Up One Day, Down the Next—California Air Resources Board Receives Mixed Reviews in its Implementation of its Cap-and-Trade Program and Low Carbon Fuel Standard

Petroleum PollutionIn recent weeks, California appellate courts issued two decisions regarding California Air Resources Board (CARB) programs implemented under AB32, the Global Warming Solutions Act, with mixed results.  The first decision upheld the legality of a key element of CARB’s cap-and-trade program, the auction of emission credits.  In that case, the Third Appellate District rejected an industry challenge and found that the auctions are within the authority granted to CARB by AB32 and are not an illegal tax. In the second case, the Fifth Appellate District delivered a setback—the second in that court—for CARB’s Low Carbon Fuel Standard (LCFS), finding the agency failed under the California Environmental Quality Act (CEQA) to adequately analyze the potential effects of NOx emissions resulting from the increased use of biofuels mandated by the LCFS.  CARB was first ordered by the court to correct this CEQA violation in a 2013 writ of mandate, but the agency failed to do so in its 2015 re-adoption of the LCFS.  The court, noting the environmental benefits of this program, however, did not invalidate the LCFS and only froze the required standards at 2017 levels until CARB corrects the CEQA deficiencies.  These decisions do little to clarify the muddy waters around how agencies should analyze greenhouse gas emissions under CEQA, as that analysis is inextricably intertwined with the effectiveness of the State’s greenhouse gas regulatory programs. Continue Reading

Third District Finds that EIR for Residential Development Inadequately Assessed Traffic Impacts

East sacramentoCities charged with preparing EIRs for proposed projects often look to their general plans and other adopted policies to set thresholds of significance for assessing environmental impacts. A lead agency’s discretion to select a particular significance threshold has long been afforded deference under CEQA’s “substantial evidence” standard of review. Potential impacts assessed under a general plan-based significance threshold have similarly enjoyed deferential review under the substantial evidence standard. However, in East Sacramento Partnerships for a Livable City v. City of Sacramento (2016) 5 Cal.App.5th 281, as modified on denial of rehearing, the Third Appellate District appears to have relied on the less deferential “fair argument” standard in holding that compliance with a general plan policy does not conclusively establish there is no significant environmental impact. In so holding, the court found that the City of Sacramento (“the City”) failed to adequately address the traffic impacts related to a development project.

Following publication of the East Sacramento decision, requests for depublication were filed with the California Supreme Court. Although the Supreme Court denied those requests, the weight of appellate authority still strongly favors application of the substantial evidence standard of review in this context. For this reason, the East Sacramento description of the governing legal standards is an outlier of little precedential value to the extent it is cited for the proposition that fair argument review may be applied to an EIR.

The underlying project involved a 328-unit residential development (“Project”) on an approximately 49-acre infill site located in the City of Sacramento. The City certified an EIR which found that all project-specific and cumulative impacts could be mitigated to a less than significant level. A neighborhood group, East Sacramento Partnership for a Livable City (“ESPLC”), filed a petition for writ of mandate challenging the development and alleging a number of CEQA violations. The trial court denied the petition in its entirety. On appeal, ESPLC raised five alleged CEQA violations, of which the Court of Appeal found merit in only one: that the City’s use of a general plan policy as a threshold of significance resulted in an inadequate analysis of the Project’s traffic impacts.

The general plan policy at issue—Mobility Element Policy M 1.2.2—allows for flexible Level of Service (“LOS”) standards depending on geographic area. It allows LOS F conditions (i.e., congested, “stop and go” traffic) in the “core area” during peak hours, but generally requires that LOS E (roadway at traffic capacity) be maintained in multi-modal districts and LOS D (roadway approaching capacity) be maintained in all other areas. Using this policy as a significance threshold, the EIR found no significant traffic impacts in the core area, even though several intersections in that area would operate at LOS F (under cumulative plus project conditions), and similar changes to LOS conditions outside the downtown-midtown area were deemed to be significant impacts that required mitigation.

The Third District found fault in the City’s reliance on this significance threshold and held the EIR’s traffic impacts analysis to be deficient on that basis. Specifically, the court held that compliance with a general plan policy does not, by itself, “insulate a project from the EIR requirement, where it may be fairly argued that the project will generate significant environmental effects.” In reaching this conclusion, the Third District’s analysis muddled the distinction between the ‘substantial evidence’ and ‘fair argument’ standards of review.

In the opinion, the court initially set forth the proper standard of review in the EIR context: whether the lead agency’s decision is supported by substantial evidence, with reasonable doubts resolved in favor of the agency. But the court then reviewed the City’s significance threshold for the traffic impact analysis under a line of appellate decisions that apply the “fair argument” standard to a lead agency’s initial determination regarding whether to prepare an EIR. Namely, under the fair argument standard, a project requires preparation of an EIR, rather than a mitigated negative declaration, whenever it can be fairly argued on the basis of substantial evidence that the project may have significant environmental impacts. However, a long line of CEQA cases articulates that the fair argument standard does not apply after the lead agency has elected to prepare an EIR.

Here, the Third District may actually have applied the substantial evidence standard of review, or determined that the standard of review did not make a difference to the result. Regardless, the opinion as drafted, even after the court modified it upon denial of rehearing, is difficult to parse and ultimately blurs the distinction between substantial evidence review and fair argument review, which is otherwise very clear in the corpus of CEQA case law.

Limitations on Subsequent Review Under CEQA

SF MuniSince the California Supreme Court’s 2016 ruling in Friends of the College of San Mateo Gardens v. San Mateo County Community College District, California appeals courts have issued a spate of decisions addressing subsequent review under the California Environmental Quality Act (“CEQA”), including two in the last two months of 2016.  In both cases, the appeals court upheld the agency’s decision not to undertake further environmental review. Continue Reading

Banning Ranch Conservancy v. City of Newport Beach

Photo by Mark Rightmire, Orange County Register/SCNG)

Photo by Mark Rightmire, Orange County Register/SCNG)

On March 30, 2017, in the first of at least three CEQA rulings expected this year, the California Supreme Court issued its long-awaited decision in Banning Ranch Conservancy v. City of Newport Beach.  In a unanimous opinion authored by Justice Carol Corrigan, the Court invalidated an EIR for the coastal development at Banning Ranch approved by the City of Newport Beach.  Despite the fact that the EIR addressed in detail the project’s physical impacts on wetlands and sensitive habitats, the Court nevertheless held that it failed to adequately disclose and consider the controversy surrounding the potential presence of Environmentally Sensitive Habitat Areas (“ESHA”) under the Coastal Act.  This decision falls within a growing line of cases mandating inclusion of non-CEQA regulatory requirements within the confines of the CEQA environmental review process, and in a manner that places ever greater burdens on lead agencies and EIR preparers. Continue Reading

Second District Denies Mandatory Relief from Adverse Judgment to Plaintiff Whose Counsel Failed to Timely Lodge Administrative Record

LED Street LightOn April 13, the Second Appellate District disapproved two of its prior decisions that had expansively interpreted the availability of mandatory relief from default or dismissal under Code of Civil Procedure section 473(b). In The Urban Wildlands Group, Inc. v. City of Los Angeles, the court held that this mandatory relief provision did not apply to an adverse judgment at a CEQA merits hearing, resulting from plaintiff’s failure to lodge the administrative record with the court prior to the hearing.

The underlying mandate petition and complaint alleged a single cause of action challenging the City’s finding that a streetlight replacement project using LED lights was exempt from environmental review under CEQA. The parties stipulated that plaintiff would prepare the administrative record and, following certification by the City, lodge it with the trial court. However, plaintiff never lodged the certified record. At the hearing on the merits, the trial court determined that plaintiff could not present sufficient evidence to support its arguments because it failed to lodge the record. Accordingly, the trial court denied the plaintiff’s petition and complaint and entered judgment in favor of the City. Continue Reading

Fourth Appellate District Upholds EIR for 200-Acre Specific Plan Development in Riverside County

French Valley in Riverside CountyIn its February 14 decision (certified for publication on March 15) in Residents Against Specific Plan 380 v. County of Riverside, the Fourth Appellate District upheld the County of Riverside’s (“County’s”) approval of a master-planned community.  The opinion provides helpful guidance for lead agencies and applicants in understanding when changes made to a project in direct response to public comments after publication of a Final EIR do not necessitate recirculation.  The decision also reaffirms that where defects in a notice are not prejudicial, unwinding of the approval is not required.

The case involves a proposed 200-acre development in the French Valley region of Riverside County, containing a mixture of residential, mixed use, commercial, and open space uses (“Project”).  The Project, which was proposed by the Hanna Marital Trust (“Trust”), required approval of a specific plan (known as Specific Plan 380), a general plan amendment, and a zoning change. Continue Reading

Downey Brand Partners to Speak at AEP 2017 State Conference in San Francisco

3-14-2017 1-13-38 PM_editI am pleased to announce that both Christian Marsh and I will be participating in panel discussions at the Association of Environmental Professionals’ 2017 State Conference, entitled “Bridging the Gap” and taking place in San Francisco from May 18 through May 21 (view schedule of events).  As stated by AEP, “the conference seeks to ‘bridge the gap’ between CEQA practitioners and the technical experts they rely on, between CEQA and planning, and among other related local, regional, statewide, and national environmental issues.” Continue Reading

CEQA Implications of California Supreme Court Decision Finding Public Officials’ and Employees’ Personal Accounts Do Not Escape Reach of Public Records Act

On March 2, 2017, the California Supreme Court ruled in City of San Jose v. Superior Court that where a public employee uses a personal email account or texts to communicate about the conduct of public business, those writings may be subject to disclosure under the California Public Records Act (“PRA”). While resolving one long-debated question in California law, this decision also raised myriad new issues, including issues that are specifically relevant to litigation under the California Environmental Quality Act (“CEQA”). Continue Reading

California Supreme Court Grants Review in Medical Marijuana CEQA Case

Medical MarijuanaOn January 11, the California Supreme Court granted review of the Fourth Appellate District’s decision in Union of Medical Marijuana Patients, Inc. v. City of San Diego (2016) 4 Cal.App.5th 103.  The two issues to be decided by the Court are as follows:

  • Is the enactment of a zoning ordinance categorically a “project” within the meaning of CEQA?
  • Is the enactment of a zoning ordinance allowing the operation of medical marijuana cooperatives in certain areas the type of activity that may cause a reasonably foreseeable indirect physical change to the environment?

Continue Reading

Ninth Circuit Upholds Final EIS for Tahoe Area Regional Plan Update

Lake Tahoe WaterIn Sierra Club v. Tahoe Regional Planning Agency, the Ninth Circuit affirmed the district court’s summary judgment in favor of the Tahoe Regional Planning Agency (“TRPA”), finding that the TRPA’s final Environmental Impact Statement (“EIS”) for the agency’s Regional Plan Update (“RPU”) sufficiently addressed localized impacts on soil erosion and water quality. The 2012 RPU, among other things, restricted future development to areas that are already developed, and limited the extent of development in those areas. Plaintiffs, Sierra Club and Friends of the West Shore, challenged the RPU’s EIS, principally arguing that the RPU failed to adequately address the localized effects of the runoff created by the plan’s permitted development, and that the RPU improperly assumed that Best Management Practices (“BMPs”) would reduce water quality impacts of concentrated development. Continue Reading

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