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In Tomlinson v. County of Alameda (2010) 188 Cal.App.4th 1406, the petitioners challenged the County’s determination that the infill exemption set forth in the CEQA Guidelines (Section 15332) applied to a development project located within the County and not within a city. The County argued the petitioners failed to exhaust their administrative remedies on this issue. On appeal, the First Appellate District declined to determine whether the petitioners’ participation in the administrative process was adequate to exhaust administrative remedies because, relying on Azusa Land Reclamation Co. v. Main San Gabriel Basin Watermaster (1997) 52 Cal.App.4th 1165, the court held that Public Resources Code section 21177 does not apply to categorical exemption determinations.

The California Supreme Court granted review of Tomlinson to address whether Public Resources Code section 21177 requires a petitioner to exhaust administrative remedies before filing an action challenging a public agency’s determination that a project is categorically exempt from CEQA. The hearing was held on April 4, 2012, at approximately 10:30 A.M. At the hearing, Remy Moose Manley, LLP represented the petitioners. Real Parties in Interest shared their allotted time for oral argument with amicus curiae League of California Cities. Real Parties in Interest were represented by Abdalah Law Offices and amicus curiae League of California Cities was represented by Cox Castle & Nicholson LLP.

During oral argument, Real Parties in Interest and the League of California Cities took the position that a party has no duty to exhaust administrative remedies on a categorical exemption if the lead agency does not hold a publicly noticed hearing. But, Real Parties in Interest and the League of California Cities, explained that if an agency has a hearing on a categorical exemption and the notice issued for the hearing identifies the applicable exemption, then a petitioner has the burden to raise specific issues challenging the use of the exemption during the administrative process. Petitioners did not disagree with these conclusions. Petitioners, however, argued that the notice issued by the County did not adequately describe the infill exemption and that, even if it had, Petitioners adequately exhausted on the issue.

Petitioners’ stance appeared to surprise the Court. Justice Marvin Baxter asked Petitioners if an exhaustion requirement can apply to categorical exemptions. Petitioners responded in the affirmative. Justices Goodwin Liu, Joyce L. Kennard, and Carol Corrigan peppered Petitioners with a series of additional questions in an effort to understand whether Petitioners believed the appellate court’s holding was rightly or wrongly decided. Petitioners did not take a firm position on the merits of the Court of Appeals’ holding. Petitioners stated that the Court of Appeals reached its decision based on a strict reading of Public Resources Code section 21177.

Turning to the facts in the case, Justice Liu was particularly critical of the adequacy of the notice issued by the County because the notice failed to disclose that the infill exemption only applied to cities. Justice Liu asked both the Real Parties in Interest and the League of California Cities why a petitioner, unrepresented by counsel during the administrative process, should be required to expressly cite the “within city limits” language when the County failed itself to reference it in the public notices or during the project hearings. Justice Kennard, however, pointed out that during the administrative process petitioners cited to other portions of the regulatory language set forth in CEQA Guidelines section 15332. Therefore, Justice Kennard questioned whether this was evidence that petitioners had received sufficient notice to be able to review the exemption and to raise a clearly articulated challenge based on the “within city limits” requirement.

Several of the Justices appeared to be sympathetic to the argument that petitioners either satisfied the exhaustion requirement or were not required to do so under the circumstances in this case. Justices Tani Gorre Cantil-Sakauye, Carol Corrigan, and Liu returned frequently to the issue of fairness. Justice Marvin Baxter rhetorically asked why no one was discussing fairness to the project applicant. Justice Baxter also stated his opinion that the discussion of fairness exceeded the scope of the question before the Court. The question he explained was whether, as a matter of law, the exhaustion doctrine applies to categorical exemption decisions under CEQA.

As to the question of law before the Court, Justice Kennard asked whether the Court would need to overturn the Azusa decision to reverse the Court of Appeals’ decision in this case. Justice Kennard stated that it could be argued that Azusa is distinguishable because the facts in that case suggest that no hearings were held. Here, all parties admit the County held at least three hearings on the project.

The Court will issue a written opinion within 90 days of the April 4, 2012, oral argument.

Written By: Tina Thomas and Chris Butcher
For questions relating to this blog post or any other California land use, environmental and/or planning issues contact Thomas Law Group at (916) 287-9292.

The information presented in this article should not be construed to be formal legal advice by Thomas Law Group, nor the formation of a lawyer/client relationship. Readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

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