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NO PRELIMINARY INJUNCTION OF THE PANOCHE VALLEY SOLAR PROJECT

Wednesday, September 7th, 2016

In Defenders of Wildlife v. United States Fish & Wildlife Service, 2016 U.S. Dist. LEXIS 109509, the Northern District of California refused to preliminarily enjoin Panoche Valley Solar (PVS) from constructing a 247-megawatt solar facility comprised of approximately 1,529 acres of photovoltaic panels installed on a 2,154-acre site in the Panoche Valley in San Benito County.

The Panoche Valley is home to a variety of endangered species, such as the blunt-nosed leopard lizard, the San Joaquin kit fox, and the giant kangaroo rat.  Each of these species has been in decline due to loss of habitat or fragmentation of existing habitat.  The giant kangaroo rat, for example, survives in less than five percent of its historic geographic range.

In early 2016, the U.S. Fish and Wildlife Service (FWS) issued a biological opinion (BO) under the Endangered Species Act, concluding that the project would not likely jeopardize the survival and recovery of any of the species identified above.  Accordingly, FWS issued an incidental take statement, which authorized limited take of the listed species during the project construction, operation, and maintenance for the life of the project.

While the BO acknowledged that the solar facility would permanently impact 1,688 acres of habitat and temporarily impact 466 acres of habitat, such impacts were minimized by conditions to reduce the anticipated take.  Conditions included designing the project to avoid areas with high densities of listed species, monitoring construction work by FWS-approved biologists, relocating species to nearby habitat, and preserving and managing conservation land for the species covered by the incidental take statement.

Based on the BO, the U.S. Army Corps of Engineers issued a Section 404 permit pursuant to the Clean Water Act, authorizing PVS to discharge dredged or fill material into 0.121 acres of waters of the United States.

Both the BO and the Section 404 permit were challenged in federal court by the Defenders of Wildlife, Sierra Club, and the Santa Clara Valley Audubon Society. After finding it was unlikely that plaintiffs would succeed on the merits, the Court denied their request for a preliminary injunction. This decision allows PVS to rely on the BO and Section 404 permit while the matter is litigated.

The Rose Foundation Releases Report on CEQA Economic Impact

Thursday, August 18th, 2016

CEQA has been in effect since 1970, when it was signed into law by Governor Ronald Regan. Over the past 46 years, there have been many debates about the effect CEQA has on the California economy. In response to recent analyses that link CEQA to economic challenges in the State, the Rose Foundation for Communities and the Environment released a report on August 15, 2016 entitled “CEQA in the 21st Century: Environmental Quality, Economic Prosperity, and Sustainable Development in California.”

Key findings of the report include:

  • Since 2002, the state has averaged 195 CEQA lawsuits a year.
  • Lawsuits were filed for less than 1 out of every 100 projects reviewed under CEQA that were not considered exempt.
  • In San Francisco, only 14 environmental impact reports (EIRs) were prepared in the past three years (less than 5 EIRs per year).
  • Because California consistently ranks among the top states in terms of economic prosperity and development, the report concludes that the State’s environmental protections, including CEQA, have not constrained growth.

The full report can be accessed at: https://www.pcl.org/media/CEQA-in-the-21st-Century.pdf

IN UNPUBLISHED OPINION, COURT OF APPEAL UPHOLDS CEQA REVIEW FOR FRESNO’S FULTON MALL PROJECT

Monday, August 15th, 2016

The City of Fresno’s Fulton Street lies in the heart of its downtown and was once a bustling commerce center lined with numerous retailers. Suburbanization drew those retailers to the periphery of town in the 1950s. In the early 1960s, in an attempt to revive its urban core, the City turned Fulton Street into Fulton Mall, a 6-block pedestrian mall. Fulton Mall featured planting beds with shade trees, shrubs, and flowers; water fountains, pools, and streams; shade pavilions, siting areas, and playgrounds; and sculptures and mosaic artwork. Unfortunately, interest in Fulton Mall declined by the 1970s and it soon became plagued by high crime rates, deteriorating physical conditions, and low lease rates.

In 2011, the City of Fresno released a draft Fulton Corridor Specific Plan that identified three ways of improving Fulton Mall: (1) reintroduce two-way car traffic throughout the Mall; (2) reintroduce two-way car traffic but keep selected original features of the Mall; or (3) keep the Mall as pedestrian only and invest funding in restoring and repairing the original features. Option 2 was established as the City’s preference. Thereafter, the City began applying for (and receiving) various state and federal funds to put toward the Fulton Mall project (Project). In 2013, the City began preparing the environmental impact report (EIR) for the Project in compliance with CEQA. An initial study released with the Notice of Preparation determined that the Project may have significant impacts on aesthetics and historical resources, but would not significantly impact air quality, greenhouse gas emissions, parks, traffic, and utilities.

The City certified the final EIR in early 2014 and selected Option 1 as the preferred alternative due to its “straight street” design and the increased number of on-street parking spaces. The Downtown Fresno Coalition (Coalition) filed a petition for writ of mandate, alleging that the City pre-committed to Option 1 through its federal funding agreements and that the EIR inadequately analyzed certain impacts.  In Downtown Fresno Coalition v. City of Fresno, 2106 Cal. App. Unpub. LEXIS 5212, the Fifth District Court of Appeal rejected these claims and found that the City had complied with CEQA.

The Court first held that the Coalition was not collaterally estopped from bringing the CEQA suit even though it had previously brought a suit under the National Environmental Policy Act (NEPA) in federal court against the City, the Federal Highway Administration, Caltrans, and the federal Department of Transportation regarding federal funding that was given to the project without a NEPA review. The Court found the issues in the two cases to be distinct, despite the City’s arguments about the similarities between CEQA and NEPA.

Next, the Court addressed the Coalition’s argument that the federal funding had effectively precluded consideration of an alternative that featured full or partial restoration of the Mall. The Court noted that the grant funding was conditional on full compliance with CEQA and found that the City had fully complied by with the Supreme Court’s requirements in Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116 by not precluding consideration of any project alternative or mitigation.

Finally, the Court considered the Coalition’s claim that the EIR did not present a legally adequate analysis of the Project’s effects on certain resources. The City had narrowed the scope of the EIR to focus on the Project’s potentially significant effects on short-term visual character and historical resources. The Court found the analysis sufficient because impacts to air quality, greenhouse gas emissions, parks, traffic and utilities were determined to be less than significant; moreover, the initial study had presented extensive rational for that determination.  The Court concluded that the City had no legal obligation to analyze less than significant impacts in the EIR in the manner urged by Coalition.

COURT OF APPEAL UPHOLDS USE OF CLASS 3 CAT EX FOR CAR WASH/COFFEE SHOP PROJECT IN REDONDO BEACH

Tuesday, August 2nd, 2016

The City of Redondo Beach approved a conditional use permit (“CUP”) for the construction of a 4,080 square foot combination car wash and coffee shop in a commercial zone that borders a residential area (“Project”). The City found the Project exempt from CEQA under the Class 3 categorical exemption for up to four “new, small facilities or structures” that are under 10,000 square feet in an urbanized area. (CEQA Guidelines, § 15303.) Petitioners, who own homes adjacent to the proposed development, filed a petition for writ of mandate challenging the City’s use of a CEQA exemption and issuance of the CUP. In Walters v. City of Redondo Beach, 2016 Cal. App. LEXIS 605, the Court of Appeal upheld the trial court’s denial of Petitioners’ petition for writ of mandate.

Petitioners argued that a car wash did not fit within the definition of commercial buildings because it involved the installation of industrial equipment. The court noted that the definition of commercial buildings is not limited to the listed examples of a store, motel, office, or restaurant because it also includes “similar structures.” The court held that the type of business and the equipment that would be used for the Project was not substantially different from the listed examples.

The court similarly rejected Petitioners argument that the Project’s square footage was too large for the exemption. Citing Fairbank v. City of Mill Valley (1999) 75 Cal.App.4th 1243, the court held that the exemption covers one to four commercial buildings on the parcel as long as the total floor area of the building(s) does not exceed 10,000 square feet.

A Class 3 exemption can only be used if the project does not involve the use of significant amounts of hazardous substances and the surrounding area is not environmentally sensitive. Because Petitioners could not show that the surrounding area was considered environmentally sensitive or that the business used hazardous chemicals, the court determined that the Project fell within the Class 3 categorical exemption.

Next, the court considered whether the unusual circumstance exception precluded the use of a categorical exemption. As stated by the Supreme Court in Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086, there are two alternative ways to determine whether the unusual circumstances exception to a categorical exemption applies to a project: (1) by proving both unusual circumstances and a reasonable probability of a significant environmental effect that is due to those circumstances; or (2) by proving that the project will have a significant environmental effect.

Applying the first alternative, the court found that there was nothing particularly unusual about the Project and noted the parcel’s past use as a car wash from 1965 until 2001. While Petitioners pointed to the loud air blowers and extensive activities that are conducted outside of the business’ structures, the court held that the general effects of operating a business cannot serve as unusual circumstances. Nor did the court find it unusual that the business was located near a residential neighborhood.

Under the second Berkeley Hillside alternative, the court considered whether Petitioners had put forward sufficient evidence that the project will have a significant environmental effect due to noise and traffic effects. The court concluded that Petitioners had not, pointing to the fact that the City had conditioned the project on compliance with the applicable noise standards  and that the City’s traffic expert had concluded that the nearby intersection currently operates as LOS A and would continue to do so after the Project.  The court noted that Petitioners had erred by focusing on whether the Project may have a significant effect, which was not enough to establish that the Project will have a significant effect. Accordingly, the court concluded that the exception did not apply and that the City properly determined that the Project is categorically exempt.

Key Point: A Class 3 categorical exemption may apply to a commercial project when the commercial business is similar to a store, motel, office, or restaurant.

COURT OF APPEAL EXTENDS CEQA HOLDING ON RECORD PREPARATION LABOR COSTS TO OTHER ADMINISTRATIVE RECORD CASES

Monday, August 1st, 2016

After successfully defending a challenge to a resolution granting nonconforming use status to a mining operation in Santa Clara County, Respondent’s attorney filed a motion to recover costs associated with the preparation of the administrative record. This included the labor costs for the attorneys and paralegals who had assisted with the preparation of the large and complex record. Respondent was not otherwise entitled to recover attorney’s fees, and Petitioner argued that to grant these fees in the context of labor costs would be the equivalent of granting attorney’s fees.

While the trial court found that there was good reason to grant the costs due to the complexity of the record, it ultimately denied the motion because there was no appellate legal authority on point. In No Toxic Air v. Lehigh Southwest Cement Co., 2016 Cal. App. LEXIS 624, the Court of Appeal provided that authority by extending CEQA precedent to other proceedings that involve an administrative record.

In the CEQA context, this issue was definitively decided in Otay Ranch, L.P. v. County of San Diego (2014) 230 Cal.App.4th 60,where the court ruled that the prevailing party could recover the labor costs of attorneys and paralegals in the creation of the administrative record as long as the labor costs were reasonably and necessarily incurred. To hold otherwise, the court stated, would undermine the statutory policy of shifting the costs and expenses of preparing the administrative record.

Here, the Sixth District held that the same reasoning used in Otay Ranch applied in other cases in which an administrative record was prepared. Accordingly, the Court held that labor costs for attorneys and paralegals to prepare the administrative record are recoverable as expenses under Code of Civil Procedure, section 1094.5, subdivision (a).

Key Point: A prevailing party can recover the labor costs of attorneys and paralegals in the creation of the administrative record, even in non-CEQA administrative mandamus cases, as long as the labor costs were reasonably and necessarily incurred.

NINTH CIRCUIT REJECTS NEPA CHALLENGE TO THE JAMUL INDIAN VILLAGE CASINO PROJECT

Friday, July 29th, 2016

In Jamul Action Committee v. Chaudhuri, 2016 U.S. App. LEXIS 13104, the Ninth Circuit held that the National Environmental Protection Act (NEPA) did not apply to the Jamul Indian Village Casino project in Jamul, California due to an irreconcilable timing conflict between NEPA and the Indian Gaming Regulatory Act (IGRA).

The Jamul Indian Village (Tribe), a federally-recognized Indian tribe, has been planning the Casino for more than fifteen years. In the late 1990s, the Tribe enacted a gaming ordinance (GO) describing how it would operate a high-stakes gaming facility in Jamul. In 2013, the National Indian Gaming Commission (Commission) approved a revised GO for the project under the IGRA.

The Casino has been opposed by many individuals and organizations, including the Jamul Action Committee, the Jamul Community Church, and four residents of rural Jamul. This lawsuit against the Commission was the most recent attempt to stop the project. The project opponents argued that NEPA review should have been conducted before the Commission approved the revised GO in 2013. The district court held that a NEPA review was not required because the Commission’s approval was not a major federal action within the meaning of NEPA.

The Ninth Circuit affirmed the district court’s decision, but on different grounds. The appellate court, citing Flint Ridge Development Company v. Scenic Rivers Association of Oklahoma (1976) 426 U.S. 776, held that a NEPA review was not required due to an irreconcilable and fundamental conflict between IGRA and NEPA. The court reasoned that it was impossible for the Commission to comply with both statutes. The shortest time frame in which an EIS could be prepared under the NEPA statutory scheme was 120 days. But under IGRA, the Commission was required to approve the revised GO within 90 days of receiving it, a timeline controlled by Congress and triggered by the action of the Tribe.

Key Point: An agency may not be required to prepare an EIS, even for a major federal action, if an irreconcilable and fundamental conflict exists between NEPA and another applicable substantive statute. Such a conflict exists when a statute mandates a fixed deadline that is too short to allow the agency to comply with NEPA and the deadline and action triggering the deadline are not within the agency’s control.

FEDERAL DISTRICT COURT HAS JURISDICTION OVER CORPS’ CEASE AND DESIST LETTER WHEN CONSTITUTIONAL CLAIMS ARE RAISED

Thursday, July 28th, 2016

In Duarte Nursery, Inc. v. United States Army Corps of Engineers, 2016 U.S. Dist. LEXIS 76037, the Eastern District of California granted the U.S. Army Corps of Engineers’ (“Corps”) motion for summary judgment, finding that Duarte Nursery (“Nursery”) had violated the federal Clean Water Act (“Act”) by moving dirt around its property as part of tilling activities. The Act generally prohibits the discharge of pollutants into “navigable waters,” or “waters of the U.S.,” without a permit.

The Nursery owned approximately 2,000 acres of land. Prior to purchasing the land, Nursery president John Duarte was aware of a draft delineation that had been prepared. The draft delineation noted that there were 40.78 acres of pre-jurisdictional waters of the U.S. on the property, including vernal pools, seasonal wetlands, and intermittent and ephemeral drainages that have physical connections to Coyote Creek, a tributary of the navigable Sacramento River. In 2012, the Nursery arranged to have wheat grown on the property. The planting process involved tilling the soil with a harvester with a ripper attachment.

An employee of the Army Corps observed the equipment and activities taking place on the property and informed John Duarte that the ripping activity potentially violated the Act. The Corps then sent a cease and desist letter (“C&D Letter”) to the Nursery in February 2013. In October 2013, the Nursery and its president sued the Corps, raising due process claims under the Fifth Amendment and the Corps asserted an enforcement action as a counterclaim.

In deciding the parties’ cross-motions for summary judgment, the court first rejected the government’s argument that the C&D Letter was not subject to judicial review under section 702 of the Administrative Procedure Act (“APA”) because it was not a final agency action. The court held that a party could seek judicial review of an agency action that was not a “final agency action” when a party raised constitutional challenges to the agency action. Additionally, the court noted that the Supreme Court found cease and desist orders issue under the Act to be sufficiently final to trigger APA review in Sackett v. EPA (2012) 132 S.Ct. 1367, 1374.

Next, the court rejected the plaintiffs’ procedural due process claim under the Fifth Amendment because the C&D Letter, which merely advised plaintiffs that their activity was in violation of the Act, did not deprive plaintiffs of their constitutionally protected interest. The court reasoned that a deprivation of a constitutionally protected interest could occur only after an enforcement action was brought by the DOJ or EPA; threatened enforcement of a deprivation of a liberty or property interest was not enough.

Finally, the court held that Nursery, including its president John Duarte, had violated the Act because they discharged soil into waters of the U.S. without a permit. The court held that a corporate officer who directs the activities could be subject to a civil enforcement action under the Act. The court also rejected the plaintiffs’ contention that the tilling activity was exempt under the Act’s farming exemption because there was no farming activity other than grazing on the property between 1998 and 2012 and the exception only applied to the continuation of established and ongoing farming activities. Moreover, the court found that the tilling activity impaired the flow of the waters of the U.S., necessitating a permit even if the farming exception did apply.

IN CENTRAL VALLEY SHOWDOWN OVER ANNEXATION, THE CITY OF KINGSBURG REIGNS (MOSTLY) SUPREME

Thursday, July 28th, 2016

In 2012, the City of Kingsburg began the process of annexing approximately 430 acres of land in Fresno County, including developed land that was home to three major facilities: a glass manufacturing plant, a grape processing facility, and a raisin processing plant. The land proposed for annexation separates the City of Kingsburg from the City of Selma, which is located approximately five miles to the north.

Before approving the annexation, Kingsburg concluded that the project would not cause any significant environmental impacts with mitigation and prepared a mitigated negative declaration (MND). When Kinsgburg certified the MND in September of 2012, it also requested that the Fresno County Local Area Formation Commission (LAFCo) initiate proceedings to approve the annexation. After continuing the annexation hearing several times, LAFCo approved the annexation on July 17, 2013.The City of Selma brought two actions challenging the decision: one against Kingsburg and one against LAFCo.

The court decided City of Selma v. City of Kingsburg, 2016 Cal. App. Unpub. LEXIS 5207 in an unpublished opinion. The City of Selma had challenged the CEQA process used by Kingsburg to approve the annexation and to repeal certain design standards applicable to the annexation area that concerned the large glass manufacturer, including a requirement to place electrical and telecommunications lines underground.

The court first held that written materials relevant to the agency’s compliance with CEQA must be included in the administrative record, even if the documents were prepared after the project was approved. Next, the court affirmed the trial court and held that Kingsburg had complied with CEQA for the annexation project by preparing an MND. In doing so, the court rejected Selma’s challenges to the adequacy and scope of the water supply analysis and Kingsburg’s ability to provide fire protection to the annexed area.

Finally, the court found that Kingsburg had failed to demonstrate that the common sense exception applied to the repeal of the design standards. The court rejected Kingsburg’s argument that the existence of other standards precluded the possibility that repealing the design standards could cause significant environmental impacts. The Court also held that Kingsburg erred by failing to reference the factual record in its notice of exemption.

The Fifth Appellate District partially published its opinion in City of Selma v. Fresno County Local Agency Formation Commission, 2016 Cal. App. LEXIS 581. For various reasons, the LAFCo hearing had originally been noticed for April 10, 2013 but was continued until July 17, 2013. Selma argued that this violated Government Code section 56666, subdivision (a)’s 70-day limitation for continuances. The court agreed, but concluded that the 70-day limitation is directory rather than mandatory pursuant to section 56106.

The court contrasted this provision with Government Code section (h), a mandatory provision which requires an annexation hearing to be scheduled for a date not more than 90 days after the annexation application was received. Because the continuance provision at issue was directory rather than mandatory, the remedy was not reversal of LAFCo’s determination.  The court acknowledged that this holding made the 70-day continuance limitation “relatively toothless.”

Key Point: Failure to comply with the continuance limitation, as opposed to the initial scheduling requirement, for LAFCo annexation proceedings will not result in a reversal of the LAFCo’s determination.

COURT OF APPEAL HOLDS “DISCOVERY RULE” DOES NOT EXTEND CEQA STATUTE OF LIMITATIONS

Tuesday, July 26th, 2016

In Communities for a Better Environment v. Bay Area Air Quality Management District, 2016 Cal. App. LEXIS 596, Petitioners challenged Bay Area Air Quality Management District’s (BAAQMD) July 2013 determination that the approval of the Richmond rail-to-truck facility to transload crude oil instead of ethanol was ministerial and therefore not subject to CEQA. BAAQMD did not provide the public with notice of its determination and Petitioners did not learn of the decision until January 31, 2014, when one of Communities for a Better Environment’s staff members received an email disclosing the change from ethanol to crude oil.

Petitioners filed their petition in March 2014 and it was subsequently dismissed by the trial court as untimely. Petitioners appealed, arguing that the so called “discovery rule” applied. In the typical case, the discovery rule postpones the accrual of an action from the date an injury occurs until the date the plaintiff has actual or constructive notice of the facts constituting the injury. Petitioners argued that the discovery rule should apply in this case because there was no way to discover that the approval had taken place—they claimed that the transloading operation is entirely enclosed, making any changes invisible to the public.

The appellate court held that the discovery rule did not extend the statute of limitations in this case because the legislature created the applicable triggering dates when drafting the statute and those dates, providing constructive notice to Petitioners, had occurred. Specifically, an action to challenge a determination that a project is not subject to CEQA accrues on one of three alternative dates set forth in Public Resources Code section 21167, subdivision (d): (1) filing of a notice that the project is not subject to CEQA, which triggers a 35 day statute of limitations; (2) if no notice is filed, then within 180 days of the agency’s formal decision to carry out or approve the project; or (3) if there is no formal determination, then within 180 days from the commencement of the project.

The court distinguished the situation from Concerned Citizens of Costa Mesa, Inc. v. 32nd District Agricultural Association (1986) 42 Cal.3d 929, where the Supreme Court held that an action accrues on the date a plaintiff knew or reasonably should have known of the project only if no statutory triggering date has occurred. Here, the court held that the triggering dates had occurred, even if they were not apparent to Petitioners.

While the court acknowledged that public participation may be served by applying the discovery rule in cases such as this, where no notice is given and there is virtually no indication to the public that the project has been approved and commenced, it concluded that it could not read such an exception into the statutory text, such a change would have to be initiated by the Legislature.

PROJECT PROPONENTS SCORE A DECISIVE VICTORY IN GOLDEN STATE WARRIORS ARENA CASES

Thursday, July 21st, 2016

On July 18, 2016, in a 54-page opinion, Judge Wong of the San Francisco Superior Court delivered a decisive victory to the respondents and real parties in interest in the litigation concerning the proposed Golden State Warriors arena in Mission Bay Alliance v. Office of Community Investment and Infrastructure. Thomas Law Group represented the Office of Community Investment and Infrastructure (OCII).

For years, the Warriors have been planning to relocate to San Francisco from their current stadium in Oakland. The Project involves constructing a multi-purpose event center and mixed uses, including office, retail, and open space, on an 11-acre site in the Mission Bay South Redevelopment Plan (Plan) area. In April 2015, the Governor certified the Project as an Environmental Leadership Development Project under AB 900. A subsequent environmental impact report (SEIR) was prepared for the Project, tiering from the 1998 Mission Bay EIR.

OCII, the successor agency to the San Francisco Redevelopment Agency, certified the Final SEIR and approved the Project on November 3, 2015. That same day, OCII’s executive director determined that the Project qualified as a “secondary use” permitted under the Plan. Acting as responsible agencies under CEQA, various local agencies and departments of the City and County of San Francisco (City) subsequently granted additional approvals for the Project. Petitioners challenged these actions on numerous fronts in two actions that were later consolidated.

The court first held that OCII did not abuse its discretion in finding that the event center is an authorized secondary use under the Plan because the Project qualifies as a nighttime entertainment use, a recreation building use, and as “public structures or uses of nonindustrial character.”

Next, the court held that OCII complied with CEQA, specifically finding that the SEIR addresses all impacts of the Project at the appropriate level of detail and adequately analyzes impacts relating to land use, hazards and hazardous materials, recreation, biological resources, transportation and transit, toxic air contaminants, noise, wastewater facilities, greenhouse gas emissions, and wind. The court also held that the SEIR analyzes a reasonable range of potentially feasible alternatives.

Finally, the court addressed the remaining non-CEQA claims, finding that the City did not abuse its discretion when it determined that the event center complies with Prop M and when it approved the Place of Entertainment permit. The court further held that the Project did not include an economic development subsidy.

Accordingly, the court denied both of Petitioners’ petitions for writ of mandate. Pursuant to the accelerated litigation timeline under AB 900, the Court of Appeal would hear any appeal filed by Petitioners by the end of this year.