Third District Upholds Supplemental EIR for Huntington Beach Desalination Plant, Reiterating Established Principles Related to CEQA’s Subsequent Review Provisions

June 15th, 2021

By: Sam Bacal-Graves

In California Coastkeeper Alliance v. State Lands Com. (2021) 64 Cal.App.5th 36, the Third District Court of Appeal upheld the trial court’s ruling that a supplemental EIR was adequate, concluding that the certifying responsible agency was not required to prepare a subsequent EIR or assume the lead agency role.

The case involved a desalination plant that underwent three successive rounds of environmental review (Project). The City of Huntington Beach prepared the initial EIR in 2005 and a subsequent EIR in 2010 (2010 Subsequent EIR). In 2015, regulatory changes occurred, forcing Project proponents to adopt further changes to the Project. The California State Lands Commission (Lands Commission) prepared a supplemental EIR to the 2010 Subsequent EIR (2017 Supplemental EIR) to address lease modifications in response to the regulatory changes. These included the following three changes to the Project: installation of wedgewire screens; installation of multiport diffusers; and operational reduction of seawater intake by approximately 30 percent. The Lands Commission prepared the 2017 Supplemental EIR without assuming the lead agency role.

Petitioners filed suit against the Lands Commission, alleging that the agency was required to assume the lead agency role in order to prepare the 2017 Supplemental EIR to the 2010 Subsequent EIR. Petitioners also argued that environmental review was improperly segmented across the three rounds of environmental review; the Court’s analysis of that issue was not published and is, therefore, not analyzed herein. The trial court denied the petition, and Petitioners appealed.

    Supplemental/Subsequent EIRs

The Court first considered the Lands Commission’s election to undertake subsequent environmental review, and specifically to prepare a supplemental, rather than subsequent, EIR. The Court acknowledged that Petitioners did not challenge the decision to proceed by supplemental EIR instead of a subsequent EIR; nonetheless, it explained why the Lands Commission’s actions were appropriate under Public Resources Code section 21166, the CEQA Guidelines, and the Supreme Court’s Friends of College of San Mateo Gardens v. San Mateo County Community College Dist. (2016) 1 Cal.5th 937 (San Mateo Gardens) decision. We have included this analysis because it is a noteworthy discussion of Public Resources Code section 21166 and San Mateo Gardens. The Court emphasized that a subsequent EIR may only be required if a triggering event under section 21166 and CEQA Guidelines section 15162 occurs because CEQA seeks to balance environmental protection with “interests in finality and efficiency.” It reiterated the principles from San Mateo Gardens that an agency’s decision to proceed with subsequent review, as opposed to initiate new environmental review from scratch, rests on a determination that the original environmental review retains some informational value. An agency’s determination that the original EIR retains informational value is factual in nature and is, therefore, reviewed under the substantial evidence standard of review.

In reviewing the Lands Commission’s decision to proceed by a supplemental EIR, the Court found that substantial evidence supported the its determination that the 2010 EIR retained informational value; further, Petitioners did not dispute this determination. Next, the Court explained that CEQA Guidelines section 15163 grants the agency discretion to choose to prepare a supplemental EIR if “[o]nly minor additions or changes” to the prior EIR are needed. The Court went on to conclude that the Lands Commission’s choice to prepare a supplemental EIR here was supported by substantial evidence, describing the three minor changes proposed.

However, as noted above, Petitioners did not actually dispute the choice to proceed by supplemental EIR rather than subsequent EIR. Instead, they attempted to invoke de novo review by reframing the issues to allege that the Lands Commission failed to proceed in a manner authorized by CEQA. First, Petitioners largely disregarded differences between supplemental and subsequent EIRs and simply argued that the Lands Commission failed to proceed in the manner required by law because it failed to step into the lead agency role. As discussed below, the Court rejected this challenge. Petitioners additionally argued that the agency failed to proceed in the manner required by law because it unlawfully piecemealed/segmented its environmental review. As noted above, in the unpublished portion of the opinion, the Court rejected this challenge.

    Assumption of Lead Agency Role

Petitioners alleged that the Lands Commission was required to assume the role of lead agency pursuant to CEQA Guidelines section 15052(a)(2). Section 15052(a)(2) provides that a responsible agency shall assume the role of lead agency when the following conditions occur: (a) a subsequent EIR is required; (b) the lead agency has granted a final approval; and (c) the statute of limitations has expired to challenge the lead agency’s action under CEQA has passed. Here, the parties only disputed whether the first prong was satisfied.

Petitioners argued that the election to proceed via a supplemental EIR only arises when the requirement to prepare a subsequent EIR has been triggered. Thus, according to Petitioners, since the requirement to prepare a subsequent EIR had been triggered, the agency could not circumvent the requirement to assume lead agency status by simply labeling the CEQA document a supplemental EIR instead of a subsequent EIR.

The Court disagreed, noting that the relevant language in CEQA Guidelines sections 15052 and 15162 makes clear that, where circumstances permit a supplemental EIR to be prepared, the agency is not required to prepare a subsequent EIR. This conclusion is supported by other language in the Guidelines which indicate that a supplemental EIR can be prepared by a responsible agency.

Petitioners also argued that the Lands Commission assumed lead agency status by noticing and circulating the environmental document as a lead agency would. The Court disagreed, reiterating that the Lands Commission’s actions were aligned with that of a responsible agency, and that a supplemental EIR must be given the same notice and public review as an initial draft EIR.

Accordingly, the Court affirmed the trial court’s denial of the petition.

Key Points: In determining that subsequent environmental review is required, and in determining that only a supplemental EIR is needed, the agency’s decisions are given deference under the substantial evidence standard of review. If a responsible agency prepares a supplemental EIR, rather than a subsequent EIR, it is not required to assume lead agency status, even if the other conditions under CEQA Guidelines section 15052(a)(2) are met.