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Posts from July, 2015


Court Remands Challenge to Categorical Exemption for School Closure to Allow Further Findings or Evidence to be Considered by the School District

Wednesday, July 22nd, 2015

The California Fourth District Court of Appeal reversed and remanded a case involving the closure of two public schools in the Barstow Unified School District (BUSD). In Save Our Schools v. Barstow Unified School Dist., 2015 Cal.App.Unpub. LEXIS 4926, Save Our Schools (SOS) sued BUSD over the closure of two schools. BUSD closed the schools in 2013 after years of declining student enrollment in the school district. BUSD concluded its decision to close the schools was exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines section 15314 (categorical exemption for minor additions to existing schools) and Public Resources Code section 21080.18 (statutory exemption for school closures if impacts of closure are otherwise exempt from CEQA).

Following the closures, SOS petitioned alleging that insufficient evidence supported the CEQA exemptions. The superior court denied their petition, but the court of appeal agreed with SOS and reversed.

As defined in CEQA Guidelines section 15314, a minor addition to a school is defined as: (1) the addition of 10 of fewer classrooms; or (2) an increase in original student capacity of 25 percent or less. “Original student capacity” means the school’s physical space for housing students, or number of students that can be physically accommodated before the transfer.  The court found that the administrative record failed to disclose the “[o]riginal student capacity” at any of the receptor schools.  The court concluded it was possible some of the receptor schools were near capacity at the time of the closures and student transfers.  The court stated this was a “critical gap in the evidence” that prevented BUSD from determining based on sufficient evidence whether the school closures were exempt from CEQA pursuant to CEQA Guidelines section 15314.

On remand, the court directed BUSD to “effectively conduct an initial study to determine whether any categorical exemptions and any exceptions to those exemptions applied.”  Citing Ford Motor Co. v. NLRB (1939) 305 U.S. 364, 374, the court explained further that on remand BUSD “may adopt a corrected decision, without considering additional evidence, if its exemption determinations may be corrected based on the record before it at the time it passed the resolutions approving the closures and transfers. [Citation.] Alternatively, the District may consider additional evidence.”  The court also noted that SOS and other challengers must be provided an opportunity to present their own evidence and arguments on remand.

BUSD also argued that SOS’s petition was already moot because the schools had been closed for two years at the time of the decision. The court disagreed. The court noted that, on remand, BUSD could determine that the closures were not exempt from CEQA, and the schools could be reopened or BUSD could adopt other mitigation to address adverse environmental effects—if any—of the closures and transfers.

Court Upholds Monetary Fines Ordered by Trial Court for Violation of Williamson Act Contract

Wednesday, July 22nd, 2015

The action in County of Humboldt v. McKee, 2015 Cal. Unpub. LEXIS 4177, began when plaintiffs Humboldt County (County) sued Robert McKee and Buck Mountain Ranch Limited Partnership (collectively McKee). The original litigation (McKee I) involved McKee’s purchase of a property in Humboldt County which he then subdivided and sold. The property was an “agricultural preserve” under the Williamson Act.

In a lengthy unpublished decision, the court upheld the trial court’s decision finding McKee violated County guidelines and the applicable Williamson Act Contract (Contract).  Among other holdings, the court explained “the Williamson Act does not require local governments to permit temporary nonuse of agricultural preserves; the Contract and County guidelines did not permit McKee’s specific activities on the Preserve during cessation of livestock grazing; and the Williamson Act does not preclude local governments from imposing fines or penalties for violations of the act or violations of local guidelines and contracts adopted pursuant to the act.”

With respect to the issue of fines and penalties, the court upheld the trial court’s imposition of $199,100 in penalties against McKee as authorized under the County guidelines and unfair competition law.  McKee argued that the Williamson Act restricts remedies for violations of the Act to contractual remedies, and does not provide for penalties. The court disagreed, noting that, when considering the overall statutory scheme of the Williamson Act, the act does not preclude noncontractual remedies.

9th Circuit Holds ESA Does not Compel Use of Any Specific Methodology in “Balancing of Benefits” When Designating Critical Habitat

Wednesday, July 22nd, 2015

In 2005, the National Marine Fisheries Service (NMFS) designated the Green Sturgeon as a threatened species under the Endangered Species Act (ESA). When a species is considered threatened, under ESA, agencies are required to designate critical habitat for that species. Critical habitat is land that is essential to the conservation of the species and may require special management considerations or protections. In determining whether or not to exclude an area from critical habitat ESA says an agency “may exclude any area from critical habitat if [it] determines that the benefits of such exclusion outweigh the benefits of specifying such area as part of the critical habitat.” (16 U.S.C. § 1533(b)(2).) In 2010, NMFS designated over 11,000 square miles of marine habitat, 897 square miles of estuary habitat, and riverine habitat as critical habitat for the Green Sturgeon.

Following the designation, the Building Industry Association of the Bay Area and Bay Planning Coalition (collectively BIABA) sued. The court granted summary judgment in favor of NMFS. It stated that NMFS had a nondiscretionary duty to consider the economic impact of all critical habitat designations, but was not required to use any particular methodology, NMFS had complied with that duty, and NMFS’s decision not to exclude areas was not reviewable. BIABA appealed, and, in Bldg. Industry Assn. of the Bay Area v. U.S. Dept. of Commerce (9th Cir., July 7, 2015, No. 13-15132) __ F.3d __ (2015 U.S.App.LEXIS 11645), the Ninth Circuit affirmed the district court’s decision in its entirety.

First, the Ninth Circuit held ESA did not require NMFS to follow a specific methodology when designative critical habitat. ESA Section 4(b)(2) provides:

The Secretary shall designate critical habitat… on the basis of the best scientific data available and after taking into consideration the economic impact… The Secretary may exclude any area from critical habitat if he determines that the benefits of exclusion outweigh the benefits of specifying such area as part of critical habitat, unless he determines, based on the best scientific and commercial data available, that the failure to designate such an area as critical habitat will result in the extinction of the species concerned.

16 U.S.C. § 1533(b)(2).

BIABA asserted that this section requires the agency to assess whether the economic benefits of excluding an area from designation outweigh the conservation benefits of including the area. The court was not convinced. The court stressed that the word “may” in the statute suggested that the agency has discretion in whether or not to balance economic benefits. NMFS’s interpretation was reasonable given the statute’s language, and the court was required to defer to NMFS’s interpretation.

BIABA also argued that NMFS violated ESA because it did not consider the economic impacts in all of the areas considered for designation, but only those that were considered high risk. The court said this approach was within NMFS’s powers because the Green Sturgeon was unlikely to survive without these high risk areas, and NMFS was only statutorily required to designate an area if extinction of the species would otherwise occur.

Finally, BIABA argued the district court incorrectly held decisions by NMFS not to exclude areas are not reviewable by courts. The court disagreed. Section 4(b)(2) explains that the decision to exclude areas from designation is always completely discretionary, and in no circumstance is exclusion required under section 4(b)(2). The court held there is no basis under section 4(b)(2) for reviewing the decision not to exclude areas from designation, so there is no basis for reviewing BIABA’s claim.

Key Point

ESA Section 4(b)(2) does not require agencies to follow a specific balancing-of-benefits methodology. Section 4(b)(2) is a discretionary process through which agencies include or exclude areas for designation. An agency’s decision not to e

Center for Biological Diversity v. Department of Fish & Wildlife, S217763. (B245131; 224 Cal.App.4th 1105; Los Angeles County Superior Court; BS131347.)

Thursday, July 16th, 2015

Petition for Review Granted

July 9, 2014

Current Status

Fully briefed by the parties as of November 26, 2014.

Amicus briefing complete as of March 16, 2015.

The Court Ordered the Attorney General, or an appropriate state agency to be identified by the Attorney General, to serve and file an amicus curiae brief on or before August 7, 2015.

Court’s Statement of Issues Presented

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?  Center for Biological Diversity (CBD) argues that: (1) CDFW and Army Corps of Engineers’ mitigation measures to protect special status fish, including specifically, a measure permitting the U.S. Fish and Wildlife Service, if necessary during project construction, to move out of immediate harm’s way stranded unarmored three spine stickleback, a stated designated “endangered” and “fully protected” fish, is not prohibited “take” or a prohibited “authorization” under state law; (2) the exhaustion doctrine as set forth in Public Resources Code section 21177 cannot be interpreted to bar CEQA claims based on comments submitted after the comment period on the EIR has ended; and (3) the California Department of Fish and Wildlife’s (CDFW) use of a hypothetical “business as usual’ version of the Newhall Ranch Project as a baseline for determining the significance of the project’s GHG emissions was impermissible under CEQA. CBD seeks a writ directing the CDFW to vacate its certification of the EIR and all related approvals.  Newhall argues that (1) CBD’s interpretation of the Fish and Game Code would prevent the US Fish and Wildlife Service from collecting stranded stickleback and relocating them to another part of the river – this interpretation ignores the Service’s independent federal authority to move the fish and runs afoul of the Fish and Game Code’s conservation management principles; (2) the CDFW’s CEQA obligations to review comments on the EIR should not be extended to match the Corps’ separate obligation under NEPA to accept and respond to public comments on the Final EIS; and (3) the EIR properly quantified and disclosed existing emissions without the project and projected emissions with the project, then exercised its discretion to determine significance by assessing whether project emissions would impede statewide compliance with AB 32, consistent with the methodology used in the 2008 Scoping Plan adopted by the Air Resources Board.  Plaintiffs and Respondents:
  4. Parties/Counsel
  5. CDFW argues that (1) the CDFW’s and Army Corps of Engineers’ (Corps) mitigation measures do not authorize “take” of the unarmored threespine stickleback, a California fish designated as “fully protected” and “endangered” under State law; rather, under the fundamental canons of statutory construction, the words of the Fish and Game Code must be interpreted to allow the CDFW to move stranded stickleback out of harm’s way without authorizing “take” of stickleback, as such interpretation is consistent with the conservation purpose of the statutory scheme; (2) the exhaustion doctrine does not require the CDFW to respond to CBD’s comments submitted long after the 120-day public comment period ended and the public hearing on the project closed; the fact that the Corps accepted comments received during a separate public comment period required under NEPA for the Final EIS did not extend the comment period for State CEQA review; and (3) the CDFW properly relied on guidance from the Air Resources Board to define the methodology for the EIR’s climate change analysis and evaluated the project’s projected GHG emissions impacts by quantifying existing emissions on the site and quantifying the emissions expected to result from the project, and the CDFW’s determination that the impacts are less than significant are supported by substantial evidence in the record and should be accorded great deference.
  6. Summary of the Parties’ Arguments
  • Center for Biological Diversity, Represented by Center for Biological Diversity, UCLA School of Law, Chatten-Brown and Associates, and Chatten-Brown and Carstens
  • Wishtoyo Foundation/Ventura Coastkeeper, Represented by Law Office of Jason A. Weiner, Chatten-Brown and Associates, Chatten-Brown and Carstens, UCLA School of Law, and Center for Biological Diversity
  • Friends of the Santa Clara River, Represented by UCLA School of Law, Chatten-Brown and Carstens, and Center for Biological Diversity
  • Santa Clarita Organization for Planning and the Environment, Represented by, Chatten-Brown and Carstens, UCLA School of Law and Center for Biological Diversity
  • California Native Plant Society, Represented by Chatten-Brown and Carstens, UCLA School of Law and Center for Biological Diversity

Defendant and Appellant:

  • Department of Fish and Wildlife, Represented by Office of the General Counsel of the California Department of Fish and Wildlife and Thomas Law Group

Real Party in Interest:

  • The Newhall Land and Farming Company, Represented by Gatzke Dillon and Balance, Nielsen Merksamer Parrinello Gross & Leoni LLP, Morrison and Foerster, and Downey Brand LLP

Procedural History

The Plaintiff and Respondent conservation groups brought this action to challenge the CDFW’s certification of a proposed development project’s environmental impact report/environmental impact statement (EIR/EIS), approval of a resource management plan, adoption of a conservation plan, and issuance of incidental take permits.  The Los Angeles County Superior Court granted plaintiffs’ petition for writ of mandate.

The Court of Appeal, Second District, reversed and remanded to the trial court, directing judgment be entered in favor of CDFW.  In the published portion of its opinion, the appellate court found that CDFW’s project authorization would not result in prohibited take or possession of Unarmored Threespine stickleback because: (1) there was substantial evidence that the CDFW’s actions would not result in death to the fish; and (2) the statutory scheme permitted the CDFW to approve live trapping and transplantation techniques for purposes of conservation.  Substantial evidence also supported CDFW’s mitigation plan determinations regarding the San Fernando Valley Spineflower, an endangered species under the California Endangered Species Act (CESA).  The court held that since the Spineflower take was incidental to lawful activity, and that the take would not jeopardize the Spineflower’s existence, the CDFW’s issuance of an incidental take permit did not constitute an abuse of discretion.  In an unpublished portion of its opinion, the appellate court endorsed the EIR’s greenhouse gas (GHG) analysis.  CDFW used an AB 32-derived GHG threshold of significance, which stated that the project’s GHG emissions would be significant if the project would impede the achievement of a reduction in statewide GHG emissions to 1990 levels by 2020.  The court upheld the CDFW’s discretion to use this threshold, finding that the CDFW’s GHG analysis was consistent with the CEQA Guidelines and supported by substantial evidence in the record.

Amicus Curiae Briefs

  • Los Angeles County Metropolitan Transportation Authority, Metropolitan Transportation Authority of Southern California, Foothill/Eastern Transportation Corridor Agency, San Joaquin Transportation Corridor Agency, Kern County Water Agency, Riverside County Transportation Commission, and State Water Contractors, in support of Defendant and Appellant;

Amici argue the collection and relocation of stickleback by the United States Fish and Wildlife Services (USFWS) personnel or its agents is not a form of prohibited “take” or “possession” under the Fish and Game Code.  Even if it were, the Supremacy Clause would prevent the CDFW from prohibiting such actions by agents of the USFWS.  Amici also argue agencies must have discretion to use Air Resources Board GHG targets to make CEQA significance determinations.

 

  • Environmental Protection Information Center, in support of Plaintiffs and Respondents;

Amicus alleges the court’s unnecessary “harmonization” conflated the California Fully Protected Species Laws and the CESA, when these two statues are very distinct.  It also argues the court’s decision (that live trapping and transplantation are not unlawful take or possession) fundamentally alters CESA by creating a loophole to CESA’s take prohibition.  And lastly, amicus claims that even if CESA conservation applied to the Fully Protected Species Laws, it does not apply here because the activity at issue involves CEQA mitigation rather than CESA conservation.

 

  • Santa Clarita Valley Economic Development Corporation, in support of Defendant and Appellant;

Amicus argues the CDFW’s analysis of GHG emissions fully complies with CEQA.  CBD’s argument as to the deficiencies in the CDFW’s analysis is not only incorrect, but it is not prejudicial, thus, CBD is not entitled to relief.  Additionally, amicus argues CBD’s interpretation of CEQA places form above substance, ignoring the CEQA requirement of balancing environmental issues with other competing considerations.  Lastly, the CDFW properly exercised its discretion in approving the project even in the face of significant environmental impacts, as evidenced by the statement of overriding considerations.

 

  • Planning and Conservation League, in support of Plaintiffs and Respondents;

Amicus is primarily concerned with the exhaustion doctrine, arguing that Ventura Coastkeeper and Wishtoyo Foundation made their comments on the final EIR/EIS four months before approval, giving the CDFW ample time to consider any final EIS/EIR inadequacies.  Additionally, amicus argues the Legislature intended CEQA exhaustion requirements to permit public comment until the last anticipated opportunity, which is the final public hearing on the project.

 

  • The Karuk Tribe, The Kashia Band of Pomo Indians of Stewarts Point Rancheria, The Pala Band of Mission Indians, The Pechanga Band of Luiseno Indians, The Santa Ynez Band of Chumash Indians, and The TInoqui-Chaloa Council of Kitanemuk & Yowlumne Tejon Indians of the Former Sebastian Indian Reservation, in support of Plaintiffs and Respondents;

Amici primarily argue that requiring issue exhaustion during the draft EIR comment period adversely affects tribal participation in CEQA.  Tribal cultural resource issues are often addressed late in the CEQA process, and thus Tribes may not be able to comment until it is too late.  Amici argue this requirement goes against the most recent state legislative mandates, which necessitates agencies to increase tribal participation in the CEQA process.

 

  • California Building Industry Association, Building Industry Legal Defense Foundation, Building Industry Association of the Bay Area, California Business Properties Association, and California Association of Realtors, in support of Defendant and Appellant;

Amicus urges the court to apply judicial deference to three specific issues: (1) the CDFW’s conclusion the project will not harm stickleback; (2) thresholds of significance are supported by substantial evidence; and (3) the CDFW’s interpretation of take is reasonable and conforms to legislative intent.  Amicus also argues exhaustion under CEQA requires comments to be timely and sufficiently specific; late and vague comments are not good faith efforts of public participation.

 

  • George Deukmejian, Pete Wilson and Gray Davis, in support of Defendant and Appellant;

Amici argue CBD’s interpretation of “take” is contrary to the language and intent of the Fish and Game Code, and would take away the CDFW’s ability to develop methods for protecting special status species.  Amici also argue the exhaustion requirement should not be relaxed.  Lastly, amici claim the CDFW properly exercised its discretion in evaluating the project’s GHG impacts; the CEQA Guidelines provide agencies with discretion to select the methodology with which to analyze a project’s GHG impacts.

 

  • Sacramento Metropolitan Air Quality Management District, in support of Defendant and Appellant;

Amicus argues the CDFW reasonably relied on AB 32 in setting its GHG thresholds because CEQA vests agencies with such discretion.  Also, amicus argues the CDFW properly exercised its discretion by applying the 2020 BAU methodology to determine whether the project’s emissions were significant.

 

  • San Joaquin Valley Air Pollution Control District and County of Kern, in support of Defendant and Appellant;

Amici argue the CDFW’s GHG analytical methodology and significance conclusions are supported by substantial evidence in the record.  Compliance with environmental standards is a long recognized method for evaluating a project’s impacts.  Additionally, amici argue that the Legislature’s enactment of express GHG reduction targets strongly suggests CEQA does not silently impose other targets, as CEQA’s general provisions cannot be read to override specific standards adopted by the Legislature.  Lastly, there is no evidence of a prejudicial abuse of discretion; CEQA only requires completeness and a good-faith effort at full disclosure, which is what the CDFW did here.

 

  • The League of California Cities, California State Association of Counties, California Special Districts Association and Southern California Association of Governments, in support of no party;

Amici urge the court to uphold the CDFW’s discretion to interpret and apply CESA and the Fully Protected Species Laws.  Amici also argue the court should preserve the requirement that parties raise their objections during the available public process.  Lastly, both AB 32 and CEQA give agencies discretion to determine how to meet GHG reduction goals.

 

  • Sierra Club, in support of Plaintiffs and Respondents;

Amicus argues the CDFW’s GHG analysis violates CEQA because the EIR (1) uses an improper baseline to evaluate climate change impacts; and (2) fails to provide substantial evidence that a 29% reduction from Business as Usual (BAU) is sufficient to mitigate the project’s GHG impacts.  Under the CDFW’s application of the BAU comparison, few projects would result in a significant impact on the environment.

 

  • California Chamber of Commerce, in support of Defendant and Appellant;

Amicus argues the CDFW must have discretion to analyze GHG impacts of the project, especially given the technical complexity involved.  Additionally, amicus claims CDFW’s analysis of GHG emissions did not prejudice CBD, therefore, no relief is justified.  Lastly, amicus asks the court to clarify the standard for exhausting administrative remedies under CEQA.

 

Case Implications

  • Regarding “take”:

The case presents a first-ever hard look at the intersection of a number of key provisions of the Fish and Game Code.  Specifically, the definition of “take” under state law as it relates to species protected under the California Endangered Species Act (CESA) and designated as “fully protected”; the state definition of “conservation” under CESA; and state law prohibiting “take” or any such authorization by CDFW for state designated fully protected species.

 

Should CDFW prevail, project proponents working with state and federal wildlife agencies may benefit from broader, more progressive notions of conservation, particularly when it comes to designing and implementing measures to avoid and minimize harm to various special status species.

 

Should petitioners prevail, a more narrow view of “conservation” would control under state law, particularly as to species designated as “fully protected.”

 

  • Regarding “exhaustion”:

Governor Jerry Brown has stated: “Like California, CEQA must be more nimble,” must “expedite litigation timelines while preserving informed decision-making and mitigation of environmental harm,” and must “help reduce the time and costs” of environmental review. (Gov. Jerry Brown, Press Release (Jan. 25, 2012) Petitioners’ interpretation of the exhaustion of administrative remedies requirement would do just the opposite by unnecessarily and unjustifiably protracting the CEQA review process and adding to the significant costs of review

  • Regarding GHG emissions:

Petitioner’s restrictive position would prohibit any increase in greenhouse gas emissions over existing conditions.  Such position, if adopted by the Court, would have drastic consequences for California’s economy, job growth and competitiveness.  Because few new projects on undeveloped or under-developed sites would be able to meet such a standard, much-needed investment would be driven out of the state, stalling economic growth.

The record before the court discloses the enormously damaging implications to billions of dollars of transportation and water supply improvement projects should there be a holding that CEQA lead agencies have no discretion to use the Air Resources Board-approved Scoping Plan greenhouse gas emissions reduction target as a significance threshold under CEQA.  As a result of such an outcome, California would be prevented from pursuing development of under-developed land despite projected increases in its population and the dire need for much-needed housing and improvements to its transportation and water supply infrastructure.

Key Cases that May be Affected by the Court’s Ruling

  • Tomlinson v. County of Alameda (2012) 54 Cal.4th 281;

 

The court examined the exhaustion of administrative remedies.

  • North Coast Rivers Alliance v. Marin Municipal Water Dist. (2013) 216 Cal.App.4th 614;

 

This case addressed an agency’s ability to select its own significance thresholds.

  • Assn. of Irritated Residents v. State Air Resources Board (2012) 206 Cal.App.4th 1487; Here, the court evaluated CARB’s authority/expertise in matters pertaining to GHG emissions.
  • Communities for a Better Environment v. Cal. Resources Agency (2002) 103 Cal.App.4th 98; Here, the court indicated that the “one additional molecule rule” is not the law.
  • Neighbors for Smart Rail v. Exposition Metroline Construction Authority (2013) 57 Cal.4th 439; Here, the court examined an agency’s ability to establish a future baseline.
  • Tuolumne Jobs & Small Business Alliance v. Superior Court of Tuolumne County (2014) 59 Cal.4th 1029;

 

Here, the court addressed statutory construction and held that environmental review under CEQA was not required before a city council could directly adopt a voter initiative for a land-use plan pursuant to Elec. Code, section 9214, subdivision (a).

Friends of the Eel River v. North Coast Railroad Authority, S222472. (A139222; 230 Cal.App.4th 85; Marin County Superior Court; CV1103591, CV1103605.)

Wednesday, July 8th, 2015

Petition for Review Granted

December 10, 2014

Current Status

Fully briefed by the parties as of April 30, 2015.

Amicus briefing in progress.

Court’s Statement of Issues Presented

The court will consider two 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. Res. 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?

Summary of the Parties’ Arguments

Plaintiffs and Appellants, Friends of the Eel River, et al. (Friends) argue that the ICCTA does not preempt the North Coast Railroad Authority’s (NCRA) actions. Friends argue that in enacting the ICCTA, Congress did not expressly or impliedly preempt any state laws. Rather, they argue, ICCTA only prohibits states from regulating rail transportation, thus furthering the ICCTA’s purpose of deregulating the railroad industry and centralizing the economic regulation of rail transportation. Friends argue that three doctrines defeat federal preemption. First, courts are to construe federal preemption statutes to preserve states’ plenary control over their subdivisions absent an “unmistakably clear” statement that Congress intended to intrude on that sovereign function. Here, California’s Legislature exercised its sovereign power over public agencies, such as NCRA, to conduct CEQA review before carrying out a project. Second, under the market participant doctrine, courts should not infer federal preemption of a state’s proprietary non-regulatory actions. In this matter, California’s requirement of CEQA compliance and enforcement are a proprietary component of an internal business decision involving state funding and the management of state-owned property. Third, Friends argue that federal law does not preempt an entity’s voluntary commitments because self-imposed obligations are not considered regulatory. Here, CEQA was self-imposed and not preempted.

Defendants and Respondents, NCRA, et al. (NCRA) counter that consistent with ICCTA’s plain language, legislative history, and the interpretation of that language by other courts and the Federal Surface Transportation Board (STB), the ICCTA preempts CEQA’s application. NCRA argues that Friends fails to lay out the relevant facts, including the fact that Friends seeks to use CEQA as a state permitting or preclearance law to shut down a privately operated railroad that is currently transporting goods in interstate commerce. NCRA argues that applying CEQA would delay or deny NCRA the ability to conduct its activities, thus interfering with the STB’s jurisdiction, and with the maintenance and operation of rail transportation. NCRA further argues the ICCTA’s preemption of CEQA is not defeated by the market participation doctrine. First, this doctrine does not work as an exception to an express preemption, and second CEQA is regulatory, as it requires public agencies to comply when it chooses to undertake a project; NCRA explains that CEQA “is not narrowly focused on market-oriented actions.” Finally, NCRA argues that their voluntary agreement is not binding and that they did not agree to waive the ICCTA preemption. Rather, the NCRA “mistakenly, but in good faith, believe[d] that it needed to complete” an EIR for resumed rail operations, but had since determined that the ICCTA expressly preempted application of CEQA to the project.

Parties/Counsel

Plaintiffs and Appellants:

  • Friends of the Eel River, Represented by Shute Mihaly & Weinberger
  • Californians for Alternatives to Toxics, Represented by Law Offices of Sharon E. Duggan, Klamath Environmental Law Center, Environmental Law and Justice Clinic at Golden Gate University School of Law, Environmental Law Clinic and Mills Legal Clinic at Stanford Law School, Klamath Environmental Law Center

Defendants and Respondents:

  • North Coast Railroad Authority, Represented by North Coast Railroad Authority and Cox Castle and Nicholson LLP
  • Board of Directors of North Coast Railroad Authority, Represented by Christopher J. Neary

Real Party in Interest and Respondent:

  • Real Party in Interest and Respondent Northwestern Pacific Railroad Company, Represented by Cox, Castle & Nicholson

Procedural History

Two environmental groups, Friends of the Eel River and Californians for Alternatives to Toxics, filed petitions for writ of mandate under CEQA to challenge the certification of an EIR and approval of a railroad company’s freight operations by NCRA.  The trial court denied the petitions for writ of mandate, holding that CEQA review was preempted by the ICCTA, and that NCRA and the railroad company were not estopped from claiming federal preemption.

The First District Court of Appeal affirmed the judgement, holding that the ICCTA expressly preempted CEQA review of proposed railroad operations, and that the environmental groups’ CEQA claims fell within that preemption.  The appellate court additionally explained that the market participation doctrine found in Town of Atherton v. California High Speed Rail Authority (2014) 228 Cal.App.4th 314, could not be used to avoid such federal preemption.   In Town of Atherton, the California High Speed Rail Authority was taking proprietary actions in the market, acting as an owner of the property and not as a regulator; therefore, the market participation exception to preemption applied.  In contrast, NCRA acts in a regulatory capacity, thus the exception to preemption does not apply.  Lastly, the appellate court explained that while NCRA entered into an agreement with Caltrans, where it volunteered to comply with CEQA, the preemption analysis remains the same.  NCRA’s alleged voluntary agreement to comply with CEQA arose from its contract with the state (CalTrans), not from its acceptance of funds from a bond measure.  The agreement between these two parties does not unambiguously require environmental review for railroad operations where CEQA is preempted and the environmental groups do not have standing to enforce this contract.

Amicus Curiae Briefs – Briefing in Process, Check Back for Updates

  • South Coast Air Quality Management District, Bay Area Air Quality Management District, in support of Appellants;
  • Madera County Farm Bureau, Merced County Farm Bureau, in support of Appellants;
  • Town of Atherton, California Rail Foundation, Transportation Solutions Defense and Education Fund, Community Coalition on High-Speed Rail, Patricia Hogan-Giorni, in support of Appellants;
  • Sierra Club, Coalition for Clean Air, Natural Resources Defense Council, Planning and Conservation League, Communities for a Better Environment, in support of Appellants;
  • Center for Biological Diversity, in support of Appellants;
  • California Environmental Protection Agency, the California Natural Resources Agency, and their Departments and Boards in support of no party; and
  • California High Speed Rail Authority, in support of Respondents.

Case Implications

This case would have implications on federal preemption of CEQA under the ICCTA, as well as the market participant exception to preemption.

Regarding “preemption”:

  • The appellate court stated that whether the ICCTA generally preempts CEQA’s application to a project involving railroad operations is a pure question of law subject to de novo review.   If the California Supreme Court affirms the appellate court’s ruling, this would affirm the federal preemption of the ICCTA.

Regarding “market participant exception to preemption”:

  • In Town of Atherton, the market participant exception to preemption required the California High Speed Rail Authority (Authority) to comply with CEQA for a portion of the rail line.       This exception applied because the court found the Authority was acting in its capacity as the owner of property, not as a regulator. The Supreme Court may take this opportunity to restrict or expand the market participant exception set forth in Town of Atherton.

Key Cases that May be Affected by the Court’s Ruling

  • Town of Atherton v. California High Speed Rail Authority (2014) 228 Cal.App.4th 314;  The Court applied the market participant exception to the California High Speed Rail Authority because it was taking proprietary market actions, rather than acting in its regulatory capacity. Thus, the California High Speed Rail Authority was required to comply with CEQA for a portion of the rail line.
  • People v. Burlington N. Santa Fe R.R. (2012) 209 Cal.App.4th 1513; The Court held the ICCTA provides the STB exclusive jurisdiction with respect to the regulation of rail transportation. Thus a PUC general order issued to regulate the time a stopped train can occupy a public rail crossing is preempted by ICCTA, as it attempts to directly manage railroad operations.

Supplement to 16 year old EIR is Acceptable, Project Proponents Need Not Address Every Comment Following Public Review.

Tuesday, July 7th, 2015

In City of Irvine v. County of Orange, (July 6, 2015, G049527)__Cal.App.4th__, the Fourth District Court of Appeal affirmed the adequacy of a Supplemental Environmental Impact Report (SEIR) prepared approximately 16 years after the original EIR was adopted. The court granted publication on July 7, 2015.

The dispute began in 1996 when the City of Irvine (Irvine) challenged the County of Orange’s (County’s) certification of an Environmental Impact Report (EIR) involving the expansion of the Musick Facility (Musick). The Musick facility is a 1,200 inmate jail, and the proposed expansion would make it a 7,584 inmate jail. In Musick I, the court held that the 1996 EIR was adequate, but the project fell through for financial reasons.

In 2011, newly available state funding revived the Musick project. Irvine immediately challenged the County’s application for state funding, alleging that the application for funding itself required an EIR. In Musick II, the court held that there was no need for a new EIR just to apply for state funds.

The County then prepared an SEIR to the 1996 EIR.  The SEIR reflects major changes that have taken place in the area surrounding Musick over the 16 years separating the two documents. First, a proposed airport that was supposed to be built next to the facility was scrapped in favor of a large park. Second, agricultural land around the facility and in the County almost entirely disappeared. Following the County’s certification of the SEIR, Irvine immediately sued, seeking a writ of mandate to invalidate the SEIR, but the trial court denied Irvine’s petition.

On appeal, Irvine raised four arguments: (1) the changes since the 1996 EIR warranted a new EIR, (2) the EIR’s traffic study was inadequate, (3) the mitigation measures for the loss of agricultural land were inadequate, and (4) the County’s responses to comments on SEIR were inadequate. The court of appeal disagreed with Irvine on all its arguments and held for the County.

Irvine argued that the significant changes between the 1996 EIR and SEIR warranted a new EIR altogether. The court disagreed.  While the CEQA Guidelines state that a lead agency “may” prepare a supplemental EIR where “[o]nly minor additions or changes would be necessary to make the previous EIR adequate to apply to the project in the changed situation” (CEQA Guidelines, § 15163), the court noted that a “subsequent” EIR and a “supplemental” EIR are statutorily similar in their requirements.   Moreover, the court explained that the appropriate judicial approach is to look to the substance of the EIR, not its nominal title.

Next, Irvine challenged the SEIR’s traffic study. It alleged that the SEIR is inconsistent in its descriptions of project phasing because it uses 2014 as the date an initial phase of the prison expansion would be completed when the evidence demonstrates the initial phase will not be completed until 2018.  While the court acknowledged an accurate, stable and finite project description is critical, the court explained that evaluation of interim traffic impacts based on anticipated future construction necessarily cannot be predicted with certainty.  Furthermore, the court concluded even if delays in the start of construction resulted in discrepancies, it was nothing more than an “insubstantial and technical error.”

Irvine also alleged that the mitigation measures for the loss of agricultural land were inadequate. But, the court noted that the price of land in the County had far outgrown any feasible level for agriculture to remain profitable. The court noted that a land price of $60,000 per acre is approximately the break-even point for agricultural profitability, and land in the County was averaging $2 million per acre in 2012.

Finally, Irvine argued that the County’s allegedly deficient responses to their comments on the SEIR required a new EIR. Irvine had submitted 88 comments on SEIR, and challenged eight of the responses given by the County. The court noted that the CEQA Guidelines do not specifically require responses to comments, only responses to “significant environmental issues raised.” The court explained:

When a comment raises a “significant” environmental issue, there must be some genuine confrontation with the issue; it can’t be swept under the rug. Responses that leave big gaps in the analysis of environmental impact are obviously inadequate. By the same token comments that bring some new issue to the table need genuine confrontation. And comments that are only objections to the merits of the project itself may be addressed with cursory responses.

The court held that many of Irvine’s comments were “objections to the merits of the project” that the County adequately addressed with cursory responses. For the remaining comments, the court found the County’s responses to be adequate.  The court noted further that the case was “drowning in ‘paperwork’” and Irvine failed to demonstrate any prejudice resulting from the alleged inadequate responses.

Key Point

Age does not automatically render an EIR invalid.  Additionally, the appropriate judicial approach to evaluating an EIR is to look to its substance, not its nominal title.  Furthermore, CEQA Guidelines only require responses to “significant environmental issues raised.”  Comments that do nothing but object to the project’s merits may be addressed with cursory responses.

Court of Appeal Publishes Case Clarifying “Catalyst Theory” Attorney Fees

Tuesday, July 7th, 2015

On July 6, 2015, the Fourth District Court of Appeal ordered publication of Coalition for a Sustainable Yucaipa v. City of Yucaipa (July 6, 2015, E057589) __Cal.App.4th__.   The court upheld the trial court’s ruling denying attorney’s fees to the Coalition for a Sustainable Yucaipa (Coalition) after the City of Yucaipa (City) rescinded project approvals for reasons unrelated to the litigation.   The court held the Coalition was not a prevailing party under the “catalyst theory” because the Coalition failed to show that they were a substantial factor in the City’s decision to revoke the entitlements.

Key Point

Plaintiffs who claim they are a prevailing party eligible to recover under the “catalyst theory” bear the burden of showing they were a substantial factor in the decision that rendered the litigation moot.

Read Thomas Law Group’s original blog on the case at:

http://www.thomaslaw.com/blog/court-of-appeal-denies-attorneys-fees-motion-in-ceqa-litigation-after-contract-dispute-resulted-in-revocation-of-project-approvals/

In Plurality Opinion, Ninth Circuit Holds Traditional Four-Factor Test for Granting Injunctive Relief Applies in ESA Litigation

Monday, July 6th, 2015

The dispute in Cottonwood Environmental Law Center v. U.S. Forest Service, 2015 U.S. App. LEXIS 10176 (Cottonwood), involved the ongoing battle over Federal protection of the Canada Lynx. In 2000, the Canada Lynx was listed as a threatened species under the Endangered Species Act (ESA). Six years later, the Fish and Wildlife Service (FWS) designated 1,841 square miles as critical habitat for the Canada Lynx, but did not designate any National Forest lands. Soon after, the Forest Service adopted the Northern Rocky Mountains Lynx Management Direction (Lynx Amendments), setting permitting standards on activities that affect the Canada Lynx, and completed Section 7 consultation with FWS.

In 2009, FWS revised its critical habitat designation to 39,000 square miles. Unlike the 2006 designation, the 2009 revised designation identified critical habitat in eleven National Forests. Despite this significant addition of critical habitat in the National Forests, the Forest Service declined to reinitiate Section 7 consultation with FWS on the Lynx Amendments. In 2012, The Cottonwood Environmental Law Center (Cottonwood) sued claiming the Forest Service violated ESA by failing to reinitiate consultation. The trial court granted summary judgement in favor of Cottonwood, but refused to enjoin any related projects. Both Cottonwood and the Forest Service appealed.

On appeal, the Ninth Circuit considered whether Cottonwood had standing to bring the case, whether the issue was ripe for the courts, whether the Forest Service violated ESA section 7 by failing to reinitiate consultation on the Lynx Amendments with FWS, and whether an injunction was an appropriate remedy.

The Ninth Circuit first held that Cottonwood had standing to bring the programmatic challenge. The Forest Service argued that Cottonwood did not have standing because they challenged the Forest Service’s failure to reinitiate consultation, rather than any particular action that directly caused injury. The court disagreed, stating Cottonwood had shown particularized harm because their declarations established that their members used the National Forests for viewing, enjoying, and studying the Canada Lynx. The declarations also established a necessary “geographic nexus between the individual[s] asserting the claim and the location suffering an environmental impact.” (See W. Watershed Project v. Kraayenbrink (9th Cir. 2011) 632 F.3d. 472, 485.)

The court also noted that this was not the first time the Ninth Circuit found a plaintiff alleging a programmatic challenge had standing. A procedural injury exists after a Forest Plan is adopted, as long the plan is traceable to an action that affects the plaintiff’s interests. Uncertainty about whether reinitiating the consultation will benefit the plaintiff or not has no bearing on the plaintiff’s standing.

The Ninth Circuit next held the case was ripe for review. The Forest Service argued the issue was not ripe until a specific project was challenged. The court disagreed because Cottonwood had not sought any sort of substantive result, but had brought suit in order to enforce a procedural violation under Section 7.

Turning to the merits, the Ninth Circuit held the Forest Service violated Section 7 by failing to reinitiate consultation. The Forest Service argued that it did not have to reinitiate consultation because it already promulgated the Lynx Amendments and incorporated them into the Forest Plan before the FWS released the revised critical habitat designation. But, the court pointed out that nothing in ESA or its implementing regulations limits reinitiation of consultation to where there is ongoing agency action. The ESA implementing regulations require reinitiation of formal consultation “where Federal involvement or control over the action has been retained or is authorized by law and: … (B) if new information reveals effects of the action that may affect listed species or critical habitat in a manner or to an extent not previously considered;…, or (d) If a new species is listed or critical habitat designated that may be affected by the identified action.” (50 C.F.R. § 404.16.)

The court reasoned that reinitiation of Section 7 consultation “could yield important actionable information.” FWS’s re-evaluation of the data generated a drastically different result that justified vast designation of previously unprotected critical habitat. These new protections triggered new obligations the Forest Service could not evade by relying on an analysis it completed before the protections were in place.

Finally, in a plurality ruling, the Ninth Circuit held that in the context of granting injunctive relief, the court’s nearly three-decade old holding that there is a presumption of irreparable injury where there has been a procedural violation in ESA cases is no longer good law.

The majority agreed with the Forest Service that the presumption of irreparable harm has been overruled by two decisions on the National Environmental Policy Act (NEPA). Like ESA, NEPA traditionally presumed environmental damage, warranting an injunction. But, in Winter v. Natural Resources Defense Council, Inc. (2008) 555 U.S. 7, 22 (Winter), the Supreme Court ruled that this test for injunctions under NEPA was too lenient. Additionally, in Monsanto Co. v. Geerston Farms (2010) 561 U.S. 139, 157 (Monsanto), the Supreme Court disapproved of cases that did not use a traditional four-factor test for injunctions.

Here, the court reasoned that, “[w]hen Supreme Court precedent undercuts the theory or reasoning underlying the prior circuit precedent in such a way that the cases are clearly irreconcilable, the prior circuit precedent is no longer binding.” (Cottonwood, supra, 2015 U.S. App. LEXIS 10176, *13 [Citation.].)

Judge Pregerson dissented to the court’s decision on the injunction. He reasoned that Winter and Monsanto were decisions under NEPA and not ESA. He argued that existing Supreme Court precedent favored the current standard for inunctions under ESA, and the majority’s ruling undermined the substantive purpose of ESA, conserving threatened species and ecosystems.

Key Point

Thomas v. Peterson, 753 F.2d 754, 764 (9th Cir. 1985), which established an exception to the traditional test for injunctive relief when addressing procedural violations under the ESA and created a presumption of irreparable harm has been effectively overruled by two recent Supreme Court cases, Winter and Monsanto, addressing injunctive relief in the context of NEPA.  The traditional four-factor test for granting injunctive relief applies in both ESA and NEPA litigation.

Court Upholds Substantial Reduction in Attorney Fee Award Based on Limited Success of the Prevailing Party

Monday, July 6th, 2015

In North County Watch v. County of San Louis Obispo, 2015 Cal. Unpub. LEXIS 4275, the Second District Court of Appeal affirmed the trial court’s decision to award only a small portion of the attorney fees sought by the petitioner on the basis of their limited success in the litigation.  The dispute resulting in the underlying litigation began when Santa Margarita Ranch (SMR) applied for San Luis Obispo County (County) permission to divide its 14,000 acre property into 111 residential parcels, five open space parcels, and one remainder parcel. North County Watch (NCW) sued, alleging the County’s EIR certification violated CEQA, the County’s findings were not supported by substantial evidence, the County’s approval of the tentative tract map violated the Subdivision Map Act, and that the project conflicted with the County’s General Plan.

The trial court ruled that the County violated CEQA by limiting off-site air mitigation fees to $204 per household, and that the County had not complied with federal protocol for determining the presence of Vernal Pool Fairy Shrimp (VPFS) in the project’s seven vernal pools. The County performed a one-year VPFS study where a two-year study was required by the standard protocol for VPFS studies.

NCW moved for attorney fees under Cal. Civil Code section 1021.5. NCW requested approximately $269,000 but were awarded $54,600 plus $11,774 in costs. The court reasoned that NCW only succeeded on three litigated matters: the air pollution issue, the vernal pool issue, and the attorney fee motion. The court held SMR and the County each liable for half of the fees.

NCW appealed, alleging the trial court applied the wrong formula for partial success and should have awarded the undisputed amount spent on matters that were clearly necessary to the litigation. The appellate court disagreed, ruling that the trial court did not abuse its discretion by reducing the attorney fees award. The court cited similar decisions where courts substantially reduced fees awarded relative to the success of claims raised by the prevailing parties.

The County also cross-appealed the lower court’s decision, claiming they were not an “opposing party” and therefore not liable for NCW’s attorney fees. The court disagreed, holding that a public agency that initiates and maintains an action or policy that is challenged, cannot avoid a fee award by refusing to oppose the litigation.

The County also argued it was not a losing party in the litigation. The County argued a party cannot become a losing party unless it places itself in a position that is adverse to the prevailing party. The court disagreed, ruling that a party is liable for attorney sees under section 1021.5 if they are responsible for initiating and maintaining actions or policies that are harmful to public interest and give rise to litigation. Here, the County was an opposing party because it was responsible for initiating and maintaining the actions and policies that led to the litigation.