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Second District Court of Appeal Upholds Conservation Alternatives, Even in Absence of Additional Conceptual Designs; Defers to Lead Agency in Presence of Substantial Evidence

Thursday, February 8th, 2018

The building at the center of the litigation, 9080 Santa Monica Boulevard (Hunter Kerhart Photography/LA Weekly)

Rendering of the proposed Melrose Triangle Gateway building, which was proposed to replace the historic building (Architect Studio One Eleven/WEHOville)


In L.A. Conservancy v. City of W. Hollywood (2017) 18 Cal. App. 5th 1031, the Second District Court of Appeal affirmed the trial court’s decision upholding the adequacy of the environmental impact report (EIR) and supporting CEQA findings made by the City of West Hollywood (City) concerning approval of a mixed-use project on a three-acre “gateway” site in the City.

The Project, as proposed, required demolition of a building built in 1928 and remodeled in 1938, which was considered eligible for listing on the California Register of Historical Resources. The EIR acknowledged that demolition of the building constituted a significant and unavoidable impact.  As a result, the EIR included a project alternative that proposed redesigning the Project in order to preserve the historic building.  In approving the Project, the City rejected the preservation alternative, but required that portions of the historic building façade be incorporated into the Project design.

Plaintiff Los Angeles Conservancy (plaintiff) alleged that the City violated CEQA because the analysis of the preservation alternative was inadequate, the Final EIR failed to sufficiently respond to comments concerning preservation of the historic building, and evidence did not support the City’s findings that the preservation alternative was infeasible. The trial court denied the plaintiff’s petition. On appeal, the court affirmed.

First, the court held that the EIR’s analysis of the conservation alternative was detailed enough to permit informed decision making and public participation. The court rejected plaintiff’s argument that the City was required to prepare a “conceptual design” for the alternative.  The court noted that no legal authority required a conceptual design to be prepared for an alternative included in an EIR.

Second, the court found that comments on the draft EIR cited by the plaintiff did not raise new issues or disclose any analytical gap in the EIR’s analysis. The court noted that to respond to comments that merely expressed general Project objections and support for the preservation alternative, the City could properly refer the commenters back to discussion included in the draft EIR concerning the historic building on the project site.

Finally, the court stated that a court must uphold the lead agency’s findings concluding an alternative is infeasible if supported by substantial evidence. In undertaking this inquiry, “[a]n agency’s finding of infeasibility… is ‘entitled to great deference’ and ‘presumed correct.’” While the court noted that the plaintiff may have demonstrated that the City could have concluded the preservation alternative was not infeasible, other evidence in the record supported the City’s determination that the alternative was impractical or undesirable from a policy standpoint.  Thus, substantial evidence supported the City’s infeasibility findings.

Key Point:

Environmental project review documents providing detailed conservation alternatives to demolishing existing sites eligible for California Register of Historical Resources designation need not include additional conceptual designs to support these alternatives. Additionally, courts must uphold a lead agency’s finding concluding that an alternative is infeasible if supported by substantial evidence.

Second District Court of Appeal Upholds Decertification of Portion of Contested EIR on Remand

Thursday, February 8th, 2018

Construction of the Newhall Ranch Project, a 21,500-home development currently under construction along the Highway 126 freeway in north Los Angeles County.(Courtesy of Austin Dave, The Signal)

In Center for Biological Diversity v. California Dept. of Fish & Wildlife (2017) 17 Cal. App. 5th 1245, the Second District Court of Appeal addressed a challenge to the postremand judgment involving the Newhall Ranch Project issued by the trial court in response to Center for Biological Diversity v. Department of Fish & Wildlife (2015) 62 Cal.4th 204 and Center for Biological Diversity v. Department of Fish and Wildlife (2016) 1 Cal.App.5th 452.  Following the terms of the remand, the trial court entered judgment in favor of the plaintiffs on two issues: the analysis of greenhouse gas emission and stickleback impacts. Judgment was rendered in favor of the California Department of Fish & Wildlife (department) and the developer as to all other issues.

The judgment further ordered that a peremptory writ of mandate be issued directing the department to decertify the portions of the EIR that address the significance of the project’s greenhouse gas emissions, and the validity of the stickleback mitigation measures. The judgment stated: “Consistent with the Supreme Court’s opinion, all remaining portions of the EIR comply with CEQA.” Accordingly, the writ directed the department to void certification of portions of the EIR that address the department’s determination regarding the significance of the project’s greenhouse gas emissions and the stickleback mitigation measures.

The judgment and writ also enjoined all project activity including construction until the EIR was compliant with law. Further, the department also was ordered to “suspend” two project approvals that related directly to the EIR’s determinations regarding the significance of the project’s greenhouse gas emissions and stickleback mitigation measures, but four other approvals were left in place because no action was needed as to them “unless compliance with the Writ changes or affects” them.

Plaintiffs appealed from the trial court’s judgment on remand, arguing that the trial court’s decision to decertify only a portion of the EIR and leave some of the project approvals in place violated CEQA. The court rejected plaintiffs’ challenges to the postremand judgment.

First, the court explained that Public Resources Code section 21168.9, subdivision (a) clearly allows a court to order partial decertification of an EIR following a trial, hearing, or remand. The section applies when a court finds that “any determination, finding, or decision of a public agency” is noncompliant. (Pub. Resources Code § 21168.9, subd. (a).) After making such a finding, “the court must enter an order, in the form of a peremptory writ of mandate, containing one or more of three specified mandates. (Pub. Resources Code § 21168.9, subds. (a) & (b).) One of those three mandates is voiding the agency determination “in whole or in part.” (Pub. Resources Code § 21168.9, subd. (a)(1).) When a court voids an agency determination “in part,” it must make severance findings pursuant to Public Resources Code section 21168.9, subdivision (b), to determine whether the voided portions are severable, and whether the remainder will be in full compliance with CEQA. In reaching its holding, the court distinguished LandValue 77, LLC v. Board of Trustees of California State University (2011) 193 Cal.App.4th 675 and Bakersfield Citizens for Local Control v. City of Bakersfield (2004) 124 Cal.App.4th 1184 on the basis that in those cases the courts did not make the severance findings required under Public Resources Code section 21168.9, subdivision (b).

Second, the court rejected plaintiffs’ argument that it was improper for the trial court to leave some project approvals in place. The court explained that under Public Resources Code section 21168.9, subdivision (b), the court is required to order “only those mandates which are necessary to achieve compliance with this division and only those specific project activities in noncompliance with this division.” Thus, if the court finds that it will not prejudice full compliance with CEQA to leave some project approvals in place, it must leave them unaffected.

Finally, the court reviewed the severability findings made by the trial court to confirm whether the court properly exercised its authority. Applying the abuse of discretion standard, the court concluded the trail court’s severability findings satisfied Public Resources Code section 21168.9, subdivision (b).

 

Key Point:

When examining inadequate portions of an EIR, Public Resources Code section 21168.9, subdivision (b) allows courts to determine whether the inadequate and voidable portions are severable, and whether the remainder will be in full compliance with CEQA.

Fourth District Court of Appeal Rejects Finding of Mootness in Remand Proceedings for SANDAG’s 2050 RTP/SCS, Reverses in Part and Remands to the Superior Court

Thursday, February 8th, 2018

Cleveland National Forest, east of San Diego (Photo By Alexander S. Kunz, courtesy of the USDA)

Following Cleveland National Forest Foundation v. San Diego Association of Governments (2017) 3 Cal.5th 497 (“Cleveland II”), in which the Supreme Court reversed the Fourth District Court of Appeal’s decision (“Cleveland I”) (for an in-depth discussion of that decision, see our previous coverage of the case) and held that the EIR prepared for the San Diego Association of Governments’ (“SANDAG”) 2050 Regional Transportation Plan/Sustainable Communities Strategy (“Plan”) did not need to include an analysis of the Plan’s consistency with greenhouse gas (“GHG”) emission reduction goals of 80 percent below 1990 levels by 2050 (established by Executive Order (“EO”) No. S-3-05) to comply with CEQA, with respect to the other alleged deficiencies in the EIR, the Supreme Court “express[ed] no view on how, if at all, [its] opinion affect[ed] their disposition.”

The matter returned on remand to the Fourth Appellate District in Cleveland National Forest Foundation v. San Diego Association of Governments (2017) 17 Cal.App 5th 413 (“Cleveland III”). There, the Court rejected SANDAG’s argument that this case was moot because the Plan and the EIR had been superseded by SANDAG’s 2015 Plan and a 2015 EIR prepared for the 2015 Plan, respectively. The court explained that because the EIR might still be relied upon by project applicants the EIR was not superseded by the subsequent 2015 Plan EIR. Accordingly, the Court of Appeal reissued its opinion addressing the issues not reviewed by the Supreme Court. The court also republished its opinion, noting that automatic depublication upon grant of review is no longer required by the California Rules of Court (as it was when the Supreme Court originally took this case).

Because the matter was not moot, the court held that the EIR failed to address mitigation for the Plan’s GHG impacts. Finding that the EIR considered three measures that would result in little to no concrete steps toward emissions reduction and three onerous or unrealistic measures, the court concluded that it lacked the information required under CEQA – a discussion of mitigation measures that could both substantially lessen the Plan’s significant GHG impacts and be implemented in a feasible manner.

Lastly, the court exercised its discretion to consider other challenges to the EIR raised through the plaintiff’s cross-appeals. SANDAG argued that the plaintiffs forfeited these challenges by failing to obtain rulings on them from the trial court. The court explained that the forfeiture rule is not automatic and the court may exercise its discretion to excuse any forfeiture when it finds the issues sufficiently important.

Turning to these challenges to the EIR, the court held that: (1) the EIR failed to adequately discuss project alternatives because none of the project alternatives focused on significantly reducing vehicle miles traveled (“VMT”), finding that SANDAG’s own Climate Action Strategy stated that achieving the state’s GHG reduction goals would require significant reductions in VMT; (2) the EIR failed to provide adequate baseline information about exposures to toxic air contaminants and the location of sensitive receptors; (3) the EIR failed to correlate the Plan-related emissions to resulting adverse health impacts; (4) the EIR impermissibly deferred the analysis of air quality mitigation measures; (5) the EIR impermissibly understated the Plan’s growth-induced impacts on agricultural lands by failing to account for impacts to farmland of less than 10 acres put into production within the last 20 years; and (6) the plaintiffs failed to exhaust their administrative remedies as to their concerns about the Plan’s impacts to small firms and lands redesignated rural residential.

In dissent, Justice Benke argued that the majority erred in reissuing Cleveland I as modified (i.e., Cleveland III) because the case should have been remanded to the trial court for it to determine whether the case was moot as a result of SANDAG’s certification of the 2015 EIR for the 2015 Plan.

Key Point:

Liability may be imposed upon agencies for environmentally deficient programmatic EIRs, regardless of subsequent EIRs covering the same geographic area. When an EIR might still be relied upon by project applicants, it cannot be superseded by subsequent Plan EIRs, and challenges brought against the relied-upon EIR are not moot.

Fourth District Court of Appeal Upholds College Land Purchase, Dismisses CEQA Challenges

Thursday, February 8th, 2018

Part of the existing campus of defendants, Mt. San Jacinto Community College (courtesy of Mt. San Jacinto Community College).

In Bridges v. Mt. San Jacinto Community College District (2017) 14 Cal.App.5th 104, the Fourth District Court of Appeal affirmed the trial court and upheld Mt. San Jacinto Community College District’s (“College”) purchase agreement for approximately 80 acres of unimproved land in the City of Wildomar (“Property”), located about a mile southwest of Interstate 15.

Over the past 17 years, the College had considered building a new campus in southwest Riverside County to serve the growing communities along the Interstate 15 corridor. In the spring of 2003, the District entered into an option agreement to purchase the Property from the property owner, Riverside County Regional Park & Open-Space District (“District”). Subsequently, the College initiated CEQA review for the construction of a 488,000-square-foot campus intended to serve approximately 15,000 part-time and 10,000 full-time students on the Property. In May 2006, the College terminated CEQA review due to a lawsuit related to the option agreement.

On May 8, 2014, the College’s board of trustees held a public meeting to consider a motion to enter into an agreement to purchase the Property from the District for $2.455 million. In June 2014, the College and the District executed a purchase agreement for the Property, which conditioned both the opening and closing of escrow on CEQA compliance. Later, the voters approved a $295 million bond measure to upgrade and expand the College’s facilities, including the construction of facilities on the Property. The plaintiffs sued the College. The trial court held for the College.

On appeal, the court held plaintiffs were barred from raising their objection in a CEQA suit because they did not offer any comments during the meeting where the College’s board of trustees considered the purchase agreement for the Property, and therefore failed to exhaust their administrative remedies. The plaintiffs argued they were excused from the exhaustion requirement because the College did not give appropriate notice of the meeting. Finding that the May 8, 2014 meeting was a regularly scheduled meeting of the board of trustees, not a public hearing under CEQA, the court held that the College provided appropriate notice at least 72 hours in advance, as required by the Brown Act. With no evidence in the record showing that the College improperly noticed the meeting, the court held that under Evidence Code section 664, it must presume the College regularly performed its official duty, including providing proper meeting notice.

The court nonetheless addressed the merits of the plaintiff’s CEQA claims. First, the court rejected the plaintiff’s argument that the College must issue an EIR before it signed the purchase agreement. The court explained that CEQA Guidelines section 15004, subdivision (b)(2)(A) allowed the College to enter into the purchase agreement if it conditioned its future use of the site on CEQA compliance. The court also found that the purchase agreement did not commit the College to a definite use of the Property, unlike the circumstances in Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116.

Second, the court found that the purchase agreement was not a project under CEQA, given that no development plans existed at the time the College executed the purchase agreement. Third, stating that it “bordered on the frivolous,” the court rejected plaintiff’s argument that the College was required to prepare an EIR under Public Resources Code section 21080.09, which requires a college to prepare an EIR when it selects a location for a campus and approves a long range development plan. The court reasoned that campus site selection involves more than the execution of the purchase agreement.

Key Point:

Although significant changes to a community (such as the purchase of land by a college) may be approved at regularly scheduled public meetings, the Brown Act allows for contemplation of these changes as long as the public agency provides notice to the public 72 hours before the meeting.

Aptos Council v. County of Santa Cruz (2017) 10 Cal.App.5th 266

Thursday, February 8th, 2018

The Sixth District Court of Appeal affirmed the trial court’s decision and upheld three ordinances amending the County’s zoning regulations in an effort to modernize its zoning regulations.

These ordinances were intended to: (1) extend minor exceptions to zoning site standards (the “minor exceptions ordinance”); (2) alter certain height, density, and parking requirements for hotels in commercial districts (the “hotel ordinance”), and (3) establish an administrative process for approving minor exceptions to the County’s sign ordinance (the “sign ordinance”). The County adopted an addendum to a previously adopted negative declaration for the minor exceptions ordinance, a negative declaration for the hotel ordinance, and statutory, categorical, and common sense exemptions for the sign ordinance.

Plaintiff Aptos Council filed a lawsuit alleging that Santa Cruz County’s approval of the ordinances violated CEQA because the zoning code approvals collectively constituted a single project requiring preparation of an environmental impact report.

On appeal, the court held that the County did not engage in improper piecemeal environmental review. The court found that the adoption of the three ordinances did not constitute a single project that must be evaluated in an EIR applying the two-prong test provided by the California Supreme Court in Laurel Heights Improvement Association v. Regents of University of California (1988) 47 Cal.3d 376. The test provides that an EIR must include an analysis of the environmental effects of future expansion or other action if: (1) it is a reasonably foreseeable consequence of the initial project; and (2) it will be significant in that it will likely change the scope or nature of the initial project or its environmental effects. The court explained that the County’s proposed changes in its zoning regulations, such as altering the density requirements for hotels and reducing the required number of parking spaces per hotel room, did not rely on the implementation of the other regulatory changes proposed by the County, such as eliminating the need to obtain a variance for certain signs. Thus, the court concluded that the first set of changes was not a reasonably foreseeable consequence of the other regulatory changes.

Finally, the court rejected Aptos Council’s argument that the negative declaration prepared for the hotel ordinance was inadequate because it failed to consider the impacts from future developments that would be encouraged by the hotel ordinance. Aptos Council argued that the County’s own stated reason for adopting this ordinance – to facilitate growth – meant that increased hotel developments were a reasonably foreseeable consequence of the ordinance. Rejecting this argument, the court found that future hotel developments were not required to be analyzed because Aptos Council was merely speculating about future development and thus failed to adequately identify substantial evidence in the record to support its fair argument claim.

Court Rejects CEQA Lawsuit Challenging Approval of Planned Parenthood Clinic Premised on Potential Secondary Environmental Impacts Associated with Clinic Protests

Wednesday, September 27th, 2017

In Respect Life S. San Francisco v. City of South San Francisco, 2017 Cal. App. LEXIS 801, the First Appellate District held that the City of South San Francisco’s approval of a conditional-use permit allowing an office building to be converted to a medical clinic did not violate requirements imposed by the California Environmental Quality Act (CEQA). The City determined that the project fell within several categorical exemptions to CEQA, and thus, the permit did not require further CEQA review.

The case arose after the owner of an office building in downtown South San Francisco applied for a conditional-use permit to allow the building to be used as a medical clinic for a new tenant, Planned Parenthood. The physical changes to conversion of the building for use as a medical clinic were minor, and the City’s Planning Commission approved the permit after holding a public hearing.

Petitioner Respect Life South San Francisco (Respect Life) disagreed with the Planning Commission’s determination that the project fell into categorical exemptions and appealed to the City Council. Specifically, Respect Life alleged that the City ignored the “inherently noxious and controversial nature” of Planned Parenthood’s services which would cause protests leading to “environmental impacts… including traffic, parking, [and] public health and safety concerns,” thus necessitating an Environmental Impact Report (EIR) under CEQA.

The City Council affirmed the Planning Commission’s determination that the permit was exempt from CEQA under three categorical exemptions applying to (1) the operation of existing facilities (CEQA Guidelines section 15301); (2) the conversion of small structures (CEQA Guidelines section 15303); and (3) the development of urban in-fill projects (CEQA Guidelines section 15332). Thereafter, Respect Life filed a petition for a writ of mandate. The trial court upheld the City’s finding that the Project was exempt from CEQA and denied the petition. Respect Life subsequently appealed to the First District.

On appeal, Respect Life acknowledged that the project fell within at least one of CEQA’s categorical exemptions, but contended a full environmental review was still necessary due to the unusual-circumstances exception to those categorical exemptions. The “unusual-circumstances exception” provides that “a categorical exemption shall not be used for an activity where there is a reasonable possibility that the activity will have a significant effect on the environment due to the unusual circumstances.”

The Court of Appeal first noted the different standards of review: first the party seeking to establish the unusual-circumstances exception must show “that the project has some feature that distinguishes it from others in the exempt class, such as its size or location,” and second, that there is “a reasonable possibility of a significant effect [on the environment] due to that unusual circumstance.” (Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086.) The Court elaborated that a deferential standard applies in reviewing the first element, and a non-deferential standard applies in reviewing the second.

Because the City Council did not directly address whether the Project would result in any unusual-circumstances, the Court concluded that to affirm such an implied municipal determination, the court must assume that the entity found the project involved unusual circumstances, but then consider whether a fair argument exists that the project will have significant effect on the environment. The Court then held that Respect Life failed to identify substantial evidence of any potentially significant environmental impact.

In reaching this holding, the Court explained that a “significant effect on the environment means a substantial or potentially substantial, adverse change in the environment.” (§ 21068.) The Court was unpersuaded by Respect Life’s argument that “the notoriety of [Planned Parenthood] and its activities,” would cause significant environmental impacts such as sidewalk obstruction, public safety concerns, parking congestion, business disruption and increases in noise levels. They found that there was no substantial evidence presented to support a fair argument that there was a reasonable possibility that these impacts will have a significant environmental impact, and conversely found evidence in the record showing the opposite. As a result, the Court of Appeal upheld the trial court’s decision denying Respect Life’s petition.

Key Point:

While the City ultimately prevailed in this litigation, the decision serves as an important reminder regarding the value of a lead agency making express findings addressing the exceptions to the categorical exemptions.  If the City had expressly concluded that the Project did not involve any unusual circumstances, then the Court could have upheld the City’s determination based on the much more deferential “substantial evidence” standard of review and not been required to consider whether a “fair argument” of a potentially significant environmental impact existed.

Certified Regulatory Program’s Environmental Documents Must Comply with CEQA’s Policy Goals and Substantive Requirements

Monday, September 25th, 2017

In Pesticide Action Network North America v. California Department of Pesticide Regulation, 2017 Cal. App. LEXIS 803, the First Appellate District reversed the trial court and set aside the Department of Pesticide Regulation’s (“DPR”) approval of amended labels for two pesticides, Dinotefuran 20SG and Venom Insecticide.  The purpose of the amended labels was to allow both pesticides to be used on additional crops, such as fruiting vegetables, onions, peaches, and nectarines.

In 2006, a phenomenon called “colony collapse disorder” began, where many honey bees disappeared from managed hives in the United States. According to the 2012 Report on the National Stakeholders Conference on Honey Bee Health (“NSC Report”), approximately 28 to 33 percent of honeybee colonies had failed each year since 2006, while a normal loss rate was ten percent.  The NSC Report noted that colony collapse disorder was being caused by several factors, including pesticides.  In February 2009, the Department initiated a reevaluation of the two pesticides at issue in this case along with 280 other pesticide products.  In September 2014, the Department was granted by the California Legislature until July 1, 2018 to complete a thorough reevaluation of the pesticides on pollinator health.

In January 2014, before the Department completed the reevaluation, it released public reports concerning its proposed decisions to approve amended labels for Dinotefuran 20SG and Venom Insecticide. Subsequently, the Department approved the label amendments.  The plaintiff sued to set aside the Department’s approval, contending that the Department violated CEQA in approving the label amendments.  The trial court ruled in favor of the Department.

On appeal, the court rejected the Department’s argument that the environmental review was exempt from CEQA because it was conducted pursuant to the Department’s pesticide registration program certified under Public Resources Code (“PRC”) section 21080.5, which allowed the Department’s environmental documents to serve as the “functional equivalent” of CEQA documents. Based on the plain language of PRC section 21080.5 and case law, the court concluded that the Department’s registration program was subject to the broad policy goals and substantive requirements of CEQA while exempt from the CEQA procedural requirements set forth in CEQA Chapters 3 and 4 and PRC section 21167.

Next, the court identified the broad policy goals and substantive requirements of CEQA applicable to certified regulatory programs and found that the Department did not comply with these requirements. First, citing PRC section 21001(g), the court held that the Department must consider alternatives to registering the proposed new uses for the two pesticides.  Accordingly, the court found that the reports “glaringly” failed to address any feasible alternative.  Second, finding that the Department’s environmental documents must provide an adequate baseline, given the CEQA’s goal of informing the public of the potential impacts of a proposal, the court concluded that the Department failed to provide adequate baseline information.  Third, relying on case law, the court also found that the Department must consider the project’s cumulative impacts, but failed to so.  Finally, finding that the Department was required to recirculate any new significant information about the project, the court held that because the Department’s initial public reports were “so inadequate and conclusory … public comment on the draft was effectively meaningless” its effort to explain its decision in response to comments required recirculation.

Key Point:

While exempt from the CEQA procedural requirements set forth in CEQA Chapters 3 and 4 and PRC section 21167, environmental documents prepared under a certified regulatory program pursuant to PRC section 21080.5 must comply with the policy goals and substantive requirements of CEQA.

California Supreme Court Holds Federal Regulation of State Owned Rail Lines Does Not Preempt CEQA

Monday, August 14th, 2017

In Friends of the Eel River v. North Coast Rail Road Authority, 2017 Cal. LEXIS 5650, the California Supreme Court addressed whether the federal Interstate Commerce Commission Termination Act (ICCTA) preempts the application of the California Environmental Quality Act (CEQA) for a California railroad project governed by the state’s North Coast Rail Authority (NCRA) and operated by a privately leased entity.

NCRA was sued under CEQA for inadequacies in its rail line project EIR. NCRA argued that the line was subject to federal ICCTA regulation instead of CEQA, removed the matter to the Ninth Circuit, and rescinded its EIR. The federal court remanded the matter to state court. The trial court held that the ICCTA preempted CEQA, and the First Appellate District affirmed. In December of 2014, the California Supreme Court granted petitioners’ petition for review as it related to the preemption issue.

The Court examined the ICCTA’s statutory construction and historical background, finding that although the ICCTA contains an express preemption provision and contemplates a unified national rail system, it was intended to combat rail monopolies while minimizing the need for federal regulatory control. The ICCTA expressly allows private rail owners to govern themselves internally via market-based self-correction and corporate bylaws, as long as those internal governances do not conflict with the ICCTA or other federal regulatory agencies. The Court concluded that this freedom to govern a private rail company translates to the freedom to govern state-controlled rail companies as well.

The Court held that the federal interest in railroads does not entirely sweep away the exercise of a state’s regulatory police powers when such regulation merely implicates rail transport, and that it does not follow that any and all state regulations touching on powers that may be federally regulated are preempted. The Court determined that application of CEQA to a public entity charged with developing state property is not a classic regulatory behavior, especially when there is no encroachment on the regulatory domain of the Surface Transportation Board or inconsistency with the ICCTA. Rather, application of CEQA constitutes self-governance on the part of a sovereign state. The Court presumed that Congress did not intend to preempt a state’s adoption and use of the tools of self-governance, or to leave the state without any means of establishing the basic principles under which it will undertake significant capital expenditures. The Court further concluded that ICCTA’s preemption of CEQA would be improper because it would allow the state to start and fund a rail line, but restrict how work is done on the line, unlike private owners.

The Court, relying on analyses of Gregory v. Ashcroft (1991) 501 U.S. 452, Garcia v. San Antonio Metro. Transit Auth. (1985) 469 U.S. 528, and Nixon v. Missouri Municipal League (2004) 541 U.S. 125, held that when interpreting Congressional legislation, there must be unmistakably clear language to establish an intrusive exercise of Congress’ commerce clause powers against a state. The Court explained that when there is the possibility of preemption, the law should be presumed as preserving a State’s chosen disposition of its own power, in the absence of a clear and plain statement from the legislature. The Court utilized the presumption argument to support the view that CEQA is not preempted in this case, and concluded that preemption would interpose improper federal authority between a State and its municipal subdivisions. Particularly, the Court found that it would be improper to preempt the state’s ability to dictate how its own subdivision addresses environmental concerns caused by the state’s own railroad business.

Examining the market participant doctrine, the Court found that the while the doctrine ordinarily is used to analyze preemption when a state interacts with private parties as a participant in a private marketplace for goods, labor, or services, it does not address a state’s ability to govern its own governmental subsidiary. Nevertheless, the Court continued its analysis of the doctrine, and found that because states operating in a private marketplace are subject to the same burdens imposed by Congress on private owners, courts will presume that Congress would afford states, as owners, the same freedoms as private parties. The Court held that the state’s application of CEQA to NCRA’s proceedings can be analogized to a private corporation enforcing its bylaws.

The Court concluded that Congress did not intend to intrude upon state self-governance in this context. The Court found that affirming preemption would commit the state to a one-way ratchet—able to enter the rail business, but unable to require anything of the subordinate agency it set up to carry out the state’s rail initiative.

The Court was careful to establish that CEQA actions might cross the line into preempted regulation if the review process imposes unreasonable burdens outside the particular market in which the state is the owner and developer of a railroad enterprise. The Court also acknowledged that its holding does not mean that the ICCTA has no power to govern state-owned rail lines. State-owned rail lines, like private ones, clearly must comply with STB and ICCTA, and state regulation of rail carriers is preempted by these provisions.

Key Point:

The California Supreme Court found that Congress did not pen the ICCTA to infringe upon state self-governance in a manner dissimilar from private railway owners. Preempting the state’s ability to adopt laws governing its own development schemes would leave the state without the tools necessary to govern its own subdivision. This preemption would deprive the state of the ability to make decisions to carry out the goals the state embraced concerning development projects, including undertaking environmental mitigation or deciding not to undertake a project at all because of its environmental hazards. Although CEQA may be preempted by federal law when it imposes unreasonable burdens on rail line owners, when addressing the competing interests surrounding governance over NCRA’s contested railway, enforcing environmental procedures which California has imposed on itself does not constitute grounds for ICCTA preemption.

Supreme Court Upholds SANDAG Analysis of Greenhouse Gas Emissions; Cautions that it is not a Template for Future EIRs

Monday, August 7th, 2017

In Cleveland Nation Forest Foundation v. San Diego Association of Governments (2017) 3 Cal. 5th 497, 220, the Supreme Court of California held that San Diego Association of Government’s (SANDAG’s) environmental impact report (EIR) for its 2050 Regional Transportation Plan/Sustainable Communities Strategy need not include an analysis of the plan’s consistency with greenhouse gas emission reduction goals of 80 percent below 1990 levels by 2050, established by Executive Order (EO) No. S-3-05, in order to comply with the California Environmental Quality Act (CEQA) (Pub. Resources Code, § 21000 et seq.).

The case originated in 2011, when CREED-21 and Affordable Housing Coalition of San Diego filed a petition for a writ of mandate challenging the adequacy of SANDAG’s EIR under CEQA. The Cleveland National Forest Foundation and Center for Biological Diversity filed a similar petition, in which the Sierra Club and the state Attorney General later joined. Among other things, the complaints alleged that because SANDAG did not use the EO’s 2050 emission reduction goal as a threshold of significance, the impact conclusions within the report were misleading to the public.

The trial court granted the writ of mandate in part, finding the EIR failed to carry out its role as an informational document because it did not analyze the inconsistency between the state’s policy goals reflected in the EO and the transportation plan’s greenhouse gas emissions impacts post-2020. The lower court also found that the EIR failed to adequately address mitigation measures for the transportation plan’s greenhouse gas emissions impacts. In light of these findings, the court declined to decide the other challenges raised in the petitions. SANDAG appealed, arguing that the EIR complied with CEQA in both respects. Cleveland National Forest Foundation and Sierra Club cross appealed, contending that the EIR violated CEQA by failing to analyze a reasonable range of project alternatives, failing to adequately analyze and mitigate the transportation plan’s air quality impacts, and understating the transportation plan’s impact on agricultural lands. The Attorney General separately cross-appealed, arguing that the EIR further violated CEQA by failing to adequately analyze and mitigate the transportation plan’s impact on particulate matter pollution. The Court of Appeal affirmed the lower court’s decision, and concluded that the EIR failed to sufficiently consider feasible mitigation measures and project alternatives that would curb the rise in greenhouse gas emissions.

The Supreme Court recognized that SANDAG updated its RTP/SCS in 2015 (in response to the Court of Appeal’s opinion), and that the updated RTP/SCS included some analysis of the Plan’s consistency with the EO’s 2050 emission reduction goal. Although SANDAG’s 2010 regional transportation plan was superseded, the Supreme Court granted review on the question of whether a transportation plan’s EIR must include an analysis of the plan’s consistency with the EO’s 2050 greenhouse gas emission reduction goal. The Court found that this issue is an important question of law that is likely to recur, and needed to be addressed. The Court held that, in analyzing greenhouse gas impacts at the time of the EIR, SANDAG did not abuse its discretion by declining to adopt the EO as a measure of significance, or to discuss the EO in detail.

In reaching its holding, the Court nevertheless disagreed with SANDAG’s claim that because its role in achieving the EO’s 2050 emission reduction goal is ‘likely small’, the agency could reject the target as a measure of significance. According to the Court, given the global scale of climate change, a long term solution requires the aggregation of many small reductions in greenhouse gas emissions by public and private actors at all levels. The Court found that SANDAG’s response to comments in the final EIR, which stated that the EO is not an adopted greenhouse gas reduction plan and that there is no legal requirement to use it as a threshold, was not dispositive. Although lead agencies have discretion in preparing an EIR, the exercise of that discretion must be based on available scientific and factual data. The EO’s 2050 goal of reducing California’s greenhouse gas emissions to 80 percent below 1990 levels is a reflection of the effort the scientific community believes necessary to stabilize the climate, and the Court stated that this scientific information is important to policymakers and citizens when considering the emission impacts of a project.

Despite these initial observations, the Supreme Court ultimately found in favor of SANDAG, and held that the disputed EIR sufficiently addressed the fact that greenhouse gas emissions under the plan would exceed the EO’s 2050 emission reduction goal. The Court found that divergences between the plan’s projected emissions and the EO goal were readily apparent in the EIR, and did not find the inconsistencies to be omitted, obscured, scattered in appendices, or buried within the text of the EIR. The fact that part of the discussion of greenhouse gas impacts in 2050 appeared in the response to comments section of the final EIR (rather than the original draft) did not invalidate the adequacy of the entire document.

The Court held that SANDAG did not abuse its discretion in declining to adopt the 2050 goal as a measure of significance. Neither the Attorney General nor the other plaintiffs were able to point to guidance on how the 2050 goal translates into specific reduction targets broken down by region or sector, and there are no reliable means to forecast the effect of future state actions to reduce emissions by 2050.

However, in reaching its holding the Court stated that SANDAG’s EIR is not intended to serve as a template for future EIRs. The Court stressed that the holding was in no way an invitation for regional planners to “shirk their responsibilities” under CEQA, and delineated that as more and better data becomes available, regional planners are expected to straightforwardly address such data.

Noting the enactment of SB 32, which codifies the goal of a 40% reduction of greenhouse gas emissions below 1990 levels by 2030, the Court stated that this regulation may clarify the way forward for public agencies to meet the state’s 2050 climate goals in a manner that was not available at the time of the disputed EIR’s drafting. This regulatory clarification, together with improved methods of analysis, may change the manner in which CEQA analysis of long-term emissions impacts is conducted. For this reason, the opinion has narrow application.

The Court reversed the judgment of the Court of Appeal on the issue of the EIR’s analysis of greenhouse gas emission impacts. The Court did not address the remainder of the Court of Appeal’s holding, and remanded to the Court of Appeal for proceedings consistent with the decision.

In dissent, Justice Cuéllar argued that SANDAG’s EIR was not adequately transparent under CEQA and SB 375, and that the regional plan was drafted in disregard to California’s long range greenhouse gas emission and environmental stability goals. The dissent criticized the agency’s response to the issue of increasing emissions over time by burying the discussion “in a nearly 700-page appendix”, and found that approval of SANDAG’s EIR, while narrow in scope, harms not only the future of California’s environmental quality, but also the legal interplay between CEQA and SB 375.

Key Point:

While the decision was widely-anticipated to shed light on how to adequately address climate change in CEQA documents, the Court instead emphasized the narrowness of its holding, noting that it was not a general endorsement of the adequacy of the plan or its EIR, nor did it address whether SANDAG’s responses to the “indisputably significant greenhouse gas impacts” were adequate. The Court went so far as to caution that its decision may not serve as a template for future EIRs, and provided only that planning agencies must ensure that CEQA analyses stay in step with evolving scientific knowledge and state regulatory schemes.

President Trump Executive Order Aims At Revising EPA Waters of The United States (WOTUS) Rule

Monday, July 24th, 2017

On February 28, 2017, President Trump singed an executive order (“Order”) intended to roll back a rule promulgated by the U.S. Environmental Protection Agency (“EPA”) and U.S. Army Corps of Engineers (“Corps”) (collectively “Agencies”) under the Clean Water Act (CWA), known as the Waters of the United States (WOTUS) Rule (“Rule”). Noting that EPA can regulate “navigable waters,” waters that truly affect interstate commerce, the President announced that the Order would direct EPA to take action, paving the way for the elimination of this “very destructive and horrible rule.”

On March 6, 2017, the Agencies published in the Federal Register a Notice of Intent to review and rescind or revise the Rule in response to the Order. The Rule, which was issued under the Obama administration and became effective on August 28, 2015, defines “waters of the United States” to clarify CWA jurisdiction based on science and several U.S. Supreme Court cases. These cases addressed the federal government’s jurisdiction over activities affecting the wetlands, rivers, and streams that fed into “navigable waters,” which are defined as “waters of the U.S.” and regulated under CWA.

After the Rule was issued in 2015, numerous states, farmers, and industry groups filed lawsuits to enjoin the Rule, claiming that the Rule would dramatically expand the federal agencies’ regulatory jurisdiction. On October 9, 2015, the U.S. Court of Appeals for the Sixth Circuit in In re: EPA, 803 F.3d 804 (6th Cir. 2015), stayed the Rule nationwide, pending the court’s resolution of an issue related to the court’s jurisdiction over the case.

The Order directs the Agencies to initiate the process of rescinding or revising the Rule. The Order first directs the Agencies to review the Rule for consistency with the policy of keeping the Nation’s navigable waters free from pollution and at the same time promoting economic growth and minimizing regulatory uncertainty. Then, it directs the Agencies to publish for notice and comment a proposed rule rescinding or revising the Rule.

In addition, the Order also directs the Agencies and the heads of all executive departments and agencies to review all orders, rules, regulations, guidelines, or policies implementing or enforcing the Rule, and rescind or revise them to reflect any changes made to the Rule. Further, the Order requires that the Agencies take appropriate action concerning any litigation before the federal courts.

Finally, the Order requires that the Agencies interpret the term “navigable waters” in CWA in a manner consistent with Justice Scalia’s plurality opinion in Rapanos v. United States, 547 U.S. 715 (2006). The opinion, in which Justices Roberts, Thomas, and Alito joined, interpreted the term “waters of the U.S.” as “relatively permanent, standing or flowing” bodies of water “connected to traditional interstate navigable waters” as well as wetlands with a “continuous surface connection” with such waters. The plurality seemed to support narrower CWA jurisdiction than Justice Kennedy’s concurring opinion in Rapano, based on which the Rule was developed. Justice Kennedy’s opinion suggested that the term “waters of the U.S.” encompasses wetlands that possess a “significant nexus” to navigable waters.

Given the Rule’s extensive nationwide impact, any revision to the Rule will likely be challenged in court by stakeholders. Any change to the Rule requires the Agencies to comply with the notice and comment requirements under the federal Administrative Procedures Act. Stakeholders affected by the revision to the Rule should participate in the forthcoming notice and comment procedures. Thomas Law Group will closely monitor the notice and comment procedures associated with the Order.