California Supreme Court Grants Review of Decision Invalidating SANDAG Regional Transportation Plan

The California Supreme Court has agreed to review the appellate court decision Cleveland National Forest Foundation v. San Diego Association of Governments. As we previously reported, the court of appeal in that case invalidated the EIR for the San Diego Association of Government’s 2050 Regional Transportation Plan and Sustainable Communities Strategy.

In its petition for review to the California Supreme Court, SANDAG raised a number of issues. However, the high court’s order granting review limits the scope of review to the most important and controversial issue in the case: whether the EIR for a regional transportation plan must include an analysis of the plan’s consistency with the greenhouse gas emission reduction goals reflected in Executive Order No. S-3-05. The vote to review the case was unanimous.

Council Member Barred From Considering Own Appeal

In Woody’s Group, Inc. v. City of Newport Beach, the Fourth District Court of Appeal held that the City Council of Newport Beach “violated two basic principles of fairness: you can’t be a judge in your own case, and you can’t change the rules in the middle of the game.” Thus, a council member who appealed a planning commission decision to the city council could not participate in the appeal; nor could the city council consider the appeal at all when the council member had failed to pay the filing fee or otherwise follow the procedures in the municipal code. Woody’s Group v. City of Newport Beach, No. G050155 (4th Dist., Jan. 29, 2015).

Woody's WharfWoody’s Wharf is a long-established restaurant and bar overlooking Newport Harbor. In September 2013, the Newport Beach Planning Commission approved a conditional use permit and variance to allow Woody’s to install a patio cover, continue to operate until 2 a.m. on weekends, and allow dancing inside the restaurant. Four days after the approval, Newport Beach City Council member Mike Henn sent the city clerk an email with an “official request to appeal” because he “strongly believed” the approval was inconsistent with policies in the City’s General Plan. The city council subsequently voted 4 to 1 to reverse the planning commission decision, with Henn in the majority.

Under the City’s municipal code, an appellant from a planning commission determination must be an “interested party,” post a fee, and use the proper form. The code contained no provision for appeals by city council members.

The court of appeal found that the appeal did not comport with due process because the council member who brought the appeal also took part in the decision. The court held that an interested party for the purposes of bringing the appeal cannot simultaneously be a disinterested person for the purposes of affording due process in hearing the appeal, where the council is acting in an adjudicatory capacity. The court invoked the “cardinal rule” that “a person cannot be a judge in his or her own case,” and stated, “we will not assume the drafters of Newport Beach’s Municipal Code intended to contravene a cardinal rule of justice in the absence of a clear statement of such remarkable intent.”

The court also found that the city council violated its own municipal code by entertaining Henn’s appeal because he did not comply with the procedures laid out in the code. The City argued that there was a longstanding practice of allowing council members to appeal without paying a filing fee because their appeals are taken for the benefit of the City’s residents. The court rejected this argument, finding “no room for unwritten rules, policies or customs outside the municipal code or for the city council to give its members special privileges to appeal.” The court also rejected the trial court’s rationale that the improper appeal was harmless because interested parties (such as local residents) would surely have filed appeals anyway.

The court concluded that a city council’s consideration of an appeal not authorized under the municipal code required nullification of the council’s decision rather than remand for reconsideration. The court ordered reinstatement of the planning commission’s decision, thereby returning dancing and late nights to Woody’s Wharf.

California Supreme Court Upholds Most Commonly Used CEQA Categorical Exemptions

The California Supreme Court has issued its long-awaited decision in Berkeley Hillside Preservation v. City of Berkeley, No. S201116 (March 2, 2015). The Court’s decision clears up some of the ambiguity that has surrounded the standard of review for challenges to CEQA exemptions under the unusual circumstances exception. In doing so, the Court rejected the controversial approach taken by the court of appeal and instead opted for a middle ground, balancing the interest in giving effect to the legislatively-mandated exemptions against CEQA’s overarching goal of ensuring review of significant environmental effects.Proposed House

Background

The project at issue was a large house to be built in the City of Berkeley. The city granted a use permit and found the project exempt from CEQA under the Class 3 (construction and location of limited numbers of new, small facilities or structures) and Class 32 (in-fill development) exemptions. The city also determined that none of the exceptions to categorical exemptions listed in CEQA Guidelines section 15300.2 were triggered, including the exception for a “significant effect on the environment due to unusual circumstances.” An organization sued, alleging, among other things, that the exemptions were barred by the unusual circumstances exception.

The court of appeal overturned the City’s exemption determination, holding that the possibility that a proposed activity might have a significant effect on the environment “is itself an unusual circumstance,” barring reliance on a categorical exemption.

A Potentially Significant Environmental Effect Alone Is Not Sufficient to Trigger the Unusual Circumstances Exception.

The California Supreme Court reversed and remanded, holding that a party bringing a challenge under the unusual circumstances exception must establish both 1) that there are unusual circumstances that justify removing the project from the exempt class; and 2) that there is a reasonable possibility of significant environmental impacts due to those unusual circumstances.

The Court began by examining the text of section 15300.2, which provides: “A categorical exemption shall not be used for an activity where there is a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances.” According to the Court, the plain language of this provision supported the view that there must be some showing of unusual circumstances for this exception to apply. The court of appeal’s interpretation would, the Court found, render the phrase “due to unusual circumstances” mere surplusage.

The Court further found that under the court of appeal’s interpretation, the categorical exemptions would have little, if any, effect. The Court noted that under CEQA section 21080(c) and (d) and Guidelines section 15061(b)(3), when there is no substantial evidence that an activity will have a significant effect on the environment, “further CEQA review is unnecessary; no CEQA exemption is necessary to establish that proposition.” Thus, under the court of appeal’s interpretation, the categorical exemptions would serve no purpose, applying only when the proposed project is already outside the scope of CEQA review. Continue Reading

CEQA Year in Review 2014

Insurance-Recovery-Resources-imageA Summary of Published Appellate Opinions Under CEQA

 By Stephen Kostka, Julie Jones, Barbara Schussman, Alan Murphy,  Ned Washburn, Laura Zagar, Kathryn Bilder, Christopher Chou and Marie Cooper

In 2014, courts, regulators and public agencies continued to struggle with the relationship between CEQA and California’s efforts to reduce greenhouse gas emissions.  Courts of appeal held that San Diego County’s regional transportation plan, sustainable communities strategy and climate action plan all violated CEQA, concluding that public decisionmakers had not done enough to analyze and mitigate GHG impacts from vehicles.  Another court held that EIRs must provide detailed discussion of a proposed project’s energy use.  And under the mandate of Senate Bill 743, the Office of Planning and Research proposed sweeping CEQA Guidelines changes that would shift the focus of CEQA transportation analysis from traffic congestion to reduction of vehicle GHG emissions.

The year also saw a surprising conflict in decisions regarding the analysis of impacts to agricultural resources, with one court reaffirming a lead agency’s ability to identify its own significance thresholds and another court taking a much more hands-on approach.  Turning to mitigation for impacts to agricultural land, a third court confirmed earlier cases holding that CEQA does not require agricultural conservation easements as mitigation.

Court decisions tackling the nuts-and-bolts operation of CEQA were equally interesting.

During the year four appellate courts discussed the functions and uses of program EIRs versus project EIRs; these cases may help lay to rest persistent misconceptions about program EIRs.  One court addressed the circumstances under which a city commission can approve a CEQA document.  Another delved, with uncertain results, into the distinction between a proposed project element and a mitigation measure.

The California Supreme Court issued only one CEQA decision in 2014.  The court held that CEQA compliance is not required where a city council is presented with an initiative measure and a short Elections Code deadline to either adopt or reject it.

Finally, the Legislature’s key contribution in 2014 was Assembly Bill 52, which adds tribal cultural resources to the categories of cultural resources in CEQA, provides for tribal consultation, and requires lead agencies to consider mitigation measures for impacts to tribal cultural resources.

CEQA Year in Review can be accessed here, or is available in pdf form here.

 

25th Annual Briefing on Land Use and Development Law — Materials Available

Perkins Coie attorneys — most of whom contribute regularly to this report — recently presented the 25th Annual Land Use & Development Law Breakfast Briefing in Palo Alto, San Francisco and Walnut Creek.   The presentation focused on 2014 developments and trends in land use, affordable housing, school facilities financing, CEQA, real estate and environmental and resources Law.  This year, for the first time, the breakfast briefing will also be presented in San Diego, on February 12, 2015.BreakfastBrief

For an electronic version of the 25th Annual Land Use & Development Law Breakfast Briefing materials, click here.  If you would like a hard copy, please contact MichelleRodriguez@perkinscoie.com.

BB Photos

U.S. Supreme Court Tells Cities to Explain a Cell Tower Denial in Timely Fashion, Even if in a Separate Document

The tension between demand for high-quality, ubiquitous cell phone service and opposition to cell towers in residential neighborhoods has resulted in significant disputes between wireless carriers and municipalities over siting of such towers. Typically, the fight begins and ends at a city council.  Recently, however, one such dispute resulted in a U.S. Supreme Court decision, T-Mobile South, LLC v. City of Roswell, Georgia,  No. 13-975, Jan. 14, 2015, which delved into procedural issues associated with denial of proposed cell towers and provided guidance to municipalities as to how and when such denials must be explained.Cell Phone Tower

T-Mobile proposed to construct a cell tower (disguised as a 108-foot tall pine tree, as required by local ordinance) on a vacant residential property.  As is often the case, there was substantial neighborhood opposition to the new tower based on concerns that it was not needed, that the technology was outdated,  and that it was aesthetically incompatible with the neighborhood.  The application was discussed at a public meeting and ultimately rejected by the City Council.  After the meeting, the City sent a notice of the denial to T-Mobile but without any written explanation.  Minutes of the Council meeting were published 26 days later, shortly before the deadline to file suit challenging the denial.

Approval or rejection of cell phone towers is addressed in the federal Telecommunications Act of 1996. In that Act, Congress delegated to the local governments the power to consider cell tower applications and required that a denial of an application “be in writing and supported by substantial evidence contained in a written record.” T-Mobile argued that the denial, while in writing, did not contain any explanation and, as such, could not be supported by substantial evidence. The City argued that T-Mobile representatives were present at the public meeting and thus knew the reasons. On top of that, they claimed, the release of the meeting minutes 26 days later (and four days before a petition for judicial review was due) satisfied the Act’s requirement of a written explanation. The Eleventh Circuit upheld Roswell’s denial, and the Supreme Court granted certiorari to resolve a conflict between the circuits.

With a surprising degree of dissension on a seemingly simple issue, the Court addressed conflicting views in the Courts of Appeal and ultimately determined that a City need not include the rationale for its denial of a cell tower application in the denial document itself, provided it states those reasons with sufficient clarity in some other written record issued essentially contemporaneously with the denial. The Court did not set a precise time limit between the denial and the statement of reasons, but concluded that the 26-day delay between the notice of denial and release of the detailed minutes in this case did not satisfy the “essentially- contemporaneous” standard. It reasoned that a near-contemporaneous statement of reasons was necessary because suit must be filed within 30 days, and the record must reflect the stated rationale in order to enable judicial review. Justice Sotomayor, who delivered the majority opinion, criticized Chief Justice Robert’s dissenting view, under which the locality would have been allowed to withhold its explanation for denial until after the lawsuit is filed. The majority opinion, in a sharply worded footnote, observed that such a practice would lead to post hoc rationalization by the public agency in its defense of its action.

Ultimately, the Court remanded the case for further proceedings, and the City of Roswell may well deny the application again, but this time in a letter with some explanation. The Court was painstaking in its refusal to even consider whether the denial was actually based on “substantial evidence,” leaving to another day the question of whether a locality can deny a cell tower application based primarily on NIMBY concerns. The Court also offered little guidance on what sort of written record is needed to pass procedural muster.  It acknowledged that “a locality may rely on detailed meeting minutes as it did here,” but suggested that “the local government may be better served by including a separate statement containing its reasons.”

California Supreme Court Poised To Decide Key CEQA Questions: The Court’s Lineup For 2015

California Supreme CourtThe California Supreme Court’s involvement in CEQA cases has been relatively limited since the statute’s enactment in 1970, with the court taking review of at most one or two appellate court decisions a year.  The last two years have, however, seen a dramatic shift in this trend, with the result that the court now has nine pending cases on its docket.  The pending cases span a broad range of issues, but they all involve fundamental questions:  the breadth of CEQA’s reach, the scope of agency discretion, the vitality of categorical exemptions, limits on mitigation obligations, and procedural limitations on CEQA litigation.

  • The court’s review in one case will include a key issue regarding CEQA’s scope — does required environmental review end with effects of the project on the environment, or must the environment’s impact on the project also be examined?  The court’s decision should squarely resolve this issue.
  • A pair of cases before the court involve categorical exemptions and the exception for significant impacts resulting from “unusual circumstances.”  Courts of appeal have issued conflicting decisions on this topic, and the high court’s decision on this question could have a major effect on the efficacy of these commonly used exemptions.
  • Limits on judicial review of an agency’s CEQA decisions is the subject of two cases before the court. In both cases, the courts of appeal took an expansive view of the powers of the court to reevaluate agency decisions. The high court may conclude that greater deference is owed lead agencies in light of their knowledge and expertise in the subject matter.
  • In two cases, the court will address potential limitations on the mitigation required for environmental impacts, including whether fiscal constraints can be used to limit mitigation measures and whether impacts on public services such as emergency and fire services must be mitigated.
  • The court will decide the important question of whether judicial review is limited to CEQA claims raised prior to the close of the period for public comment on a draft EIR, or whether issues raised for the first time during later hearings may also be considered.
  • Finally, the court will tackle another subject of conflicting appellate decisions — the effect of federal preemption on application of CEQA to publicly operated railroads. Resolution of the case will likely have significant implications for California’s High Speed Rail project.

Continue Reading

Federal Court Invalidates San Francisco Tenant Relocation Requirements

The Northern District of California has struck down part of San Francisco’s rent control ordinance as an unconstitutional taking under the Fifth Amendment in Levin v. City and County of San Francisco, Dist. Court, ND California 2014, No. 3:14-cv-03352-CRB (N.D. Ca Oct 21, 2014). The case may have important implications for monetary exactions in local land use permitting.

At issue in Levin were the relocation payments required by the 2014 amendments to the San Francisco rent control ordinance. Under the ordinance, owners of rent-controlled property were required to make certain payments for tenants evicted under the Ellis Act. Under the 2014 amendments to the rent ordinance, in order to withdraw the unit under the Ellis Act, property owners were required to pay the greater of the lump sum required under the original ordinance or an amount equal to twenty-four times the difference between the unit’s current monthly rate and the fair market value of a comparable unit in San Francisco.

Plaintiffs, owners of rent-controlled properties in San Francisco, filed suit, bringing a facial challenge against the 2014 ordinance as violating the Takings Clause of the Fifth Amendment.

The court ruled in favor of the plaintiffs, finding that the 2014 ordinance constituted an exaction that violated the Takings Clause. The court first held that the San Francisco ordinance, which demanded monetary payment from the property owners in exchange for a permit to remove a unit from the rental market, had to satisfy the Nollan/Dolan requirements of essential nexus and rough proportionality. Next, the court found that the ordinance could not meet either of those requirements. Both steps in the court’s analysis may prove important in future cases involving monetary exactions.

Extending the reach of Nollan/Dolan

The Nollan/Dolan standard constitutes a special application of the unconstitutional conditions doctrine to the government’s land use permitting power. The Nollan and Dolan cases specifically applied to adjudicative land use exactions involving a government demand for property owners to dedicate an easement as a condition of obtaining a development permit. The central concern in these two cases was that the government may use its substantial power in land use permitting to pursue governmental ends that lack an essential nexus and rough proportionality to the effects of the proposed new use of the property.

The Supreme Court’s 2013 decision in Koontz v. St. Johns River Water Management District expanded the reach of Nollan and Dolan to monetary exactions. Because of the direct link between the government’s demand and a specific piece of real property, the Court held that the central concern in Nollan and Dolan was implicated and application of the standard to monetary exactions was appropriate.

Levin followed the Koontz logic in applying Nollan and Dolan to San Francisco’s rent ordinance. In applying, Koontz, it made several significant holdings:

  • Levin held that applying the Nollan/Dolan standard to the demand for relocation payments was appropriate because the demand for payments operated upon an identified property interest by directing the owner of a particular piece of property to make a monetary payment. Thus, even though the rent ordinance did not impose a deed restriction, a covenant, or even a lien on the property, the Nollan/Dolan standard still applied because the fees demanded were directed at a particular piece of property.
  • Prior to Koontz, Ninth Circuit precedent held that the Nollan/Dolan standard was limited to ad hoc or adjudicatory exactions and did not apply to legislatively imposed exactions. Levin interpreted Koontz as removing the legislative/adjudicative decision and held that the rent ordinance relocation payments, despite being legislatively imposed, were nevertheless subject to the requirements of Nollan/Dolan.
  • Prior to Koontz, it was thought that the Nollan/Dolan standard did not apply to facial takings claims. Levin read Koontz as abrogating this precedent in finding the rent ordinance unconstitutional on its face.

Applying the Nollan/Dolan standard

Levin also provides an important discussion of the necessary relationship between the impact of the permitted action and the fee demanded under Nollan/Dolan. The court stressed that mere “but-for” causation is insufficient to satisfy the requirements of essential nexus and rough proportionality. The city argued that the relocation payment was justified because the property owner’s withdrawal of a unit from the housing market “causes” the evicted tenant to be exposed to market rents. This justification, however, was not sufficient to meet the requirements of Nollan/Dolan. While an eviction arguably results in certain costs such as relocation costs, it does not cause the gap in affordability that the property owners were forced to pay under the 2014 ordinance. Thus, the court concluded, the monetary exaction demanded neither shared an essential nexus with nor was roughly proportional to the impact of the withdrawal of the rental unit.

Conservation Easements Not Required As Mitigation For Permanent Loss Of Farmland

In Friends of the Kings River v. County of Fresno, the California Fifth District Court of Appeal upheld the County of Fresno’s adoption of an Environmental Impact Report for a mining operation that will result in a permanent loss of 600 acres of farmland.  Most notably, the Court held that a County is not required to adopt an agricultural conservation easement as a mitigation measure for a project causing direct loss of farmland, even where agricultural conservation easements are economically feasible.

The subject of the appeal was the Carmelita Mine and Reclamation Project, a proposed aggregate mine and related processing plant in the Sierra Nevada Foothills, about 15 miles east of the City of Fresno.  The 1,500-acre site has significant mineral deposits, and is currently used for growing row crops and stone fruit trees.

The petitioners, Friends of the Kings River, challenged the project’s Environmental Impact Report under the California Environmental Quality Act, and the project’s reclamation plan under the Surface Mining and Reclamation Act of 1975

Friends first appealed approval of the project with the State Mining and Geology Board, who granted the appeal and remanded the reclamation plan to the County for reconsideration. The County approved a revised reclamation plan, and Friends appealed to State Mining and Geology Board again.  The Board denied the second appeal.

While the first appeal was pending, Friends petitioned for a writ of mandate, alleging abuse of discretion under CEQA.  The trial court denied the petition, and Friends appealed.  On appeal, Friends argued that the trial court erred by ruling on the petition before it was ripe for review, and that the EIR was inadequate under CEQA for a plethora of reasons.

The Fifth District dismissed Friends’ ripeness claim by finding that the State Mining and Geology Board’s grant of Friends’ first appeal did not affect the validity of the reclamation plan. Thus, the remand of the reclamation plan to the County did not affect the trial court’s ability to issue a ruling on the merits, or the County’s certification of the EIR and approval of the project.

The Court then addressed Friends’ contention that the County failed to require mitigation for the conversion of farmland in violation of CEQA.  The Court rejected Friends’ argument, noting that the EIR recommended three mitigation measures, which the Count upheld.  The Court also rejected the contention that the County was required to establish agricultural conservation easements to mitigate the permanent loss of 600 acres of farmland.  The Court held that while a County must consider using agricultural conservation easements as a mitigation measure for direct loss of farmland, it is not required to adopt an agricultural conservation easement as a mitigation measure, even where such an easement is financially feasible.

Friends asserted a number of additional CEQA challenges, but those too failed, as the Court found that there was substantial evidence to support the County’s findings.

Fortunately for project proponents, this decision maintains the variety of mitigation alternatives available when a project causes loss of farmland.  Project proponents whose project directly leads to farmland loss will not necessarily be required to mitigate with an agricultural conservation easement, but will still need to analyze adoption of such an easement, in order to comply with CEQA.

Friends of Kings River v County of Fresno,  F068818 (5th District 12/8/2014)

Court Blocks Opponents’ Shot at Halting New Kings Arena

The court of appeal recently upheld legislation modifying several deadlines for CEQA review of a project that includes a proposed new arena for the Sacramento Kings, rejecting a claim the statute violates separation of powers.  Saltonstall v. City of Sacramento, No. C077031 (3d Dist., Nov. 20, 2014).

In 2013, the National Basketball Association approved the sale of the Kings to a local group planning to build a new downtown Sacramento entertainment and sports center, including an arena for the team.  Yet the NBA also reserved the right to acquire and relocate the franchise to another city if a new arena does not open in Sacramento by 2017.

In response, the Legislature amended CEQA, exclusively for the downtown arena project, to expedite the environmental review process.  The City of Sacramento complied with the accelerated deadlines, certified an environmental impact report, approved the arena project, and promptly was sued by project opponents.

images[8]The court of appeal rejected the opponents’ constitutional challenge to the CEQA legislation, holding that the amendment does not materially impair the core function of the courts, the legal standard for finding a separation of powers violation.

First, the statute does not infringe on the courts’ power to issue injunctive relief.  The court of appeal acknowledged that the legislation changes the standards for injunctive relief in connection with the arena project, but ruled that the Legislature has the prerogative to specify which interests should be weighed against the benefits of a new arena.  Indeed, the court reasoned, the Legislature has the constitutional right to exempt the arena project entirely from CEQA review, so it follows that the Legislature may determine which interests must be considered in deciding whether to halt its construction.

Second, the legislation does not unconstitutionally impose impossibly short deadlines on the courts.  One statutory provision requires the Judicial Council to adopt a rule to facilitate completion of judicial review of the project’s CEQA compliance within 270 days.  The court upheld the challenged provision, noting that it imposes no penalty for judicial review that exceeds the specified period and thus is “suggestive” only.

On more than one occasion in recent years, the Legislature has treated large-scale sports venues differently for CEQA purposes.  This decision reaffirms the Legislature’s authority to do so.

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