On May 25, 2017, the First Appellate District published a modified version of its unpublished March 23, 2017 opinion, holding that the Mendocino County Air Quality Management District’s (“MCAQMD”) issuance of an “Authority to Construct” (“ATC”) for an asphalt production plant could be challenged under CEQA. In Friends of Outlet Creek v. Mendocino County Air Quality Management District, the trial court had sustained a demurrer by the MCAQMD and the applicant on the grounds that petitioner could only challenge the ATC approval in a proceeding under Health and Safety Code section 40864. The First Appellate District reversed, finding ample legal authority for administrative mandate proceedings under CEQA to challenge issuance of permits by air quality management districts.
At issue in Friends of Outlet Creek, as well as a companion case still pending before the First Appellate District, is an application to restart asphalt production at an existing facility located in the County of Mendocino (“County”). In March 2015, the County Board of Supervisors approved the application and issued a Notice of Exemption under CEQA for that approval. The applicant subsequently applied for an ATC from the MCAQMD. In June 2015, the MCAQMD issued the ATC, finding that the proposed operation would not result in a significant net increase in air contaminants regulated under the Clean Air Act, and that an EIR was not required because the County had already complied with CEQA.
Friends filed two lawsuits: one attacking the County’s approval, and one (after losing an administrative appeal) against the MCAQMD. In the case against the MCAQMD—which resulted in this opinion—petitioner alleged that the MCAQMD (1) failed to comply with CEQA by not conducting its own environmental review, and (2) failed to follow its own regulations, which require it to certify that it reviewed and considered a lead agency’s separate EIR or negative declaration when it approves a project without conducting its own CEQA review. The MCAQMD and the applicant demurred to both causes of action, arguing that petitioner could only challenge the ATC approval in a proceeding under Health and Safety Code section 40864. The trial court agreed and sustained the demurrer with leave to amend. However, rather than filing an amended complaint, Friends appealed the trial court’s decision.
The First District reversed, finding “considerable precedent” that air quality management districts could be sued for failing to comply with CEQA, both with respect to adoption of rules and regulations (which are quasi-legislative actions that may be the subject of an ordinary mandate action under Code of Civil Procedure (“CCP”) section 1085) and individual permit decisions, such as the ATC at issue here (which are quasi-adjudicative actions subject to challenge in an administrative mandate proceeding under CCP section 1094.5).
The appellate court explained, however, that the scope of the action against the MCAQMD was limited to invalidating the ATC, and petitioner could not (as it had suggested to the court) use this lawsuit to challenge any of the County’s actions or approvals, including the substance of any of the County’s prior CEQA reviews.
The appellate court also rejected two other grounds offered by the applicant for affirming the trial court’s ruling. First, the court rejected the argument that the MCAQMD’s issuance of the ATC was a ministerial action not subject to CEQA. Given that the MCAQMD did not appear to treat approval of the ATC as a ministerial act, and in light of the “paucity” of the record before it, the court concluded it could not evaluate whether the MCAQMD’s actions amounted to ministerial acts. Second, the court rejected appellant’s argument that petitioner failed to exhaust its administrative remedies, as that argument focused only on exhaustion of remedies related to the County’s decisions, which were not at issue in this case against MCAQMD.
It remains to be seen how this case will unfold on remand, and how the companion case challenging the County’s actions will influence the ultimate result for the parties. As of September 2016, the appeal in the companion case (A147499)—which is pending before a different division of the First District—was fully briefed, and oral argument had been waived.