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CEQA Updates

Keeping You Up-to-Date on the California Environmental Quality Act

Posts from August, 2013

Plastic Bag Coalition Unable to Litigate its Way Out of a Paper (or Cloth) Bag

Thursday, August 8th, 2013

In Save the Plastic Bag Coalition v. County of Marin, 2013 Cal. App. LEXIS 588, the Court of Appeal for the First Appellate District affirmed denial of a petition for writ of mandate challenging a county’s adoption of an ordinance banning single-use plastic bags.

In January of 2011, the Marin County Board of Supervisors (“Board”) adopted a proposed ordinance banning single-use plastic bags and requiring a fee for paper bag use at specified retail establishments in order to promote greater use of reusable bags by the public. In adopting the ordinance, the Board determined the ordinance was categorically exempt from CEQA pursuant to CEQA Guidelines sections 15307 and 15308 (regulatory action designed to assure the maintenance, restoration, enhancement, or protection of natural resources and the environment).

Appellant filed a petition for a writ of mandate ordering the County to set aside the ordinance for non-compliance with CEQA and sought a declaration that State law preempted the ordinance. Appellant argued the ordinance was not categorically exempt from CEQA because, based on a “life cycle” assessment, reusable and paper bags have a greater negative effect on the environment than plastic bags.

The First Appellate District held the California Supreme Court’s decision in Save the Plastic Bag Coalition v. City of Manhattan Beach (2011) 52 Cal.4th 155, did not support the need for an EIR in this case. The court there held open the possibility that a plastic bag ban resulting in a significant increase in paper bag usage could trigger the need for an EIR. Appellant contended that, due to Marin County’s large size and population, the ordinance would lead to a significant increase in paper bag use, and therefore an EIR should be prepared. The court noted that because the ordinance at issue here only applied to unincorporated parts of Marin County, it would affect a much smaller number of retailers than the Manhattan Beach ordinance. The court next addressed appellant’s contention that a categorical exemption could never be used for a plastic bag ban because a “blanket” exemption of that sort would preclude an EIR under all circumstances, contrary to the Manhattan Beach decision; the court pointed out that, in referencing “blanket” exemptions, appellant was actually describing statutory exemptions, not categorical exemptions, which allow for exceptions.

Appellant then argued that the exemptions the County relied on related to regulations, which should be read narrowly to mean administrative regulations implementing an existing law. The court rejected that argument, noting that it was unaware of any authority supporting the claimed distinction between legislative and regulatory actions in the context of CEQA exemptions.

In considering whether the unusual circumstances exception to the categorical exemptions applied, the court stated that appellant focused its argument on establishing that plastic bags were not as environmentally harmful as suggested by the County, but had not actually attempted to show that the County lacked evidence to support its contention that the plastic bag ban would preserve and enhance the environment. As such, the court deemed that issue forfeited.

In reaching its holding, the court noted a split of authority regarding the standard of review to be applied in reviewing an agency’s determination as to whether a project fell within an exception to a categorical exemption (“fair argument” test versus “substantial evidence” test), but stated that such a determination was unnecessary in this case since it would not change the outcome.

In reliance on supporting evidence and absent unusual circumstances, local jurisdictions with relatively small populations can likely find that a proposed plastic bag ban is categorically exempt from CEQA under a Class 7 and/or Class 8 exemption.

Court Allows ARB’S LCFS Regulations to Remain In Effect Pending Outcome of New Proceedings

Thursday, August 8th, 2013

In POET, LLC v. California Air Resources Board, 2013 Cal. App. LEXIS 554, the Fifth District Court of Appeal reversed the trial court’s decision denying plaintiffs’ petition for a writ of mandate seeking invalidation of California Air Resources Board (“ARB”) approval of low carbon fuel standards (“LCFS”) regulations for non-compliance with CEQA. In an unpublished part of its opinion, the court further ruled that ARB violated the Administrative Procedures Act (“APA”) by failing to include consultant e-mails in the rulemaking file. Nevertheless, the court allowed the regulations to remain in effect, pending completion of CEQA- and APA-compliant proceedings.

The Global Warming Solutions Act of 2006 (“AB 32”) directed ARB to devise and implement strategies to reduce carbon emissions. As part of its compliance with this mandate, ARB developed LCFS performance standards imposing a limit on the annual average carbon intensity of fuels used by regulated parties. In approving the LCFS standards, ARB’s Board delegated to the Executive Officer the duty to respond to environmental issues.

Plaintiffs filed a petition for writ of mandate to set aside the LCFS regulations, alleging the Board had violated CEQA by: (1) approving the regulations prior to completion of environmental review; (2) delegating partial decision-making authority to its Executive Officer; and (3) improperly deferring mitigation for increased NOx emissions. The trial court denied plaintiffs’ petition and plaintiffs appealed. On appeal, plaintiffs raised an additional argument that ARB had violated the APA by failing to include relevant consultant e-mails in the rulemaking file.

The court first held an environmental document prepared pursuant to certified regulatory program must be completed before a lead agency may approve a project. The court then determined that the principles regarding the timing of project approval enunciated in Save Tara v. City of West Hollywood, 45 Cal. 4th 116 (2008), applied to ARB’s actions. A review of the language of the Board’s resolution, agency press releases, and subsequent notices of decision led the court to conclude that ARB had approved the regulations for CEQA purposes at the Board hearing, having committed itself to a particular course of action that foreclosed the Executive Officer’s ability to consider the full range of alternatives.

Next, the court considered whether the Board had improperly delegated decision-making authority to the Executive Officer. The court observed that CEQA’s basic purpose of informing decision-makers about possible environmental effects would be frustrated if the two functions—project review and environmental review—could be performed by different people. The court therefore held that, while delegation may be authorized, splitting the decision-making authority was improper.

The court then examined whether ARB had improperly deferred mitigation for increased NOx emissions from biodiesel. ARB stated it would conduct rulemaking at the end of a test program to ensure no NOx increase and would partially mitigate this impact by promulgating fuel specifications. But because ARB had not established objective performance criteria to measure whether the stated goal would be achieved, the court held it had improperly deferred mitigation.

The court concluded that ARB’s approval of the LCFS regulations should be set aside, but that, on balance, the environment would be better served by allowing the regulations to remain in effect pending ARB’s compliance with CEQA. However, the court prohibited ARB from stepping up enforcement beyond the 2013 levels until it complies with its legal obligations.

The decision-making body of the lead agency cannot delegate authority to certify an EIR pursuant to CEQA while retaining approval authority for a project.
Certified regulatory programs remain subject to the limitations set forth in Save Tara related to timing of project approval.
Courts can, and should, consider the consequences of setting aside a project when crafting the remedy for a CEQA violation.

California Supreme Court Issues Neighbors for Smart Rail Decision: Predicted Conditions Baseline Allowable Under CEQA in Limited Circumstances

Monday, August 5th, 2013

In a much anticipated decision, the California Supreme Court held in Neighbors for Smart Rail v. Exposition Metro Line Construction Authority that lead agencies can use future predicted conditions as an environmental baseline in assessing the impacts of proposed projects. The court held that in order for an agency to omit the normally required existing conditions baseline analysis and rely solely on a predicted conditions baseline, it must first demonstrate that the existing conditions analysis would be uninformative or misleading. In doing so, the court disapproved of the holdings in Sunnyvale West Neighborhood Assn. v. City of Sunnyvale City Council (2010) 190 Cal.App.4th 1351 (Sunnyvale) and the Fifth Appellate District’s decision in Madera Oversight Coalition, Inc. v. County of Madera (2011) 199 Cal.App.4th 48 (MOC).

The dispute in Neighbors for Smart Rail originated over the second-phase of a transit project called the Exposition Transit Corridor, a proposed light rail line connecting downtown Los Angeles with Santa Monica. The Exposition Metro Line Construction Authority (“Expo Authority”) approved the project on February 4th,

The central issue in the case is the environmental baseline that was used to evaluate traffic, air quality, and greenhouse gases. CEQA Guidelines section 15125(a) states that an EIR “must include a description of the physical environmental conditions in the vicinity of the project, as they exist at the time the notice of preparation is published, … [t]his environmental setting will normally constitute the baseline physical conditions by which a lead agency determines whether an impact is significant.” Lead agencies have relied on the use of the word “normally” in the guideline to use environmental baseline based on conditions that exist after the publication of a notice of preparation (“NOP”). This typically happens for large projects that will be constructed over a long period of time. Lead agencies often argue that a future environmental baseline reflecting the likely conditions in which the project will be built gives a more accurate assessment of the project’s impacts.

The Supreme Court addressed a related environmental baseline issue in Communities for a Better Environment v. South Coast Air Quality Management District (2010) 48 Cal.4th 310 (“CBE”). There, the court held that a petroleum refinery project must use actual historical emissions as its environmental baseline for evaluating a proposed expansion; it was impermissible to use maximum permitted capacity as a hypothetical baseline. The court noted that neither CEQA nor the CEQA Guidelines “mandates a uniform, inflexible rule for determination of the existing conditions baseline. Rather, an agency enjoys the discretion to decide, in the first instance, exactly how the existing physical conditions without the project can most realistically be measured, subject to review, as with all CEQA factual determinations, for support by substantial evidence.” The court did not address whether a future baseline reflecting an agency’s projected environmental setting could be used as the basis for analysis in an EIR.

Since CBE, two appellate districts have held that agency’s may not use a projected environmental setting beyond the date of project approval. The Sixth Appellate District’s decision in Sunnyvale and the Fifth Appellate District’s decision in MOC both held that projected future conditions provide an improper baseline for determining traffic impacts.

In preparing the EIR for the Exposition Transit Corridor, the Expo Authority determined that a 2009 baseline (when the NOP was published) would not provide a reasonable basis for determining the project’s traffic and air quality impacts. The EIR instead uses a 2030 baseline that the agency determined based on projected changes in the environmental setting between 2009 and 2030. This approach would be a clear violation of CEQA under Sunnyvale or MOC.

The Second District disagreed with the Sunnyvale and MOC opinions and upheld the Expo Authority’s use of a future baseline. The Second District held that “in a proper case, and when supported by substantial evidence, use of projected conditions may be an appropriate way to measure the environmental impacts that a project will have on traffic, air quality and greenhouse gas emissions. As a major transportation project that will not even begin to operate until 2015 at the earliest, its impact on presently existing traffic and air quality conditions will yield no practical information to decision makers or the public.”

The Supreme Court struck a balance between the split in the appellate districts. The court agreed with the Second District, and correspondingly disapproved of Sunnyvale and MOC, in holding that agencies may rely solely on a predicted conditions baseline. The court’s decision also imposes a new requirement that will result in a more restrictive use of future baselines than what would have otherwise been permissible under the Second District’s ruling. The court held that agencies can rely solely on a predicted conditions baseline only after they justify the omission of an existing conditions baseline. Before an agency can eliminate an analysis based on existing conditions, it must first determine, based on substantial evidence, that the inclusion of an existing conditions analysis would be misleading or without informational value.

The court stated, “[t]o the extent a departure from the ‘norm[]’ of an existing conditions baseline (Guidelines, § 15125(a)) promotes public participation and more informed decisionmaking by providing a more accurate picture of a proposed project’s likely impacts, CEQA permits the departure. Thus an agency may forego analysis of a project’s impacts on existing environmental conditions if such an analysis would be uninformative or misleading to decision makers and the public.”

The court then applied this rule to the present case and held that, while Expo demonstrated that a predicted baseline was a more informative analysis, there was no evidence in the record that an existing conditions analysis would have been uninformative or misleading. The court implied that in this case, the lead agency should have analyzed the project’s impacts against an existing conditions baseline as well as a predicted baseline. Nonetheless, the court held that under these circumstances, the omission of an existing conditions baseline did not deprive decision makers or the public of substantial information relevant to approving the project, and was therefore a non-prejudicial error.

The court also upheld the adequacy of mitigation for spillover parking effects, which was the only other issue before the court. The court held that the agency made the proper findings for reliance on local jurisdictions to implement mitigation measures and that the findings were supported by substantial evidence. The Petitioner’s speculation that local agencies may not agree to permit the parking facilities was not sufficient to show that the mitigation measures violated CEQA.

Key Point: The baseline issue has important implications for all environmental review documents under CEQA as it affects the underlying basis of the analysis. After this decision, agencies have the discretion to rely solely on a predicted conditions baseline; however, in doing so, agencies must be sure to demonstrate that the inclusion of an existing conditions baseline would be uninformative or misleading. It is not enough to show that the predicted conditions baseline is supported by substantial evidence or that it is more informative than the existing conditions baseline. Agencies would be wise to include explicit findings in their project approval documents supporting the determination to rely solely on a predicted conditions baseline.

CEQA Challenge Barred by 30-Day Statute of Limitations Based on Exemption Not Asserted in Notice of Exemption

Monday, August 5th, 2013

In May v. City of Milpitas, 2013 Cal. App. LEXIS 557, the Court of Appeal for the Sixth Appellate District held that a 30-day statute of limitations in Government Code section 65457 barred a CEQA challenge for which a Notice of Exemption (“NOE”) had been filed. NOE’s typically trigger a 35-day statute of limitations; however, the court held the newer and more specific Government Code section trumped the longer statute of limitations. The lawsuit would have been timely if CEQA’s 35-day time-period had applied. The Court relied in part on language in CEQA strongly promoting finality and expeditious resolution of CEQA challenges. This case is yet another reminder that CEQA’s short statutes of limitations are inflexible and courts are unforgiving in their enforcement.

In 2008, the City of Milpitas (“City”) certified a program environmental impact report (“EIR”) for its transit area specific plan (“Plan”). On November 1st, 2011, the City adopted a resolution approving amendments to the developer’s entitlements to allow a residential condominium development within the Plan area. The Resolution stated that the project was consistent with the Plan and that no additional environmental review was required. On November 3rd, 2011, the City filed an NOE for the project, citing CEQA Guidelines sections 15168(c)(2) (based on project’s consistency with Plan EIR) and 15061(b)(3) (no possibility the project could have a significant effect on the environment). The filing of an NOE typically starts a 35-day statute of limitations to challenge the lead agency’s determination that the project is exempt from CEQA.

On December 7th, 2011, petitioners filed a petition for writ of mandate to invalidate the project approvals on the basis that the City’s CEQA exemption determination was improper and that an EIR is required. The City demurred, arguing the suit was time-barred by Government Code section 65457 because it had not been filed within 30-days of the November 1st project approval. Appellants responded that their suit was timely because the exemptions the City had relied on in its NOE were subject to a 35-day limitations period. The trial court sustained the City’s demurrer, dismissing the action without leave to amend. The Court of Appeal affirmed.

Government Code section 65457 provides that residential projects consistent with a specific plan for which an EIR has been certified are exempt from CEQA as long as none of the events set forth in Public Resources Code (“PRC”) section 21166 occur. The triggering events under PRC section 21166 include substantial changes in the project or the circumstances surrounding the project, or significant new information. When the City found the project exempt under Guidelines section 15168(c)(2), it implicitly found that none of the events requiring additional environmental review under section 21166 had occurred. The City, therefore, made the findings necessary to exempt the project under Government Code section 65457 despite the fact that the City did not cite Government Code section 65457 in the project approval resolution or the NOE. Government Code section 65457 specifies that lawsuits challenging projects exempt under that section must be filed within 30-days of project approval. The clock starts on the 30-day statute of limitations automatically upon approval of a project exempt under Government Code section 65457; there is no requirement to file a notice of exemption.

The appellants’ argued that one or more of the triggering events in section 21166 had actually taken place, rendering the exemption non-applicable. The court explained that that contention related to the merits of appellants’ suit, which was irrelevant for purposes of a statute of limitations analysis. Even though the City had not explicitly invoked the exemption in its NOE, the project qualified for the exemption based on the City’s findings.

Lastly, the court held that appellants could not rely on equitable estoppel to preclude respondents from invoking the statute of limitations because any detrimental reliance on appellants’ part was unreasonable. The filing of the NOE had no bearing on whether the shorter statute of limitations in Government Code section 65457 applied.

A Mendocino County Quarry Project Can’t Keep the ACE in the Hole, Court Finds Inadequate the EIR’s Farmland Conversion Analysis

Monday, August 5th, 2013

On July 27, 2010, Mendocino County approved the Kunzler Terrace Mine Project, a 65.3 acre sand and gravel quarry one mile north of Ukiah. Project opponents sued, alleging various CEQA violations. The First District Court of Appeal ruled in favor of the challengers and published the portion of the decision addressing impacts to agricultural lands. The court disagreed with the County and ruled that Agricultural Conservation Easements (ACEs) are not legally infeasible mitigation for site-specific farmland conversion impacts. The court did not publish the remaining portions of the decision, including required recirculation of the EIR with new biological mitigation measures and the adequacy of truck traffic mitigation measures.

Forty-five of the Project’s 65.3 acres are designated prime farmland by the Department of Conservation’s Farmland Mapping and Monitoring Program (FMMP). The project’s EIR concluded there was no feasible mitigation available for the conversion of prime farmland and found the impact to agricultural lands significant and unavoidable. The EIR explained that on-site mitigation is infeasible because the aggregate resources are located directly beneath the farmland and the finished grade after mining will be below the groundwater level. The EIR further explained that off-site mitigation, typically the acquisition of an Agricultural Conservation Easement (ACE), would not mitigate the conversion of farmland. According to the EIR, ACEs only address indirect and cumulative effects of farmland conversion, of which this project has none.

The court stated, “the legal feasibility of a mitigation measure is not a question of fact reviewed for substantial evidence but rather is a question of law that we review de novo.” The court then disagreed with the agency’s legal conclusion and found the “ACEs may appropriately mitigate for the direct loss of farmland when a project converts agricultural land to a nonagricultural use, even though an ACE does not replace the onsite resources.” The court left open the possibility that off-site ACEs may be economically infeasible, but rejected the assertion that ACE’s are legally infeasible.

The court also held that the County failed to adequately respond to a comment letter from the Department of Conservation recommending in-lieu fees as an alternative to the purchase of ACEs. The comment suggests in-lieu fees could be donated to a local, regional, or statewide organization or agency for the purpose of acquiring ACEs. The County’s response stated that the County was legally precluded from accepting in-lieu fees for ACE acquisition because it does not have a comprehensive farmland mitigation program. The court held the County’s response did not address the recommendation that in-lieu fees be paid to entities other than the County and thus failed to explain whether in-lieu fees are feasible mitigation.

The feasibility of mitigating farmland conversion has been a controversial CEQA issue for many years. This case, should it stand, clarifies the legal parameters for farmland conversion analysis required in an EIR. The decision does not address whether ACEs can reduce site-specific farmland conversion impacts to a less than significant level. The court, however, clearly rejected the County’s determination that ACEs are legally infeasible for mitigating site-specific impacts.