Archive for December, 2014


Supreme Court will hear Friends of the Eel River

December 26th, 2014 by Gwynne Hunter

The California Supreme Court has granted a petition for review of Friends of the Eel River v. North Coast Railroad Authority. We previously wrote about the case here.

Friends of the Eel River and Town of Atherton created an appellate court split on the issue of federal preemption of railway projects. The court in Atherton held that the market participant doctrine, whereby proprietary state actions are protected from federal preemption, applies to the High Speed Rail. Friends of the Eel River disagreed. The court held that even if the decision to prepare an EIR were proprietary, a writ proceeding by a private group challenging the adequacy of that review would be regulatory, and not part of the proprietary action.

Recently, the Surface Transportation board issued a decision holding that federal law preempts application of CEQA to a portion of the High Speed Rail line. In reading this conclusion, the court sided with Friends of the Eel River and disagreed with Atherton on the market participant issue.

Appellants are set to file their opening brief on the merits at the end of February.

The Surface Transportation Board (STB) issued a ruling on December 12, 2014, concluding that 49 U.S.C. § 10501(b) preempts application of CEQA to the Fresno to Bakersfield segment of the state high-speed rail project. Under this statute, STB’s jurisdiction over transportation by rail carriers is exclusive, even if the tracks are located entirely in one state. Furthermore, the remedies provided with respect to regulation of rail transportation “are exclusive and preempt the remedies provided under Federal or State law.”

The issue before STB was whether a state court can, under CEQA, enjoin construction of a rail line that the Board has authorized. In 2013, STB found it had jurisdiction over the High Speed Train system. It subsequently granted petitions for exemption that permitted construction of the first segment of the rail line, between Merced and Fresno. After STB’s assertion of jurisdiction, the High Speed Rail Authority noted in its environmental documentation that it was not waiving the right to assert federal preemption in response to any potential legal challenge to its CEQA compliance.

STB stated that due to the conflicting appellate court opinions regarding CEQA preemption presented in the recent Town of Atherton and Friends of Eel River state appellate court decisions, the Board was uniquely qualified to resolve the preemption question. STB first determined that state permitting or preclearance requirements, such as CEQA, were categorically preempted as to any rail lines and facilities that are an integral part of rail transportation. STB found it difficult, as a practical matter, to separate CEQA’s injunctive remedies—the focus of opponents’ lawsuits—from a state court’s ability to enforce compliance with CEQA itself. Thus, the issue became whether CEQA as a whole is preempted with regard to the line. Applying “well-established preemption principles,” the Board concluded that it was.

STB noted that the line would be constructed and operated as part of the interstate rail network. Any implied agreement to comply with CEQA that potentially could have the effect of prohibiting the construction of a rail line authorized by the Board, therefore, would unreasonably interfere with interstate commerce by conflicting with the Board’s exclusive jurisdiction and preventing the Authority from exercising its power.

The Board noted that to the extent its preemption analysis conflicted with the court’s decision in Atherton, it respectfully disagreed with that opinion. STB did not believe that the market participant doctrine creates an exception to federal preemption in the context of a CEQA enforcement suit for a railroad project under the Board’s jurisdiction. The Board agreed with Eel River’s reasoning that even if a state agency’s action can be viewed as proprietary and the initial decision to prepare the EIR a component of that proprietary action, a writ proceeding by a private citizen’s group challenging the adequacy of the CEQA review is not part of that proprietary action. This is because the aspect of CEQA that allows a citizen’s group to challenge the adequacy of an EIR when CEQA compliance is required is regulatory in nature; a lawsuit against a government entity cannot be viewed as part of its proprietary action, even if the lawsuit challenges that proprietary action. This holding, the Board stated, does not infringe upon state sovereignty because the CEQA enforcement actions are not being brought by the state. It also held that whether Proposition 1A requires the Authority to comply with CEQA as a condition of its funding is a question of state law for a state court to decide. One commissioner dissented, arguing that the majority had gone further with its preemption holding than the Authority had requested.

The Supreme Court has granted review of Friends of Eel River. Briefing is currently set for the end of February 2015.

In a partially published opinion, the Fifth District Court of Appeal clarified an issue regarding appeals under the Surface Mining and Reclamation Act of 1975 (SMARA) and upheld the county’s choice of mitigation for loss of farmland. Friends of the Kings River v. County of Fresno, Case No. C071891 (Dec. 8, 2014).

The project in this case involved a proposed aggregate mine and construction of related processing plants on a 1,500-acre site in the County of Fresno. Mining and production activities would eventually occupy about 900 acres of the site; the remaining acreage would continue to support orchards. The project application included a reclamation plan as required by SMARA.

The County of Fresno prepared and certified an EIR for the project in 2012. Subsequently, petitioners submitted a designation appeal to the State Mining and Geology Board (SMGB) alleging that the reclamation plan failed to comply with SMARA. The SMGB granted the appeal and remanded the reclamation plan to the county. The county, in turn, revised the reclamation plan. During the SMGB appeal process, petitioners also filed a petition for writ of mandate against the county alleging violations of CEQA. The trial court denied the petition, and an appeal ensued.

The first published issue in the opinion addresses the scope of the SMGB’s authority over reclamation plans approved by a local lead agency. Petitioners argued that by remanding the county’s approved reclamation plan, the SMGB set aside or nullified the reclamation plan. Petitioners reasoned that the county failed to proceed in the manner required by law because the county approved a CUP absent a valid reclamation plan, contrary to the county code. The appellate court disagreed. Under SMARA, the only remedy available for a successful appeal to the SMGB is remand to the lead agency for reconsideration. The lead agency must then hold a public hearing and reconsider the action, but the lead agency is not required to set aside its prior decision.

The second published issue in the opinion addresses whether the county complied with CEQA by inadequately mitigating for permanent loss of farmland. The EIR for the project acknowledged that about 600 acres of farmland would be permanently lost over the course of 100 years. The county determined this loss of farmland would be a significant impact and adopted three mitigation measures addressing the impact. During public comments on the project, the county received a suggestion that permanent agricultural conservation easements (ACEs) could mitigate for the loss of farmland. The county addressed this suggestion in a master response which compared proposed mitigation measures with the recommendation to include ACEs in the project. The master response concluded that establishing such easements would not reduce the amount of farmland permanently converted as a result of the project. Therefore, the county found that ACEs would not mitigate the significant impact to less-than-significant levels, or substantially reduce the severity of the impact. The appellate court determined this evaluation of suggested mitigation measures compared to proposed mitigation measures was sufficient.

The appellate court rejected petitioner’s follow-up argument that the county was required to adopt ACEs as mitigation for the project as a matter of law. In support of this argument, Petitioner relied on Masonite Corp. v. County of Mendocino (2013) 218 Cal.App.4th 230, in which the First District Court of Appeal held that ACEs may appropriately mitigate for the direct loss of farmland. In Masonite, the County of Mendocino argued that ACEs only mitigate for “indirect and cumulative effects of farmland conversion.” The First District corrected the county, explaining that ACEs may compensate for direct loss within the meaning of the CEQA Guidelines, so the county erred by declining to consider ACE’s as a potentially feasible mitigation measure. In contrast, the County of Fresno considered the feasibility of ACEs in the final EIR.

The Second District Court of Appeal held the County of Ventura violated CEQA when it increased the height of a proposed building by 15 feet without filing a supplemental EIR. The county had filed an addendum considering the impact of the building’s change in location, but the addendum neglected to mention a change in building height from 75 feet to 90 feet. The court considered this a substantial change in the project requiring major revisions to the EIR. Ventura Foothill Neighbors v. County of Ventura, Case No. B254120 (Dec. 15, 2014).

In 1993, the County Board of Supervisors decided to construct a five-story ambulatory care clinic on the county’s Medical Center campus. The 1993 EIR stated that the building would be up to 75 feet tall. The county delayed construction until 2005, when the board decided the clinic should be relocated a few hundred feet northwest of the original location to reduce environmental impacts and to utilize a more parking-centric location. The county prepared an addendum for the relocation and filed a notice of determination (NOD). Neither the addendum nor the NOD stated that the clinic would exceed 75 feet. In 2008, a nearby resident inquired about the presence of a rig on the site, and learned that the relocated clinic was to be 90 feet tall. The height difference, petitioners claimed, would “significantly diminish the superior ocean view setting” of the Foothill residences. The trial court held in favor of the residents, and the court of appeal affirmed.

The court of appeal denied the county’s argument that the Ventura Foothill Neighbors were time-barred from challenging the decision to proceed with an addendum because the challenge fell outside CEQA’s 30-day statute of limitations. The court distinguished the California Supreme Court decision in Committee For Green Foothills v. Santa Clara County Bd. of Supervisors (2010) 48 Cal.4th 32, in which the Court held that filing of a valid NOD triggers a 30-day statute of limitations. Since the neither the addendum or the NOD made any mention of the increase in the building’s height, the timeline ran from the time of the neighbor’s inquiry.

The California Fish and Game Commission approved an emergency listing of the Tricolored Blackbird (agelaius tricolor) under the California Endangered Species Act at the Commission’s regular meeting on December 3, 2014. The Center for Biological Diversity filed the petition to list the Tricolored Blackbird with the Fish and Game Commission on October 8, 2014. The petition included a request for emergency action to protect the species.

The petition describes the Tricolored Blackbird as a nesting passerine largely endemic to California. The vast majority of the population occurs in the Central Valley and surrounding foothills. This bird is unique due to its formation of large nesting colonies (the largest of any North American passerine since the extinction of the Passenger Pigeon). A single colony site may include thousands of breeding pairs. The bird’s inclination to form vast nesting colonies makes the species particularly vulnerable to habitat destruction and human interference causing mass reproductive failures for the season. For example, large colonies will attempt to nest on active agricultural lands, and eggs and nests are then destroyed during harvest or weed abatement activities.

Audubon California, which supported the listing, cited a survey completed in the summer of 2014 which showed a 44 percent decline in the population of Tricolored Blackbirds since 2011. Over the last six years, the population has dropped 64 percent, to historic low numbers. The Commission found this and other evidence presented in the emergency petition compelling. The emergency petition allows six months of protection for the bird, at which time the emergency listing may be renewed for another six months. The Commission may consider a formal listing petition during this time.

The emergency petition and comment letters are available on the Commission’s website here.

In a case heavy on administrative law and civil procedure, the Third District Court of Appeal determined that the California Air Resources Board acted within the scope of its authority when it promulgated regulations addressing heavy-duty engines currently in use. Therefore, the trial court should not have granted a motion for judgment on the pleadings which challenged these regulations. Engine Manufacturers Association v. California Air Resources Board, Case No. C071891(Nov. 24, 2014).

CARB is charged with overseeing the vast regulatory process designed to protect and improve California’s air quality. As part of these efforts, CARB regulates engines installed in vehicles certified for sale in the state. Most of these certified engines come equipped with an on-board diagnostic system (OBD). OBDs monitor emissions systems and detect malfunctions in these systems. Engine manufacturers must demonstrate to CARB that the installed OBDs will function properly for the “actual life” of the engine before new engines can be sold in the state. To satisfy this requirement, new engines are rigorously tested via an “accelerated aging process.” The OBD must function properly at the end of this test to pass for certification.

The regulations challenged in this case require engine manufacturers to apply the pre-certification testing on a sample of in-use engines for engines with model year 2010 and later. If the OBDs on the in-use engines selected for testing function properly, no further testing of the engine group is required. Otherwise, the regulations empower CARB to require additional testing or order recall and repair of engines in an engine class with failing OBDs.

The Engine Manufacturers Association (EMA) challenged the regulations for in-use engines. EMA’s complaint alleged that CARB exceeded its statutory authority by adopting regulations that would be “onerous and costly” for manufacturers and that the regulations unlawfully mandate recall and repair of engines.

After CARB filed an answer, EMA filed a motion for judgment on the pleadings. The motion was granted following lengthy proceedings before multiple trial court judges. The trial court reasoned that the authorizing statute at issue addressed only new engines, as opposed to in-use engines, and that the regulations were not “reasonably necessary.”

The Appellate Court’s Decision

The appellate court determined that EMA’s motion for judgment on the pleadings was granted in error. In short, since CARB filed an answer which raised fair grounds for presenting a defense, the case could not have been settled on the pleadings. Careful to show its work, the appellate court explained the analytical route it took to reach this conclusion.

First, the appellate court independently reviewed whether the OBD regulations were consistent with the law controlling the agency’s actions. The Health and Safety Code directs CARB to adopt regulations, rules, and standards to address air pollution caused by motor vehicles. Section 43013, subdivision (a) explicitly grants CARB the authority to adopt “in-use performance standards.” The appellate court characterized the regulations at issue—regulations ensuring in-use OBDs function properly as establishing an in-use performance standard—as falling within the scope of the statute. Along with rejecting the narrow reading of the statute urged by EMA and adopted by the trial court, the opinion emphasizes that the Legislature granted CARB broad authority to adopt regulations addressing vehicle emissions. This authority is limited by the requirement that regulations be feasible and cost-effective. But since CARB specifically denied EMA’s allegations to the contrary, the issue could not be settled in a judgment on the pleadings.

Second, the appellate court concluded EMA’s motion should not have been granted because the trial court improperly made a finding that the proposed OBD regulations were not “reasonably necessary” for CARB to carry out the intended purposes of the Health and Safety Code. While it is true that an agency’s regulations must be “reasonably necessary to effectuate the statutory purposes,” EMA had the burden to demonstrate, with evidence based on the pleadings, that the regulations did not meet this requirement. Since EMA did not meet this burden, the trial court should not have issued a ruling against CARB.

This published opinion may not break new ground on administrative law issues, but it provides a helpful explanation of judicial review of an agency’s quasi-legislative rules. The opinion is careful to note and explain the different standards of review the court applies.

In a 2-1 decision, the Fourth District Court of Appeal concluded that the environmental impact report (EIR) for a regional transportation plan for the San Diego area was inadequate because it did not apply a long-term greenhouse gas emissions reduction target contained in a 2005 Executive Order. The opinion, Cleveland National Forest Foundation v. San Diego Association of Governments, Case No. D063288, was filed Nov. 24, 2014, includes a vigorous dissent, and is available here.

The case involved the 2050 Regional Transportation Plan and Sustainable Communities Strategy, adopted in 2011 by the San Diego Association of Governments (SANDAG). The Regional Transportation Plan calls for investing $214 billion in local, state and federal transportation funds over the next 40 years for transit projects and improvements to highways, roads and streets. The Sustainable Communities Strategy is designed to reduce greenhouse gas (GHG) emissions to state-mandated levels over time. The San Diego region was the first region in California to produce a Regional Transportation Plan that includes a Sustainable Communities Plan, as required by Senate Bill 375.

At issue in the case was a 2005 Executive Order issued by former Gov. Arnold Schwarzenegger. The Executive Order established reduction targets for GHG emissions, including a target of 80 percent below 1990 levels by 2050. Following the 2005 Executive Order, the Legislature enacted the California Global Warming Solutions Act of 2006 (AB 32) and the Sustainable Communities and Climate Protection Act of 2008 (SB 375). SB 375 requires the California Air Resources Board to establish regional reduction targets for GHG emissions from cars and light duty trucks for 2020 and 2035, and to revisit those targets every eight years through 2050 or sooner if circumstances warrant. The Air Resources Board set initial regional reduction goals for 2020 and 2035, but not beyond.

The program EIR for SANDAG’s Regional Transportation Plan applied three different thresholds to analyze the significance of GHG emissions, based on CEQA Guidelines section 15064.4. The EIR’s analysis included standards tied to the years 2020 and 2035. The EIR discussed the Executive Order’s 2050 reduction target, but explained it did not apply it to the analysis because the Air Resources Board had not yet developed such a formal target. The EIR found the proposed transportation plan would lead to GHG emissions reductions through 2020, but increases in emissions after that.

The petitioners, Cleveland National Forest Foundation and Sierra Club, challenged the EIR on several grounds under CEQA. Among other things, the petitioners found fault with the EIR because it did not analyze longer term GHG emissions impacts under the goal contained in the 2005 Executive Order. SANDAG argued the EIR could not apply policy goals contained in the Executive Order because no statute or regulation had translated the Order’s goals into “comparable, scientifically based emissions reduction targets.”

The majority agreed with the petitioners that the EIR’s GHG impacts analysis was deficient. According to the majority opinion, the failure to use the Executive Order’s 2050 target as a significance threshold violated CEQA’s requirement for a “reasonable, good faith effort at full disclosure.” The majority referred to the omission as a failure to perform a “consistency analysis” with the Executive Order.

The majority also held that the EIR violated CEQA by failing to analyze a reasonable range of project alternatives, failing to adequately analyze and mitigate the transportation plan’s air quality impacts, improperly deferring the formulation of mitigation, and understating the plan’s impacts on agricultural lands.

The dissent described the majority’s requirement of a “consistency analysis” with the Executive Order as “judicial fiat, pure and simple” and “a new formulation of the law.” The dissent stated that a policy directive from the Governor’s office does not constitute a required threshold of significance under CEQA. According to the dissent, in the absence of the Legislature’s independent action in tasking the Air Resources Board with adopting regional 2050 GHG targets, the EIR was not required to consider the broad 2050 goals contained in the Executive Order.

This case stems from one of the many efforts by opponents of the City of Sacramento’s decision to approve a partially subsidized downtown arena project to stop the project. Here, the project opponents argued Public Resources Code section 21168.6.6, which shortens several CEQA deadlines for the project, is unconstitutional. The Third District Court of Appeal disagreed in a published opinion: Saltonstall v. City of Sacramento, Case No. C077031 (Nov. 20, 2014).

As a result of the City’s efforts to retain the Kings NBA team, the NBA blocked sale of the team to the city of Seattle. But the NBA reserves the right to acquire the team and relocate it to another city if the downtown arena is not opened by 2017. To address this timeframe, the Legislature passed Senate Bill 743. Relevant to this case, the bill added section 21168.6.6 to the Public Resources Code. This section accelerates the ordinary CEQA litigation timeline, with provisions addressing, for example, speedy preparation of the administrative record. The section also augments the proof of harm required to obtain a preliminary injunction against the project. Specifically, a preliminary injunction may only issue if proceeding with the project presents an “imminent threat to the public health and safety” or if unforeseen historical or archaeological artifacts are discovered on the project site. The section applies only to the downtown arena project.

The project opponents initially sought a preliminary injunction in the trial court to stop demolition and construction activities for the downtown arena. The trial court declined to grant the injunction, and the project opponents appealed on the grounds that section 21168.6.6 violates the state constitution.

Project opponents first argued section 21168.6.6 violates the state constitution’s separation of powers doctrine. Project opponents reasoned that, by passing this section into law, the Legislature infringed on the power of the state courts to grant injunctive relief. The appellate court noted that while the section does change the standard for granting injunctive relief, nothing in the section prevents a court from issuing such relief. Therefore, the courts may still fulfill their adjudicatory function under the section.

In reaching this outcome, the appellate court emphasized that CEQA is a legislative act, subjective to legislative limitation and amendment. In fact, the court pointed out that the Legislature could exempt the downtown arena project entirely from the requirements CEQA. Such an exemption implicates no constitutional rights because rights derived from CEQA are granted by the Legislature.

Nor does section 21168.6.6 impermissibly interfere with the judicial branch by requiring the Judicial Council to adopt procedures for resolving actions, “to the extent feasible,” within 270 days. The appellate court noted the time-line is suggestive and, therefore, does not materially impair the ability of state courts to adjudicate cases pursuant to the section.

In light of its determination that section 21168.6.6 is constitutional, the appellate court declined to overturn the trial court’s decision to deny the preliminary injunction. The appellate court also rejected the City’s request for sanctions for failure to comply with Rules of Court, rule 8.276(b)(1). Requesting sanctions pursuant to this rule requires that the moving party file a motion supported by a declaration. The City did not file such a supported motion.