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.