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CEQA Updates

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

Posts from January, 2018


CARB Regulatory Advisory “Project Approval” Triggers CEQA Review Despite Agency Certified Regulatory Program, Public Testimony Must Be Adequately Addressed to Meet Cal APA Standards

Wednesday, January 31st, 2018

Commercial delivery trucks like those subject to the modified CARB Regulations at issue. (ModiusDaXter)

In John R. Lawson Rock & Oil, Inc. v. State Air Resource Board (2018) 20 Cal. App. 5th 77, the Fifth District Court of Appeal found the California Air Resources Board’s (CARB) issuance of a regulatory advisory was “project approval” triggering CEQA review. Doing so prior to completion of environmental review violated CEQA timing requirements. Later, CARB relied on a negative declaration, which the Court also set aside. Further, CARB failed to comply with the California Administrative Procedures Act (CalAPA). As such, the Court directed CARB to comply with CEQA in modifying a set of 2008 regulations known as the Truck and Bus Regulations (Regulations).

CARB issued the Regulations to reduce greenhouse gas emissions from large vehicles by, as pertinent here, requiring vehicle owners to retrofit and upgrade existing vehicles by January 2014. In mid-2013, CARB staff found the global recession substantially reduced trucking activity making compliance with the Regulations financially difficult, especially for those in rural areas and small business settings. CARB responded by delaying reporting deadlines and requesting modification proposals. In November 2013, CARB issued a regulatory advisory stating a handful of modifications to the Regulations would be implemented. Specific changes included: delaying compliance dates, eliminating filter replacement requirements for certain light trucks, and providing a 10-year window where only engines less than 20-years-old would require modernization. After circulating a staff report and proposed modifications in March 2014, CARB issued its final approval in December 2014. Plaintiffs and Respondents filed suit on behalf of fleets that had already incurred significant cost in complying with the unmodified regulations, alleging CARB failed to comply with CEQA and CalAPA requirements.

The Appellate Court found agencies that operate under a certified regulatory program are exempt from certain elements of CEQA review yet still subject to the “functional equivalent” of CEQA environmental review, per the Court’s holding in POET, LLC v. State Air Resources Control Board (2013) 218 Cal.App.4th 681. CARB’s regulatory program requires the preparation of a public staff report at least 45 days before public hearing on a proposed regulation, discussion of environmental alternatives, response to public comment, and compliance with CEQA. Within the regulatory scheme, documents like the CARB staff report are expected to be analyzed and considered before project approval in the same way that CEQA documents are considered.

Applying CEQA principles, the Court determined that project approval triggering CEQA or its equivalent occurred where the regulatory advisory “opened the way” for a project to proceed. CARB conduct following the advisory was “detrimental to further fair environmental analysis.” That the final approval was not to be until 2014 and there was stated CARB authority to change the modifications before that time was insufficient to show the regulatory advisory was not project approval. Language in the advisory that truckers could immediately take advantage of certain programs and the subsequent CARB reliance on the advisory “foreclosed alternatives” to the proposed modifications. Because the advisory was issued before environmental review was complete, CARB failed to comply with CEQA timing requirements.

Next, the Court held the proper baseline for CEQA consideration in this case is the actual environmental conditions at the time of review, not those allowable by the current regulations. As such, CARB acted within its discretion to use a baseline that recognized some trucks and buses were not yet in compliance

Despite this, substantial evidence supported a fair argument that modifications to the Regulations would negatively and significantly impact air quality therefore CARB was incorrect to rely on a negative declaration. CARB failed to address that the modifications, while continuing to decrease emissions in the long term, would increase emissions in the short term. CARB also failed to address the inconsistencies between the proposed project’s emissions and applicable general plans, specific plans, and regional plans.

Notwithstanding these findings, the Court held that the trial court incorrectly directed CARB to prepare an EIR, or its functional equivalent. Such a remedy is only appropriate where the agency no longer has discretion to act in compliance with CEQA. Here, CARB still retained such discretion so the proper remedy is to simply direct CARB to comply with CEQA.

Lastly, CARB failed to comply with CalAPA where it did not adequately address economic impacts to intrastate commerce. While the Court usually gives deference to the agency on determinations of economic impacts, there is no deference for improperly adopted regulations. Here, CARB heard public testimony that relaxing the regulations would impact intrastate competition where those in compliance took on a large expense to be so and others would be able to undercut them. The Court held that testimony, while not written in a formal letter or report, nonetheless put CARB on notice of such issues. While CARB claimed it answered this issue in other comment answers, the Court found that its responses were not supported by any record evidence or meaningful analysis.

Key Point:

A regulatory advisory may be “project approval” triggering CEQA where it forecloses project alternatives therefore environmental review must be complete before its issuance. This standard applies to partially-exempt regulatory bodies and state agencies when their certified regulatory programs are intended to be CEQA-compliant.

First District Court of Appeals Affirms, Remands LA Railyard Project FEIR, Attorney General Exempt from Exhaustion Requirements, CEQA Analyses Must Be Presented to Adequately Inform

Friday, January 12th, 2018

The Port of Los Angeles meets the Pacific Ocean waters at sunrise (Pete)

In City of Long Beach v. City of L.A. (2018) 19 Cal.App. 5th 465,

The First District Court of Appeal concluded that the Port of Los Angeles (Port) Project description was accurate, not misleading, and did not result in piecemealing. As such, the Court affirmed in part and remanded in part a judgement setting aside the City of Los Angeles (City) and Real Party in Interest BNSF Railway Company (BSNF) (collectively Appellants) final EIR related to BNSF’s railyard construction project. The Court also found that the Attorney General has no obligation to exhaust administrative remedies.

At the Port, shipping containers are loaded onto trains at railyard facilities for transport across the Country. The Port is currently served by one “near-dock” railyard facility. Trucks take some containers to “off-dock” railyards, like BSNF’s current facility (Hobart Yard) twenty-four miles from the Port. BSNF proposed a new 153-acre near-dock railyard approximately four miles from the Port, diverting traffic headed to Hobart Yard and increasing the volume of cargo transported in the Port-railway interface (Project).

In 2005, the Port staff issued an initial study and NOP and, later, a supplemental NOP. In 2011, they released a draft Environmental Impact Report (EIR) for the project. In response to public comment, the Port staff revised major portions of the draft and released a revised draft EIR in September 2012 for 45-day public review. Thereafter, a final EIR (FEIR) was issued, identifying significant unavoidable environmental impacts on air quality, noise, GHG emissions, and traffic. Following public review, the board of harbor commissioners certified the FEIR and approved the Project. The resolution was appealed to the Los Angeles City Council, which affirmed certification of the EIR and approval of the Project.

Seven suits were filed in multiple Counties. The Attorney General intervened on one. The trial court, after consolidating the petitions, set aside the certification of the FEIR and project approval. Specifically, the trial court found the FEIR project description and analysis of growth-inducing impacts, cumulative impacts, noise, traffic, air quality, greenhouse gas emissions, and mitigation measures were inadequate. Appellants timely appealed.

The Appellate Court first addressed the Attorney General’s intervention. Appellants alleged the Attorney General failed to abide by exhaustion requirements because he/she did not raise the issues in the administrative hearing that he/she brought in the intervening action. Indeed, no party had raised the claims. The Court found that neither a plain reading of Public Resources Code section 21177’s exhaustion requirements nor the legislative history supported applying the section’s requirements to the Attorney General. The Court found that the Attorney General need not be a party in the administrative hearings nor is he/she limited to raising issues raised during the administrative proceedings because he/she is specifically exempt from both identity and issue exhaustion requirements. (Pub. Res. Code, § 21177 (d).)

The Court next considered the adequacy of the project description. The Court agreed with the trial court that the FEIR project description was sufficient because it was not “misleading or inaccurate.” Unlike San Juaquin Raptor Rescue Center v. County of Merced (2007) 149 Cal.App.4th 645, the project description at issue in this case did not send any “conflicting signals to decision makers about the nature and scope of the Project” as no part of the FEIR suggested the overall rail capacity would remain unchanged.

The Court then addressed claims that the FEIR failed to address indirect physical changes to the original off-dock railyards. CEQA requires consideration of all “reasonably foreseeable” indirect environmental effects. Here, substantial evidence in the form of worldwide and domestic intermodal business studies supported the City’s conclusion that a predicted amount of economic growth could occur with or without the Project. While the proposed near-dock site would increase the cargo capacity of the Port, because the Project would retire an equal amount of use at the Hobart site and growth would occur regardless of the Project, the Project did not increase the demand or volume of cargo at the Port, it merely changed the place at which the cargo is distributed. The Court found this analysis was adequate.

The Court upheld the conclusion of the trial court that the FEIR failed to adequately inform decision makers and neighbors about the concentration of pollutants in the project vicinity. Despite Appellant’s claim that it performed worst-case-scenario analyses and disclosed air quality concentration impacts, the information was spread throughout the FEIR, never analyzed or discussed, and did not disclose the frequency of significant concentration occurrences. The Court stated that the FEIR was deficient because it did not disclose or estimate how frequently and for what length of time the level of particulate air pollution in the area would exceed the standard of significance—e.g., the duration of the worst case scenario.

The Court was careful to state it did not agree with the trial court’s determination that the composite emissions or the methodology was misleading, but the analysis was instead incomplete because a reader could not compare air pollution concentrations at any given point in time. The Court determined that this deficiency rendered the public and decision makers unable to consider alternatives or mitigation measures, or balance competing considerations before adopting a statement of overriding considerations.

Further, the Court held while the cumulative impact analysis of noncancerous health risks was sufficient, the discussion of cumulative air quality impacts failed to be a “good faith and reasonable disclosure” for the same reasons detailed above. Finally, the Court upheld the FEIR’s GHG analysis, noting that the Project relocating shipping activities twenty miles closer to the ship yard would result in less emissions than not building the Project at all.

The Court affirmed the trial court’s decision to set aside certification of the FEIR and suspend project activities until the City could bring ambient air pollutant concentrations and cumulative impacts analysis into CEQA compliance. The Court reversed the trial court’s judgements on the GHG emissions, noise, transportation and cumulative impact (for noncancerous health risks only).

The Court affirmed in part and remanded in part for further proceedings.

Key Point:

An EIR must display statistical and quantitative reports in a manner which can be understood and easily accessed by laypersons. Although the information may be present in documents, if it cannot be fairly compared and understood (here, it was spread throughout thousands of pages), it will likely not stand up to a CEQA challenge.

The Attorney General is exempt from CEQA identity and issue exhaustion requirements.

Private Attorney General Doctrine Attorney’s Fee Award Proper Where Financial Burden Disproportionate to Financial Stake

Friday, January 12th, 2018

Homes along the wetlands of Heron Bay, San Leandro, California that may have suffered environmental impacts by the project. (SWA Group)

In Heron Bay Home Owner’s Association v. City of San Leandro (2018) 19 Cal.App.5th 376, the First District Court of Appeal affirmed a trial court judgement awarding partial attorneys’ fees where the financial burden of enforcement made an award appropriate pursuant to Code of Civil Procedure section 1021.5. The Heron Bay Homeowners’ Association (Heron Bay) was successful in their CEQA suit and while a “pecuniary interest in the outcome of the litigation [was] not disqualifying…the issue [was] whether the financial burden placed on the party is out of proportion to its personal stake in the lawsuit.”

Real Party in Interest Halus Power Systems manufactures wind turbines on a five-acre parcel in the City of San Leandro’s (City) industrial zone. Halus Power proposed to build a single 100-foot tall wind turbine on its property for renewable power generation and on-site research and development (Project). During the public comment period, Heron Bay expressed concern regarding the Project’s impacts on views, wildlife, aircraft navigational radar, noise and vibration levels, and property values. The City approved the Project, granted a height restriction variance, and issued a mitigated negative declaration. Heron Bay filed suit.

The trial court found there was substantial evidence supporting a fair argument that the Project as mitigated would have significant environmental impacts and directed the City to set aside its approval until the City had prepared an EIR. Halus Power ultimately decided not to proceed with the Project.

Heron Bay moved for an award of attorneys’ fees under Code of Civil Procedure section 1021.5 (Section 1021.5), the private attorney general doctrine. The trial court determined that the value of the suit to Heron Bay was approximately $5.8 million, and reasonably anticipated legal costs should have totaled approximately $240,000. The trial court also noted that Section 1021.5 was intended to address the problem of affordability in public interest litigation, and pointed out that a lawsuit aimed at avoiding financial loss, such as an anticipated harm to property values, may be especially hard to finance. Balancing these findings, the trial court awarded Heron Bay $181,471.70 in attorneys’ fees. The City timely appealed.

The Court found that to qualify for Section 1021.5 attorneys’ fees, a plaintiff must establish: (1) that the suit resulted in enforcement of an important right affecting the public interest; (2) that a significant benefit was conferred on the public or a large class of persons; and (3) that the necessity and financial burden of enforcement are such as to make the award appropriate. The City disputed Heron Bay’s claim that they met the third requirement.

The Court found that, contrary to the City’s assertions, Heron Bay faced a substantial financial burden compared to the potential benefit at stake in the litigation. Membership in the homeowners’ association was mandatory, each member had a vote, and only a few properties in the 629-unit development were likely to be within view of the Project. Accordingly, the Court reasoned that many members likely did not have sufficient individual financial motivation to retain counsel for CEQA litigation absent the possibility of Section 1021.5 fees.

The Court pointed out Heron Bay retained counsel on a “partially contingent fee basis,” allowing it to initially pay less than a third of the amount that retained-counsel actually billed. This “indicated Heron Bay and its members did not actually value the ‘benefit’ here sufficiently to undertake the litigation absent the incentive of a potential fee award under [S]ection 1021.5.” Further, the benefit Heron Bay sought was not “immediately bankable” and could not be used to pay counsel. The Court agreed with the trial court that the CEQA litigation costs would be a “much larger financial commitment” than the previous administrative proceeding they had been through. A court must evaluate these factors when determining whether the personal interests of Heron Bay “transcended the litigation costs.”

The Court then held some amount of pecuniary interest does not disqualify a party from being awarded attorneys’ fees. Heron Bay demonstrably was not solely motivated by a desire to avoid a loss in property values where its members submitted comments during the public comment period regarding not only property values, but also impacts on wildlife, aesthetics, health, and noise levels. The City’s argument that Heron Bay was ineligible for attorneys’ fee awards because it acted purely out of self-interest was unfounded. The City’s alternative argument—that Heron Bay was not authorized by its governing documents to pursue a purely altruistic action—was similarly dismissed.

The City’s final argument was that the trial court contradicted itself by concluding that Heron Bay’s “financial incentive” was “mitigated by the uncertain value of the benefit sought,” because the trial court assigned a subjective value, informed by Heron Bay’s claims, of $5.8 million to Heron Bay’s avoided property value loss. The Court stated that the trial court erred in applying an arbitrary evaluation, but found this did not affect the question of whether Heron Bay’s financial incentive was so large and the benefit so certain that it precluded any award. Since the City gave no credible evidence for a specific valuation of the projected loss, the Court could not agree that Heron Bay’s financial stake made Heron Bay ineligible for attorneys’ fees—the trial court conclusion was supported by substantial evidence.

Finally, the Court rejected speculative evidence regarding the Project’s projected harm to property values. The trial court’s ruling could not guarantee the City would refuse the requested variance or require Halus Power to make changes to the project following adoption of an EIR, or that Halus Power would abandon the project.

Accordingly, the Court affirmed the trial court’s ruling and awarded Heron Bay its costs on appeal, including attorneys’ fees, in an amount to be determined by the trial court.

Key Point:

A financial interest in the litigation does not automatically preclude an award of attorney’s fees under the private attorney general doctrine. Where the financial burden of bringing the lawsuit is disproportionate to a party’s financial stake in the lawsuit, fees may be awarded.

Third District Court of Appeal Gives Great Deference in Quasi-Judicial Agency Decision Not to Delist Coho Salmon, Ending Decades-Long Dispute

Friday, January 5th, 2018

Drawing of an adult male coho salmon (A. Hoen and Co, Department of Commerce and Labor Bureau of Fisheries)

In Central Coast Forest Association v. Fish and Game Commission (2018) 18 Cal. App. 5th 1191, the California Third District Court of Appeal found the California Fish and Game Commission (Commission) was correct to deny a petition to delist coho salmon from state protection under the California Endangered Species Act (CESA). Deferring to the scientific expertise of the Commission, the Court held there was substantial evidence to support the decision where petitioner’s arguments rested purely on speculation.

To delist a species under CESA, the Commission must find a petition is warranted and, if so, determine if the action to list or delist is warranted. The Commission bases these initial and secondary findings on highly-technical and scientific information from the Department of Fish and Wildlife.

The coho salmon in southern San Francisco/Santa Cruz County have been a CESA-listed endangered species since 1995. In 2004, the Commission expanded the listing’s parameters and delineated coho salmon north of Punta Gorda as a threatened species and coho salmon south of Punta Gorda as an endangered species. Central Coast Forest Association and Big Creek Lumber Company (Petitioners) sought delisting of the southern coho salmon. Petitioners alleged the fish were not endangered species as there were never wild, native salmon in the region; and if there were, they were destroyed by unfavorable environmental conditions. Further, the salmon present are solely sustained by hatchery plants, and as such, are not wild or native to California.

The Commission considered and denied Petitioners’ delisting petition in 2005 and again in 2007 for failing to contain sufficient scientific information. Petitioners twice failed to gain an order from the Superior Court overturning the decisions. Upon appeal, the California Supreme Court remanded the matter to the Third District Court of Appeal.

In reviewing, the Court focused on the sufficiency of the evidence and the deference they award to such determinations. Petitioners were required to present sufficient information to indicate the delisting may be warranted, information that would lead a reasonable person to conclude that there was a “substantial possibility” delisting could occur. Evidence is sufficient only if it is material, credible, supports the petition, and, when weighed against the Commission’s written report and any comments received, is strong enough to indicate that delisting may be justified.

Where the Commission’s decision to delist species is quasi-judicial, a higher deference is awarded to Commission findings. Specifically, the Commission’s technical and scientific resources and its legally wide discretion in decision-making makes the Court affirm the decision where the weight of the evidence is clearly justified or unclear. The Court will only reverse the decision where the evidence clearly weighs against it.

The Court examined the Commission’s evidence and Petitioner’s evidence regarding coho salmon’s historical existence in the contested area; including archaeological Native American middens, historical newspaper articles, hatchery records, drought and flood records, historical environmental factors, and genetic evidence. The Court found the Commission’s evidence was sufficient to determine Petitioner’s delisting petition unwarranted. The Commission showed that coho salmon are native to the contested area by genetically sequencing and comparing extant salmon with salmon museum specimens collected in 1895 from four adjacent streams in Santa Cruz County.

The Commission’s evidence also showed the sustained coho salmon population is not the result of hatchery planting. Historic hatchery output was sporadic and small in the southern San Francisco region, therefore the current population was not likely descended from local stock and no genetic evidence showed the current population is descended from out-of-state stock. The Court noted that even if existing populations were bolstered by local non-wild hatchery fish, these fish would genetically be considered California-native hatchery fish, and thus would be protected by the CESA.

Ultimately, the Court dismissed Petitioners’ evidence for it was “circumstantial” where they were “pick[ing] out bits of information that appear to substantiate their claim.” Thus, the Commission’s decision was appropriate where Petitioners’ claims were the product of “no scientifically credible data” and “[w]hat the petitioners call ‘evidence’ is actually persuasive writing, not valid scientific evidence.”

Answering technical questions posed by the Supreme Court, the Court found that a species “range” for consideration, per the Department of the Interior interpretation, is wherever the species is found, not only where it is known or historically known to be. Further, a portion of a listed species may only be delisted where it is individually “carved out” as a separate species, unlike what was petitioned for here.

Because the Commission has highly technical knowledge and delegated authority to list and delist endangered species, the Court affirmed the Commission decision to deny the delisting petition.

Key Point:

Where a quasi-judicial agency decision is challenged, the Court will give great deference to the decision, affirming where evidence is sufficient or unclear to support the decision. Sufficient evidence to the contrary is where credible, scientific based evidence outweighs the agency’s evidence.

General Plan Update Size Limit Not Likely to Cause Urban Decay, Local Commercial Real Estate Agent Letter “Speculative,” Not Substantial Evidence of a Fair Argument

Thursday, January 4th, 2018

Packwood Shopping Center in the Visalia’s neighborhood commercial zone and subject to the 40,000 sq.ft. cap on tenants. (The Registry SF)

In Visalia Retail, LP v. City of Visalia (2018) 20 Cal.App.5th 1, the Fifth District Court of Appeal affirmed a trial court judgment maintaining a general plan amendment and accompanying EIR limiting commercial tenants to 40,000 square feet of space. A letter from a local commercial real estate agent predicting that the size cap would cause grocers to refuse to locate in the neighborhood commercial centers leading to a “downward spiral of physical deterioration” was insufficient to support a fair argument of an environmental impact.

On October 14, 2014, Visalia City Council approved a final EIR for the City’s general plan update establishing a 40,000 square foot cap on tenants in neighborhood commercial zones. Visalia Retail, LP brought suit claiming that the potential for urban decay was not adequately addressed in the EIR. The trial court denied the petition. Visalia Retail timely appealed.

Appellant claimed that the EIR was insufficient for failing to consider the potential for urban decay as large stores would be discouraged from establishing themselves in the neighborhood under the new restriction on square footage. The Court, unconvinced, found that CEQA is focused on significant environmental effects, not purely economic impacts. Relying on Joshua Tree Downtown Business Alliance v. County of San Bernardino (2016) 1 Cal.App.5th 677, the Court found CEQA environmental review of potential for urban decay is only appropriate where there is a potential for physical deterioration. Absent such a showing, CEQA is satisfied.

The primary evidence of urban decay submitted by Appellant was a letter prepared by a local commercial real estate agent who claimed the 40,000 square foot cap would discourage grocers from locating in neighborhood commercial centers, “which will cause vacancies, which in turn will result in urban decay.” The real estate agency offered the following support for these claims: (1) the real estate agent was personally unaware of any grocers willing to build new stores under 40,000 square feet; (2) a “typical” large grocer requires at least 50,000 square feet to profit at any one site; (3) a recent line of 10,000 – 20,000 square foot stores was unsuccessful; and (4) three Visalia stores under 40,000 square feet went out of business.

The Court found the letter to be speculative and not rising to the level of substantial evidence on which a fair argument of urban decay could be predicated. First, the limit of the real estate agent’s personal knowledge did not preclude the existence of stores that may be willing to come into the area or have an atypical store size. Further, the fact that other stores were unsuccessful, some a quarter the size of the cap, was not evidence that stores will fail in the City in the future, especially absent discussion or explanation of why they failed. The letter demonstrated speculative causation and failed to show that urban decay would likely result from the cap.

Appellants also claimed the cap made the City’s general plan internally inconsistent by discouraging development in neighborhood commercial sites where the general plan encourages such infill. The Court, presuming the general plan amendment was correct under established precedent, clarified that “just because the general plan prioritizes infill development, avoiding urban sprawl, does not mean all of its policies must encourage all types of infill development. General plans must balance various interests and the fact that one stated goal must yield to another does not mean the general plan is fatally inconsistent.” Essentially, the general plan may give preference to infill that has a 40,000 square foot cap and still be internally consistent.

The Court affirmed the trial court judgement.

Key Point:

Evidence of economic impacts alone is insufficient to support a claim that a project will result in urban decay; urban decay need only be addressed by an EIR where there is potential for physical deterioration.

A single comment letter, unsupported by facts, explanation, or critical analysis, does not raise to the level of “substantial evidence of a fair argument” required by CEQA.