First District Finds that a Defective Notice does not Excuse Exhaustion Obligations Otherwise Available to Petitioner.

March 1st, 2021

By: Sam Bacal-Graves

In Schmid v. City & County of San Francisco (Feb. 1, 2021, No. A158861) ___Cal.App.5th___ [2021 Cal. App. LEXIS 85] the First District Court of Appeal upheld a decision of the Historic Preservation Commission (HPC) and Board of Supervisors of San Francisco (City) to remove a contentious statue. Frear Stephen Schmid and Patricia Briggs (Plaintiffs), opponents of the removal, brought claims for a civil rights violation under the Bane Act, for mandamus relief based on a variety of alleged violations including a violation of CEQA, for illegally using public funds for the removal, and for declaratory relief. (For purposes of this case review, only the CEQA claim is examined in full.)

The statue at issue, “Early Days,” was one of five scenes comprising a larger monument dedicated in 1894 to commemorate the admission of California into the Union and depicting the young state’s history. Allegations of racism and racial insensitivity had long been levied against “Early Days” for its depiction of a Native American man described at the dedication as undergoing “the struggle of dawning intelligence” and a priest bending down to lift “the savage from his low estate to walk the pathway of the Christian faith.” In 2018, the HPC granted a Certificate of Appropriateness to take down the statue and place it in storage, declaring the removal to be categorically exempt from CEQA. Following the administrative process and removal, Plaintiffs filed suit, alleging that the final adjudication and implementation of its decision were invalid and constituted abuses of authority. The trial court sustained a demurrer without leave to amend, and Plaintiffs appealed.

One of the Plaintiffs alleged that the removal of the statue was not categorically exempt from CEQA review and required an EIR. The trial court, however, did not address Plaintiff’s substantive CEQA argument because the court held that the Plaintiff failed to exhaust administrative remedies under CEQA.

On appeal, Plaintiff claimed that he was excused from exhausting administrative remedies under Public Resources Code section 21177, as the City’s notice documents for the HPC meeting inadequately described the project and did not mention CEQA. As the Court explained, section 21177 requires that alleged violations of CEQA be presented to the agency before the end of the hearing at which the CEQA decision is made and that the plaintiff personally raise some claim of noncompliance with CEQA. However, if notice of the hearing is defective, these prerequisites are excused.

The Court agreed with Plaintiff that the City’s notice document was defective, finding the facts analogous to Defend Our Waterfront v. State Lands Com. (2015) 240 Cal.App.4th 570. There, the First District held the petitioner was not obligated to exhaust administrative remedies under section 21177 because the State Lands Commission failed to indicate in its meeting agenda that a CEQA exemption would be considered. Under this precedent, the Court found that the City’s failure to notice that a CEQA exemption would be considered at the HPC meeting excused Plaintiff’s failure to raise its CEQA challenge before the HPC.

However, the Court also held that this exception did not excuse Plaintiff from exhausting additional available administrative remedies, relying on Tahoe Vista Concerned Citizens v. County of Placer (2000) 81 Cal.App.4th 577. There, the plaintiffs objected to the adoption of a negative declaration at the Planning Commission but only appealed the approval of a conditional use permit to the Board of Supervisors. The Third District explained that raising the issue at the Planning Commission satisfied section 21177, but it did not satisfy the judicially created doctrine of exhaustion, which requires appealing the issue to the decisionmaking body with ultimate authority.

Here, following this reasoning, the Court observed that under CEQA and the City’s administrative code Plaintiff could have appealed the CEQA determination to the Board of Supervisors, the body responsible for making final CEQA determinations. Instead, Plaintiff appealed to the Board of Appeals, a separate body with no jurisdiction over a CEQA appeal. Plaintiff had notice of the agency’s approval of the CEQA exemption by this point, as he challenged it in allegations to the Board of Appeals. As such, the failure to appeal to the appropriate body was not excused by the original deficient notice. Nor, as Plaintiff argued, did the Board of Supervisors’ subsequent resolution approving of the removal render such an appeal futile. Their agreement with the removal as a policy matter did not speak to their views of the appropriateness of proceeding via categorical exemption, as they were never presented with reasoned arguments that the exemption was inapplicable. The court was also unsympathetic to Plaintiff’s allegation that the bifurcated approval process “created a regulatory morass,” given the CEQA Guidelines authorize local lead agencies to establish procedures for hearing CEQA appeals. As such, despite excusal from the requirements of section 21177, the CEQA claim was still barred under the doctrine of exhaustion.

The Court of Appeal upheld the trial court’s dismissal without leave to amend as to this and all other causes of action.

Key point: Defective notice may excuse CEQA’s “issue exhaustion” requirement but does not excuse petitioners from exhausting administrative remedies where the challenger had actual notice and such additional administrative remedies are available. Agencies should carefully define what actions are to be heard in a notice to avoid excusal of CEQA’s issue exhaustion requirements due to ineffective notice.