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In Neighbors for Smart Rail v. Exposition Metro Line Construction Authority (2013) __Cal.4th__ (Case No. S202828) (slip op., August 5, 2013), a majority of the California Supreme Court held that a lead agency only has the discretion to completely omit analysis of the project impacts on existing conditions if it can justify its decision to exclusively use a future conditions baseline by showing an existing conditions analysis would be misleading or without informational value. On this basis, the majority found a light-rail project’s EIR deficient for exclusively using year-2030 conditions as the baseline and for failing to provide an existing conditions analysis. Although the lead opinion by Justice Werdeger and the concurrence by Justice Baxter provided different rationales for upholding the EIR, the six justices joining in these two opinions did agree to affirm the appellate court’s judgment that upheld the EIR and denied the petition for writ of mandate.

Facts and Procedural Background

In 2007, the Exposition Metro Line Construction Authority (Expo Authority) issued a notice of preparation for an EIR for the Exposition Corridor Transit Project (Expo Phase 2), which would construct a light-rail transit line running from a station in Culver City to a terminus in Santa Monica. The Expo Phase 2 project was designed to provide high-capacity transit service between the Westside area of Los Angeles and Santa Monica, creating an alternative to the area’s congested roadways. The Expo Authority certified a final EIR and approved the Expo Phase 2 project in 2010.

Subsequently, Neighbors for Smart Rail filed a petition for writ of mandate alleging that the approval of Expo Phase 2 violated CEQA. The superior court denied the petition, and the Court of Appeal affirmed. The Neighbors filed a petition for review with the California Supreme Court, raising two issues: (1) the propriety of the EIR’s exclusive use of a future conditions baseline for assessment of likely impacts on traffic congestion and air quality, and (2) the adequacy of mitigation measures for potentially significant spillover parking effects in areas near planned transit stations.

California Supreme Court’s Decision

The Court issued one lead opinion and two concurring and dissenting opinions. Justice Werdeger, joined by Justices Kennard and Corrigan, wrote the Court’s lead opinion. Justice Baxter, joined by Chief Justice Cantil-Sakauye and Justice Chin, wrote a concurrence and dissent that differed from the lead opinion on the baseline issue. Justice Liu wrote a separate concurrence and dissent that differed from the lead opinion on the question of whether the EIR’s failure to use existing conditions as the baseline was prejudicial. All justices agreed that the Neighbors’ contentions regarding mitigation for spillover parking effects should be rejected. Otherwise, the Court split along different lines on both the baseline and prejudice analyses. Nonetheless, there was a majority of four justices on every issue except the prejudice question, and six justices agreed the EIR should be upheld.

Justice Werdeger’s lead opinion tackled the baseline issue first. In an overview of leading CEQA cases that discuss the use of a future conditions baseline, the lead opinion paid special attention to Communities for a Better Environment v. South Coast Air Quality Management District (2010) 48 Cal.4th 310, and Sunnyvale West Neighborhood Association v. City of Sunnyvale City Council (2010) 190 Cal.App.4th 1351. Expressing the majority’s view, the lead opinion concluded that unusual aspects of a project or surrounding conditions can justify a departure from the “default” use of an existing conditions baseline that CEQA Guidelines section 15125, subdivision (a), prescribes. In other words, the Court held that while lead agencies have the discretion to “omit an analysis of the project’s significant impacts on existing environmental conditions and substitute a baseline consisting of environmental conditions projected to exist in the future, the agency must justify its decision by showing an existing conditions analysis would be misleading or without informational value.” The Court explicitly disapproved Sunnyvale West Neighborhood Association, supra, 190 Cal.App.4th 1351, and Madera Oversight Coalition v. County of Madera (2011) 199 Cal.App.4th 48, insofar as they hold the exclusive use of a future conditions baseline may never be employed.

Having established the appropriate standard for analyzing the baseline issue, the Court proceeded to conduct a factual assessment of the Expo Authority’s use of projected conditions in the year 2030 as a baseline. After a brief review of the EIR’s discussion of traffic congestion, air pollution, and baseline choice, the Court found that the administrative record did not contain substantial evidence to support the Expo Authority’s decision to omit an analysis of project impacts on existing conditions. This conclusion was joined by Justice Liu and represents the majority view.

Nonetheless, the three justices in the lead opinion proceeded to find that the EIR’s failure to use an existing conditions baseline did not have a prejudicial effect and did not deprive decision makers or the public of substantial information relevant to the project’s potential impacts. In part II.B.5, the lead opinion provides its prejudice analysis and explains how the EIR’s extensive analysis of year 2030 project impacts demonstrated “the lack of grounds to suppose the same analysis performed against existing . . . conditions would have produced any substantially different information.” But Justice Werdeger’s opinion is carefully worded to limit the lead opinion’s conclusion– that the EIR’s failure to analyze the project’s effects on existing traffic and air quality conditions had no prejudicial effect– to “these particular factual circumstances.” As footnote 2 explains, the prejudice analysis in part II.B.5 does not represent the view of the majority. In fact, Justice Liu based his dissent on the prejudice issue, and Justice Baxter’s concurrence brings up Justice Werdegar’s prejudice analysis only to support the assertion that the EIR’s assessment of Expo Phase 2’s impacts did adequately inform decision makers and the public.

The lead opinion closes with a short discussion of the adequacy of mitigation measures for spillover parking effects. The Expo Authority and Metropolitan Transportation Authority (Metro) had adopted a series of measures proposed by the EIR, including: monitoring of on-street parking, Metro’s financial and administrative assistance with appropriate permit parking programs, and Metro’s commitment to work with local jurisdictions to decide on other options (time-restricted, metered, or shared parking arrangements) if necessary. The Court rejected Neighbors’ reliance on Federation of Hillside & Canyon Associations v. City of Los Angeles (2000) 83 Cal.App.4th 1252, 1260-62, finding that case to be factually distinguishable. While acknowledging that the Expo Authority and Metro “cannot guarantee local governments will cooperate to implement permit parking programs or other parking restrictions,” the Court found that the record supported the conclusion that local municipalities can and should cooperate. This portion of the opinion is the only part that enjoys the support of all seven justices.

Justice Baxter’s concurring and dissenting opinion disagreed with the lead opinion’s baseline analysis. Rejecting the new standard articulated by the majority, Baxter’s opinion proposed a new rule in which “an agency retains discretion to omit an analysis of a project’s likely impacts with an existing conditions baseline, so long as the selected alternative of a projected future conditions baseline is supported by substantial evidence and results in a realistic impacts analysis that allows for informed decisionmaking and public participation.” Using this alternative rule, Baxter’s opinion concluded that the agency “did not abuse its discretion in forgoing an existing conditions baseline in favor of a 2030 baseline” because substantial evidence did support the 2030 baseline as a realistic baseline for analyzing the project’s impacts. According to Baxter’s opinion, the EIR should be upheld because it was not deficient and, therefore, there was no need to address the question of whether the alleged baseline error was prejudicial. Finally, Baxter’s opinion asserts two main criticisms of the majority’s analysis: (1) the majority’s restrictions are not supported by CEQA or CEQA Guidelines, (2) the majority’s analysis creates uncertainties regarding CEQA compliance, increasing project costs and delays.

[RMM Partner Tiffany K. Wright and Associate Amanda R. Berlin represented Real Parties in Interest Los Angeles County Metropolitan Transportation Authority]

In Masonite Corporation v. County of Mendocino (2013) __Cal.4th__ (Case No. A134896), a partially-published opinion filed July 25, 2013, the First District Court of Appeal held that an EIR must evaluate the economic feasibility of using an agricultural conservation easement (ACE) and in-lieu fees as mitigation for the Project’s conversion of farmland to nonagricultural use. This is required even when the Project will only result in the direct loss of farmland associated with the Project and will not put development pressure on surrounding farmland.

Background and Procedural History

In 2008, Granite Construction Company applied to the Mendocino County Planning Commission for a conditional use permit to develop a sand and gravel quarry on 65.3 acres approximately one mile north of Ukiah. The Department of Conservation classified 45 of the site’s 65 acres as “prime farmland.” Although most of the site was cultivated as a vineyard when the application was submitted, the site has been zoned for industrial use since 1982. Granite proposed reclaiming most of the area as open space after the mining operations had ceased, but reclaiming the land for agriculture was impossible.

The EIR identified this permanent loss of prime farmland as a significant and unavoidable project impact. The County Planning Commission certified the EIR and adopted a statement of overriding considerations. Masonite filed a petition for writ of mandate challenging the County’s compliance with CEQA. The Mendocino County Superior Court denied the petition for writ of mandate, and Masonite appealed.

Court of Appeal’s Decision

In the EIR, the County determined that no mitigation was possible to offset the loss of 45 acres of prime farmland. Masonite argued that the impact could have been mitigated by the acquisition of ACEs on offsite properties or by payment of “in-lieu” fees to fund such acquisitions.

The County believed that an ACE was not legally feasible in this case because a conservation easement only addresses the indirect and cumulative effects of farmland conversion and does not replace on-site resources. According to the County, indirect and cumulative impacts of farmland conversion occur when a Project affects neighboring agricultural uses by increasing the speculative land value and farming costs due to land use incompatibilities and nuisance issues. Through the so called “domino effect,” this would lead to development pressure on agricultural lands. The County felt that the domino effect was unlikely here because the nearest active agricultural operation was across the Russian River (a natural barrier); therefore, a conservation easement as mitigation was not appropriate in this case.

The state Department of Conservation (DOC) disagreed, submitting comments on the Draft EIR asserting that the loss of agricultural lands from this project (the 45 acres that would be mined) could have been minimized by the acquisition of ACEs on comparable land of at least equal size. According to the DOC, because the loss of farmland is felt beyond just the surrounding area, comparable replacement land could be found regionally or even statewide.

In developing the standard of review for the County’s finding of infeasibility, the court noted that this was an issue of law that the court should review de novo since the County had determined it would be legally infeasible to use ACEs as a mitigation measure. According to the court, an agency’s conclusion that mitigation was infeasible is only entitled to deference under the substantial evidence standard if infeasibility is based on economic, environmental, social, and technological factors. In this case, “[b]ecause the County decided that ACEs were not a legally feasible means to mitigate the loss of farmland at the Project site, it never investigated whether ACEs were economically feasible, and there is no evidence to review.”

The court looked to multiple sources to determine if ACEs were legally feasible for mitigating direct effects, as opposed to cumulative or indirect effects. It noted that if agricultural lands were preserved through conservation easements at a 1:1 ratio, then at least half the agricultural land in the region would be preserved. Furthermore, the court concluded that this preservation of substitute resources would comport with the CEQA Guidelines’ definition of “mitigation” in section 15370, subdivision (e), which specifically mentions substitute resources. Case law on the use of conservation easements as mitigation for biological resources, the common usage of ACEs as mitigation by local governments, and the Legislature’s policy to preserve agricultural land also influenced the court’s decision. Based on this analysis, the court held that ACEs are legally feasible mitigation measures, and the County must explore the economic feasibility of ACEs in a supplemental EIR.

Additionally, the court required the County to consider the economic feasibility of in-lieu fees as an alternative to a conservation easement. The County had rejected the idea in the EIR as legally infeasible because the County’s lack of a comprehensive farmland mitigation program legally precluded it from accepting in-lieu fees. The court found this fact immaterial because there were third parties that could accept the in-lieu fees for conservation programs.

 On December 13, 2012, a Fresno County superior court judge in California Farm Bureau Federation v. County of Fresno upheld the county’s partial cancellation of a Williamson Act contract, which will allow a solar generation project to be built on “Prime Farmland” as classified by the Department of Conservation.

 Under the Williamson Act (Gov. Code,  §§ 51200-51297.4), landowners can voluntarily enter into contracts with local governments to limit use of their land to agricultural and “compatible” uses in exchange for a reduction in property valuations for property tax purposes. Williamson Act contracts typically have a ten year initial term that is automatically extended year by year if the landowner and government agency fail to file a notice of nonrenewal. Landowners who wish to release their lands from use restrictions before a contract expires must petition the government agency to cancel the contract.

In October 2011, the Fresno County Board of Supervisors voted to partially cancel a Williamson Act contract for 90 acres of a 156-acre parcel of farmland in order to allow the development of a solar generation project. In its application for cancellation, the landowner Boyce Land Company stated the 66 acres remaining under contract would be used to cultivate citrus, while the 90 acres released from use restrictions would be permitted to become the site of a low-profile photovoltaic facility operated by Westlands Solar Farms LLC . The California Farm Bureau Federation (CFBF) challenged the Board of Supervisor’s decision to cancel the contract, alleging violations of the Williamson Act .

The court disagreed with CFBF and ruled in favor of Fresno County. The county had based its decision to cancel the contract upon a finding that the cancellation is “in thepublic interest” per Government Code section 51282, subdivision (c). It highlighted “the need for renewable energy, lack of adequate and sustainable water supply, proximity to an existing electrical substation, and that the request is only for partial cancellation.”

 

 

 

 On December 12, 2012, the Governing Board of the Tahoe Regional Planning Agency voted 12 – 1 with one abstention to adopt an updated Tahoe Regional Plan and a new Regional Transportation Plan/Sustainable Communities Strategy (RTP/SCS).

Both California and Nevada state leaders have spoken in support of the collaborative efforts that went into protecting Lake Tahoe. The two primary agencies, both created out of the Bi-State Compact of 1980, involved in the creation of the regional plans were the Tahoe Regional Planning Agency (TRPA) and the Tahoe Metropolitan Planning Organization.

Originally enacted in 1987 because of alarm over reduced clarity in the beautiful waters of Lake Tahoe, the Tahoe Regional Plan creates a more efficient planning framework, controls the amount and type of community development, and simplifies the complex regulations that homeowners face, among many other improvements. The goals and policies of the Regional Plan are to reach and maintain existing environmental requirements while planning and facilitating beneficial growth and development, as dictated by the Bi-State Compact. The approved Plan Update accomplishes this by adding further incentive for the transfer of development back into existing community centers to encourage environmentally and economically beneficial redevelopment. It continues to honor the TRPA goal of protecting and enhancing Lake Tahoe’s legendary clarity.

 The new RTP helps to meet the per capita targets set by the California Air Resources Board by including an SCS that reduces greenhouse gas emissions from cars and trucks. It has combined land use policies and transportation investments, ensuring that everything is in compliance with Senate Bill 375 (The Sustainable Communities and Climate Protection Act). The RTP/SCS also helps mitigate existing traffic issues, promotes automobile alternatives for transportation, while repairing water quality issues caused by transit.

These regional plans will shape environmental regulation and life in the Lake Tahoe Basin for the next two decades, providing a framework for continued environmental improvement and interstate cooperation. TRPA’s Executive Director, Joanne S. Marchetta, has stated that the level of public participation shows a commitment and dedication by the people of the Lake Tahoe Basin to enforcing vitally important protections even though they have been so hotly contested. (Michel Wigney)

Banning Ranch Conservancy v. City of Newport Beach

December 13th, 2012 by Elizabeth Sarine

(2012) 211 Cal.App.4th 1209

On December 12, 2012, the Fourth Appellate District upheld the City of Newport Beach’s EIR for the Sunset Ridge Park Project, finding that the city did not improperly “piecemeal” the project and that substantial evidence supported the city’s analyses of cumulative impacts and growth-inducing impacts.

In March 2009, the City announced that it was acting as the lead agency to prepare an EIR for the Newport Banning Ranch Project. The City’s Notice of Preparation (NOP) explained that Newport Banning Ranch Project proposes the development of residential, commercial, and overnight resort accommodations on the Banning Ranch site. Two months after the City issued the NOP for the Newport Banning Ranch Project, the City issued a NOP for the Sunset Ridge Park Project. The NOP for the park project explained that the City proposed to develop an approximately 18.9-acre site with active and passive recreational uses and an access road to the park through Newport Banning Ranch.

The challenge brought by Banning Ranch Conservancy alleged that the City had violated CEQA in certifying the EIR for the Sunset Ridge Project. The trial court denied the petition and petitioner appealed.

Petitioner contended the “project” analyzed in the EIR should have included both the Newport Banning Ranch Project and the Sunset Ridge Park Project. The appellate court disagreed, finding that that the Newport Banning Ranch Project would not be a “consequence” of the City’s park project. The court also rejected all of petitioner’s claims that the EIR had not adequately addressed the Park Project’s environmental impacts, including cumulative and growth-inducing impacts. [RMM Partner Whitman F. Manley and Senior Counsel Jennifer S. Holman represented respondent City].

 

On December 12, 2012, the Fourth District Court of Appeal, in Banning Ranch Conservancy v. City of Newport Beach (2012) ___Cal.App.4th___ (Case No. G045622), affirmed the judgment of the Superior Court of Orange County that the City of Newport Beach complied with CEQA with respect to the City’s review and approval of the Sunset Ridge Park Project.

Background

In 2006, the City of Newport Beach purchased land in the northwest corner of the West Coast Highway and Superior Avenue. The western boundary of the parcel abuts Banning Ranch, a “primarily undeveloped” approximately 400-acre site controlled by Newport Banning Ranch, LLC (NBR LLC). A majority of the Banning Ranch site is located in unincorporated Orange County, but is within the City’s Sphere of Influence (SOI).

In March 2009, the City announced that it was acting as the lead agency to prepare an EIR for the Newport Banning Ranch Project. The City’s Notice of Preparation (NOP) explained that Newport Banning Ranch Project proposes the development of residential, commercial, and overnight resort accommodations on the Banning Ranch site. The NOP also explained that, as part of the project, an access road, “Bluff Road,” would be constructed from a southern terminus at West Coast Highway to a northern terminus at 19th Street and that Bluff Road would serve as the primary roadway through the project site.  Further, the NOP stated that the unincorporated areas of the site would be annexed to the City as part of the project. Lastly, the NOP repeatedly referred to the City’s plans to build a park, the Sunset Ridge Park, adjacent to Banning Ranch.

Two months after the City issued the NOP for the Newport Banning Ranch Project, the City issued a notice of preparation for the Sunset Ridge Park Project. The NOP for the park project explained that the City proposed to develop an approximately 18.9-acre site with active and passive recreational uses and an access road to the park through Newport Banning Ranch.

Thereafter, in October 2009, the City issued a draft EIR for the park project. The draft EIR analyzed, among other things, the park’s access road. Petitioner Banning Ranch Conservancy submitted comments contending that the draft EIR had “piecemealed” the project by failing to acknowledge the full extent of the project. In particular, petitioner noted that it appeared that the park access road in the draft EIR for the park and the Bluff Road proposed in the Newport Banning Ranch Project were the same road. Petitioner further asserted that the draft EIR failed to adequately analyze growth-inducing impacts, cumulative impacts, and impacts to the California gnatcatcher.

The City responded to the public comments and prepared a final EIR. The responses acknowledged that the proposed Sunset Ridge Park Project access road and the Bluff Road proposed for the Newport Banning Ranch Project assume generally the same roadway alignment from West Coast Highway, but disagreed with the suggestion that the Newport Banning Ranch Project is part of the Sunset Ridge Park Project and therefore should be analyzed in the same EIR as a single project. The responses to comments explained that the two projects were distinct and also that both the City’s general plan and Orange County’s master plan envision a similar north-south roadway through the Newport Banning Ranch property extending from West Coast Highway to 19th Street.

The City certified the final EIR at its public hearing on March 23, 2010. At the same hearing, the City approved an “access agreement” between it and NBR LLC. In exchange for the Banning Ranch easement, the City agreed to design and construct the access road improvements from the West Coast Highway to the park to match the proposed vertical and horizontal alignment of the east side of the proposed Bluff.

Petitioner thereafter brought suit in the Superior Court of Orange County, alleging that the City had violated CEQA in certifying the EIR for the Sunset Ridge Project. The trial court denied the petition and petitioner appealed.

The Court of Appeal’s Decision

The appellate court first considered petitioner’s claim that the City had impermissibly “piecemealed” the project by not treating the Newport Banning Ranch Project and the Sunset Ridge Park Project as the same project. CEQA generally prohibits an agency from “chopping up” a large project into many little ones, each of which might have individually minimal environmental consequences, but collectively may have significant environmental impacts. This “chopping up” of a large project is known as “piecemealing.”

The court explained that the California Supreme Court set forth a piecemealing test in Laurel Heights Improvement Association v. Regents of University of California (1988) 47 Cal.3d 376, 396. Specifically, the Supreme Court held that an EIR must include an analysis of the environmental effects of future expansion if: (1) it is a reasonably foreseeable consequence of the initial project; and (2) the future expansion or action will be significant in that it will likely change the scope or nature of the initial project or its environmental effects.

The court in this case explained that application of the Laurel Heights piecemealing test in the courts of appeal has been fact-specific and the case law is not easily harmonized. Nevertheless, the court found that the leading cases could be grouped into potentially useful categories. For instance, there may be improper piecemealing when the purpose of the reviewed project is to be the first step toward future development. There may also be improper piecemealing when the reviewed project legally compels or practically presumes the completion of another action. On the other hand, two projects may properly undergo separate environmental review (i.e., no piecemealing) when the projects have different proponents, serve different purposes or can be implemented independently.

 In this case, petitioner contended the EIR incorrectly defined the project to include only the park and access road. According to petitioner, the “project,” within the meaning of CEQA, included both the Newport Banning Ranch Project and the Sunset Ridge Park Project. Applying the two-part test set forth in Laurel Heights, the court agreed with petitioner that the Newport Banning Ranch Project is “reasonably foreseeable.” Indeed, it appears to be imminent in that the City is already preparing an EIR for that project.

The court disagreed, however, that the Newport Banning Ranch Project “will likely change the scope or nature of the initial project or its environmental effects.” In particular, the court found that the Newport Banning Ranch Project would not be a “consequence” of the City’s park project. For instance, explained the court, the park’s access road is only a “baby step” toward the Newport Banning Ranch Project. Further, the projects have different project proponents, serve different purposes in that one will provide recreational opportunities for existing residents and the other develops a new neighborhood. Moreover, the City’s general plan calls for construction of Bluff Road or its equivalent; the City intends to build the road regardless of whether Newport Banning Ranch is developed. For these reasons, the court rejected petitioner’s claim that the City had impermissibly piecemealed the Sunset Ridge Park Project.

Next, the court addressed petitioner’s claims that the EIR had not adequately addressed the Park Project’s environmental impacts. Petitioner argued that the EIR’s cumulative traffic impact analysis violated CEQA in that it did not list the Newport Banning Ranch Project as one of the projects that could contribute to cumulatively significant impacts. The court found, however, that the EIR accounted for traffic at Banning Ranch because the EIR’s analysis assumed build-out of the City’s general plan, which included a proposed Bluff Road (or equivalent). The court explained that although the EIR could have been clearer on this point, an EIR need not achieve “perfection.”

Second, petitioner argued that the EIR’s conclusion that the Sunset Ridge Park Project would not cause significant growth-inducing impacts lacked substantial evidence because its proposed infrastructure could help serve Newport Banning Ranch. The court explained that an EIR’s growth-inducing impact analysis need not be detailed and the detail required in any particular case depends upon a multitude of facts, including the nature of the project, and the ability to forecast the actual effects the project will have on the environment. Here, the court explained that substantial evidence supported the EIR’s conclusion that the park will not have a growth-inducing impact in regard to the Newport Banning Ranch Project because that project was proposed first. It therefore was not a consequence of the Park Project.

Third, petitioner argued that the EIR’s cumulative biological impacts analysis violated CEQA because it did not mention the Newport Banning Ranch Project. But, as the court explained, the City’s final EIR responses to comments explained that the draft EIR did account for that project in its biological cumulative impacts analysis in that both projects are within the boundaries of the Natural Communities Conservation Plan (NCCP). Compliance with the NCCP will ensure that cumulative impacts are not significant.

Fourth, petitioner argued that the EIR downplayed the Park Project’s significant impact on the habitat of a threatened bird, the California gnatcatcher. Again, the court disagreed. The court explained that substantial evidence in the form of the observation and opinions of the City’s biologist supported the conclusion that the project would only impact 0.68 acres of gnatcatcher habitat. Further, substantial evidence showed the mitigation measures for this impact, which required replacing 0.41 acres of scrub at a two-to-one ratio, was adequate. The court refused to second-guess the expert opinions of the City’s biologists.

Lastly, petitioner argued that the EIR failed to disclose the Park Project’s alleged inconsistency with the California Coastal Act. In particular, petitioner argued that the EIR wrongly concluded that the Park Project was consistent with the Coastal Act’s protection of “environmentally sensitive habitat areas” (ESHAs). The court rejected this claim, finding that the EIR accurately disclosed that no area of the project had been designated an ESHA.

On December 10, 2012, the California Second District Court of Appeal, in Central Basin Municipal Water District v. Water Replenishment District of Southern California (2012) __Cal.App.4th__ (Case No. B235039) upheld the Los Angeles County Superior Court’s order sustaining a demurrer to the Central Basin Municipal Water District’s (CBMWD’s) petition for writ of mandate, which alleged that defendant Water Replacement District of Southern California (WRD) improperly failed to conduct CEQA review before declaring a “water emergency” in the Central Basin.

Background

Groundwater management in the Central Basin groundwater basin is governed by a court ordered judgment. The judgment provides a comprehensive framework for water use in the Central Basin and imposes a “physical solution” described as “an equitable remedy designed to alleviate overdrafts and the consequential depletion of water resources in a particular area, consistent with the constitutional mandate to prevent waste and unreasonable water use and to maximize the beneficial use of water, with recognition that it is a limited resource.” (Hillside Memorial Park & Mortuary v. Golden State Water Co. (2011) 205 Cal.App.4th 534, 538, fn. 2.)

The judgment empowers WRD to declare a “water emergency” when the Central Basin resources risk degradation.  Declaring a water emergency alters the portions of a pumper’s allocation of water that the pumper may “carryover” to another year, meaning the entity retains the right to that water longer than it otherwise would. It also permits a longer period to replace a pumper’s over-extraction of groundwater (i.e., an extraction of an amount greater than the pumper’s annual allotment). The judgment imposes a limit of one year on a declared water emergency, though the term may be less than one year. The judgment also reserves continuing jurisdiction to the court.   

In November 2010, WRD declared a water emergency, which by later resolution expired on June 30, 2011. On December 29, 2010, CBMWD challenged the declared water emergency in a petition for writ of mandate, contending that WRD was required to follow CEQA prior to declaring a water emergency. WRD demurred, and the trial court sustained the demurrer, finding that CBMWD could not state a cause of action under CEQA. The trial court court explained that WRD’s declaration was under the authority granted by the judgment and that although WRD was a public agency in most respects, it was acting as an agent of the court in this situation, and was therefore not subject to CEQA. CBMWD appealed.

The Court of Appeal’s Decision

The court of appeal concluded that the trial court properly sustained WRD’s demurrer to CBMWD’s petition for writ of mandate because CEQA does not apply, and even if it did, it would be trumped by the physical solution governing the Central Basin.

The court explained that CEQA is inapplicable to WRD’s declaration of a water emergency for two separate reasons. First, the declaration of a water emergency by itself has no environmental impact and therefore is not a project within the meaning of CEQA. Instead, the court found the declaration is “a mere statement” that the resources of the Central Basin risk declaration. CBMWD argued that other provisions of the Judgment may trigger significant environmental effects, but the court found that this argument is irrelevant because WRD’s only role was to declare the water emergency. Second, WRD had no discretion to alter the terms of the judgment even if it prepared an EIR and determined that the carryover and delayed replacement would have significant environmental effects. Thus, even if the declaration of the water emergency should be viewed together with its consequences, WRD’s decision was a ministerial act, rather than a discretionary approval triggering CEQA review.  

The court then explained that even if CEQA were applicable, it is trumped by the physical solution imposed in the basin. The court explained that where a court-imposed judgment is in place establishing a physical solution to a groundwater issue, the public agency has no judgmental controls to exercise, i.e. the power to act is reserved to the court. Here, the appellate court explained, the trail court properly denied CBMWD’s petition to mandate compliance with CEQA as it sought to “frustrate the physical solution in the Central Basin.” In particular, through its petition for writ of mandate, CBMWD sought to have WRD exercise its authority in contravention of the judgment by requesting WRD study consequences of the carryover and five-year replenishment, which are terms of the judgment establishing a physical solution (and not subject to WRD’s modification).   

The court declined to consider CBMWD’s remaining arguments because they were not properly raised in the appeal. (Laura Harris)

The Fifth District Court of Appeal in Tuolumne Jobs & Small Business Alliance v. Superior Court (2012) 210 Cal.App.4th 1006, has held that a city council’s decision to approve a development project under Elections Code section 9412, subdivision (a), is not a ministerial decision and does not exempt the project from the California Environmental Quality Act (CEQA). Where a lead agency approves a project by adopting the text of a voter initiative as an ordinance instead of holding a special election under Elections Code section 9412, subdivision (b), CEQA review is necessary. The court acknowledged creating a split of authority because it did not follow Native American Sacred Site & Environmental Protection Assn. v. City of San Juan Capistrano (2004) 120 Cal.App.4th 961, and certified the relevant portion of the case for partial publication.

Background

Wal-Mart sought to expand an existing store in Sonora and make it into a Wal-Mart Supercenter. The city prepared an environmental impact report (EIR), but postponed its vote on the EIR when it received notice of an initiative petition seeking to approve the construction and operation of the supercenter. On October 18, 2010, the city council held a public hearing to consider the Wal-Mart initiative. After the public hearing, the city council voted to adopt the text of the initiative as an ordinance even though the EIR had not been certified.

Tuolumne Jobs & Small Business Alliance filed a writ of mandate in trial court alleging a violation of CEQA. The trial court sustained a demurrer filed by Wal-Mart with respect to three of the four causes of action. Petitioner then filed a writ of mandate with the appellate court seeking to vacate the superior court’s order sustaining the demurrer. The Fifth District Court of Appeal stayed the trial court proceedings while it considered the petition.

The Court of Appeal’s Decision

As a preliminary matter, the court discussed the grounds for writ relief and the standard of review for demurrers. Then the court turned to the main question of law before it: whether CEQA review is required when a lead agency approves a project by adopting as an ordinance the text of a voter initiative with signatures of at least 15 percent of the jurisdiction’s registered voters.

First, the court noted that “the prerogatives of the electorate when exercising its right of initiative must not be thwarted by procedural constraints” in CEQA or other state laws. Furthermore, the voters’ power to approve an initiative in an election is protected by the California Constitution and cannot be undermined by state laws without clear legislative intent to preempt that power. The court thus framed its interpretation of the statutory language in Elections Code section 9214 as an exercise in selecting a construction that most closely achieves legislative intent.

Second, the court laid out the legal implications of the holding in Friends of Sierra Madre v. City of Sierra Madre (2001) 25 Cal.4th 165, that CEQA review is required even if an election is held where a public agency was the entity that chose to put the initiative on the ballot. The court quoted CEQA Guidelines section 15378, subdivision (b)(3), which was amended after the  Friends of Sierra Madre decision to establish that submittals of voter initiatives not sponsored by a public agency are not “projects” as defined by CEQA, but CEQA review is required for those initiatives that are sponsored by a public agency. The court used section 15378 and the holding in Friends of Sierra Madre to conclude that CEQA clearly applies when a city council approves a project without an election after a “mere 15 percent of voters” expressed support of the initiative.

The court then dismissed arguments that the voters’ constitutional power of initiative or the ministerial-projects exemption would support finding the project was excused from CEQA review. The court found that the city’s decision not to submit the initiative to the voters was a policy decision and an exercise of agency discretion that deprived the voters of the opportunity to make the final decision.

Finally, the court discussed why it chose not to follow Native American Sacred Site & Environmental Protection Assn. v. City of San Juan Capistrano. The court in Native American Sacred Site had held that an agency’s decision to approve a project via adoption of an initiative without holding an election is ministerial because the city was bound by Elections Code section 9414 to either adopt a qualified voter-sponsored initiative or to place it on the ballot. The Fifth District Court of Appeal disagreed, concluding that an agency’s policy decision between two choices is discretionary, even if the agency has a mandatory duty to make a choice. Moreover, it found a crucial distinction between the situation where a city is being compelled to hold an election because it failed to act on a petition and the situation where the city chooses to adopt the initiative without submitting it to the voters in an election. Therefore, the court held that CEQA review is required where a lead agency chooses to approve a project submitted to it by voter initiative under Elections Code section 9214, subdivision (a).

On November 29, 2012, the Supreme Court of California in Pacific Palisades Bowl Mobile Estates, LLC v. City of Los Angeles, (2012) __ Cal.4th __ (Case No. S187243) affirmed the judgment of the Second District Court of Appeal, finding a mobilehome park conversion is a “subdivision” under the Subdivision Map Act and also a “development” subject to permitting requirements of the Coastal Act.

The controversy in this case arose after the City of Los Angeles (City) rejected an application from Palisades Bowl Mobile Estates, LLC to convert its 170-unit mobilehome park, which is within the coastal zone, from tenant occupancy to resident ownership. The City asserted Palisades Bowl had failed to include applications for a coastal development permit or for Mello Act approvals. Rather than submit these applications, Palisades Bowl filed a petition for writ of mandate and complaint for injunctive and declaratory relief.

At the trial court, Palisades Bowl argued the proposed conversion from tenant occupancy to resident ownership was not subject to the Coastal Act because it was not a “development” as defined by that act. The trial court agreed and also found that Government Code section 66427.5 precluded the City from imposing conditions and requirements mandated by the Coastal and Mello Acts. The court of appeal reversed the trial court’s decision, and the Supreme Court subsequently granted review.

The Supreme Court’s Decision

i.        The Coastal Act

The Supreme Court first addressed whether the Coastal Act requires a permit for mobilehome park ownership conversions. The Coastal Act requires a coastal development permit for “any development” in the coastal zone. Public Resources Code section 30106 defines “development” as a “change in the density or intensity of use of land, including, but not limited to, subdivision pursuant to the Subdivision Map Act.” The Court pointed out that the Subdivision Map Act specifically refers to mobilehome park conversion as a form of subdivision.

Palisades Bowl argued the conversion of the mobilehome park was not a development under the Coastal Act because it would not alter the density or intensity of land use. The Supreme Court disagreed and cited to Public Resources Code section 30106, which lists “subdivision” in a non-exclusive list of projects subject to the Coastal Act. Furthermore, the Court noted that section 30106 addresses changes in the intensity of land uses. Therefore, Palisades Bowl’s assumption that the Coastal Act only applied to projects increasing density or intensity of use was mistaken.

The Supreme Court held that all subdivisions, even conversions of mobilehome parks that do not immediately alter use of land, are “developments” for the purposes of the Coastal Act. The Court also concluded that a broad interpretation of “development” as used in the Coastal Act is consistent with what the Legislature intended.

ii.      The Mello Act

The Supreme Court next considered whether the requirements of the housing elements law, Government Code sections 65580-65589.8, applies to conversions of residential units within the coastal zone. Under these Government Code sections, local governments are required to adopt a “housing element” as part of their general plans. The housing element must identify and analyze existing and projected housing needs, among numerous other requirements. The Mello Act supplements the housing element requirements by establishing “minimum requirements for housing within the coastal zone for persons and families of low or moderate income.” Specifically, local governments are prohibited from authorizing the conversion or demolition of occupied low or moderate income residential units without making provisions for the replacement of those units.

The Supreme Court held the Mello Act expressly applies to “most conversions” of residential units in the coastal zone, including the conversion of the ownership structure of a mobilehome park.

iii.    The Subdivision Map Act

Lastly, the Supreme Court considered Palisades Bowl’s argument that Government Code section 66427.5 of the Subdivision Map Act exempts mobilehome park conversions from other state laws, regulations, or policies. Palisades Bowl argued that this section prohibits local governmental entities from enforcing compliance with any state law requirements other than those imposed by section 66427.5.

Government Code section 66427.5 imposes several requirements on subdividers and seeks to prevent the economic displacement of all nonpurchasing residents during the conversion of a rental mobilehome park to resident ownership. Part of the procedure required by section 66527.5 involves a hearing before the relevant decision-making body which is limited in scope to the issue of compliance with section 66427.5. Palisades Bowl argued that by limiting the scope of the required hearing, the Legislature intended to define the full extent of local government’s obligation and power to review an application for an ownership conversion of a mobilehome park. By this reasoning, the City lacked authority to reject Palisades Bowl’s application for failure to comply with the Coastal and Mello Acts.

The Supreme Court disagreed with Palisades Bowl, holding Government Code section 66427.5 does not exempt conversions of mobilehome parks to resident ownership from compliance with the Coastal Act and Mello Act. The Supreme Court construed the hearing requirement of section 66427.5 to allow local agencies to establish procedures and conduct additional hearings required by other state laws, including the Coastal and Mello Acts.

 

 

On November 27, 2012, the Sixth District Court of Appeal in Habitat and Watershed Caretakers v. City of Santa Cruz (2012) __Cal.App.4th __ (Case No. H037545) reversed a trial court’s judgment and directed the City of Santa Cruz to vacate certification of a final EIR for a project to amend the city’s sphere of influence. 

In 2006, the Regents of the University of California (the Regents) adopted a 2005 Long Range Development Plan (LRDP) for the University of California, Santa Cruz (UCSC). The LRDP contemplated the development of the north campus, which was not within the City of Santa Cruz’s (City) territorial boundaries or sphere of influence. The City and other parties brought a CEQA action against the Regents challenging their certification of an EIR for the LRDP, but the parties to the litigation entered into a comprehensive settlement agreement in August 2008.

In October 2008, the City applied to the Local Area Formation Commission (LAFCO) for a sphere of influence (SOI) amendment to include within the SOI the undeveloped north campus portion of UCSC. At the same time, the Regents applied for provision of extraterritorial water and sewer services. The City prepared an EIR for the project of amending its SOI while the applications were pending before LAFCO.

In August 2010, the City certified the final EIR and Habitat filed a petition challenging the certification. The trial court denied the petition, and Habitat appealed.

Assessment of Impacts

i.     Water Supply

The appellate court first turned to the issue of water supply and noted that the draft EIR extensively described the City’s water supply situation. The City had previously considered various strategies for addressing water supply, including conservation, curtailment of use during shortage, and construction of a desalination facility. Ultimately, the draft EIR determined that the City had sufficient supply to serve the project in normal years but would have a water supply shortfall during dry years regardless of growth rate and even without the project’s increased water demand.

Habitat claimed the draft EIR failed to demonstrate that the water required for the development of north campus was available and failed to discuss the environmental consequences of proceeding with the project without adequate water supplies. Citing Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova (2007) 40 Cal.4th 412, the court established that an EIR is not required to establish a likely source of water and instead may address reasonably foreseeable impacts of supplying water to the project, acknowledge the degree of uncertainty involved, discuss reasonably foreseeable alternatives, and disclose significant foreseeable environmental effects of each alternative, as well as mitigation measures to minimize each adverse impact. The draft EIR disclosed and discussed these issues, therefore the court found the EIR’s discussion of water supply was adequate.

ii.   Watershed Resources

Habitat asserted that the draft EIR failed to discuss the impact of development of the north campus on erosion in the Cave Gulch watershed. In particular, Habitat argued the final EIR’s reference to a storm water management plan was improper because the plan itself was not included in the final EIR. The appellate court disagreed, noting the draft EIR discussed, described, referenced, and incorporated analysis and mitigation measures discussed in the LRDP EIR. In addition, the final EIR described and referenced relevant portions of the storm water management plan. The court found this approach was proper and did not deprive decision makers of necessary information.

Habitat also argued the draft EIR was inadequate because the City failed to delineate wetlands. The draft EIR explained that the LRDP EIR’s mitigation measures required predevelopment delineation of wetlands. The draft EIR concluded that delineation was not initially required because wetland resources are dynamic and their precise boundaries are likely to change over the 15-year term of the 2005 LRDP. Since the EIR recognized the existence of wetlands and contained protective mitigation measures, the court found wetland delineation was appropriately deferred to project-level environmental review for future individual projects in the north campus.

iii.  Biological Resources

Habitat also argued the EIR was inadequate because the City did not perform necessary studies and analysis to show that future changes in the City’s water supply would not significantly harm biological resources. The appellate court determined this argument failed because the City did not propose to increase its water supply by drawing more water from its existing sources in order to meet water demand from North Campus. Instead, the City proposed to meet the campus needs through conservation, curtailment and possible construction of a desalination facility. The court found the EIR did not need to analyze impacts from the City’s current water usage from existing sources because they are not impacts of the project and would occur even without the project.

Description of the Project and its Objectives

Habitat argued that the draft EIR’s description of the project’s primary objective were incorrect because the draft EIR stated the comprehensive settlement agreement required the City to provide water and sewer services to the north campus when the agreement actually required the City only to initiate a LAFCO application for an amended SOI.

The appellate court first noted the comprehensive settlement agreement did not leave the City with any discretion because it obligated the City to provide water service if LAFCO approved the City’s SOI application and the Regents’ application. Thus, the court found the purpose of the final EIR was to provide LAFCO with information about the environmental consequences of their decision.

Finally, the court agreed with Habitat, finding the statements of the project’s objectives in the EIR failed to describe the purpose of the project and only described the nature of the project. Given the misstated project objectives, the court next considered whether these misstatements skewed the consideration of alternatives and mitigations.

Range of Alternatives

Habitat argued the EIR’s discussion of alternatives was inadequate because it failed to consider any alternatives that would avoid some of the significant environmental impacts of the project. Habitat argued analysis of a reduced-development alternative or a limited-water alternative was required. The court agreed, holding that consideration of the proposed alternatives could not be eliminated solely because they would “impede to some extent the attainment of the project’s true objectives.” Because the EIR failed to discuss any feasible alternative, the court determined it did not comply with CEQA.

Mitigations

Finally, Habitat argued that the EIR failed to provide specific, certain, and enforceable mitigation measures for the Project’s significant and unavoidable impacts on water supply. The appellate court disagreed. The draft EIR incorporated numerous mitigation measures from the LRDP EIR. In addition, the comprehensive settlement agreement required the Regents to implement a group of high priority conservation measures which the appellate court determined were specific and certain. The court found it sufficient that these mitigation measures addressed the impacts of the project on the City’s water supply; it rejected Habitat’s argument that the mitigation measures were required to address the City’s overall water supply shortfall. [RMM Counsel of Record: James G. Moose, Sabrina V. Teller, Jeannie Lee]