate court found that the trial court did not abuse its discretion when reaching this outcome, so the trial court’s award stood.

Of note in this case, the appellate court dismissed two petitioners from the appeal. The court determined Otay Ranch lacked capacity to appeal because it was a cancelled limited partnership. The court was not convinced that the appeal was part of Otay Ranch’s “winding up” process since the partnership had been cancelled and had completed winding up its affairs well before the appeal. Likewise, Sky Communities lacked capacity to appeal because it was a suspended corporation. A suspended corporation may not prosecute or defend an action, nor appeal from an adverse judgment. Sky Communities insisted the defect was not fatal because the Franchise Tax Board could always revive the corporation, retroactively validating the earlier notice of appeal. But the court noted the Board had not yet issued a certificate of revivor and Sky Communities remained a suspended company lacking the capacity to appeal.

Analysis and Conclusion

The size and complexity of administrative records continues to grow, straining the resources of local governments. However, this case offers hope that at least some courts appreciate the burden of record costs in CEQA litigation. The Fourth Appellate District’s opinion recognizes that, for projects with lengthy procedural history or other technical aspects, specialized knowledge and the expertise of paralegals and attorneys may be required to produce a record sufficient for certification. This characterization is likely applicable to numerous CEQA records, which commonly span tens of thousands of pages as a result of increasingly strict rules created by the courts for CEQA records. Based on this case, local governments should carefully document time reasonably spent by staff and any necessary outside assistance on record preparation in the event these costs are recoverable.

This case also serves as an important reminder for both potential CEQA petitioners and real parties to maintain active partnership or corporate standing. Dissolved partnerships and inactive corporations cannot pursue CEQA litigation.

Governor signs three CEQA bills, vetoes one

September 26th, 2014 by Gwynne Hunter

Governor Jerry Brown announced this week that he signed the following CEQA-related bills:

AB 52: Assemblymember Mike Gatto (D-Los Angeles)—Native Americans

This bill specifies that a project with an effect that may cause a substantial adverse change in the significance of a tribal cultural resource is a project that may have a significant effect on the environment. The bill requires a lead agency to begin consultation with a California Native American tribe that is traditionally and culturally affiliated with the geographic area of the proposed project, if requested to do so, prior to determining whether a negative declaration, mitigated negative declaration, or EIR is required for a project.

The bill provides examples of mitigation measures that may be considered to avoid or minimize impacts on tribal cultural resources. These provisions apply to projects that have a notice of preparation or a notice of negative declaration filed or mitigated negative declaration on or after July 1, 2015. The bill requires the Office of Planning and Research to revise on or before July 1, 2016, the guidelines to separate the consideration of tribal cultural resources from that for paleontological resources and add consideration of tribal cultural resources.

This bill also requires the Native American Heritage Commission to provide each California Native American tribe on or before July 1, 2016, with a list of all public agencies that may be a lead agency within the geographic area in which the tribe is traditionally and culturally affiliated, the contact information of those agencies, and information on how the tribe may request those public agencies notify the tribe of projects within the jurisdiction of those public agencies for the purposes of requesting consultation.

AB 1104: Assemblymember Rudy Salas (D-Bakersfield)—Exemption for Biogas Pipeline

CEQA provides exemptions from its requirements for certain projects, including for a project that consists of the inspection, maintenance, repair, restoration, reconditioning, relocation, replacement, or removal of an existing pipeline, if specified conditions are met. (Pub. Resources Code, § 21080.23, subd. (a).)

This bill provides that, for purposes of that exemption, until January 1, 2018, “pipeline” also means a pipeline located in Fresno, Kern, Kings, or Tulare County, that is used to transport biogas, as the bill defines that term, and that meets the existing requirements for the exemption and all local, state, and federal laws. The bill would make legislative findings and declarations as to the necessity of a special statute for the Counties of Fresno, Kern, Kings, and Tulare.

SB 674: Senator Ellen Corbett (D-Hayward)—Exemption for residential infill projects

CEQA exempts from its requirements residential infill projects meeting specified criteria, including, among other things, that a community-level environmental review was adopted or certified within five years of the date that the application for the project is deemed complete and the project promotes higher density infill housing. For the purposes of this exemption, CEQA defines “residential” to include a use consisting of residential units and primarily neighborhood-serving goods, services, or retail uses that do not exceed 15% of the total floor area of the project.

This bill instead exempts as “residential” a use consisting of residential units and primarily neighborhood-serving goods, services, or retail uses that do not exceed 25% of the total building square footage of the project.

 

Vetoed—AB 543

Governor Brown also vetoed one CEQA-related bill, AB 543, which would have required the Office of Planning and Research to prepare and develop recommended amendments to the CEQA Guidelines that would establish criteria for a lead agency to assess the need for translating certain notices into non-English languages. The governor stated that existing federal and state laws already provide guidance to lead agencies regarding the circumstances which give rise to the need for translating public documents. “Translating public notices and other important information is often good practice,” Governor Brown noted. “In fact Title VI of the Civil Rights Act of 1964 and Government Code Section 11135 require lead agencies to do just that. The High Speed Rail Project and the Bay Delta Conservation Plan are examples of projects where the lead agency determined that translation of environmental review documents was merited.” The bill was presented by Assemblymember Nora Campos (D-San Jose).

Rominger v. County of Colusa (Sept. 9, 2014), Case No. C073815

This case originates from an application for approval of a tentative subdivision map filed with the County of Colusa. The application proposed dividing four existing parcels into 16 parcels. The proposed parcels ranged in size from about 1 acre to 30 acres. The existing site consisted of agricultural use and light industrial uses related to agriculture. The application indicated no specific plans for expansion were available, and the present intention for the parcels was for their existing uses to continue.

The County prepared an initial study in June 2010 to determine if approval of the proposed tentative subdivision map could have significant environmental impacts. The initial study identified potentially significant impacts to cultural resources but determined these impacts could be mitigated to less-than-significant. Therefore, the County proposed adoption of a mitigated negative declaration for the project.

During the public comment period on the MND, the Romingers submitted comments suggesting an EIR was necessary for a variety of reasons. As a result of these comments, the County determined a water supply assessment was needed and cancelled the public hearing on the MND. Thereafter, a revised initial study was completed in August 2011. The revised initial study concluded that the project could potentially have significant impacts on air quality, cultural resources, and hydrology/water quality. Again, the initial study determined these impacts could be mitigated to less-than-significant and that an MND would be appropriate. The Romingers renewed their complaints during the public comment period for the updated MND. The County approved the MND in spite of these objections, and the Romingers filed a petition for writ of mandate asserting that an EIR was necessary. The trial court rejected the petition, concluding that approval of the tentative map was not a “project” for the purposes of CEQA. The Romingers appealed.

The Appellate Court’s Decision

On appeal, the Romingers argued that the County was barred from asserting that the proposed subdivision was not a CEQA project or that the project was exempt from CEQA based on the common sense exemption. The Romingers reasoned that the County could not make these arguments because the County treated the proposed subdivision as a CEQA project at the administrative level and approved an MND. The appellate court did not find this reasoning persuasive. The court’s task under CEQA is to review agency actions for compliance with procedures required by law. The County reasoned preparation of the MND was entirely voluntary and not required by law in the first place. Therefore, it would be a waste of judicial resources to review the adequacy of the voluntarily prepared MND. The appellate court agreed and allowed the County to argue no environmental review was required in the first place. However, the court disagreed with the County that approval of the tentative subdivision map was not a project under CEQA. Public Resources code section 21080 specifically provides that an approval of a tentative subdivision map is a project subject to CEQA.

The appellate court also concluded that the “common sense” exemption did not apply to the County’s approval. The County argued the map approval, in this specific case, fell within CEQA’s common sense exemption in the CEQA Guidelines section 15061(b)(3). The County reasoned that the action only established new parcel lines and that there was no possible effect on the environment as a result. But the appellate court noted that, in the application, the real parties stated the objective for the subdivision was to facilitate “future expansion where separate financing may be needed.” Therefore, the record demonstrated the purpose of the subdivision was to make development on the parcels easier. Under the common sense exemption, the agency must show, based on evidence in the record, that there is no possibility that the action may result in a significant effect on the environment. Here, the reasonable possibility that creation of smaller parcels could lead to development that might not otherwise occur pushed the project beyond the confines of the common sense exemption.

On the specific challenges to the MND, the appellate court sided with the project opponents on only a single issue. The appellate court determined substantial evidence in the record supported a fair argument that the project may have significant traffic impacts. In this case, a traffic engineer submitted a comment letter suggesting the County relied on unrealistically low trip generation estimates. This comment letter cited specific evidence, such as the proximity of a major interstate, and the potential for the light-industrial uses to be redeveloped as more traffic-intensive uses. In light of this, and other evidence, the traffic engineer suggested that the County should use the general trip generation characteristics from categories in the authoritative trip generation source reference Trip Generation, 8th Edition. Based on these trip generation numbers, the project could potentially have a significant traffic impact on an intersection of a county road and State Highway 99. This evidence in the record supported the fair argument made by the Romingers. In protest, the County pointed to substantial evidence supporting a contrary conclusion. But the appellate court explained that pointing to contrary evidence was insufficient to defeat the fair argument. Therefore, the appellate court concluded that the county prejudicially abused its discretion when it failed to prepare an EIR addressing the potentially significant traffic impact.

Also of note, the appellate court concluded that the County did not entirely comply with the requirement to provide a full 30-day review period for the MND. The Romingers complained that the review period was only 29 days long. But the appellate court reviewed the record and determined that this error did not preclude informed decisionmaking or informed public participation. Since the error was not prejudicial, the error could not provide a basis for relief.

Conclusions and Analysis

The opinion adds to the litany of cases which accept a broad definition of “project” for the purposes of CEQA. This is especially true where the statute explicitly identifies the action as an example of a project. The opinion treads over fresher ground in CEQA law where the appellate court approaches the fair argument standard in a detailed and thoughtful manner. The opinion recognizes that the fair argument must be supported by substantial evidence in the record. The court rejects numerous attacks on the MND in this case where the arguments constituted vague criticisms unsupported by any specific facts. At the same time, the opinion demonstrates the perils of relying on a negative declaration. Because the petitioners supported a fair argument that the project may have a significant traffic impact, the County will be required to prepare an EIR analyzing the traffic impact.

A native subspecies of longhorn beetle will remain listed as “threatened” under the Federal Endangered Species Act. The U.S. Fish & Wildlife Service determined that the best currently available information does not support delisting the Valley Elderberry Longhorn Beetle (VELB). This decision was published in the Federal Register on September 17, 2014.

The continuing listed status of the VELB means issues related to the beetle will need to be considered in project planning and CEQA analysis. Since VELB are highly reliant on elderberry bushes, project mitigation for the beetle often involves avoiding destruction of or replacing impacted elderberry bushes. Of note though, the Service determined the geographic range of the species does not extend into Kings, Kern, and Tulare Counties.

If new information becomes available that indicates the VELB no longer needs protection under the ESA, the Service will again consider delisting. Until then, watch those elderberry bushes during project planning.

The U.S. Fish & Wildlife Service’s official press release can be found here: http://www.fws.gov/sacramento/outreach/2014/09-16/outreach_newsroom_2014-09-16.htm

The owners of adjacent bluff-top homes applied to the City of Encinitas in 2003 for authorization to replace an erosion control structure and bluff wall, as well as the lower portion of a staircase that gave the owners access to the beach below. The city approved the project but conditioned its approval on the homeowners obtaining a permit from the California Coastal Commission. By the time the Commission considered the permit application, a severe storm had caused the bluff below the homes to collapse. The applicants therefore sought to demolish the remaining erosion control structure, construct a new seawall and bluff protection, and reconstruct the lower stairway. The Commission approved the permit subject to numerous special conditions, including precluding reconstruction of the stairway and limiting the permit’s duration to 20 years. Lynch v. California Coastal Commission (Sept. 9, 2014) 14 C.D.O.S. 10586.

The homeowners challenged the special conditions of the permit. Meanwhile, they signed and recorded the required deed restrictions, satisfied the other prerequisites to permit issuance, obtained the permit, and constructed their project. The Commission argued the owners could no longer proceed with their action because they had agreed to the permit conditions and accepted the benefit of the permit. The trial court found the homeowners had not specifically agreed to nor necessarily accepted the challenged conditions, but the court of appeal disagreed.

The appellate court iterated the maxim that “he who takes the benefit must bear the burden”; i.e., after accepting the benefits of the permit, they could not then challenge aspects of the permit with which they disagreed. The court did not find that the homeowners fit under any exceptions to this general principle. The exception allowing a developer to comply with a condition under protest and proceed with development while simultaneously challenging the condition did not apply to conditions imposed by state agencies or to conditions restricting the manner in which the developer may use its property. The exception for when an agency imposes new conditions on a permit for a later phase of a project already underway did not apply here, as the project did not fit those parameters.

The court did not agree that there should be an “under protest” exception for permit applicants who are opposed to nonfee conditions and desire to build their projects while simultaneously challenging the conditions. The exception would effectively swallow the general rule, as almost all permit applications are submitted by applicants who view the conditions unfavorably. Furthermore, allowing applicants to accept a permit’s benefits while challenging its burdens would foster litigation and create planning uncertainty. Finally, an invalid nonfee condition is not readily quantified or remedied. The court noted that interpretation of deed restrictions is the same as interpretation of contracts, and stated it was “unwilling to condone deliberate subterfuge in recorded documents as doing so would subvert the documents’ noticing function.”

Even if respondents had not waived their right to challenge the permit conditions, the court reasoned, the Commission had lawfully limited the duration of respondents’ permit. The Commission’s findings provided substantial evidence that the seawall would likely need substantial changes within 20 years and would have long-term impacts on adjacent properties. The court found no authority categorically precluding the Commission from imposing a condition limiting the duration of a permit. The court also noted that the reconstruction of the lower stairway required a permit, and therefore must conform to the city’s local coastal program. The court found the reconstruction inconsistent with both general plan policies and coastal bluff overlay regulations, and thus inconsistent with the city’s local coastal program.

Dissent

The dissent argued that the homeowners had not waived their right to challenge the permit conditions, as they had followed all the legal requirements for challenging the conditions and had put the Commission on notice of their objections and intent to challenge them in court.

The dissent concluded that section 30235 of the California Coastal Act precluded the Commission from imposing any condition on the seawall except a condition intended to eliminate or mitigate the seawall’s adverse impacts on the local shoreline sand supply. The majority argued that this position had been rejected in Ocean Harbor House Homeowners Association v. California Coastal Commission. The majority also argued that the conditions were intended to mitigate the project’s adverse long-term impacts.

Finally, the dissent argued that the Commission’s actions violated the Takings clause. The majority argued that until the Commission reached a final decision on future applications for renewals of the seawall, any takings claim was not ripe for adjudication.

The First District Court of Appeal previously issued a partially published opinion in the case San Francisco Tomorrow v. City and County of San Francisco, Case No. A137753. Those portions of the opinion were discussed in a prior blog post found here.

After the initial partial-publication order, the First District ordered part II of its discussion published, which analyzes whether the project complied with the City’s general plan.

San Francisco Tomorrow, joined by amicus curiae Sierra Club, argued that the trial court improperly deferred to the City’s interpretation of certain “priority policies” contained within the City’s general plan. San Francisco Tomorrow reasoned that the priority policies had been enacted by citizen initiative rather than being authored by the City itself. Therefore, the petitioners urged the appellate court to strictly interpret the requirements of these policies and strike down the City’s findings which determined that the project was “generally compatible” or compatible “on balance” with the priority policies. But the appellate court disagreed, pointing to a host of cases describing the abuse of discretion standard courts apply when reviewing a municipality’s consistency findings. The court determined this standard of review does not change where policies are the result of an initiative adopted by voters, because once an initiative has been approved, it becomes part of the applicable land-use plan. The court declined to apply a strict construction of the individual priority policies and determined that a reasonable person could find that the project was consistent with and furthered various general plan policies.

California’s groundwater will be regulated for the first time under a package of three bills signed by Governor Jerry Brown on September 16, 2014. Together, the bills  establish the “Sustainable Groundwater Management Act” and impose mandates aimed at overseeing and managing California’s groundwater on a sustainable basis into the future. The California Legislature passed the historic legislation on August 29, 2014.

Until now, California was the only state in the nation that did not comprehensively manage and regulate its groundwater. The state could regulate water diverted from reservoirs and above-ground streams, but did not have authority to limit underground pumping prior to the new legislation’s passage and signing by the governor. According to a recent report by the California Water Foundation, groundwater is used to meet 40 percent of the state’s water demands in an average water year. That number can rise to 60 percent or more during droughts such as the one currently gripping the state. A recent study by the California Department of Water Resources revealed that extractions are exceeding replenishment rates in many places, resulting in unsustainable drainage of underground aquifers.

The bill package includes AB 1739 by Assemblymember Roger Dickinson (D-Sacramento), and SB 1168 and SB 1319 by Senator Fran Pavley (D-Agoura Hills). The legislation focuses on local and regional control of groundwater supplies, with eventual direct state intervention if local management falls short. The new act assigns local agencies the authority and responsibility for managing the groundwater basins upon which they rely through various investigative, regulatory, and enforcement tools. “Backstop” provisions allow the State Water Resources Control Board to develop interim plans for basins when local communities fail to prepare or enforce their plans. The legislation expressly states that local agencies and the state must respect all existing rights to surface water and groundwater.

Under the Act, the Department of Water Resources is tasked with ranking groundwater basins as high, medium, low, or very low priority to characterize the seriousness of groundwater problems. Local and regional agencies with “high” or “medium” priority basins that also have critical overdraft conditions must adopt “groundwater sustainability plans” by 2020. Basins ranked high or medium but without critical overdraft conditions must adopt such plans by 2022. In basins ranked as low and very low priority, sustainability plans are optional. “Sustainability” is characterized as the volume of water  that can be pumped without causing long-term problems such as degraded water quality or significant and unreasonable supply depletion. The plans, in limiting groundwater extractions, must also take into consideration economic, social and environmental effects. Sustainability plan approvals are exempt from CEQA.

Senator Pavley’s SB 1168 contains provisions related to local and regional agencies and the creation of sustainability plans. Assemblymember Dickinson’s AB 1739 contains complementary provisions for state intervention where local and regional agencies fail to comply with the new act. Pavley’s SB 1319 amends AB 1739 to place certain limitations on the state’s enforcement authority. The bills were designed to function in tandem, and all three needed to be signed by the governor for the new act to become operative.

To read the bills and related analyses, go to http://www.leginfo.ca.gov/.

The California Water Foundation report can be viewed here.

The DWR study can be viewed here.

 

Under Public Resources Code section 21167.6, petitioners may elect to prepare the administrative record in a CEQA proceeding. Petitioners Coalition for Adequate Review and Alliance for Comprehensive Planning chose to prepare the record of proceedings in this case. The court held the City could recover most of its reasonable record preparation costs even though petitioner had elected to prepare the record. Coalition for Adequate Review v. City and County of San Francisco (Sept. 15, 2014) Case No. A135512.

The trial court held on the merits in favor of the City. The City then filed a memorandum of costs, seeking $64,144 for the administrative record, a professional messenger, and service. The City had certified the record in part, claiming it was incomplete due to petitioners’ failure to include statutorily required documents. The City then added these documents to the record. The trial court concluded that because it was the City that had sought to supplement the record, the City should bear that cost. The court further held that petitioners’ discovery requests had not been extraordinary and were not the but-for cause of the City’s costs, and that granting the City’s cost request would chill future petitioner litigation. The appellate court reviewed the issue de novo.

The issue before the court was whether petitioners’ election to prepare the record precluded an award of record preparation costs to the City. The court held that a petitioner’s election to prepare the record does not preclude a public agency from recovering supplemental record preparation costs when incurred to ensure a statutorily complete record. Section 21167.6, subdivision (b)(2) contains no ipso facto prohibition on the recovery of record preparation costs by a public agency. The court stated that in order for an agency to recover costs, circumstances need not be extraordinary, as was the case in St. Vincent’s School for Boys, wherein the city was required at petitioner’s request to locate more than 58,000 pages of documents. A public agency need not put itself at risk of a statutorily incomplete record, the court opined.

The court disagreed that its holding would have a chilling effect on CEQA challenges, as section 21168 expressly provides for the prevailing party to recover costs of record preparation. Furthermore, the parties, and not the public agency, pay the costs, and thus public monies are not used to fund CEQA challenges brought by private parties.

The court then delved into the reasonableness of specific cost items. It disallowed paralegal costs related to the supplemental record where those costs were expended to ensure “completeness” of the record. Public agencies face this chore every time a petitioner elects to prepare the record, and to allow potentially sizeable recoveries for the task would undermine the statutory scheme for controlling the costs of record preparation. The court found that labor costs of assembling the record, production of excerpts of the record, messenger fees, overnight service fees, and the city’s copy of the record prepared by petitioners were all potentially recoverable, and remanded these costs to the trial court for a reasonableness determination. Planning department labor costs to locate documents provided to petitioners, however, were not recoverable here as they “did not approach the egregious abuse the occurred in St. Vincent’s School.”

RMM would like to congratulate Senior Partner Jim Moose on his selection to the Sacramento Business Journal’s Best of the Bar 2014: An Insider’s Guide to Top Local Lawyers. Published Aug. 29, 2014, the Best of the Bar 2014 directory recognizes Sacramento-area attorneys who are especially well regarded by their peers.

Jim has enjoyed a distinguished career as one of the state’s leading environmental attorneys. His expertise on the California Environmental Quality ACT (CEQA) has made him a frequent guest speaker, author, and educator on the topic for audiences that include not only attorneys and judges, but also planners, consultants, policy experts, and students. In addition to CEQA, his practice covers the State Planning and Zoning Law, the National Environmental Policy Act (NEPA), the Endangered Species Act, the California Endangered Species Act, and other relevant land use and environmental statutes.

Jim’s clients include public agencies and project proponents up and down the state, as well as consulting firms, nonprofits and individuals. He handles all phases of the land use entitlement process and permitting processes, including administrative approvals and litigation, and has had nearly 30 opinions published by the state Courts of Appeal and the California Supreme Court. Over the past two decades, he has participated in drafting amendments to CEQA and the CEQA Guidelines. Along with Tina Thomas and Whit Manley, he is co-author of Guide to the California Environmental Quality Act (11th ed. 2007, Solano Press Books).

A native Sacramentan, Jim earned his Bachelor of Arts Degree in English and History from the University of California, Berkeley, and his J.D from the University of California, Berkeley, School of Law (Boalt Hall). Jim joined the firm as an associate in 1986, became a partner in 1990, and is now a senior partner at RMM.

To develop its Best of the Bar 2014 listing, the Sacramento Business Journal encouraged attorneys to nominate their peers. Nominees then were awarded points based on a formula with two factors that were equally weighted. One was the number of nominations received, with nominations from attorneys in firms other than the nominee’s counting for more points. The second was based on the opinion of 20 well-known lawyers who served on a peer-review panel. In all, 96 attorneys were included in the listing.

The Fifth District Court of Appeal addressed two main issues under CEQA: (1) delegation of a lead agency’s authority, and (2) the standard of review to apply when reviewing an agency’s characterization of a resource as historical or not. (Citizens for the Restoration of L Street v. City of Fresno (Aug. 29, 2014) Case No. F066498.)

The City of Fresno approved infill construction of 28 two-story townhouses on about 1.25 acres of land in the city’s downtown area. Two old houses—constructed in 1906 and 1910—were located on the project site. One house was a designated Heritage Property by the Preservation Commission, and the other house had no historical designation. Both were in a significant state of disrepair and had lost considerable integrity as historical structures. As a result, the Commission determined the homes were not worth preserving; indeed, the homes were offered for sale for one dollar each, and no buyers showed interest. So, as part of the infill project, the city proposed issuing demolition permits for the two structures.

The city prepared an initial study and mitigated negative declaration for the infill project, and issued a notice of intent to adopt the MND in June 2011. The notice did not identify the necessity of development permits or the decisionmaking body approving the demolition, or discuss that the Preservation Commission would have any role in the CEQA review process. The Preservation Commission took the lead in the certification of the MND and determined the two buildings on the project site were not historic. The Commission also certified the MND. Citizens appealed this decision to the City Council, which upheld the Commission’s certification. Citizens filed suit.

The Delegation Issue

On appeal, Citizens renewed its successful argument from below that the Preservation Commission did not have the authority to act as the city’s decisionmaking body for the purpose of certifying the MND. The appellate court turned to the city’s municipal code for guidance to determine if the Commission could be characterized as the decision-making body under CEQA Guidelines § 15356. The court determined that the municipal code did not explicitly grant the Commission the authority to approve the environmental review documents concurrently with the other project-related approvals (though the court noted that the city could adopt such an ordinance expressly granting the Commission this authority).

Due to the structure of the city’s municipal code and the approval process here, the court concluded that the city improperly split responsibility for approval of the project and certification of the environmental review. When this project was on appeal to the city council, the city council was not reviewing the demolition permits or CUPs issued for the project by the Preservation Council. Instead, the city was only reviewing the Commission’s decision to certify the MND. Therefore, the city council was not acting as the final, independent decisionmaking body for the project and the MND, as CEQA requires. The court also found the city’s notice for the public review period of the MND to be inadequate. Finally, the court determined that the city council did not explicitly address and adopt the findings required by CEQA Guidelines section 15074, and Public Resources Code section 21082.1.

The Historic Resource Designation Issue

On the issue of the appropriate standard of review to apply to an agency’s characterization of a building or site as historical or not, the court sided with the city. The court, relying on its prior analysis in Valley Advocates v. City of Fresno (2008) 160 Cal.App.4th 1039, concluded that the substantial evidence standard of review applied. Citizens urged the court to apply the fair argument standard instead.

Citizens suggested that the city’s characterization of the buildings should be reviewed under the fair argument standard because the city adopted a MND, which is reviewed under the fair argument standard. But the court explained that the Legislature adopted a specific section in CEQA (§ 21084.1) addressing historical resources. Final discretionary decisions about whether a building or site is historical are to be made during the early stages of environmental review, and since the Legislature allowed lead agencies to make discretionary decisions regarding the historic significance of resources before preparing CEQA review, application of the fair argument standard in these situations would be contrary to Legislature’s intent. An agency cannot freely exercise discretion when taking action if courts review that action as a matter of law, like under the fair argument standard. For these reasons, the court affirmed the application of the substantial evidence test to the city’s determination that the project would have no impacts on historical resources.

Conclusions and analysis

This case follows other recent cases where courts have faulted lead agencies for splitting approval of project elements, such as CUPs or permits, from certification of the project’s environmental analysis. Interestingly, the Fifth District declined to note that the bifurcated situation in this case was created by Citizens’ failure to appeal both the demolition permits and the MND to the city council. But even though Citizens only appealed the MND, arguably failing to exhaust its administrative remedies on the other issues, the court still held the city responsible for the procedural error in the approval process. This outcome sends a clear warning to lead agencies to be vigilant about ensuring the final, decisionmaking body has the discretionary authority to act on project approvals and the project’s environmental review document. The decision also affirms the Fifth District’s prior analysis in Valley Advocates with regard to agency determinations of whether buildings or sites are historic.

The controversy in this case arose after the City of San Diego declined to approve conditional use permits (CUPs) for three cell tower facilities operated by American Tower Corporation. The city had previously granted 10-year CUPs for the facilities, and American Tower applied for new CUPs after the originals expired. The city considered the applications and informed American Tower of concerns with the design of the facilities, particularly with regard to aesthetic impacts, but otherwise determined that the applications were exempt from CEQA. The city ultimately denied the CUP applications. American Tower then filed suit in federal district court, raising claims under California’s Permit Streamlining Act. American Tower Corp. v. City of San Diego (Aug. 14, 2014) Case No. 11-56766.

California’s Permit Streamlining Act

Under California’s Permit Streamlining Act, the city was required to act on the CUP applications within 60 days of the city’s exemption determination. The city did not meet this deadline, and American Tower argued that the CUP applications became approved as a matter of law based on the city’s failure to act within 60 days. The district court found this argument compelling, but the Ninth Circuit reached a contrary conclusion.

The Ninth Circuit noted that the Permit Streamlining Act causes a CUP application to become approved by default only if two conditions are met: the lead agency must fail to take action within 60 days and public notice, as required by law, must have occurred. In this case, the appellate court concluded that the required public notice had not occurred, so the CUP applications could not be deemed approved.

To determine whether public notice had occurred prior to the CUP approvals, the appellate court looked to statutory provisions of the San Diego Municipal Code and the constitutional, due process protections articulated by the California Supreme Court in Horn v. County of Ventura. The court determined that the city complied with the notice requirement, so the issue became whether automatic approval of the CUP applications without an opportunity for affected landowners to be heard would “constitute a substantial or significant deprivation of other landowners’ property interests” under the framework established in Horn.

The Ninth Circuit determined that adjacent property owners might be concerned about the visual impacts of the sizable cell towers and hundreds of square feet of adjacent equipment shelters allowed by the CUPs. Therefore, the court had “little trouble” finding that automatic approval of the CUP applications would significantly infringe upon other landowners’ property interests. The City’s notices were silent on the Permit Streamlining Act default approval provision, and American Tower failed to make use of the act’s self-help provisions. Under the act, an applicant may either file an action in court to compel the lead agency to provide public notice and hearing, or the applicant may file its own public notice of the proposed action. So in this case, for example, American Tower could have filed a public notice that the CUP applications would be deemed approved if the city failed to act within 60 days after finding the CUPs exempt from CEQA. But no notice was provided to affected landowners here, so the CUP applications could not be deemed automatically approved under the act.

The Federal Telecommunications Act

American Tower advanced multiple claims under the Federal Telecommunications Act, all of which both the district court and the Ninth Circuit rejected.

Under the Telecommunications Act, a state or local agency must support decisions to deny placement of telecommunications equipment with substantial evidence, measured in the context of applicable state and local law. In this case, the San Diego Municipal code requires that CUP applications comply with, “to the maximum extent feasible,” regulations of the local land development code. American Tower failed to prove that its proposed facilities were designed “to be minimally invasive,” despite being given numerous opportunities by the city’s planning department to submit such evidence. As a result, the court found that the city supported its decision to reject the CUP applications with substantial evidence.

The Ninth Circuit also agreed with the district court that American Tower and the city were not “similarly situated” for the purposes of analyzing whether the city unreasonably discriminated against American Tower. The court noted that while the city maintained telecommunications equipment, this equipment was predominately for public services. Further, the city did not advertise available wireless space, though it did maintain some private leases, so any evidence of competition between the city and American Tower was minimal. In any event, the court found that the alleged discrimination in this case would be reasonable. The Telecommunications Act only prohibits unreasonable discrimination. Since aesthetic concerns are legitimate concerns for a locality, it was not unreasonable for the city to reject the CUP applications based on those concerns.

Finally, the Ninth Circuit held that American Tower did not support a claim under the Telecommunications Act, which mandates that regulation of telecommunications equipment not prohibit the provision of wireless services. An applicant must demonstrate that the manner in which it proposes to fill a significant wireless services gap “is the least intrusive on the values that the denial sought to serve.” Here, the city denied the CUP applications based on aesthetic concerns, and American Tower failed to meet its burden by submitting evidence that the proposed towers and structures were the least intrusive proposals.

Analysis and Conclusion

This opinion applies state law to a common, and sometimes contentious, local land-use planning issue: permitting the placement of telecommunication equipment. The case notes the limits on the power of the Permit Streamlining Act to provide default approval of a permit application, and the court implicitly encourages applicants to make use of the act’s self-help provisions in instances where lead agencies are uncooperative. This case also demonstrates the importance local regulations in the permitting and placement of telecommunications equipment.