Second District Court of Appeal Upholds Challenge to an MND for a Mixed-Use Project on Environmentally Sensitive Hillside and Award of Attorney Fees

April 6th, 2020

By: Johannah Kramer



In Save the Agoura Cornell Knoll v. City of Agoura Hills (February 24, 2020) 2020 Cal. App. LEXIS 222, in a detailed decision, the Second District Court of Appeal affirmed the trial court’s judgement and concluded that a proposed mixed-use development project in Los Angeles County presented potentially significant impacts requiring the preparation of an EIR, not an MND.

In January 2017, the City of Agoura Hills’ (City’s) Planning Commission approved a development permit, conditional use permit, oak tree permit, and a tentative parcel map for the Cornerstone Mixed-Use Project (Project). The Project is an 8.2-acre mixed-use development including 35 residential apartment units, retail, restaurant, and office space. The majority of the site is located within the Agoura Village Specific Plan (AVSP), while the remaining portion is classified as a Significant Ecological Area. The site is currently an undeveloped hillside at the southeast corner of a confluence of roads within the City. Commercial retail uses are located to the west, northwest, and north of the property. The site includes native grasses and oaks, and contains three plant species considered rare, threatened, or endangered.

The California Native Plant Society (CNPS) appealed the Planning Commission’s decision. In March 2017, the Agoura Hills City Council held a public hearing on the appeal, approved the Project, and adopted the Project’s MND. The Council found, based on the record, there was no substantial evidence that the Project would have a significant effect on the environment because the MND incorporated feasible mitigation measures reducing potential environmental impacts to a less than significant level. On March 16, 2017, the City filed a notice of determination recording its approval and adoption of the MND. Following the City’s decision, Save the Agoura Cornell Knoll (STACK) filed a verified petition for writ of mandate alleging that the approval violated CEQA, planning and zoning law, and the City’s Oak Tree Ordinance. In an amended Petition, STACK joined CNPS as an additional petitioner (collectively, Petitioners).

The trial court found there was substantial evidence to support a fair argument that the Project may have significant environmental impacts on cultural resources, sensitive plant species, oak trees, and aesthetic resources and the proposed mitigation measures were inadequate to reduce impacts to a less than significant level. The trial court also found that the oak permit issued by the City violated a local ordinance prohibiting the removal of more than 10% of the total estimated oak tree canopy or root structure on a project site. Accordingly, the trial court entered judgement in favor of Petitioners and ordered the issuance of a peremptory writ of mandate directing the City to set aside its approval and the MND. In a post-judgement proceeding, the trial court awarded Petitioners attorneys fees totaling approximately $142,000.

Project owners and developers (Appellants) challenged the trial court’s decision and presented a variety of procedural and substantive claims related to standing, forfeiture, administrative exhaustion, cultural resources, sensitive plant species, and native oak trees. The Second District Court of Appeal rejected each allegation and affirmed the holding of the trial court in its entirety.

PROCEDURAL CHALLENGES

Appellants preliminarily argued that the trial court erred in considering evidence of administrative exhaustion because Petitioners forfeited the issue by failing to raise it in their opening brief. The Court rejected this argument because, in the first amended petition for writ of mandate (joining CNPS), Petitioners alleged that they had “performed all conditions precedent to filing this action, including exhaustion of all administrative remedies available to them.” Additionally, while Petitioners’ opening brief did not address the issue of exhaustion directly, it cited to public comments regarding the Project’s significant impacts and disputing the adequacy of the MND’s mitigation measures. Then, in their reply brief, Petitioners cited some of the same evidence to  demonstrate that they had exhausted administrative remedies. The Court held that Petitioners sufficiently addressed the issue in their reply and noted that the trial court gave the parties ample opportunity over the course of two hearings to argue whether administrative remedies had been exhausted. The Court held that under these circumstances, Petitioners’ failure to argue that they satisfied the exhaustion requirement in their opening brief did not forfeit the issue in subsequent briefs.

Throughout their substantive claims, Appellants argued that Petitioners had failed to exhaust administrative remedies during the administrative proceedings. In each instance, the Court held that administrative remedies had been exhausted through a combination of Petitioner and public comments presented during the administrative proceedings.

Appellants also argued, for the first time on appeal, that the entire action must be dismissed based on Petitioners’ lack of standing. According to Appellants, STACK failed to prove that either the organization or any of its members objected to the approval prior to the close of public hearing. They further alleged that CNPS was barred from serving as a substitute petitioner by the statute of limitations because it was not named as a petitioner until after the statute of limitations ran. While standing may be raised at any time—including for the first time on appeal—statute of limitations claims are forfeited if not properly asserted in a general demurrer or pleaded in an answer. Having failed to plead the statute of limitations in its answer or a demurrer, Appellants were barred from doing so on appeal, and there was no dispute that CNPS had standing. Because one petitioner had unequivocal standing under CEQA, jurisdiction was proper. The Court also noted that attempting to determine STACK’s standing would fall outside the proper scope of review because it would require consideration of factual issues not included in the record (such as when STACK was formed and whether any of its members objected to approval of the Project during the administrative proceedings).

CULTURAL RESOURCES

The Project site includes an identified prehistoric archaeological site of cultural significance to the Chumash Native American tribes. A 2011 peer review study determined the site was eligible for listing in the California Register of Historical Resources and recommended that the site be avoided or fully excavated and recovered. In adopting the MND, the City reviewed the site studies and concluded that, because it would involve extensive grading, Project impacts were likely significant and required mitigation. The MND set forth measures requiring site monitoring during ground-disturbing activities, notification processes if human remains were discovered on the site, and an excavation program if the site could not be avoided.

Appellants argued that the trial court erred in concluding that an EIR required consideration of the Project’s impacts on tribal cultural resources. The Court found that the MND’s measures improperly deferred mitigation of Project-related impacts and were insufficient to avoid or reduce those impacts to a less than significant level. While monitoring and work stoppages were contemplated, the MND failed to analyze whether the site could be avoided or specify performance criteria evaluating the feasibility of avoidance as an alternative to excavation. Prior studies failed to define the boundaries of the archaeological site, and the City made no attempts to define its boundaries in determining if the site could be avoided, nor did the record establish that it was infeasible for the City to make that determination in its initial review. Instead, the record contained substantial evidence to support a fair argument that avoiding the site was not feasible based on the Project’s footprint.

The excavation measure suffered from similar deficiencies as the avoidance measure. The Court found that the measure improperly deferred mitigation of a recovery plan and simply provided a generalized list of measures to be undertaken by a qualified archaeologist and Native American monitor. It failed to set performance standards or guidelines to ensure that the measures would actually be effective. The program called for the future preparation of a technical report including a mitigation monitoring and reporting plan, but it failed to explain how this plan would mitigate potentially significant effects on the site’s cultural resources. It also failed to specify criteria for evaluating the efficacy of the plan. There was no indication in the record that it was impractical or infeasible for the City to articulate specific performance criteria for the data recovery measures at the time of the Project approval.

Appellants alternatively argued that an EIR was not required because expert testimony opposing the decision did not have evidentiary value and that the City was entitled to rely on the expertise of its own consultants. The Court held that the testimony did have evidentiary value and that there was no disagreement between the Petitioners’ expert and the City’s consultant. Rather, both agreed that the archaeological site should be avoided and that an excavation recovery program should be conducted if avoidance was not feasible. The Petitioners’ expert simply opined that the excavation measure did not provide for an adequate data recovery program to mitigate the site’s loss. To the extent there was conflicting expert testimony, the Court held that neither the lead agency nor the court may “weigh” conflicting substantial evidence to determine if an EIR must be prepared. Since the record contained substantial evidence supporting a fair argument that the MND’s measures are inadequate to avoid or mitigate the impacts to the archaeological site to a less than significant level, an EIR was required.

IMPACTS TO SENSITIVE PLANT SPECIES

Appellants argued that the trial court erred because the MND included three measures reducing adverse Project impacts and offseting individual plant loss through restoration, preservation, and enhancement efforts. The Project site contains three special status species that may be impacted by grading activities and would be impacted by fuel modification activities (including mowing, pruning, and brush-clearing). In adopting the MND, the City concluded that the Project’s potential impacts were significant but mitigatable through species-specific preservation efforts and monitoring.

The preservation measures included species-specific surveys and on- and offsite restoration. Specifically, prior to issuing Project-related grading permits, a qualified plant ecologist would perform surveys for each species, and, if found during their blooming period, avoidance would be required unless the Project applicant provided “substantial documentation” that a minimum avoidance setback would be infeasible or would compromise the objectives of the AVSP. If avoidance was found to be infeasible, the ecologist would prepare a restoration plan and implement a five-year monitoring program focused on salvaging and replanting individual plants.

Petitioners alleged that these measures were inadequate due to improper deferral and the failure to set performance criteria ensuring effectiveness. The Court agreed with the Petitioners because the City relied on outdated site surveys and because the most recent survey was conducted during an ongoing drought. While the measure called for future surveys during the blooming period, the MND did not establish that it was infeasible for the City to perform the surveys prior to Project approval (which would allow for an accurate assessment of impacted plant populations). The Court also found that the salvaging and replanting plan was inadequate because substantial evidence demonstrated restoration may not effectively mitigate impacts to listed species due to transplant failure. The Court also held that the MND improperly deferred performance criteria formulation. The MND provided that the setback measure would be implemented unless “avoidance would not be feasible” or if a maintenance plan was implemented. However, the MND did not specify performance standards determining the feasibility of avoidance or whether the maintenance plan would be effective. While the measure set standards for measuring the success of the restoration plan, it did not provide for feasible alternatives if salvaging and replanting efforts failed. Thus, there was a fair argument that the measure may be ineffective in offsetting the loss of the listed plants at the Project site.

Appellants argued that the failure to perform updated surveys prior to Project approval did not reflect a deficiency in the MND. The Court recognized that an agency is not required to conduct all possible tests or exhaust all research methodologies to evaluate impacts, but clarified it must undertake additional testing “if initial testing is insufficient.” Here, the MND was based on a series of outdated surveys conducted during an ongoing drought. Thus, there was a fair argument that an updated survey would be necessary to formulate adequate mitigation measures.

Appellants asserted that restoration would be feasible with an active management and maintenance plan, but the Court found that replanting would only be successful as long as the transplants were actively maintained in perpetuity. While the MND required a five-year annual reporting and monitoring program, it did not provide for active transplant maintenance in perpetuity or alternative measures if the transplants failed.

An additional measure addressing impacts to a CNPS-designated rare plant species (as opposed to a federal-listed species) was similarly rejected because there was substantial evidence that transplanting efforts may fail, plus active management would only be provided for 5 years though required in perpetuity to reduce impacts to less than significant under the AVSP EIR. Additionally, no field surveys were required prior to or following the issuance of a grading permit, so it was unclear whether any future studies would be done to provide accurate information about the extent of the impacts. The Court rejected Appellants’ argument that the City’s decision was owed deference and found an EIR was required to analyze the actual impacts to rare plants.

The Court similarly rejected the efficacy of mitigation related to the fuel modification activities because there was a fair argument that clearing wildfire fuel is disruptive to the special status species’ ecosystem and likely to result in incidental take of and direct adverse effects to the species.

The Court next addressed the trial court’s conclusion that impacts to oak trees would be arguably significant, so an EIR was warranted. The Project would remove 29 of the 59 oaks on the Project site, while an additional six would experience encroachment within their protected zones. The Project would also remove approximately 21,000 square feetof scrub oak habitat. The MND required four oak trees to be planted to replace each tree approved for removal. To mitigate theloss of scrub oak habitat, at least 213 scrub oaks would need to be planted onsite. If City staff determined that this would be infeasible (which they likely would), an equivalent in-lieu fee would need to be paid into the City’s Oak Tree Mitigation Fund.

The Court found a fair argument that replacement mitigation would be inadequate because the remaining oaks would suffer a water deficit due to mass grading, which would disrupt and reduce subsurface water flow. Additionally, substantial evidence demonstrated that there have been no successful restorations of oak woodlands due to the extensive ecological network required to support an oak grove. The Court also found that the measure would improperly defer formulation of in-lieu fee programs as an alternative to onsite tree replacement because such programs must be evaluated under CEQA. The MND provided that in-lieu fee payments would be used by the City to acquire land or plant oak trees on another site; but it failed to specify the fees to be paid or the number of trees to be planted offsite, identify whether other sites were available for planting, or analyze the feasibility of an offsite tree replacement program. The Court concluded that it cannot be presumed that offsite oak planting through an in-lieu fee payment was a feasible alternative to the onsite replacement of oak trees in their native habitat.

Appellants also challenged the trial court’s ruling regarding aesthetics violations and violation of the City’s Oak Tree Ordinance. However, the Court found Appellants only made conclusory assertions lacking reasoned argument and held the issues were forfeited.

ATTORNEY FEES

Appellants challenged the trial court’s fee award based on a failure to provide notice of the CEQA action to the Attorney General in accordance with section 21167.7 and Code of Civil Procedure section 388, and based on an improper apportionment of liability on the real party in interest.

The Court noted that Petitioners had sent timely notice to the Attorney General upon filing their original petition and ruled their failure to strictly comply with the 10-day requirement in section 21167.7 and Code of Civil Procedure section 388 did not bar them from recovering attorney’s fees.  The Court explained that the statutes do not make recovery contingent upon timely notification. Rather, the trial court is tasked with exercising its equitable discretion in light of all relevant circumstances to determine whether private enforcement is sufficiently necessary to justify a fee award. The Court distinguished Schwartz v. City of Rosemead (1984) 155 Cal. App. 3d 547, which Appellants relied on, explaining that in that case the petitioner’s delay in notifying the Attorney General of the action precluded the Attorney General from intervening and possibly making private enforcement unnecessary. Here, the Attorney General had eleven months to review the original petition and a month and a half to review the amended petition before the writ hearing. The Court held that this provided “ample time” to the Attorney General to intervene, which it failed to do, making private enforcement of the action necessary.

Appellants asserted that, even if Petitioners were entitled to recover their attorney’s fees, the real party in interest and property owner should not be held jointly and severally liable for half of the fee award, particularly as an individual. The Court found that the fee allocation was properly apportioned because the property owner had a direct interest in the Project that gave rise to the action, he actively participated in the litigation, he was identified as the sole applicant in the notice of determination, and he had held himself out as the property owner and/or applicant throughout the application and administrative processes. 

KEY POINTS

When preparing an MND, the chosen mitigation measures must clearly reduce project impacts to a less than significant level. If substantial evidence in the record supports a fair argument that a project may have significant environmental impacts because mitigation measures may not be effective, an EIR will be required.

Attorneys fees under Code of Civil Procedure 1021.5 may still be recoverable even if the Petitioner fails to timely file the notice with the Attorney General as required by 21167.7.  The Court will examine the facts to determine whether the Attorney General had sufficient time to intervene and eliminate the need for private enforcement.




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