For Whom the Statute of Limitations Tolls: First District Upholds Dismissal of Untimely CEQA Claims, Finding that a Tolling Agreement is only Effective if Agreed to by the Project Proponent as well as Lead Agency and Petitioner

July 26th, 2021

By: Sam Bacal-Graves

In Save Lafayette Trees v. East Bay Regional Park Dist. (June 30, 2021, No. A156150) ___Cal.App.5th___ [2021 Cal. App. LEXIS 545], the First District Court of Appeal upheld the dismissal of petitioners’ CEQA claim as barred by the applicable statutes of limitations. Although Save Lafayette Trees (Petitioners) had entered into a tolling agreement with the lead agency, the real party in interest had not agreed to the tolling agreement, and could therefore enforce the applicable statute of limitations. The Court also upheld the dismissal of several non-CEQA claims, though only the CEQA holdings are discussed in this summary.

In 2017, PG&E sought to remove trees along its gas transmission pipeline for safety reasons on land owned by the East Bay Regional Park District (EBRPD). At a March 21, 2017 meeting, EBRPD approved a resolution committing to accept funding from PG&E for the tree removal, and entered into a memorandum of understanding (MOU) with PG&E to effectuate the agreement. EBRPD subsequently filed a notice of exemption on June 27, stating that the MOU was not an activity subject to CEQA and was categorically exempt. On July 31, EBRPD and Petitioners entered into a 60-day tolling agreement. PG&E did not consent to the agreement.

Petitioners filed suit against EBRPD, naming PG&E as a real party in interest, on September 29, 2017 – within the 60-day tolling period, but more than 180 days after the March 21 resolution. Thereafter, PG&E demurred, arguing that they were not bound by the tolling agreement, and that the applicable statute of limitations had expired as applied to them. Further, they argued that they were a necessary and indispensable party, requiring the suit to be dismissed because they could not be joined. The trial court agreed and dismissed the case. Petitioners appealed.

Tolling Agreements Must be Agreed to by all Necessary and Indispensable Parties

The First District, relying on its earlier holding in Salmon Protection & Watershed Network v. County of Marin (2012) 205 Cal.App.4th 195 (SPAWN), noted that agreements to toll the applicable statute of limitations are permitted under CEQA, so long as a tolling agreement has the concurrence of the project proponent as well as the lead agency and petitioner. The Court observed that SPAWN’s persuasive dictum to this effect reflected well-settled law holding that tolling agreements have no effect on non-signatory parties not in privity. Petitioners argued that PG&E’s assent was not required because the relevant CEQA limitations periods are governed by the lead agency’s actions. Therefore, Petitioners reasoned the lead agency would possess the sole power and would be the only party necessary to enter a tolling agreement. However, the Court disagreed.

Additionally, the Court concurred with the trial court’s observation that the primary purpose of CEQA’s limitations period is to protect project proponents from delay, uncertainty, and potential disruption to a project. To find that PG&E was not a necessary party to the tolling agreement would defeat the purpose of the limitations period. As such, the Court held that the tolling agreement was ineffective.

Project Approval Begins the 180-day Statute of Limitations

Petitioners argued that, even in the absence of the tolling agreement, the action was timely because the trial court had misidentified the date on which the limitations period began. Petitioners alleged that neither the agenda nor the accompanying description of the resolution for the March 21 public hearing stated that trees would be removed as part of the proposal. Therefore, Petitioners reasoned that the limitations period did not begin until they had received constructive notice of the tree removal activities many weeks after the hearing.

The Court noted that where no effective notice of exemption or notice of determination has been filed, the 180-day limitations period is measured from the agency’s approval or commencement of the project, constituting constructive notice for CEQA claims. “Approval” is defined by the CEQA Guidelines to mean “the decision by the public agency which commits the agency to a definite course of action in regard to the project intended to be carried out by any person.” Here, the record showed that EBRPD committed to a definite course of action by adopting the resolution on March 21. And, even if there were flaws in the approval process, the Court reasoned that the resolution and MOU provided the public sufficient notice to start the limitations period. The Court distinguished two cases cited by Petitioners, Concerned Citizens of Costa Mesa, Inc. v. 32nd Dist. Agricultural Assn. (1986) 42 Cal.3d 929 and Ventura Foothill Neighbors v. County of Ventura (2014) 232 Cal.App.4th 42, in which the statutory triggering date never transpired because the projects were changed after their approval, with no notice of the changes given to the public. The Court found these cases inapplicable, as no such omissions occurred here. Therefore, the adoption of the resolution authorizing the acceptance of PG&E funding for the tree replacement started the limitations period, and the failure to file a suit within 180 days was fatal to Petitioners’ CEQA claims.

While the parties made additional arguments related to potentially applicable shorter statutes of limitations, the Court found it unnecessary to address these contentions, as it had found CEQA claims to be untimely even under the longer, 180-day statute of limitations. As such, it upheld the dismissal.

Key Point: Tolling agreements are only effective if agreed to by the lead agency, project proponent, and petitioner. The onus is on petitioners to ensure CEQA claims are timely filed, as Courts strictly enforce the law’s brief limitations periods.

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