Land Use and CEQA Litigation Update

Transcription

1 Land Use and CEQA Litigation Update Thursday, September 19, 2013; 1:00 2:30 p.m. Rick W. Jarvis, Jarvis Fay Doporto & Gibson League of California Cities 2013 Annual Conference; City Attorneys Track Sacramento Convention Center

2 Land Use and CEQA Litigation Update Cases Reported from May 2013 through September 3, 2013 Rick W. Jarvis Jarvis, Fay, Doporto & Gibson, LLP 492 Ninth Street, Suite 310 Oakland, California Thursday, September 19, 2013 General Session; 1:00 2:30 pm League of California Cities Annual Conference September 2013

3 TABLE OF CONTENTS 2. Open Government and Ethics... 1 San Joaquin Raptor Rescue Center v. County of Merced (2013) 216 Cal.App.4 th Land Use... 2 Orange Citizens for Parks and Recreation v. Superior Court (2013) 217 Cal.App.4 th Save Panoche Valley v. San Benito County (2013) 217 Cal.App.4 th Honchariw v. County of Stanislaus (2013) 218 Cal.App.4 th Latinos Unidos Del Valle De Napa y Solano v. County of Napa (2013) 217 Cal.App.4 th California Building Industry Association v. City of San Jose (2013) 216 Cal.App.4 th Koontz v. St. Johns River Water Management District (2013) U.S., 133 S.Ct Cresta Bella, LP v. Poway Unified School District (2013) 218 Cal.App.4 th Dunex, Inc. v. City of Oceanside (2013) 218 Cal.App.4 th City of Dana Point v. California Coastal Commission (2013) 217 Cal.App.4 th MHC Financing Limited Partnership v. City of San Rafael (9 th Cir. 2013) 714 F.3d Lockaway Storage v. County of Alameda (2013) 216 Cal.App.4 th Page i

4 11. Protecting the Environment Golden Gate Land Holdings, LLC v. East Bay Regional Park District (2013) 215 Cal.App.4 th Neighbors for Fair Planning v. City and County of San Francisco (2013) 217 Cal.App.4 th Poet, LLC v. California Air Resources Board (2013) 217 Cal.App.4 th California Building Industry Association v. Bay Area Air Quality Management District (2013) 218 Cal.App.4 th Save the Plastic Bag Coalition v. County of Marin (2013) 218 Cal.App.4 th Neighbors for Smart Rail v. Exposition Metro Line Construction Authority (2013) 57 Cal.4 th Friends of Oroville v. City of Oroville (August 19, 2013) Cal.App.4 th Masonite Corporation v. County of Mendocino (2013) 218 Cal.App.4 th North Coast Rivers Alliance v. Marin Municipal Water District Board of Directors (2013) 216 Cal.App.4 th San Diego Citizenry Group v. County of San Diego (July 30, 2013) Cal.App.4 th May v. City of Milpitas (2013) 217 Cal.App.4 th Citizens for Ceres v. Superior Court (2013) 217 Cal.App.4 th ii

5 2. OPEN GOVERNMENT AND ETHICS II. OPEN MEETING LAWS E. Agenda Requirements and Related Procedural Issues San Joaquin Raptor Rescue Center v. County of Merced (2013) 216 Cal.App.4 th 1167 KEY POINTS The Brown Act requires an agenda to specifically identify a public agency s consideration of a CEQA document for a project it is not sufficient to simply identify the project itself if the agency is also considering the CEQA review for the same project. Practice point: While this case involves a negative declaration, its holding may also apply to a local agency determination that a project is exempt from CEQA such an exemption determination should also be separately identified in the agenda. This case holds that a county planning commission agenda violated the Brown Act by failing to mention that the commission was considering the adoption of a mitigated negative declaration for a subdivision project, and instead only identified the project itself. The court rejected the county s argument that the agenda s reference to the commission s consideration of the subdivision project itself (which the court disdainfully referred to as another item of business ) was sufficient to put the public on notice that it was also considering the environmental review for the same project. While this decision specifically deals with a negative declaration, its holding may also have implications for determinations that a project is exempt from CEQA. It is probably good practice for the agency to make sure that any such exemption determination for a project is specifically identified in the agenda. The procedural posture of this case is a bit odd, since it involved a lawsuit directly challenging a planning commission s action on a project, while its decision was still subject to administrative appeal to the board of supervisors. This timing was the result of the Brown Act s unique statutory deadline for filing such actions (within 15 days after the agency denies a request to cure and correct, per Government Code section , subdivision (c)(3)). While the litigation was pending, the board of supervisors actually granted an appeal and directed the planning commission to renotice and reconsider the item, just as a matter of good policy. But the county continued to vigorously dispute that the Brown Act was actually violated, so the court addressed the otherwise moot issue. However, in an unpublished portion of the decision, the court of appeal rejected an attempt by the petitioner to join a CEQA cause of action with the Brown Act claim, holding that the petitioner still needed to exhaust administrative remedies for the CEQA claim. 1

6 10. LAND USE II. GENERAL PLAN C. Administration 2. Consistency Requirements for Land Use Decisions Orange Citizens for Parks and Recreation v. Superior Court (2013) 217 Cal.App.4 th 1005 KEY POINTS City s interpretation of ambiguous provisions of its general plan is entitled to deference and should be set aside only if found to be arbitrary, capricious, entirely lacking in evidentiary support, unlawful, or procedurally unfair. City reasonably determined that development project was consistent with general plan, where general plan long designated the area for development, and where city found that contrary provision in land use map designating area as open space was a clerical error. This case provides an excellent example of a court deferring to a city s interpretation of its own general plan even where there was some ambiguity and apparent internal inconsistency. The city had approved a low density development project on a site that had long been used as a golf course. While the city s general plan had designated the site for low density development since 1973, some of the city s planning documents had since referred to the area as open space (probably due to the golf course), and the land use policy plan of the general plan itself had thus been amended to refer to the area as open space. Based upon a historical review and analysis of the general plan, the city determined that the project was consistent with the historical designation. As part of its approval of the project, the city amended the general plan policy map to correct the clerical error. However, project opponents circulated a referendum petition, and the electorate subsequently rejected the general plan amendment. Thus, in court, the opponents argued that the project was inconsistent with the general plan policy map, or alternatively, that the general plan was internally inconsistent. The court of appeal rejected both arguments, finding that the city acted reasonably in interpreting its own general plan. 2

7 III. ZONING I. Special Issues 10. Agricultural Preservation (Williamson Act) Save Panoche Valley v. San Benito County (2013) 217 Cal.App.4 th 503 KEY POINT Public concerns in favor of approving proposed solar power farm may be found to substantially outweigh the objectives of the Williamson Act, sufficient to support cancellation of Williamson Act contracts and consequent development of agricultural land. This case involves a challenge to a county s approval of a solar power farm project, encompassing 4,885 acres. To facilitate the project, the county approved cancellation of Williamson Act contracts covering 6,593 acres of land, of which 4,563 acres were within the project area. The court upheld the approval, finding substantial evidence supported the county s findings that other public interests (particularly the interest in providing alternative sources of renewable energy) outweighed the Williamson Act s purpose in preserving agricultural land, and that there was no other alternative proximate noncontracted land both available and suitable for the use. The court also rejected numerous CEQA challenges, including arguments that the county improperly rejected a feasible alternative site, did not adequately analyze biological impacts, improperly deferred the development of mitigation measures, failed to identify adequate mitigation lands, and improperly found that impacts to agricultural resources would be mitigated through the creation of agricultural easements. V. HOUSING B. Affordable Housing 1. Findings Required to Reject Projects Honchariw v. County of Stanislaus (2013) 218 Cal.App.4 th 1019 KEY POINT A local agency s violation of Government Code section s requirements with respect to a housing project warrants an award of attorney s fees under section (k) only if the project proposed development of affordable housing. 3

8 Government Code section , subdivision (j), requires a local agency to make certain findings in order to justify a disapproval of a proposed housing development project which complies with applicable general plan and zoning standards. In an earlier published decision in the same case, the court interpreted subdivision (j) to apply to any housing project, not just projects involving affordable housing. (Honchariw v. County of Stanislaus (2011) 200 Cal.App.4 th 1066.) Subdivision (k) of section requires a court to award attorney s fees to a prevailing developer in certain actions brought to enforce the section. This decision holds that attorney s fees are only authorized in actions involving affordable housing projects. Thus, the fact that the developer plaintiff had previously established a violation of subdivision (j) did not entitle the plaintiff to attorney s fees, where its proposed project did not include affordable housing. 5. Density Bonuses Latinos Unidos Del Valle De Napa y Solano v. County of Napa (2013) 217 Cal.App.4 th 1160 KEY POINT County density bonus ordinance invalid where it required developer to include a higher percentage of affordable units than required under Government Code section in order to obtain a density bonus. Government Code section requires cities and counties to provide developers with certain density bonuses when they provide a certain percentage of affordable units in a proposed housing development. The county in this case has an inclusionary housing requirement which requires up to 20 percent of new dwelling units in a residential development to be affordable to moderate-income households. The county adopted a density bonus ordinance which provided that any units provided to comply with the county s inclusionary housing requirement would not count towards the percentages set forth in section 65915, and that a developer thus could only obtain a density bonus if it provided affordable units in addition to what it was already required to provide to satisfy the county s inclusionary requirement. The court held that this limitation in the county s density bonus conflicted with section and was invalid. All affordable units must be considered in assessing what density bonus a development is entitled to under section 65915, even if the developer is otherwise required under local ordinances to provide some or all of those units. 4

9 VIII. EXACTIONS: FEES AND DEDICATION B. Authority 1. Police Power California Building Industry Association v. City of San Jose (2013) 216 Cal.App.4 th 1373 KEY POINTS In a facial challenge to city s adoption of inclusionary housing ordinance, burden is on the challenger to rebut the presumption that the ordinance is reasonably related to the city s legitimate police power purpose of ensuring an adequate supply of affordable housing. This decision at least partially rebuffs a facial challenge brought against a city s adoption of an inclusionary housing ordinance, sending the matter back to the trial court to determine the validity of the ordinance under the proper standard of review. The ordinance here requires development of 20 or more units to set aside 15 percent for purchase at a below-market rate (subject to certain incentives and alternatives, including an in-lieu fee). The trial court found the ordinance to be facially invalid, holding that the city did not bear its burden of demonstrating an adequate nexus between the actual impacts of new residential development and the ordinance s purpose of providing affordable housing. The court of appeal reversed, essentially holding that the city was not required to establish such a nexus (although the opinion does not actually use that word). The court found that it was not the purpose of the ordinance to mitigate the impacts of new development on housing supply, and thus the city did not have to show a reasonable relationship between the impacts of development and the ordinance s requirements. Rather, the court found that the ordinance was an exercise of the city s broader police powers, and thus that a more deferential standard of review may apply. Specifically, the court held that the plaintiff had the burden of proving that the ordinance s inclusionary housing conditions are not reasonably related to the City s legitimate public purpose of ensuring an adequate supply of affordable housing in the community. One interesting aspect of the decision is that the plaintiff insisted that it was not asserting a takings challenge to the ordinance, but was only attacking the ordinance s facial validity. The decision therefore does not address how a court might consider an as applied takings challenge to such an ordinance under Nollan and Dolan and now Koontz (discussed below). 5

10 C. Limitations 1. Constitutional Koontz v. St. Johns River Water Management District (2013) U.S., 133 S.Ct KEY POINTS Nollan/Dolan requirements of reasonable nexus and rough proportionality apply to government demands for money as a condition of a development permit, just as they apply to other types of land use exactions that are challenged as unconstitutional conditions under the Takings Clause. A government s demand for property (or money) as a condition of a development permit may be challenged as a taking under Nollan/Dolan even in cases when the government ultimately denies the permit. In Nollan v. California Coastal Comm. (1987) 483 U.S. 825, the Court held that a public agency could be found liable for a taking of property subject to the Fifth Amendment, where it imposes a condition on a development permit requiring the applicant to give up a property right (in that case, allowing a public access easement over a private development project), where the condition does not have an adequate nexus with the impacts of the development project. In Dolan v. City of Tigard (1994) 512 U.S. 374, the Court extended Nollan by holding that, not only does there need to be a nexus, but any exaction imposed on a private development project must be roughly proportional to the burdens created by the development. In Koontz, the Court has now held that the principles of Nollan and Dolan apply to monetary exactions as well as physical property exactions, and has also held (not surprisingly) that a challenge may be raised under Nollan/Dolan even where the development application is subsequently denied (rejecting the rationale that such denial means that no taking actually occurred). As the dissent in Koontz points out, the majority decision arguably goes out of its way to reach this abstract holding, without actually applying it to the facts of the case before it. The dissent in Koontz spends some time dissecting the facts of that case to demonstrate that there was no evidence that the agency there exacted anything from the developer. The majority opinion does not dispute the dissent s characterization but refuses to consider the factual question of whether the agency actually made a definite demand of the applicant, explaining that the lower court had not reached that particular question. Because the Court does not apply its holding to the facts, there is some room to debate exactly what its holding means, and how it might practically apply to a given set of facts. The bottom line in California is that Koontz may not have much practical effect in most circumstances, given the requirements that AB 1600 (i.e. Government Code 66000, et seq.) has long imposed on 6

11 development fees. While some legal commentators have suggested that application of Nollan/Dolan would impose more onerous requirements than AB 1600 (referring to language in Dolan suggesting that rough proportionality means something more than reasonable relationship ), AB 1600 is actually quite rigorous and it is unlikely that a development fee meeting its requirements would not satisfy Dolan s rough proportionality standard. That being said, Koontz may come into play in limited cases where an agency imposes a development fee or other exaction that is not subject to AB (See, for example, California Building Industry Association v. City of San Jose (2013) 216 Cal.App.4 th 1373, discussed above.) It should also be noted that Koontz does not impact the power of public agencies to impose taxes. Thus, one possible avenue for cities to consider is the possible imposition of taxes on new development in circumstances where a fee outside the scope of AB 1600 might be subject to challenge (which, of course, would necessitate voter approval, but which might be politically palatable in the case of taxes on new development). 2. Statutory Cresta Bella, LP v. Poway Unified School District (2013) 218 Cal.App.4 th 438 KEY POINT When a residential development project includes replacement of existing residential development, an impact fee for school facilities should only be imposed on the net increase in square footage, not on the entire new development, absent a study demonstrating that reconstruction of preexisting square footage increases student population. This case does not really break much new ground a prior decision has already held that a school impact fee should only be imposed on the net increase in new development. (See Warmington Old Town Associates v. Tustin Unified School Dist. (2002) 101 Cal.App.4 th 840.) In this case, the school district attempted to satisfy Warmington by concluding that the fee imposed on new development at the statutory limit would not be nearly enough to cover the cost of needed new school facilities, and thus the district had a justification for imposing the fee on the entire project, including the reconstruction of existing development. The district also argued that the preexisting units had never been subject to the fee when they were originally built in The court rejected both arguments in ruling that a school impact fee can only be imposed on the net increase in residential square footage, absent a particular showing that redevelopment of existing units will generate new students. 7

12 XI. CALIFORNIA COASTAL ACT C. Coastal Development Permits Dunex, Inc. v. City of Oceanside (2013) 218 Cal.App.4 th 1158 KEY POINT Mobilehome park conversions to residential ownership in the Coastal Zone which are subject to the requirement to obtain a coastal development permit (CDP) may be denied as inconsistent with policies of a local coastal program (LCP) which require minimization of risks of development in a flood zone. This case applies the Supreme Court s recent decision in Pacific Palisades Bowl Mobile Estates, LLC v. City of Los Angeles (2012) 55 Cal.4 th 783, which held that mobilehome park conversions under Government Code section are subject to the requirements of the California Coastal Act, specifically the need to obtain CDPs and the consequent need to ensure consistency with the applicable LCP. In this case, the city found that a particular mobilehome conversion application would violate an LCP policy requiring that new development shall minimize risks to life and property in areas of high geologic, flood, and fire hazard. The applicant challenged this decision, arguing that the mere conversion of a mobilehome park to individual ownership resulted in no physical changes and thus could not be found inconsistent with this policy. The court rejected this argument in one sentence, reasoning that the city could reasonably conclude that individual ownership would be an unacceptable increase in the risk to life and property because it would move the flood risk to individuals far less able to either respond to or bear that risk than a single owner. The court thus applied a very deferential standard of review to the city s determination of LCP consistency. (The city had alternative bases for rejecting the application which the court did not address.) The extent to which cities have discretion under Government Code section to deny conversion applications continues to be a source of uncertainty (the Court in Pacific Palisades having expressly declined to decide it). While this case deals specifically with development subject to regulation under the Coastal Act, one might argue by analogy that its reasoning could be applied in other circumstances where a mobilehome park is located in a designated local hazard area subject to, say, a general plan policy requiring minimization of hazard risks. 8

13 City of Dana Point v. California Coastal Commission (2013) 217 Cal.App.4 th 170 KEY POINTS A city s exercise of nuisance abatement powers may not be exempt from the California Coastal Act under Public Resources Code section 30005, subdivision (b), if the court later determines that such exercise was a pretext for avoiding the city s obligations under the Coastal Act (apparently regardless of whether the city s nuisance determination is otherwise proper). A city s legislative enactment of a nuisance abatement ordinance in the Coastal Zone is not itself an appealable action over which the Coastal Commission has jurisdiction to review. Section 30005, subdivision (b), broadly provides that [n]o provision of the California Coastal Act is a limitation... [o]n the power of any city... to declare, prohibit, and abate nuisances. This decision grafts a limitation onto this broad provision, holding that, in order to benefit from this limitation, a municipality must demonstrate that it has exercised its nuisance abatement powers in good faith, in that the municipality has not utilized these powers as a pretext for avoiding its obligations under its own local coastal program. This case involves a dispute over the extent to which a city had the authority to limit the hours of public use of park and beach access trails in the Coastal Zone. The Coastal Commission had previously approved an amendment to the city s local coastal program which allowed development of 125 luxury homes on an oceanfront slope. As a condition of that approval, the Commission required that the amendment include language mandating that the city maximize public access and recreation opportunities, providing that [l]imitations on time of use... shall be subject to a coastal development permit, and essentially prohibiting gates and other barriers to public trail use. Notwithstanding these provisions, the city subsequently (prior to the public opening of the trails) established hours of operations for the trails (8:00 a.m. to 5:00 or 7:00 p.m., depending on the season) and installed timed gates precluding trail use during hours the trails were closed. Upon discovering these facts, the Commission objected and sent the city a notice of violation letter threatening enforcement proceedings. The city responded by adopting a nuisance abatement ordinance essentially declaring that the closure regulations and gates were necessary to abate public nuisance conditions. The Commission then responded by asserting appellate jurisdiction over the city s adoption of the ordinance, and ultimately purported to deny the city s claim of exemption. The city filed a petition for writ of mandate challenging the Commission s assertion of jurisdiction, including a claim for declaratory relief that the Commission lacked jurisdiction to limit the city s enforcement of its nuisance abatement ordinance. In the meantime, the Surfrider Foundation filed its own petition against the city alleging violations of the Coastal Act and the city s own LCP. With respect to the city s petition, the trial court agreed that the Commission lacked appellate jurisdiction and granted the writ. However, with respect to Surfrider s petition, the trial court agreed that the city s 9

14 nuisance determination was arbitrary and capricious and ordered the city to set aside its approval of the ordinance. The Commission appealed the former order, and the city appealed the latter. The court of appeal agreed with the trial court s determination that the Commission did not have direct appellate jurisdiction over the appeals of the city s adoption of the ordinance itself, reasoning that such appellate jurisdiction only exists over adjudicative, not legislative decisions. However, the court ruled that the Commission could have jurisdiction over the development mandated by the nuisance abatement ordinance (e.g. the installation of access gates and the limitation on hours of public access), if the city could not demonstrate that the ordinance was adopted in good faith and not as a pretext for avoiding its obligations under the City s local coastal program. The court of appeal did not reach the merits of the city s appeal, and instead held that appeal in abeyance, suggesting that it might become moot if the trial court finds a pretext and thus allows the Commission to exercise jurisdiction. In a well-written dissent, Justice Benke criticized with the majority decision for placing the burden on the city to justify its ordinance, for ignoring the separation of powers principles behind section 30005(b) (as well as the presumption that local nuisance and other ordinances are valid), and for not addressing the merits of the city s appeal. XIII. CHALLENGES TO LAND USE DECISIONS A. Regulatory and Physical Takings Koontz v. St. Johns River Water Management District (2013) U.S., 133 S.Ct See discussion under section VIII(C)(1) above. MHC Financing Limited Partnership v. City of San Rafael (9 th Cir. 2013) 714 F.3d 1118 KEY POINT City s mobile home rent control laws upheld against regulatory takings, public use, and substantive due process challenges. In a case the Ninth Circuit characterized as déjà vu all over again, the court upheld a city s mobile home rent control regulations against regulatory takings and substantive due process challenges, as well as a challenge asserting that the laws run afoul of the public use requirement of the Fifth Amendment under Kelo v. City of New London (2005) 545 U.S The decision does not break any new ground following the Ninth Circuit s earlier en banc decision in Guggenheim v. City of Goleta (9 th Cir. 2010) 638 F.3d 1111, which rejected similar challenges to another mobile home rent control law. 10

15 Lockaway Storage v. County of Alameda (2013) 216 Cal.App.4 th 161 KEY POINT A public agency may be held liable for a regulatory taking based upon the agency s legally erroneous determination that a recently adopted ballot measure prevented a project from being developed pursuant to a previously-approved use permit, where the court later determines that the determination was unreasonable and unjust. This case holds a county liable for a temporary regulatory taking based upon the county s determination that a recently-adopted ballot measure prevented the county from being able to issue a building permit for a development project for which the county had previously issued a conditional use permit. The court held that the county s determination was not only in error, but that it was also unreasonable and unjust, based largely on the fact that the county s planning staff had changed its interpretation of the ballot measure (which change was based upon advice from the county counsel s office). While the court found that the county did not act in bad faith or as a result of improper motivation, the court nonetheless found a regulatory taking. The most significant aspect of the decision is the court s apparent holding that a prior decision of the Supreme Court, Landgate, Inc. v. California Coastal Comm. (1998) 17 Cal.4 th 1006, is no longer good law. In Landgate, the Court held that a legally erroneous decision of a government agency during the development approval process resulting in delay does not constitute a taking of property, at least where the agency s legal error is the result of a bona fide legal dispute. The Lockaway decision reasons, however, that Landgate did not properly consider the application of the so-called Penn Central factors for assessing regulatory takings (based upon Penn Central Transp. Co. v. City of New York (1978) 438 U.S. 104). Penn Central requires courts to weigh such factors as the economic impact of the regulation on the claimant, the extent to which the regulation has interfered with distinct investment-backed expectations, and the character of the governmental action, in order to determine whether government action constitutes a regulatory taking. At the time Landgate was decided, existing U.S. Supreme Court precedent had suggested a second alternative test for assessing whether a regulatory taking exists specifically, whether a regulation substantially advances legitimate state interests. However, since Landgate was decided, the Court in Lingle v. Chevron U.S.A. Inc. (2005) 544 U.S. 528 held that this so-called substantially advances formula... is not a valid method for identifying regulatory takings for which the Fifth Amendment requires just compensation and that Penn Central generally provides the exclusive test (subject to some exceptions). Because the decision in Landgate frequently referenced the substantially advances test, the court in Lockaway determined that it applied the wrong test and thus strongly suggested (without expressly stating) that Landgate is no longer good law. But the decision also went on to find that, even if Landgate still remains good law, the county could not prevail under its holding, reasoning that the County s change of position take[s] this case outside of the Landgate rule. 11

16 11. PROTECTING THE ENVIRONMENT II. CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) A. Overview 5. Timing for CEQA Compliance Golden Gate Land Holdings, LLC v. East Bay Regional Park District (2013) 215 Cal.App.4 th 353 KEY POINTS CEQA review does not necessarily need to be completed for a project before an agency can initiate eminent domain proceedings to acquire property for the project. Where a trial court finds that an agency did not comply with CEQA before approving a project, it may be within the trial court s discretion to nonetheless not require the agency to set aside the resolution of necessity for that project, and thus allow an eminent domain proceeding to continue while the agency takes action to comply with CEQA. A trial court allowed a park district to proceed with eminent domain proceedings to acquire property for a segment of the San Francisco Bay Trail, notwithstanding a finding that the district improperly determined the project to be exempt from CEQA. (Procedurally, this challenge was brought by the property owner as a separate CEQA writ petition, before the district had initiated eminent domain proceedings.) The trial court expressly relied upon Public Resources Code section to grant a limited remedy, and thus held that the district only had to set aside its exemption determination, but not its approval of a resolution of necessity. Interestingly, however, the court ruled that the district could not actually acquire the property until after it had complied with CEQA. The property owner appealed, arguing that the trial court erred in refusing to set aside the resolution of necessity. The court of appeal affirmed. This case has a nice discussion reaffirming the scope of the trial court s discretion to grant limited relief under section , as well as affirming the point that, at least in some circumstances, CEQA review does not need to be completed before an agency can acquire property. However, the court s discussion was very fact-specific, emphasizing that the nature of this particular project was to actually preserve open space, and thus distinguishing several cases involving actual development projects. Indeed, the court relied in part on the fact the district was under a statutory mandate to complete the Bay Trail. Thus, it is not clear how much this case can be relied upon in the case of actual development approvals. 12

17 Neighbors for Fair Planning v. City and County of San Francisco (2013) 217 Cal.App.4 th 540 KEY POINT City was not required to prepare EIR for affordable housing project before making a loan to cover specified costs of design, environmental study, and other application-related costs, where loan agreement explicitly stated that the city was not committing itself to the project and required repayment regardless of whether project went forward. This case involves a challenge to a city s certification of an EIR for and approval of a mixed-use affordable housing project. The published portion of the opinion only addresses (and rejects) petitioner s contention that the city improperly committed to the project before certifying the EIR. The petitioner primarily relied upon the City s approval of a loan of nearly $800,000 (approximately 4% of the $4 million needed to complete the project) to cover specified design and application related costs (including environmental review costs), but the loan agreement specified that the city was not committing to approve the project and required repayment of the loan regardless of whether the project went forward. Petitioner also challenged the fact that a special use zoning ordinance necessary for the project was introduced (but not approved) before the EIR was certified, and cited to various public statements made by certain officials in support of the project. The court had no trouble distinguishing Save Tara v. City of West Hollywood (2008) 45 Cal.4 th 116 in rejecting petitioner s challenge. Poet, LLC v. California Air Resources Board (2013) 217 Cal.App.4 th 1214 KEY POINTS Scope of judicial review of agency determinations made pursuant to a certified regulatory program is essentially the same as the scope of judicial review of other types of CEQA claims. Decision-making body of lead agency must complete CEQA review pursuant to its certified regulatory program before approving a project and cannot delegate CEQA compliance to another official or body who is not responsible for project approval. Lead agency may defer the formulation of mitigation measures to the future only where the agency commits to achieving specific performance criteria. Under the Administrative Procedures Act, a state agency s rulemaking file should include correspondence received from the agency s retained consultants containing their expert opinions, subject to any applicable privilege such as the deliberative process privilege. 13

18 This litigation involved a challenge to CARB s adoption of Low Carbon Fuel Standards, which were required by the California Global Warming Solutions Act of The court expressed some sympathy towards CARB, noting that it was given a difficult task and the pressure of a statutory deadline and finding that its efforts to complete the LCFS regulations on time satisfied a vast majority of the applicable legal requirements. However, the court found that CARB violated certain requirements of CEQA and the APA. Specifically, with respect to CEQA, the court found that CARB improperly approved the regulations before completing CEQA review pursuant to its certified regulatory program, that it improperly delegated the completion of CEQA review to its executive officer, and that it improperly deferred the formulation of certain mitigation measures without committing to specific performance criteria. As to the APA, it found that CARB improperly omitted from its rulemaking file certain s from its retained consultants which contained their expert opinions as to certain matters. (As to this last point, the court recognized that the deliberative process privilege may still apply to certain such communications, but CARB did not assert that privilege as to the s in question.) Notwithstanding these statutory violations, the court exercised its discretion pursuant to Public Resources Code section to allow the LCFS regulations to remain in effect pending CARB s compliance with CEQA and the APA, since setting them aside would result in greater environmental harm than allowing them to remain in effect pending corrective actions. Or, as the court stated, [i]n other words, we will avoid the irony of violations of an environmental protection statute being used to set aside a regulation that restricts the release of pollutants into the environment. Much of this case deals with the requirements of certified regulatory programs particularly applicable to state agencies and will thus be of lesser interest to cities. It does, however, include a comprehensive summary and synthesis of the caselaw regarding deferral of mitigation measures. And it provides another important example of a court relying on section to carefully tailor and limit the scope of a writ of mandate to remedy a CEQA violation, rather than setting aside an entire project approval. For many years after section was amended in 1993 to provide this discretion, some courts were rather slow in embracing it. But this case provides a detailed discussion of this section and other recent cases that have interpreted it. B. Scope 1. Definition of Project California Building Industry Association v. Bay Area Air Quality Management District (2013) 218 Cal.App.4 th 1171 KEY POINTS BAAQMD s thresholds of significance for air quality/greenhouse gas impacts, which other jurisdictions have relied upon as persuasive authority, are legally valid. 14

19 The adoption of thresholds of significance pursuant to CEQA Guidelines section is not itself a project requiring CEQA review. In June, 2010, BAAQMD adopted new thresholds of significance for air pollutants, including greenhouse gas emissions (GHGs), toxic air contaminants (TACs), and particulate matter (PM2.5), which thresholds were identified as CEQA Air Quality Guidelines and were designed to assist other lead agencies in their evaluation of greenhouse gas and other air quality impacts. BAAQMD adopted these guidelines in response to the Global Warming Solutions Act (AB 32; Health and Safety Code 38500), which calls for the reduction of GHG emissions to 1990 levels by Since their adoption, many other jurisdictions have used these guidelines as persuasive authority for their own CEQA analyses. CBIA sued and, in 2011, the trial court held that BAAQMD s adoption of the thresholds was itself a project for which BAAQMD was required to conduct CEQA review, and issued a writ of mandate directing BAAQMD to set them aside. The court of appeal reversed, holding that the promulgation of standards of significance is not a project subject to CEQA review. The court relied upon section , which encourages agencies to develop thresholds of significance and sets forth a procedure for doing so, which procedure does not require formal CEQA review. Instead, section only provides that thresholds of significance must be formally adopted through a public review process and supported by substantial evidence. The court also ruled that the adoption of thresholds is not a project because any resulting environmental effects would be too speculative to be reasonably foreseeable. Finally, the court rejected other miscellaneous legal challenges to the thresholds, finding that they were supported by substantial evidence. 3. Exemptions Save the Plastic Bag Coalition v. County of Marin (2013) 218 Cal.App.4 th 209 KEY POINTS An ordinance banning single-use plastic bags and imposing a fee on single-use paper bags may be found categorically exempt from CEQA as a regulation designed to assure the maintenance, restoration, enhancement, or protection of natural resources and the environment, particularly where it only applies to 40 retailers located in unincorporated parts of the county. Ordinances adopted by cities and counties may qualify as actions taken by regulatory agencies categorically exempt from CEQA under sections and of the CEQA Guidelines, where the ordinances are adopted to maintain, restore, enhance, or protect the environment, and where the requirements of those sections are otherwise satisfied. 15

20 This case involves a challenge to a county ordinance which bans single-use plastic bags and which imposes a fee on single-use paper bags. The court upheld the county s determination that the ordinance was categorically exempt from CEQA under sections and as a regulatory action designed to assure the maintenance, restoration, enhancement, or protection of natural resources and the environment. The decision, of course, includes an extensive discussion of Save the Plastic Bag Coalition v. City of Manhattan Beach (2011) 52 Cal.4 th 155, in which the Supreme Court upheld a city s reliance on a negative declaration for a similar ordinance. The court rejected petitioner s argument that this decision should be interpreted as precluding an agency from relying upon a categorical exemption rather than a negative declaration or EIR. The court also emphasized the limited nature of the ordinance (as a practical matter, it only affected 40 retailers located in unincorporated areas of the county), and emphasized that whether a categorical exemption could be used depend[s] upon the unique facts and circumstances presented. The case is also interesting insofar as it specifically rejects petitioner s arguments that a city or county cannot be a regulatory agency for purposes of sections and 15308, and that those sections cannot be found to apply to legislative actions. E. Environmental Impact Report (EIR) 3. Baseline Neighbors for Smart Rail v. Exposition Metro Line Construction Authority (2013) 57 Cal.4 th 439 KEY POINTS An EIR may omit analysis of a project s impacts on the existing environment and instead substitute a baseline consisting of environmental conditions projected to exist in the future, ONLY IF the lead agency can justify this approach by showing an existing conditions analysis would be misleading or without informational value. An EIR s analysis of existing conditions may take account of environmental conditions that will exist when the project begins operations, rather than conditions existing at the time of EIR preparation, if the agency reasonably anticipates a change in environmental conditions to occur before project implementation. The substantial evidence test applies to a court s review of the legal adequacy of an agency s justification for substituting a future conditions analysis for an existing conditions baseline analysis, since this determination involves primarily a factual assessment. An agency s failure to adequately justify substituting use of future projected conditions for the existing baseline may nonetheless be harmless error, where the agency s actual analysis of future conditions contains sufficient information from which the court can infer that an analysis of existing conditions would not disclose any new significant impacts. 16

21 An EIR may rely upon mitigation measures requiring future cooperation from other agencies, where the lead agency finds, based upon substantial evidence, that such other agencies can and should cooperate in the adoption of such measures. In this long-anticipated decision, the Supreme Court has addressed a conflict in the appellate courts as to the extent to which an EIR s traffic analysis may rely upon projected future conditions rather than actual existing conditions. This particular case involved a challenge to a light rail project. Even though the project was expected to be built out and operational by 2015, the EIR only analyzed the future traffic impacts which were projected to occur in And, largely because the project was projected to result in an overall reduction in automobile use, the traffic impacts were found to be less than significant (but the traffic analysis did include detailed analysis of future conditions at numerous intersections). In a divided decision, the Court held that an EIR could only analyze future conditions in lieu of existing conditions if it justified that decision based upon a finding that analysis of existing conditions would be misleading or without informational value. The Court held that the agency here did not adequately justify this approach. However, three of the four justices in the majority found that the agency committed harmless non-prejudicial error that did not warrant issuance of a writ (whereas the three justices in the dissent would have found no error in the first place). The Court emphasized the need for the public and decision-makers to be informed of the actual shortand medium-term impacts, so that they could adequately weigh those impacts against any long-term benefits of the project. And the Court acknowledged that an analysis of existing conditions could properly take into account future projected conditions anticipated to occur before the project actually begins operations. (The Court also acknowledged that it would not violate CEQA for an EIR to analyze both existing and future conditions.) One important gem in the decision is the Court s acknowledgement that the substantial evidence test applies to review of the agency s justification for use of future conditions in lieu of the existing baseline, since this determination is primarily factual. Many CEQA petitioners have argued for a broad application of the independent judgment test for review of an EIR s legal adequacy, so this case provides an important example of the Court affirming the application of the substantial evidence test where factual issues are in dispute. The case does not specifically address circumstances involving a long-term project which is expected to develop gradually over time. Under such circumstances, an EIR s traffic analysis may need to consider multiple baselines, in order to adequately analyze both near-term and long-term impacts. The Court also unanimously rejected petitioners separate challenge to the adequacy of the EIR s mitigation measure for spillover parking effects. That measure required the lead agency to monitor future parking impacts in the vicinity of future transit stations and identified a series of alternative measures to mitigate parking impacts where identified. Some of these measures required cooperation of other agencies, but all measures involved relatively low-cost solutions. Relying upon Public Resources Code section 21081, subdivision (a), the Court found substantial evidence supporting the lead agency s finding that other agencies can and should cooperate in the implementation of these measures. 17

22 4. Contents Friends of Oroville v. City of Oroville (August 19, 2013) Cal.App.4 th KEY POINTS EIR s analysis of greenhouse gas (GHG) emissions must focus on the actual emissions of the project itself and how those emissions compare to business as usual emissions, rather than just containing a meaningless comparison of project impacts to statewide impacts. This case holds that an EIR did not adequately analyze a project s GHG emissions. The project involved the replacement and relocation of a Wal-Mart with a new Wal-Mart approximately twice its size. According to the court, the EIR essentially just compared the project s GHG emissions with statewide impacts to conclude that its impacts would be less than significant (or, as the court stated, literally, miniscule ). The EIR identified the standard of significance as being whether the project would hinder or delay California s ability to meet the reduction targets set forth in Assembly Bill 32, which seeks to reduce GHG emissions to 1990 levels by the year The EIR found that the project would not hinder meeting this target, because its emissions were so small compared to the statewide targets set forth in AB 32. The court found that the city properly adopted the AB 32 reduction targets as the threshold-ofsignificance, but found that the City improperly applied them here by applying a meaningless, relative number to determine insignificant impact. As the court stated, [o]f course, one store s GHG emissions will pale in comparison to those of the world s eighth largest economy. The court also faulted the EIR for failing to identify the GHG emissions of the existing Wal-Mart store and for failing to quantitatively or qualitatively ascertain or estimate the effect of the Project s mitigation measures on GHG emissions. And the court also found that the EIR contained contradictory information as to whether and to what extent the project would increase traffic-related GHG emissions, as it suggested at one point that a one-stop shopping destination... may reduce multiple and out-of-town trips, at another point that it will not result in any significant changes in vehicle miles traveled, and in another that there will be round trips to it of up to 40 miles from neighboring communities. For an example of a case where the EIR properly applied the AB 32 standard to assess the significance of GHG emissions, the court cited with approval to Citizens for Responsible Equitable Development v. City of Chula Vista (2011) 197 Cal.App.4 th 327. In that case, the EIR analyzed a project s emissions as mitigated and identified the percentage extent to which they were reduced from business as usual to find that AB 32 s target reduction of 25 percent was met. Thus, these two cases, taken together, can provide a helpful framework demonstrating how GHG analyses should and should not be conducted. 18