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In May v. City of Milpitas, 2013 Cal. App. LEXIS 557, the Court of Appeal for the Sixth Appellate District held that a 30-day statute of limitations in Government Code section 65457 barred a CEQA challenge for which a Notice of Exemption (“NOE”) had been filed. NOE’s typically trigger a 35-day statute of limitations; however, the court held the newer and more specific Government Code section trumped the longer statute of limitations. The lawsuit would have been timely if CEQA’s 35-day time-period had applied. The Court relied in part on language in CEQA strongly promoting finality and expeditious resolution of CEQA challenges. This case is yet another reminder that CEQA’s short statutes of limitations are inflexible and courts are unforgiving in their enforcement.

In 2008, the City of Milpitas (“City”) certified a program environmental impact report (“EIR”) for its transit area specific plan (“Plan”). On November 1st, 2011, the City adopted a resolution approving amendments to the developer’s entitlements to allow a residential condominium development within the Plan area. The Resolution stated that the project was consistent with the Plan and that no additional environmental review was required. On November 3rd, 2011, the City filed an NOE for the project, citing CEQA Guidelines sections 15168(c)(2) (based on project’s consistency with Plan EIR) and 15061(b)(3) (no possibility the project could have a significant effect on the environment). The filing of an NOE typically starts a 35-day statute of limitations to challenge the lead agency’s determination that the project is exempt from CEQA.

On December 7th, 2011, petitioners filed a petition for writ of mandate to invalidate the project approvals on the basis that the City’s CEQA exemption determination was improper and that an EIR is required. The City demurred, arguing the suit was time-barred by Government Code section 65457 because it had not been filed within 30-days of the November 1st project approval. Appellants responded that their suit was timely because the exemptions the City had relied on in its NOE were subject to a 35-day limitations period. The trial court sustained the City’s demurrer, dismissing the action without leave to amend. The Court of Appeal affirmed.

Government Code section 65457 provides that residential projects consistent with a specific plan for which an EIR has been certified are exempt from CEQA as long as none of the events set forth in Public Resources Code (“PRC”) section 21166 occur. The triggering events under PRC section 21166 include substantial changes in the project or the circumstances surrounding the project, or significant new information. When the City found the project exempt under Guidelines section 15168(c)(2), it implicitly found that none of the events requiring additional environmental review under section 21166 had occurred. The City, therefore, made the findings necessary to exempt the project under Government Code section 65457 despite the fact that the City did not cite Government Code section 65457 in the project approval resolution or the NOE. Government Code section 65457 specifies that lawsuits challenging projects exempt under that section must be filed within 30-days of project approval. The clock starts on the 30-day statute of limitations automatically upon approval of a project exempt under Government Code section 65457; there is no requirement to file a notice of exemption.

The appellants’ argued that one or more of the triggering events in section 21166 had actually taken place, rendering the exemption non-applicable. The court explained that that contention related to the merits of appellants’ suit, which was irrelevant for purposes of a statute of limitations analysis. Even though the City had not explicitly invoked the exemption in its NOE, the project qualified for the exemption based on the City’s findings.

Lastly, the court held that appellants could not rely on equitable estoppel to preclude respondents from invoking the statute of limitations because any detrimental reliance on appellants’ part was unreasonable. The filing of the NOE had no bearing on whether the shorter statute of limitations in Government Code section 65457 applied.

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