First Appellate District Holds that Air Quality Management District’s Issuance of “Authority to Construct” May Be Challenged Under CEQA

Asphalt ProductionOn May 25, 2017, the First Appellate District published a modified version of its unpublished March 23, 2017 opinion, holding that the Mendocino County Air Quality Management District’s (“MCAQMD”) issuance of an “Authority to Construct” (“ATC”) for an asphalt production plant could be challenged under CEQA.  In Friends of Outlet Creek v. Mendocino County Air Quality Management District, the trial court had sustained a demurrer by the MCAQMD and the applicant on the grounds that petitioner could only challenge the ATC approval in a proceeding under Health and Safety Code section 40864.  The First Appellate District reversed, finding ample legal authority for administrative mandate proceedings under CEQA to challenge issuance of permits by air quality management districts. Continue Reading

The California Supreme Court Has a Banner Week, Hearing Argument in Three CEQA and Land Use Cases

California Supreme CourtOn May 3–4, 2017, the California Supreme Court heard oral arguments in three cases with significant implications for California land use law. Below we summarize the main issue(s) argued in each matter and possible outcomes. Because many of these cases have been pending for years, the Court that originally voted to grant review has since been dramatically transformed by Governor Brown’s newest appointments, including Justices Cuéllar and Kruger. Consequently, predicting the likely outcome in any of these cases is particularly difficult. Continue Reading

A Rare Decision on Preclusion in the CEQA Context

In May 2017, the Fifth Appellate District published a decision addressing preclusion, which is rarely a topic in CEQA litigation.  On demurrer, the Kern County Superior Court found that a CEQA petition was barred by res judicata in light of a prior judgment entered in Alameda County (the “Alameda Action”).  In Association of Irritated Residents v. Department of Conservation (2017) 11 Cal.App.5th 1202, the Fifth District reversed, and it also addressed the issue of collateral estoppel in the context of a motion to dismiss the appeal. Continue Reading

Up One Day, Down the Next—California Air Resources Board Receives Mixed Reviews in its Implementation of its Cap-and-Trade Program and Low Carbon Fuel Standard

Petroleum PollutionIn recent weeks, California appellate courts issued two decisions regarding California Air Resources Board (CARB) programs implemented under AB32, the Global Warming Solutions Act, with mixed results.  The first decision upheld the legality of a key element of CARB’s cap-and-trade program, the auction of emission credits.  In that case, the Third Appellate District rejected an industry challenge and found that the auctions are within the authority granted to CARB by AB32 and are not an illegal tax. In the second case, the Fifth Appellate District delivered a setback—the second in that court—for CARB’s Low Carbon Fuel Standard (LCFS), finding the agency failed under the California Environmental Quality Act (CEQA) to adequately analyze the potential effects of NOx emissions resulting from the increased use of biofuels mandated by the LCFS.  CARB was first ordered by the court to correct this CEQA violation in a 2013 writ of mandate, but the agency failed to do so in its 2015 re-adoption of the LCFS.  The court, noting the environmental benefits of this program, however, did not invalidate the LCFS and only froze the required standards at 2017 levels until CARB corrects the CEQA deficiencies.  These decisions do little to clarify the muddy waters around how agencies should analyze greenhouse gas emissions under CEQA, as that analysis is inextricably intertwined with the effectiveness of the State’s greenhouse gas regulatory programs. Continue Reading

Third District Finds that EIR for Residential Development Inadequately Assessed Traffic Impacts

East sacramentoCities charged with preparing EIRs for proposed projects often look to their general plans and other adopted policies to set thresholds of significance for assessing environmental impacts. A lead agency’s discretion to select a particular significance threshold has long been afforded deference under CEQA’s “substantial evidence” standard of review. Potential impacts assessed under a general plan-based significance threshold have similarly enjoyed deferential review under the substantial evidence standard. However, in East Sacramento Partnerships for a Livable City v. City of Sacramento (2016) 5 Cal.App.5th 281, as modified on denial of rehearing, the Third Appellate District appears to have relied on the less deferential “fair argument” standard in holding that compliance with a general plan policy does not conclusively establish there is no significant environmental impact. In so holding, the court found that the City of Sacramento (“the City”) failed to adequately address the traffic impacts related to a development project. Continue Reading

Limitations on Subsequent Review Under CEQA

SF MuniSince the California Supreme Court’s 2016 ruling in Friends of the College of San Mateo Gardens v. San Mateo County Community College District, California appeals courts have issued a spate of decisions addressing subsequent review under the California Environmental Quality Act (“CEQA”), including two in the last two months of 2016.  In both cases, the appeals court upheld the agency’s decision not to undertake further environmental review. Continue Reading

Banning Ranch Conservancy v. City of Newport Beach

Photo by Mark Rightmire, Orange County Register/SCNG)

Photo by Mark Rightmire, Orange County Register/SCNG)

On March 30, 2017, in the first of at least three CEQA rulings expected this year, the California Supreme Court issued its long-awaited decision in Banning Ranch Conservancy v. City of Newport Beach.  In a unanimous opinion authored by Justice Carol Corrigan, the Court invalidated an EIR for the coastal development at Banning Ranch approved by the City of Newport Beach.  Despite the fact that the EIR addressed in detail the project’s physical impacts on wetlands and sensitive habitats, the Court nevertheless held that it failed to adequately disclose and consider the controversy surrounding the potential presence of Environmentally Sensitive Habitat Areas (“ESHA”) under the Coastal Act.  This decision falls within a growing line of cases mandating inclusion of non-CEQA regulatory requirements within the confines of the CEQA environmental review process, and in a manner that places ever greater burdens on lead agencies and EIR preparers. Continue Reading

Second District Denies Mandatory Relief from Adverse Judgment to Plaintiff Whose Counsel Failed to Timely Lodge Administrative Record

LED Street LightOn April 13, the Second Appellate District disapproved two of its prior decisions that had expansively interpreted the availability of mandatory relief from default or dismissal under Code of Civil Procedure section 473(b). In The Urban Wildlands Group, Inc. v. City of Los Angeles, the court held that this mandatory relief provision did not apply to an adverse judgment at a CEQA merits hearing, resulting from plaintiff’s failure to lodge the administrative record with the court prior to the hearing.

The underlying mandate petition and complaint alleged a single cause of action challenging the City’s finding that a streetlight replacement project using LED lights was exempt from environmental review under CEQA. The parties stipulated that plaintiff would prepare the administrative record and, following certification by the City, lodge it with the trial court. However, plaintiff never lodged the certified record. At the hearing on the merits, the trial court determined that plaintiff could not present sufficient evidence to support its arguments because it failed to lodge the record. Accordingly, the trial court denied the plaintiff’s petition and complaint and entered judgment in favor of the City. Continue Reading

Fourth District Leaves Door Open for Attorney-Fee Award to Real Party in Interest

The Fourth District Court of Appeal recently issued its opinion in Save Our Heritage Organisation v. City of San Diego (2017) 11 Cal.App.5th 154, the latest round of litigation over the site development plan for a revitalization project in San Diego’s Balboa Park, finding that, under some circumstances, a project proponent may recover attorneys’ fees under Code of Civil Procedure section 1021.5.

Save Our Heritage Organisation (SOHO) previously challenged the project, which involved closing off parts of Balboa Park to traffic and diverting traffic via a new bridge to a parking structure, under CEQA.  SOHO filed the action against the City of San Diego, as lead agency, and the Plaza de Panama Committee (“Committee”), as real party in interest.  The Committee was founded to shepherd the project through the design and review process.  The superior court granted SOHO’s petition for writ of mandate, and SOHO and the Committee both filed appeals on different issues.  The City did not appeal.  The Court of Appeal rejected SOHO’s arguments and reversed the trial court, finding that SOHO failed to demonstrate that the City had abused its discretion.

The Committee filed a motion for attorneys’ fees under Code of Civil Procedure (“CCP”) section 1021.5, arguing that it met the standard for an award of fees under that section because (1) it was a successful party, (2) the project approval it vindicated conferred a substantial benefit on the general public, and its efforts were necessary to that vindication (because the City did not appeal the adverse judgment), and (3) the cost of the appeal was greater than the Committee’s pecuniary interest in the project (in fact, it had none).

SOHO opposed the fees motion.  Although SOHO did not dispute that the Committee satisfied the three-prong test set forth in CCP section 1021.5, it argued that fees are not available to project proponents because such an award would undermine the rationale behind CCP section 1021.5: promoting public interest litigation. The superior court agreed, denying the Committee’s motion.

The Court of Appeal upheld the denial of a fee award, but disagreed with the lower court’s reasoning.  First, the court stated that because a “successful party” is generally understood to mean any party to litigation who achieves its objectives, project proponents are not categorically barred from obtaining fees under CCP section 1021.5.  However, the court went on to conclude that fees could not be awarded against SOHO, based on a recognized exception to CCP section 1021.5 where the three-prong test is met, but the litigant against whom fees are sought “did nothing to adversely affect the public interest.”  The court stated that the “relevant inquiry in cases where the defendant or real party in interest prevails in defending against litigation and seeks attorney fees from the party who initiated the litigation is whether the litigation was detrimental to the public interest because it sought to curtail or compromise important public rights.”  In this case, the court answered that question in the negative.

This case seems significant at first glance but is unlikely to materially affect CEQA practice.  The recovery of attorneys’ fees under CCP section 1021.5 has historically been a one-way street, with fees potentially recoverable by successful petitioners against respondents, but not the other way around.  Potential fee awards against petitioners could have the effect of deterring meritless and nuisance-type lawsuits.  However, the bar set by the court makes such a shift in practice unlikely.  Most courts will be extremely reluctant to find that any CEQA lawsuit, even if meritless or brought by a self-interested NIMBY group, is “detrimental to the public interest because it sought to curtail or compromise important public rights.”  Thus, it is unlikely we will see courts approving fee awards against CEQA petitioners any time soon.

Fourth Appellate District Upholds EIR for 200-Acre Specific Plan Development in Riverside County

French Valley in Riverside CountyIn its February 14 decision (certified for publication on March 15) in Residents Against Specific Plan 380 v. County of Riverside, the Fourth Appellate District upheld the County of Riverside’s (“County’s”) approval of a master-planned community.  The opinion provides helpful guidance for lead agencies and applicants in understanding when changes made to a project in direct response to public comments after publication of a Final EIR do not necessitate recirculation.  The decision also reaffirms that where defects in a notice are not prejudicial, unwinding of the approval is not required.

The case involves a proposed 200-acre development in the French Valley region of Riverside County, containing a mixture of residential, mixed use, commercial, and open space uses (“Project”).  The Project, which was proposed by the Hanna Marital Trust (“Trust”), required approval of a specific plan (known as Specific Plan 380), a general plan amendment, and a zoning change. Continue Reading