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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 (CARB) issuance of a regulatory advisory was “project approval” triggering CEQA. Doing such before environmental review was complete violated the CEQA timing requirement and, later, CARB improperly relied on a negative declaration. Further, CARB failed to comply with the California Administrative Procedures Act (CalAPA). As such, the Court affirmed the trial court holding, directing 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 emissions of diesel PM, NOx, and GHG’s 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 financially difficult, especially for those in rural areas and small business settings. CARB responded by delaying reporting deadlines and requesting modification proposals. Taking note of these proposals, CARB issued a regulatory advisory in November 2013 stating a handful of Regulations modifications would be implemented, with changes slated for finalization in April 2014. 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, the board issued its final approval in December 2014. Plaintiffs and Respondents filed on behalf of fleets that had already incurred significant cost in complying with the unmodified regulations, claiming CARB failed to conform with CEQA and CalAPA requirements.

The 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, CEQA documents—like the CARB staff report—are expected to be analyzed and considered before project approval.

Applying CEQA principles, the Court determined that project approval triggering CEQA, or its equivalent, happened where the regulatory advisory “opened the way” for a project to proceed. CARB conduct following the advisory was “detrimental to further fair environmental analysis.” It was not sufficient that the final approval was not to be until April 2014 and actually happened in December 2014 and that there was stated CARB authority to change the modifications. 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 the CEQA timing requirement.

Moving to the actual environmental review, the Court held the proper baseline for CEQA consideration is the actual environmental conditions at the time of review, not those allowable by the current regulations. Here, CARB acted within its discretion to not use the maximum air quality conditions allowable in the Regulations. Rather, the baseline was the situation as it was at that time, recognizing that some trucks and buses were not yet in compliance despite the Regulations.

The Court went on to address the actual environmental analysis to determine if it ultimately complied with CEQA. CARB argued that implementing the Regulations modifications would result in a continual decrease in PM, NOx, and GHG emissions, while Plaintiffs argued pollutants would increase in the short term. CARB ignored the fair argument that modifications to the Regulations would negatively and significantly impact air quality and wholly failed to address the inconsistencies between the proposed project’s emissions and applicable general plans, specific plans, and regional plans. Where a fair argument could be made substantial evidence showed a potential for significant environmental effects, CARB was incorrect to rely on a negative declaration and therefore failed to comply with CEQA.

Despite these findings, the trial court was incorrect to direct CARB to prepare an EIR, or its functional equivalent. The Court held 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.

General Plan Update Size Limit Not Likely to Cause Urban Decay, Local Commercial Real Estate Agent Letter “Speculative,” Not Substantial Evidence for CEQA Review

Monday, January 8th, 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 the 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 the potential for urban decay was not adequately addressed in the EIR. On May 9, 2016, the trial court denied the petition for writ of mandate. The property management company appealed the decision.

Appellant claimed the EIR was insufficient for failing to consider potential for urban decay where large stores would be discouraged from establishing themselves in the neighborhood under the new restriction. 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.

Appellant’s main evidence that it was essential the EIR consider urban decay was a letter prepared by a local commercial real estate agent who claimed the 40,000 square foot cap will cause grocers to refuse to locate in neighborhood commercial centers, “which will cause vacancies, which in turn will result in urban decay.” His evidence for these claims was (1) he is 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 the site; (3) a recent line of 10,000 – 20,000 square feet stores were unsuccessful; and (4) three Visalia stores under 40,000 square feet went out of business.

The Court found the entirety of the letter to be speculative, not raising to the level of substantial evidence on which a fair argument of urban decay could be predicted, a standard set by CEQA. First, the limit of his personal knowledge does not preclude the existence of stores that may come to the area or that some stores would be willing to have an atypical sized store. Further, the fact that other stores failed, some a quarter the size of the cap, is 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 for 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, that 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 Fifth District Court of Appeal affirmed the trial court judgement.

Key Point:

Where CEQA is concerned with environmental impacts, a claim for urban decay supported only by economic impacts is insufficient. 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.

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.