In G.I. Industries v. City of Thousand Oaks (2022) 84 Cal.App.5th 814, the Second District Court of Appeal held that the Brown Act (Government Code, § 54950 et seq.) required the City of Thousand Oaks (City) to list consideration of a CEQA exemption on the public agenda for the meeting at which the proposal was approved. Though multiple prior opinions have found that CEQA does not require an exemption to be expressly approved at the time of project approval, this opinion finds that there is such a requirement under the Brown Act.

In 2021, the City considered awarding an exclusive solid waste franchise agreement (Agreement) to Arakelian Enterprises, Inc. (Real Party), and posted the item on the public agenda for the City Council’s meeting. The agenda, however, did not separately state that the City would also consider whether the Agreement was exempt from CEQA, nor did the agenda include staff’s recommendation that it was. It was not until the day of the City Council meeting that a supplemental item noticing staff’s CEQA exemption recommendation was added to the agenda. At the meeting, the City Council approved the Agreement and found it to be exempt from CEQA. G.I. Industries, a competitor of Real Party who had until then provided solid waste management to the City, sent a “cure and correct” letter alleging that the City failed to provide the requisite notice for its consideration of the CEQA exemption under the Brown Act. After the City failed to respond, G.I. Industries filed suit to vacate the approval of the Agreement and the CEQA exemption finding. The trial court sustained the City’s demurrer without leave to amend, and G.I. Industries appealed.

On appeal, G.I. Industries alleged that they were deprived of a meaningful opportunity to be heard because they did not receive the appropriate agenda notice regarding the CEQA exemption. Relying on San Joaquin Raptor Rescue Center v. County of Merced (2013) 216 Cal.App.4th 1167, which held that the adoption of an MND must be disclosed as a discrete item of business on an agency’s agenda, the Court here found that the Brown Act required the same of the City’s determination that the Agreement was exempt from CEQA. The Court held that, for the purposes of the Brown Act, there is no difference between environmental review under CEQA and a determination that a project is exempt from CEQA. Further, the Court rejected the City’s citations to cases holding that CEQA does not require a public hearing for a determination that a project is exempt. In the Court’s view, those cases did not control because they did not ever consider whether the Brown Act required what CEQA does not. The Court also dismissed the City’s concerns about the onerous impact of agendizing and separately considering a CEQA determination for basic administrative decisions. The Court opined that many of these types of decisions are not discussed at public hearings triggering Brown Act compliance, and that most City activities do not qualify as projects under CEQA as they have no potential environmental impacts.

As such, the Court held that if a local agency intends to vote or discuss a CEQA exemption at a regular meeting, it will be subject to the Brown Act requirement of agendizing and noticing. Further, the Court found that project approvals at regular meetings that were subject to staff-level CEQA exemption determinations must also be put on the agenda.

Conclusions

The facts of this case are unusual in that the agency actually considered and approved the use of a CEQA exemption at the hearing even though it was not put on the agenda. A narrow reading of the opinion would indicate that its holding only applies in this particular situation – where an exemption was actually considered and approved. However, some language in the opinion indicates a broader holding. The Court suggests that a lead agency has an obligation to make a formal exemption determination for all projects subject to CEQA, which in turn triggers the discussed Brown Act requirement. Although prior case law cited in this opinion supports the position that an exemption can be raised for the first time in litigation (Rominger v. County of Colusa (2014) 229 Cal.App.4th 690, 700-701), an expansive reading of this opinion suggests that such a procedure may violate the Brown Act, and that any reliance on an exemption is required to have first been agendized and considered at the hearing on the project. Given that an interested party must first demand that the legislative body cure and correct any mistake before seeking judicial remedies, it is likely that many of these potential violations may be easily cured. Still, until the intent of the opinion is clarified, lead agencies would do well to ensure that exempt projects are properly agendized and noticed.

Key Points

  • The Brown Act requires a CEQA exemption determination to be noticed on the hearing body’s public agenda alongside the project approval.