By William W. Abbott, Diane Kindermann, Glen Hansen, Brian Russell and Dan Cucchi

Welcome to Abbott & Kindermann’s 2015 2nd Quarter CEQA update. This summary provides links to more in depth case write-ups on the firm’s blog. The case names of the newest decisions start with Section 3 and are denoted by bold italic fonts. Highlights include the first decision (Paulek) to address exemptions following Berkeley Hillside, with this new decision succeeding in muddying CEQA legal waters. Keep Our Mountain Quiet reminds CEQA practitioners once again of the challenges when using negative declarations and will make life more difficult in the agritourism industry. And in litigation, the court of appeal affirms that a trial court decision as to an award of attorneys’ fees is rarely disturbed on appeal (Save Our Uniquely Rural Environment).

1.               2014 CEQA UPDATE

To read the 2014 cumulative CEQA review, click here: 

2.               CASES PENDING AT THE CALIFORNIA SUPREME COURT

There are 8 CEQA cases pending at the California Supreme Court. The cases, listed newest to oldest, and the Court’s summaries are as follows:

Cleveland National Forest Foundation v. San Diego Assn. of Governments,

S223603. (D063288; 231 Cal.App.4th 1056, mod. 231 Cal.App.4th 1437a; San Diego County Superior Court; 37-2011-00101593-CU-TT-CTL, 37-2011-00101660-CU-TTCTL.) Petition for review after the court of appeal affirmed the judgment in a civil action. The court limited review to the following issue: Must the environmental impact report for a regional transportation plan include an analysis of the plan’s consistency with the greenhouse gas emission reduction goals reflected in Executive Order No. S-3-05, so as to comply with the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.)?

Friends of the Eel River v. North Coast Railroad Authority, S222472. (A139222; 230 Cal.App.4th 85; Marin County Superior Court; CV1103591, CV1103605.) Petition for review after the court of appeal affirmed the judgments in actions for writ of administrative mandate. This case includes the following issues: (1) Does the Interstate Commerce Commission Termination Act [ICCTA] (49 U.S.C. § 10101 et seq.) preempt the application of the California Environmental Quality Act [CEQA] (Pub. Resources Code, § 21050 et seq.) to a state agency’s proprietary acts with respect to a state-owned and funded rail line or is CEQA not preempted in such circumstances under the market participant doctrine (see Town of Atherton v. California High Speed Rail Authority (2014) 228 Cal.App.4th 314)? (2) Does the ICCTA preempt a state agency’s voluntary commitments to comply with CEQA as a condition of receiving state funds for a state owned rail line and/or leasing state-owned property?

Center for Biological Diversity v. Department of Fish & Wildlife, S217763. (B245131; 224 Cal.App.4th 1105; Los Angeles County Superior Court; BS131347.) Petition for review after the court of appeal reversed the judgment in an action for writ of administrative mandate. This case presents the following issues: (1) Does the California Endangered Species Act (Fish & Game Code, § 2050 et seq.) supersede other California statutes that prohibit the taking of "fully protected" species, and allow such a taking if it is incidental to a mitigation plan under the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.)? (2) Does the California Environmental Quality Act restrict judicial review to the claims presented to an agency before the close of the public comment period on a draft environmental impact report? (3) May an agency deviate from the Act’s existing conditions baseline and instead determine the significance of a project’s greenhouse gas emissions by reference to a hypothetical higher "business as usual" baseline?

Sierra Club v. County of Fresno, S219783(F066798, 226 Cal.App.4th 704); Fresno County Superior Court; 11CECG00706, 11CECG00709, 11CECG00726.) Petition for review after the court of appeal reversed the judgment in an action for writ of administrative mandate. This case presents issues concerning the standard and scope of judicial review under the California Environmental Quality Act. (CEQA; Pub. Resources Code, § 21000 et seq.)

Citizens for Environmental Responsibility v. State ex rel. 14th Dist. Ag. Assn., S218240 (C070836; depublished opinion, Sacramento County Superior Court; No. 34-2011-80000902CUWMGDS). Petition for review granted. Further action stayed pending disposition of Berkeley Hillside Preservation.

Friends of the College of San Mateo Gardens v. San Mateo County Community College Dist., S214061. (A135892; nonpublished opinion; San Mateo County Superior Court; CIV508656.) Petition for review after the court of appeal affirmed the judgment in an action for writ of administrative mandate. This case presents the following issue: When a lead agency performs a subsequent environmental review and prepares a subsequent environmental impact report, a subsequent negative declaration, or an addendum, is the agency’s decision reviewed under a substantial evidence standard of review (Mani Brothers Real Estate Group v. City of Los Angeles (2007) 153 Cal.App.4th 1385)? Or, is the agency’s decision subject to a threshold determination of whether the modification of the project constitutes a “new project altogether,” as a matter of law (Save Our Neighborhood v. Lishman (2006) 140 Cal.App.4th 1288)?

California Building Industry Assn. v. Bay Area Air Quality Management Dist., S213478. (A135335, A136212; 218 Cal.App.4th 1171; Alameda County Superior Court; RG10548693.) Petition for review after the court of appeal reversed the judgment in an action for writ of administrative mandate. The court limited review to the following issue: Under what circumstances, if any, does the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) require an analysis of how existing environmental conditions will impact future residents or users (receptors) of a proposed project?

City of San Diego v. Trustees of the California State University, S199557. (D057446; 201 Cal.App.4th 1134; San Diego County Superior Court; GIC855643, GIC855701, 37-200700083692-CU-WM-CTL, 37-2007-00083773-CU-MC-CTL, 37-2007-00083768-CU-TT-CTL.) Petition for review after the court of appeal affirmed in part and reversed in part the judgment in a civil action. This case includes the following issue: Does a state agency that may have an obligation to make “fair-share” payments for the mitigation of off-site impacts of a proposed project satisfy its duty to mitigate under the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) by stating that it has sought funding from the Legislature to pay for such mitigation and that, if the requested funds are not appropriated, it may proceed with the project on the ground that mitigation is infeasible?

3.         EXEMPTIONS

Paulek v. Western Riverside County Regional Conservation Authority (June 17, 2015, E059133) ___ Cal.App.4th ___.

Highlighting the challenge in applying the California Supreme Court’s holding in Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086, the Fourth Appellate District tackled the use of categorical exemptions when applied to a habitat agency’s removal of habitat designation on real property. While the court’s conclusion may ultimately have been correct, it appears that the court did not follow Berkeley Hillside when reviewing the exemptions.

The salient facts for purposes of this blog involve the acquisition of property by the Western Riverside Regional Conservation Authority (Authority). The property at stake was property with Authority identified habitat values. The seller and Authority entered into a purchase and sale agreement by which the Authority would acquire the property over nine phases, one phase a year. With respect to the ninth phase, the Authority agreed to reassess the habitat value of the site such that if the Authority did not acquire the site, that the property owner could pursue development opportunities free from the habitat designation. According to the conservation documents, in order to remove the designation, other property would have to be similarly designated. Other property was identified which had recognized species habitat value under the conservation plan, but not for the same species associated with phase 9. Based upon CEQA exemptions Class 7 (actions taken to assure maintenance, restoration or enhancement of a natural resource) and Class 8 (actions taken by regulatory agencies… to assure the maintenance, restoration, enhancement or protection of the environment), the Authority lifted the habitat designation on the property covered by phase 9 in the purchase and sale agreement, designating additional habitat lands at the same time. Paulek challenged the use of the exemption arguing the potential impacts to the remaining habitat lands if phase 9 were to develop and the species “gap” between species covered by the existing designation and species protected by the approval of additional replacement lands.

The trial court denied Paulek’s petition for writ of mandate seeking to set aside the lifting of the designation. The court of appeal reversed, applying the Fair Argument test to the use of the exemption. The court found there was a Fair Argument in the potential for impact to habitat lands if phase 9 development and the fact that the species habitat to be protected by the replacement lands did not match the species habitat to be potentially lost if phase 9 is eventually developed. The use of the Fair Argument test is inconsistent with California Supreme Court’s decision in Berkeley Hillside which requires a reviewing court to first apply the Substantial Evidence test to the use of the exemption, then apply the Fair Argument test to a claim of unusual circumstances which would nullify the use of the exemption. There is a potential explanation for how the Paulek court reached its conclusion. The administrative history and trial court proceedings took place well in advance of the Supreme Court’s Hillside decision. According to the appellate docket, the appellate briefing in Paulek took place over a year in advance of the Berkeley Hillside decision so the status of the law remained unsettled at the time of the briefing. When lifting the habitat designation, the Authority itself employed the Fair Argument test in the administrative proceedings. Paulek, fn. 3. Thus, the appellate court followed the standard of review selected by the Authority. Today, a lead agency should follow the analytical steps crafted in Berkeley Hillside.

Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086. 

In a lengthy decision, the California Supreme Court addressed the standard of review on exemptions and whether or not unusual circumstances apply. Two of the sitting justices are no longer on the court, and with new justices to be confirmed, the continuing longevity of the decision is the subject of speculation. The case involves the use of an exemption by the City of Berkeley to approve discretionary permits for the construction of a single family home on a steep hillside. The City treated the proposal as exempt, and the neighbors claimed that unusual circumstances applied which defeated the use of the exemption. Distilled down, the high court held: (1) evidence of a potentially significant impact does not by itself defeat the use an exemption; (2) that the deferential substantial evidence applies to the use of an exemption; and (3) the Fair Argument test applies to whether or not unusual circumstances exist which defeat the use of an exemption. The lead agency may appropriately look at the neighborhood to determine unusual circumstances. The court upheld the lead agency’s rejection of opponent’s testimony on the basis that it involved speculation as to how the home would be constructed. As the court of appeal had only addressed one challenge to the use of the exemption, the case was remanded below for application of the correct standard of review to the evidence, and for consideration of all of the objections to the use of the exemption. All told, the decision provides greater comfort to the use of exemptions.

CREED-21 v. City of San Diego (2015) 234 Cal.App.4th 488.

Following an emergency, a lead agency can reset the existing conditions “baseline” to the post-emergency repair condition in circumstances in which the lead agency had long considered undertaking the full project (pre-emergency and post-emergency work). In this case, once the emergency took place, the follow-up repair work was exempt and was not required to be factored in the scope of the “project.” Substantial evidence supported the lead agency’s use of the common sense exemption for the post-emergency repair work, and there was no substantial evidence in the record to support the application of the unusual circumstances limitation on the use of the exemption.

4.         NEGATIVE DECLARATIONS

Keep Our Mountains Quiet v. County of Santa Clara (2015) 236 Cal.App.4th 714.

The Fair Argument standard remains as the operative benchmark in assessing the validity of a negative declaration. The most recent decision involves approval by Santa Clara County of a wedding site venue located off of Summit Road, a state maintained facility in rural Santa Clara County. Existing uses on the property included a winery, llama and alpaca grazing lands, barns and a residence. Adjacent properties include parkland owned by an open space district (with restricted access) and homes. In a not uncommon fact pattern, the property owner began hosting wedding events, some of which had up to 300 guests. Following complaints and direction from the County, the applicant filed for a use permit seeking 28 special events for up to 100 guests and 12 staff, during the hours of 2:00 p.m. to 10:00 p.m. The County studied the project for three years before issuing a mitigated negative declaration (MND). After taking testimony, the Planning Commission approved a revised MND in December 2011. The neighbors appealed to the Board of Supervisors who denied the appeal, affirming the MND and conditional use permit. Conditions of approval included the following limitations: only one outdoor live event (to be monitored) and the orientation of speakers away from existing homes towards the open space preserve with specific placement approved by the planning department based upon a review by a noise consultant. CEQA litigation followed. The trial court found that an EIR was required due to potential noise and traffic impacts, declining to rule on the alleged violations of planning and zoning law deeming them moot. The court also awarded the petitioner attorneys’ fees of $145,747, but declined to enhance the award as requested by the petitioner. Petitioner and real party in interest both appealed. The County did not.

The appellate decision as always turned on the evidence in the administrative record, and whether or not there was substantial evidence in the record to support the fair argument standard. Turning first to noise, the County relied upon its General Plan and noise ordinance as defining the relevant threshold of significance, but the appellate court agreed that CEQA analysis is not confined to the question of conformity to adopted general plan and noise ordinances, but that a broader inquiry was appropriate. The evidence in the record on noise was extensive. It included the applicant’s study, a peer review conducted by the County, the petitioner’s consultant’s critique of the peer review of the noise study, as well as neighbor testimony regarding noise levels associated with actual events and those undertaken by the County’s consultant conducting a mock event. The evidence from neighbors was that sound experienced by a wedding event, with the speaker placement as contemplated by the conditions of approval (DJ speaker orientation away from the homes) could still be heard by the neighbors. As to a live band, the County’s consultant concluded that a live band could be 10 db louder than DJ-generated music, leaving no room to argue a lack of substantial evidence given the court’s conclusions regarding DJ generated sound levels. Regarding crowd generated noise, neighbor testimony again carried the day in terms of substantial evidence of a fair argument (the court again concluding that reliance on the general plan and noise standard was not dispositive). There was also evidence of noise impacts to wildlife in the adjacent open space preserve. As to the impacts to potential future users of the park, there was insufficient evidence of potential impacts as future use was hypothetical and CEQA is concerned with existing physical conditions.

Turning next to traffic impacts, the court also found substantial evidence of potential impacts given the narrow road width and blind curves, as documented by the neighbors and the opponent’s consultant. The traffic studies indicated a substantial increase in traffic levels, increasing the risk. Evidence from Caltrans indicated that the accident history in the vicinity of the project was twice the statewide average. This evidence was sufficient to meet the Fair Argument standard. 

5.         ENVIRONMENTAL IMPACT REPORTS

Banning Ranch Conservancy v. City of Newport Beach (2015) 236 Cal.App.4th 1341. (Banning Ranch II)

Petitioners sued the City of Newport Beach over the approval of a residential and commercial project on one quarter of a 400-acre, largely undeveloped coastal property.  The petitioners objected to the City’s EIR because it failed to identify potential impacts to “environmentally sensitive habitat areas” (“ESHA”), defined by the California Coastal Act, as a result of the project.  The Coastal Commission had not yet determined whether ESHAs were present at the site and the site was explicitly excluded from the City’s coastal land use plan.  The Court held that the City was not required to speculate as to the presence of ESHAs at the site, because it is a legal conclusion to be made by the Coastal Commission.  Instead, the City’s inclusion of all of the necessary data and analysis regarding biological resources and habitat was sufficient. 

Charles Conway Jr. v. State Water Resources Control Board (2015) 235 Cal.App.4th671

Functionally equivalent CEQA documents can be tiered similar to the environmental impact report. In this case, the appellate court upheld the Regional Board’s preparation of a functional equivalent document for the TMDL on lake sediment in McGrath Lake. The appellate court held that only a first-tier analysis was necessary for the TMDL because a TMDL merely identifies goals for levels of one or more pollutants in a water body and does not, by itself, preclude or require any actions. In rejecting the appellants arguments that the functional equivalent documents failed to analyze the environmental and economic impacts associated with dredging, the court noted that the Basin Plan Amendment (BPA) specifically calls for the cooperation of various landowners and the Regional Board in negotiating and executing a memorandum of agreement on how the TMDL for lake sediment should be implemented. Specifically, the court held that, “Until such a plan is formulated, a full environmental analysis of any particular method of remediation is premature.”

Saltonstall v. City of Sacramento (2015) 234 Cal.App.4th 549 (Saltonstall II).

In a challenge to the EIR for a downtown entertainment and sports arena, the court of appeal affirmed the adequacy of the EIR. In terms of CEQA timing, the city had the discretion to enter into a non-binding term sheet with the developer and engage in eminent domain proceedings. The EIR included a reasonable range of alternatives and the lead agency was not required to evaluate a remodeling of the existing facility as sufficient evidence supported conclusions of infeasibility and lack of meeting city objectives. Applying the substantial evidence standard of review, the trial court and court of appeal deferred to the lead agency on traffic impacts of state highways. The court went on to hold that crowd violence was not a CEQA issue. Finally, appellants failed to perfect claims on appeal under the Public Records Act as to emails which should have been included in the administrative record.

Center for Biological Diversity v. Department of Fish & Wildlife (2015) 234 Cal.App.4th 214

The California Department of Fish and Wildlife’s program environmental impact report that analyzed its statutorily mandated fish hatchery and stocking enterprise’s impacts on a statewide basis complied with the California Environmental Quality Act where: (1) it contained a sufficient level of analysis; (2) it did not impermissibly defer formulation of mitigation measures; (3) it considered a reasonable range of alternative projects; and (4) the Department properly used the existing hatchery and stocking practice as its environmental baseline. The mitigation measures adopted by the Department on private fish vendors were underground regulations that violated the Administrative Procedure Act (APA), Gov. Code, § 11340 et seq., as they imposed qualification requirements and monitoring and reporting obligations on the vendors without complying with the APA’s notice and hearing procedures.

6.         LITIGATION 

Save Our Uniquely Rural Community Environment v. County of San Bernardino (2015) 235 Cal.App.4th 1179.

The Court of Appeal for the Fourth Appellate District held that a petitioner failed to show that a trial court abused its discretion when it awarded petitioner $19,176 in attorneys’ fees under Code of Civil Procedure section 1021.5 despite petitioner’s request for $231,098, for the following reasons: (1) The extent of a party’s success is a key factor in determining the reasonable amount of attorney fees to be awarded, and here the petitioner prevailed on only one of its numerous claims under CEQA and local zoning ordinances; (2) petitioner excessively billed the case, such as expenditure of 40 hours to prepare a reply brief that  was only 14 pages long and reiterating arguments made in the opening brief and billing partner rates for essentially clerical work; and (3) petitioner provided no reasonable explanation as to why it was entitled to Los Angeles attorney fee rates in a case in San Bernardino County. 

If you have any questions about these court decisions, contact William Abbott or Diane Kindermann. The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.