In Lake Norconian Club Found. v. Dep’t of Corr. & Rehab. (Sep. 13, 2019, No. A154917) ___Cal.App.5th___ [2019 Cal. App. LEXIS 866], the first district held that the Department of Corrections’ decision to allow the gradual deterioration of a historic hotel, which it had no duty to maintain, was not a project and could not be challenged for noncompliance with CEQA.
Since 1963, the California Department of Corrections (Department) has operated a prison next to the historic Lake Norconian Club, a former resort and hotel constructed in the 1920’s. The Department used the hotel building as a drug rehabilitation facility, and later, as the prison’s administrative offices. In 2012, the legislature decided that the prison would close and the Department prepared an EIR for the closure. The EIR stated that the Department could not allocate the necessary funds to maintain the building due to the Department’s other maintenance priorities. The legislature later changed its mind, allowing the Department to continue operating the prison, however the Department decided that it still would not maintain the former hotel.
The Lake Norconian Club Foundation (Petitioners) had repeatedly encouraged the Department to maintain the hotel since 2006. In 2014, they filed a petition alleging that the Department’s willful and ongoing failure to maintain the hotel was a continuous discretionary action with significant environmental impacts, and therefore a project under CEQA for which no environmental review had been conducted.
The trial court agreed with Petitioners that the Department’s actions and omissions constituted a project under CEQA, but nevertheless entered judgment in favor of the Department. The trial court concluded that the statute of limitation began to run when the 2013 EIR was certified, and that the 2014 petition was therefore untimely.
The Foundation appealed the judgment and the Department cross-appealed, arguing that its inaction was not a project.
No California case prior to this had yet addressed whether an agency’s failure to act could be considered a project under CEQA. However, the question had been addressed under NEPA in federal courts. In NEPA cases courts have repeatedly held that inaction does not constitute “action” (the NEPA term analogous to a “project” under CEQA). However, unlike CEQA, the federal NEPA guidelines do state that inaction may constitute action where the omission would be judicially reviewable under the APA, and case law has held that inaction in the face a mandatory duty to act would create such an omission.
However, the Court noted that CEQA contains no such guideline. Additionally, no statute was identified by Petitioners which created a duty for the Department to maintain the hotel.
The Court also stated that CEQA defines “project” by defining those activities which constitute projects. Here, it held that the failure to act was not an activity at all, even if the inactivity would lead to environmental consequences. It also noted the practical unworkability of deeming inactivity a project, particularly for attempting to determine when the project commences or receives approval for purposes of the CEQA statute of limitations.
Therefore, absent any statutory duty, the Court held that the Department’s failure to act could not be deemed a project or challenged for noncompliance with CEQA.
Key Point: Inaction is not a project under CEQA, at least where there is no affirmative duty to act.