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In Tomlinson v. County of Alameda (Case No. S188161), the Supreme Court of California held that the exhaustion of administrative remedies provision as set forth in Public Resources Code section 21177, subdivision (e), applies to a public agency’s decision that a project is categorically exempt from CEQA. The Court’s eleven page decision put to rest the notion that a project opponent need not object to a categorical exemption during the administrative proceedings prior to filing a lawsuit to challenge the exemption.

Public Resources Code Section 21177, subdivision (a), provides that a CEQA challenge may be brought only if the petitioner’s alleged grounds for noncompliance with CEQA were presented to the public agency either during the public comment period or prior to the close of the public hearing on the project before the issuance of the notice of determination (NOD). Section 21177, subdivision (e), states that CEQA’s exhaustion requirement does not apply to CEQA challenges where there was no public hearing or other opportunity for members of the public to raise their objections to a proposed action prior to approval of a proposed project. In other words, the exhaustion requirement requires either a public comment period or an opportunity for public comment at public hearings before issuance of a NOD.

The Court’s holding is a significant victory for public agencies because it overturns the Court of Appeal’s decision (188 Cal.App.4th 1406) that Section 21177’s exhaustion requirement does not apply to a public agency’s decision that a project is categorically exempt from CEQA. The Court of Appeal’s decision relied heavily on Azusa Land Reclamation Co. v. Main San Gabriel Basin Watermaster (1997) 52 Cal.App.4th 1165, which held that section 21177’s public comment provision is inapplicable when a public agency determines a project is categorically exempt from CEQA because CEQA does not provide for a public comment period preceding an agency’s exemption determination. The Supreme Court disagreed, noting that in Azusa, the public agency did not hold any public hearings prior to determining the proposed project was exempt from CEQA; in contrast, the public agency did hold public hearings in Tomlinson and thereby provided petitioners the opportunity to object to the project prior to the agency’s determination that the project was exempt under CEQA’s categorical infill exemption (CEQA Guidelines section 15332).

The Supreme Court also disagreed with the Court of Appeal’s conclusion that the public hearing provision in section 21177, subdivision (a), does not apply when no NOD is filed. The Court found instead that where a NOD is filed, the public hearing provision requires a challenging party to raise its objections to the project at a public hearing before the NOD is filed. But if no NOD is filed, the public hearing provision nonetheless applies. In other words, where a party is given the opportunity to raise its objections at a public hearing before project approval, the challenging party is required to exhaust its administrative remedies by presenting its objections at the hearing. When a party fails to raise its objection, it is precluded from later raising that objection in court. An agency’s failure to file a NOD does not negate the exhaustion requirement; rather, as the Supreme Court explained: “what matters is the opportunity for comment at … public hearings, not the filing of a notice of determination.”

In light of the Court’s conclusion that the exhaustion doctrine applies to categorical exemptions, it declined to comment on petitioners’ remaining arguments that their objections at the public hearing were in fact sufficient to satisfy the exhaustion requirement and that the lead agency had misled them. The Court remanded the case to the Court of Appeal to consider what constitutes exhaustion.

Key Point:

Under the Court of Appeal’s ruling, a petitioner could refrain from objecting to an agency’s decision to approve a categorical exemption and later file a lawsuit challenging the exemption — a result that, at least according to some practitioners, undermined the very function of the exhaustion doctrine as a jurisdictional prerequisite to the courts. The Supreme Court ruling restores the exhaustion requirement for petitioners seeking to challenge a categorical exemption where the agency holds a public hearing and provides assurances to lead agencies that any parties opposed to CEQA exemptions must first exhaust their administrative remedies before filing a lawsuit.

Written By: Tina Thomas and Ashle Crocker
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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