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In Los Angeles Dept. of Water & Power v. County of Inyo (2021) 67 Cal.App.5th 1018, the Fifth District considered a challenge to a decision by Inyo County (County) to acquire landfill sites owned by the Los Angeles Department of Water and Power (LADWP) through eminent domain. In the published portion of the opinion, the Court upheld the writ issued by the trial court and held that (1) the County’s failure to give notice of its intent to use a CEQA exemption excused the LADWP from exhausting administrative remedies as to exemption claims, and (2) the existing facilities categorical exemption did not apply to the operations of the unlined landfills.

In the unpublished portions of the opinion, which are not addressed further in this summary, the Court found that the County adopted an inappropriately narrow project description, and that by relying on this improper description, it erroneously concluded that the commonsense exemption applied. The Court also declined to reach the question of whether the unusual circumstance exception prevented use of the existing facilities exemption since it had ruled the project was not eligible for the exemption.

Since the mid-20th century, the County has operated three landfills within its borders on sites owned by LADWP. While LADWP owns the land, the County operates the landfills to serve its own needs, and those of its residents.

In 2016, the County began negotiations with LADWP for renewal of the lease at one of the landfill sites. However, LADWP requested a fourfold increase in rent and a clause allowing LADWP to terminate the lease for any reason upon 180 days’ notice. According to County staff, LADWP’s negotiation demands called into question the County’s ability to ensure long-term waste management services. County staff also described various hardships created by the lessee-lessor relationship. The County sought to purchase the sites from LADWP, but its offers were not accepted. As a result, the County sought to acquire the sites through eminent domain, and sent LADWP a notice of its intention to do so in 2017 (the Project).

LADWP objected in writing to the condemnation on various grounds, and claimed that CEQA review of the Project was required. LADWP reiterated these objections at a public hearing before the Board of Supervisors. Just before close of the public portion of the hearing, a County staff member stated that the County believed the Project was exempt from CEQA under the existing facilities categorical exemption and the commonsense exemption. This was apparently the first time the County disclosed it might rely on CEQA exemptions. The Board then approved the resolutions of necessity authorizing condemnation.

LADWP filed a petition alleging violations of CEQA by the County. The trial court granted the petition, and the County appealed.

Exhaustion of Administrative Remedies

The threshold issue on appeal was whether some of the alleged CEQA violations were barred from consideration by LADWP’s failure to exhaust administrative remedies. The Court noted that, while CEQA requires that alleged grounds of noncompliance be presented to the public agency in order to subsequently be raised in court, a party is excused from exhausting administrative remedies if the agency does not provide an opportunity for members of the public to raise objections. In Tomlinson v. County of Alameda (2012) 54 Cal.4th 281 (Tomlinson), the Supreme Court held that this provision requires exhaustion in order to challenge an agency’s use of an exemption, “as long as the public agency gives notice of the ground for its exemption determination.” The Court here interpreted “gives notice” to mean the agency must give adequate notice.

Here, the County held a public hearing to consider the Project, but did not disclose its intent to use CEQA exemptions prior to the meeting. Thus, the Court agreed with LADWP that this failure to provide notice of its grounds for CEQA compliance rendered its notice inadequate for purposes of exhaustion of administrative remedies. Further, the County’s disclosure at the end of the hearing did not constitute adequate notice. As such, the Court held that LADWP was excused from exhaustion of administrative remedies with respect to its exemption claims due to the lack of adequate public notice.

Existing Facilities Exemption

The County relied in part on the categorical exemption for existing facilities, which covers the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing structures or facilities involving negligible or no expansion of the existing or former use. (CEQA Guidelines, § 15301.)

The parties offered different interpretations of the term “facilities” as used in the exemption. LADWP argued that the exemption could not apply to the operations of an unlined landfill, relying on Azusa Land Reclamation Co. v. Main San Gabriel Basin Watermaster (1997) 52 Cal.App.4th 1165 (Azusa), which had held that the exemption should not be construed to include a large, municipal waste landfill. The County argued that Azusa was distinguishable on the facts.

The Court first considered whether the term “facilities” is ambiguous. The Court reasoned that one way to interpret the scope of categorical exemptions “is to start with the idea that classes tend to be mutually exclusive and, therefore, if an activity is covered by one exemption it probably falls outside the coverage of the other exemptions.” The Court then evaluated whether operation of a landfill, or a portion of the operation, was more properly described as operation of a facility or as a minor alteration in the condition of land under the Class 4 categorical exemption (CEQA Guidelines, § 15304). Given examples cited in the Class 4 exemption, the Court found it more accurate to characterize landfill operations as an “alteration[] in the condition of land,” rather than “exclusively as the operation of a facility or facilities.” As such, it found the term “facilities” to be ambiguous with respect to its application to landfills.

The Court then sought to resolve the ambiguity. It first noted that the statutory authorization for categorical exemptions limits them to classes of projects the Secretary of the Natural Resources Agency has determined to not have a significant effect on the environment. The Court reviewed materials supporting inferences about the Secretary’s view of whether the existing facilities exemption includes landfills. A 1998 memo written to the Secretary from staff, regarding then-proposed amendments to the existing facilities exemption, revealed an intent to overrule Azusa’s implication that the list of projects in the exemption was all-inclusive. However, the memo did not state that staff or the Secretary believed Azusa was otherwise incorrect, nor did it address its holding that landfills do not fall within the scope of the exemption. Therefore, the Court concluded that the then-Secretary did not disagree with this holding of Azusa.

Further, as noted in Azusa, the legislature has found that some landfills pose threats to groundwater, air quality, and public health. The Court agreed with the conclusions in Azusa that this legislative finding justifies the determination that unlined landfills do not constitute a class eligible for the existing facilities categorical exemption. As such, it held that the County had erroneously determined the exemption applied to the Project.

Terms of the Writ

Finally, the Court briefly addressed an argument by the County that the trial court’s writ was overly broad. The County adopted three separate resolutions of necessity – one for each of the landfill parcels. On appeal they argued the writ vacating all three should instead have considered each separately. The Court disagreed with the piecemeal approach suggested by the County, and upheld the trial court’s issuance of the writ.

Key Points:

  • Exhaustion of administrative remedies is only required to challenge the use of a CEQA exemption when the lead agency provides adequate public notice of its intent to use an exemption.
  • The existing facilities categorical exemption does not cover the operation of unlined landfills.