First District Court of Appeal Applies CEQA’s Savings Clause to Uphold Subsequent Mitigation

January 4th, 2021

By: Johannah Kramer

In Santa Clara Valley Water District v. San Francisco Bay Regional Water Quality Control Board (2020) Cal.App.LEXIS 1236, the First District Court of Appeal held that, under a plain reading of Public Resources Code section 21174, a responsible agency’s statutory obligation to impose mitigation under other environmental laws – here, the Porter-Cologne Act – is not terminated when a lead agency makes a final decision on an EIR and the responsible agency may impose additional mitigation measures when carrying out their duties under another environmental statute.

Since the 1980s, the U.S. Army Corps of Engineers (Corps) has sought to build a flood control plan for Berryessa Creek in Santa Clara County. The Corps project did not move forward until 2013, when construction of a new BART station renewed interest in the flood control plan. In 2014, the Corps began conducting environmental review for the project under federal law and designated the Santa Clara Valley Water District (District) as the project sponsor. The Corps agreed to take responsibility for design and construction, while the District would be responsible for acquiring the real property rights, making the land available to the Corps, and conducting operations and maintenance. In 2015, the District issued a draft EIR, which concluded the project would have substantial impacts on water resources, but mitigation measures would reduce those impacts to a less-than-significant level.

Meanwhile, in September 2015, the Corps applied to the San Francisco Bay Regional Water Quality Control Board (Board) under Clean Water Act section 401 for a certificate that the project complied with state law. However, because the application did not contain a proposal for compensatory mitigation to address project impacts on waters and wetlands, the Board notified the Corps that its application was incomplete. Following pressure from the state’s congressional delegation and the Governor’s office to approve the project expeditiously, the Board, the Corps, and the District agreed that the Board would issue its section 401 certification. The Board made clear to the District, however, that after issuing the section 401 certification, it would subsequently issue waste discharge requirements (WDRs) under the Porter-Cologne Act to address project design issues and environmental impacts that were not handled under the section 401 certification.

Consistent with this agreement, the Board issued the section 401 certificate in March 2016. The certificate stated that the Board, as a responsible agency under CEQA, found that environmental impacts during the construction of the project within the Board’s purview would be mitigated to less-than significant levels. However, in the same paragraph, the certificate stated that the Board would later consider WDRs to address the need to “compensate for temporal and permanent losses of functions and values” attributable to the project’s design, operation, and maintenance. The District later admitted it understood when the Board issued the certificate that the Board intended to pursue WDRs in a separate proceeding, although the District did not think additional mitigation and WDRs for the design were necessary and believed the mitigation would relate only to the project’s operation.

In April 2017, when project construction was almost complete, the Board issued a WDR order rescinding and superseding the previous section 401 certification and replaced it with a new certification and WDRs. The order required the Corps and District to provide additional mitigation to compensate for the project’s water quality impacts. The District filed suit, alleging that the order violated CEQA in addition to several other causes of action. The trial court denied the petition and this appeal followed. For purposes of this summary, only the CEQA discussion is summarized.

The First District Court of Appeal held that the Board’s failure to impose the subsequent mitigation requirements as part of the initial CEQA review did not bar it from imposing them. The District alleged that the Board violated CEQA Guidelines section 15096, which requires a responsible agency that believes a lead agency’s environmental review is deficient to file suit, prepare a subsequent EIR if permissible, or assume the lead agency role. In the absence of these actions, the responsible agency is deemed to have waived their objections. The District argued that the Board’s imposition of additional mitigation indicated disagreement with the EIR’s conclusion that impacts had been mitigated to less-than-significant levels, but that the Board had waived a challenge under section 15096, rendering the EIR presumptively valid and barring imposition of additional mitigation.

Initially, the Court criticized the procedural process taken by the Board, noting that it likely ran afoul of the principle set forth in Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116, 138 [an agency may not formally approve a project or commit itself to approval without first complying with CEQA]. The Court found that, by approving project construction for CEQA purposes in the Board’s 401 certification, then later imposing additional mitigation, the Board likely did not comply with CEQA.

Regardless of the flawed CEQA procedure, the First District sided with the Board. The Court explained that CEQA Guidelines section 15096 may prevent a responsible agency from requiring additional environmental review after a lead agency has completed its CEQA review, so long as the responsible agency does not have its own independent authority to enforce or administer an environmental law. Here, the Board possessed the independent authority and obligation to administer and enforce the Porter-Cologne Act.

The Court applied CEQA’s savings clause, Public Resources Code section 21174, which provides that no provision of CEQA is a restriction on the authority of any public agency to enforce or administer any provision of law it is specifically permitted or required to enforce or administer. The Court relied on the plain language of section 21174 to conclude that the Board’s duties under CEQA to comment on the District’s EIR did not deprive it of its authority under other environmental laws to impose mitigation requirements. Therefore, because the Board acted under the Porter-Cologne Act (and not CEQA), the Board was free to exercise its independent authority to protect water quality.

The Court analogized the case to Pacific Lumber Co. v. State Water Resources Control Bd. (2006) 37 Cal.4th 921 (Pacific Lumber), which considered whether a regional board’s input into the approval process for a timber harvesting plan under the Z’berg-Nejedly Forest Practice Act of 1973 provided an exclusive mechanism for regional water boards to regulate water quality issues such a plan may raise. The California Supreme Court in Pacific Lumber rejected the contention that the approval process for timber harvesting plans displaced the regional board’s authority under the Porter-Cologne Act, stating that the argument was incompatible with the Forest Practice Act’s savings clause, which is identical to section 21174. Relying on Pacific Lumber, the First District held that the “obvious meaning” of section 21174 is that nothing in CEQA, including CEQA Guidelines section 15096 or the statutes on which it is based, barred the Board from fulfilling its independent obligation to enforce the Porter-Cologne Act.

The Court again relied on Pacific Lumber to reject the District’s argument that a party to a first adjudicatory proceeding may not use a second proceeding to collaterally attack the findings an agency made in the first. For an administrative decision to have collateral estoppel effect, it and its prior proceedings must possess a judicial character. Here, the Court found that the District’s CEQA proceedings failed to meet this standard, as it did not involve a hearing before an impartial decision maker, testimony under oath, or the opportunity to call, examine, and cross-examine witnesses. Thus, applying collateral estoppel in this context would make section 21174 meaningless. Echoing the trial court, the First District concluded the CEQA proceedings on the project EIR did not collaterally estop the Board from issuing its WDR order.

Finally, the Court rejected the argument that the CEQA process would become a meaningless exercise if responsible agencies were permitted to impose additional environmental mitigation requirements on projects after CEQA review is complete. To the extent that the Court acknowledged the validity of this concern, it noted that a public agency is required to complete CEQA review before committing itself to a project in a way which would limit its considerations of project alternatives and mitigation measures. This would likely allow a project’s opponents to sue to prevent an agency from dividing its approval into two stages like the District agreed the Board could do here. In this case, no outside party emerged to challenge the two-stage approval process, but the Court stressed that agencies cannot count on such a lack of opposition in the future. In any event, even if these concerns had merit, they were insufficient to overcome the plain language of section 21174.

While the procedural process in this case was flawed, a plain reading of Public Resources Code section 21174 justified the District’s decision to impose additional mitigation under the Porter-Cologne Act. Accordingly, the Court affirmed the trial court’s judgment.

Key Point

Under a plain reading of Public Resources Code section 21174, a responsible agency’s statutory obligation to impose mitigation under other environmental laws is not terminated when a lead agency makes a final decision on an EIR and the responsible agency may impose additional mitigation measures when carrying out their duties under another environmental statute.