Controversial Clean Water Act Rule Published

The Environmental Protection Agency and Army Corps of Engineers published a final rule on May 27, 2015 to redefine the critically important term “Waters of the United States” under the federal Clean Water Act.

  • The rule explains the agencies’ jurisdiction with respect to “tributaries” and “adjacent” waters and comes amidst considerable debate over where to draw the lines of federal permitting authority.
  • The rule affects virtually every type of land development and resource utilization, especially in the West, where the Act’s coverage over ephemeral and intermittent streams is particularly controversial.

The new rule will almost certainly be challenged in the courts and in Congress. In this update, we analyze the details and impact of the new rule.  Read our full Update here.

Fish and Wildlife Service Launches Regulatory Initiative on Migratory Bird Incidental Take

For the first time since the Migratory Bird Treaty Act was enacted in 1918, the federal government is proposing a permit system to authorize the incidental take of the more than 1,000 species of migratory birds.

  • The Migratory Bird Treaty Act is strict liability criminal law, and it has been the subject of several recent high-profile enforcement actions against energy project developers.
  • The notice describes a three-tier system for incidental take authorizations—MOUs for federal agencies, general permits for specified industry sectors and individual permits for all other projects.

The new permit system is likely to have significant effects on projects that regularly impact migratory birds.  Read our full Update here. 

Vesting Rights Restrictions of Subdivision Map Act Do Not Bind Water District

A water district is not subject to the same vesting rights as a local agency under the Subdivision Map Act. Thus, the Subdivision Map Act does not restrict a municipal utility district’s authority to require an easement as a condition of providing water service to a residential lot on a newly-subdivided parcel. Tarbet v. East Bay Municipal Utility District, First Appellate District Case No. A140755, April 29, 2015.

In 2005, the County of Alameda approved a parcel map which subdivided a parcel into three lots. A condition of approval required that that each lot be connected to the East Bay Municipal Water District water system and the parcel map included an easement for a District water main. When the subdivider sought a letter confirming that water service would be available for each lot, the District indicated it would provide water service contingent upon compliance with its regulations.

EBMUDTarbet bought one of the lots and applied for water service. The District provided a water service estimate for installing a service connection, based on an additional 15-foot easement onto Tarbet’s property for the installation and maintenance of a water main and drain valve. Tarbet rejected the requested easement, and the District consequently refused to provide service. Continue Reading

Court Rejects Another Attempt to Stop New Kings Arena

Opponents of the Sacramento Arena project took another shot at halting the new Kings arena project, challenging the city’s certification of the project EIR on a variety of grounds. But the Court of Appeal upheld the city’s certification of the EIR, rejecting every one of the opponents’ arguments.  Saltonstall v. City of Sacramento, 234 Cal. App. 4th 549 (2015).

Arena-NightThe Project

The Sacramento Kings have played in Sleep Train arena, located in the Natomas area of Sacramento, since it opened in 1988. In March 2013, an investor group presented a plan to acquire the Sacramento Kings, construct a new downtown arena in partnership with the City, and keep the team in Sacramento on a long-term basis. The city council approved a preliminary nonbinding term sheet for development of a new entertainment and sports center in downtown Sacramento at the site of the Downtown Plaza. In 2013, the National Basketball Association approved the sale of the Kings to the investor group, reserving the right to acquire and relocate the franchise to another city if a new arena was not opened in Sacramento by 2017.

To facilitate meeting this deadline, the Legislature amended CEQA exclusively for the downtown arena project to expedite the environmental review process. The legislation also specifically allowed the city to prosecute an eminent domain action for the arena site prior to completing CEQA review.

Consistent with these accelerated deadlines, the city engaged in an expedited review process starting in April 2013. In January 2014, the city council adopted a resolution to acquire the site for the new arena by eminent domain and, in May 2014, certified the final EIR and approved the project.

Project opponents promptly sued, challenging the constitutionality of state legislation that modified several deadlines under CEQA. The court of appeal rejected the opponent’s constitutional challenge to the state CEQA legislation. Undeterred, opponents filed this second action challenging various aspects of the CEQA review performed for the project. Continue Reading

Mello-Roos Financing May Be Used to Acquire a Private Water Utility Through Eminent Domain.

An agency may acquire the assets of a private utility through condemnation using Mello-Roos bond financing, including intangible property incidental to the real or tangible property being acquired. Golden State Water Co. v. Casitas Municipal Water District, 235 Cal. App. 4th 256 (2015).Water Facilities

Upon petition by the City of Ojai, the Casitas Municipal Water District elected to acquire all of the assets of Golden State Water Company, a private utility, and take over Golden State’s water service in Ojai. Casitas formed a Mello-Roos Community Facilities District (CFD) to finance the purchase, and took steps to acquire the assets through eminent domain. Golden State filed a reverse validation action seeking to invalidate the resolutions forming the CFD and authorizing the bond financing. It argued that Mello-Roos financing cannot be used to finance acquisition of property by eminent domain or to acquire intangible assets such as goodwill and contractual water rights.

The Court of Appeal rejected the challenge, finding no support for the proposition that Mello-Roos cannot be used to acquire property through eminent domain. Observing that the Act states that its provisions shall be liberally construed, the court found that the word “purchase” in the Act connoted acquisition in exchange for compensation regardless of whether the property was being acquired voluntarily. In an acquisition by condemnation, the court noted, the public entity must pay the same price the owner would have received in an arm’s length transaction. Given the obvious practical need in certain circumstances to use condemnation powers, the court concluded that the word “purchase” was properly construed to include taking by eminent domain upon payment of just compensation. Continue Reading

Failure to Challenge Affordable Housing Condition Barred Subsequent Claim of Invalidity of Enabling Ordinance under Costa-Hawkins Act

While acknowledging that the City’s affordable housing ordinance was no longer enforceable under the Costa-Hawkins Act, an appellate court dismissed a challenge to a permit condition requiring compliance with the ordinance because the owner failed to seek timely review of the permit condition through administrative mandamus. City of Berkeley v. 1080 Delaware, LLC, 234 Cal.App.4th 1144 (2015).

1080 Delaware

In 2004, the City issued a conditional use permit for construction of 51 residential rental units. One of the permit conditions required that 20% of the units be rented at rates affordable to below-median-income households pursuant to the City’s affordable housing ordinance. Market conditions delayed construction of the building for several years, after which the owner declared bankruptcy and the property was acquired by 1080 Delaware through foreclosure. In the interim, the court in Palmer/Sixth Street Properties, L.P. v. City of Los Angeles, 175 Cal. App. 4th 1396 (2009), invalidated an affordable housing ordinance similar to the City’s under the Costa-Hawkins Act, which generally precludes cities from restricting the initial rents that may be charged by landlords.

After 1080 Delaware notified the City that it viewed the affordable housing requirements as unenforceable in light of Palmer/Sixth Street, the City filed suit seeking a declaratory judgment that the permit condition remained valid and enforceable. In response, 1080 Delaware argued that the invalidity of the ordinance on which the permit condition was based necessarily rendered the condition itself invalid. Continue Reading

California Department of Fish and Wildlife’s EIR for Fish-Stocking and Hatchery Program Upheld

A court of appeal has held that the first-ever environmental impact report for the state’s fish hatchery and stocking programs complies with CEQA, but also found that three of the EIR’s mitigation measures constituted “underground regulations” in violation of the Administrative Procedure Act. Center for Biological Diversity v. California Department of Fish and Wildlife, Third Appellate District Case No. C072486.lossy-page1-800px-STOCKING_FISH_AND_FISHING_IN_MERCED_RIVER_-_NARA_-_542561.tif

The Fish-Stocking Programs. Since the late 19th century, the Department of Fish and Wildlife has been required by statute to conduct a massive fish hatchery and stocking program. But hatchery trout introduced into mountain lakes contribute to declining amphibian populations, and hatchery salmon and steelhead are causing hybridization, which reduces the genetic diversity and strength of the fish species. As the result of a CEQA lawsuit, the Department was required to prepare its first EIR on the state-mandated program; the Department also decided to include in the EIR several other programs, including one that authorizes fish stocking in lakes and ponds by private aquaculture facilities.

The Program EIR. The Department prepared a program EIR that analyzed the program’s species impacts on a statewide, rather than a site-by-site, basis. The EIR included protocols and plans for discovering and mitigating site-specific impacts at the nearly 1,000 water bodies the Department stocks and the 24 hatcheries it oversees. The EIR’s baseline for environmental review, and its no-project alternative, was ongoing operation of the program as it had functioned from 2004-2008.

As for the private fish stocking programs, the EIR identified, and the Department adopted, new prerequisites and monitoring and reporting obligations for private vendors. Continue Reading

Second District Court of Appeal Invalidates Approval of Elder Care Facility, Citing Lack of Evidence to Support Zoning Determination

A developer relying on financial hardship to obtain approval of an elder care facility exceeding the square footage permitted in a residential zone must present evidence of such financial hardship to sustain the required finding. Simply averring that a smaller project would not achieve economies of scale needed to provide adequate support services is inadequate. Walnut Acres v. City of Los Angeles, No. B254636 (2nd Dist., April 15, 2015).

In 2006, the City of Los Angeles adopted Municipal Code section 14.3.1 in order to consolidate the land use approvals required for eldercare facilities, including housing for Alzheimer’s/dementia care, assisted living, and skilled nursing. Section 14.3.1 applies as a permitting overlay to a site’s underlying zoning. One required finding is that “strict application of the land use regulations on the subject property would result in practical difficulties or unnecessary hardships…,” the same finding required in many jurisdictions (including Los Angeles) to obtain a zoning variance.900px-Seal_of_Los_Angeles,_California.svg

The developer in Walnut Acres sought to construct a 50,289 square-foot, 60-guest room elder care facility in a residential district, with 25 percent of the beds allocated to persons with Alzheimer’s or dementia. Application of the relevant zoning provisions to the site would have limited the facility to 12,600 square feet and 16 guest rooms.

The zoning administrator approved the project over objections from neighbors. To substantiate Section 14.3.1’s “undue hardship” requirement, the zoning administrator found that strict application of the code’s requirements would, among other things “result in significant underutilization of the site and would not permit the operator to achieve the economy of scale required to provide the level of on-site support services and amenities required for the elder care facility’s unique population.” The zoning administrator’s decision was affirmed by the City Council’s Planning and Land Use Management Committee. Continue Reading

Court of Appeal Sinks Challenge to TMDL for Lake Bed Sediment

A Court of Appeal has upheld the Regional Board’s adoption of the total maximum daily load (TMDL) for concentration of pollutants in the sediment in McGrath Lake, rejecting the claim that TMDLs may not be stated in terms of concentrations of pollutants in lake bed sediments. Conway v. State Water Resources Control Board, No. B252688 (2nd Dist., March 30, 2015).

The Clean Water Act requires states to identify polluted water bodies within their jurisdictions, and to set TMDLs for those water bodies. The TMDL is the maximum amount of pollutants that can be discharged into an impaired water body from point and nonpoint sources. California implements the TMDLs in California through the Porter-Cologne Water Quality Control Act.

McGrath Lake PhotoMcGrath Lake is a small, black dune lake located at the southern end of McGrath State Beach Park in Ventura County. It is located within the McGrath Lake subwatershed, which consists primarily of agricultural fields, petroleum facilities, park lands, public roads, and a closed landfill. McGrath Lake was placed on the Clean Water Act Section 303(d) list on of impaired waters in 1998, 2002, and 2006 due to levels of organochlorine pesticides and PCBs.

In 2009, the Los Angeles Regional Water Quality Control Board set TMDLs for the lake through an amendment to the Los Angeles Basin Plan. The Board concluded that exposure of the McGrath Lake ecosystem to the organochlorine pesticides and PCBs in amounts exceeding the objectives and criteria had impaired beneficial uses, including aquatic life and recreational uses. The Basin Plan Amendment set TMDLs for contaminants from two primary sources: (1) agricultural runoff from surrounding fields that entered the lake largely through a Central Ditch; and (2) from lake bed sediment which could enter the lake by, among other ways, through desorption.

The TMDL for sediment was stated in terms of concentrations of pollutants in the sediment, not the concentration of pollutants in the lake’s water column. While setting a goal of 14 years to achieve the TMDL for the lake bed sediment, the Basin Plan Amendment acknowledged that such a goal would not be achieved by natural attenuation, and that capping or dredging would be the possible methods of remediation. Continue Reading

Appellate Court Reaffirms Broad Discretion of Trial Courts to Determine Appropriate Attorneys’ Fees

The Fourth Appellate District upheld the trial court’s award of less than 10% of the fees requested by the prevailing petitioner in a CEQA case, finding no abuse of the broad discretion accorded trial courts in awarding fees. Save Our Uniquely Rural Community v. County of San Bernardino, No. E059524 (4th Dist., March 18, 2015)

Dark backgndAl-Nur Islamic Center proposed to build an Islamic community center and mosque in a residential neighborhood in an unincorporated area of San Bernardino County. The County of San Bernardino adopted a mitigated negative declaration and issued a conditional use permit for the project. Save Our Uniquely Rural Community Environment (SOURCE) filed a petition for writ of mandate challenging the approvals. The trial court granted the petition on just one of many grounds asserted, finding a CEQA violation for failure to study environmental impacts in the area of wastewater disposal. SOURCE moved for $231,098 in attorney fees.

The trial court granted the motion, but reduced the award to $19,176, noting that SOURCE had succeeded on only one of its six CEQA arguments and on none of its four conditional use permit arguments.

The court of appeal affirmed, holding that SOURCE failed to demonstrate any abuse of discretion. The extent of a party’s success, the court stated, was a key factor in determining the amount of attorneys’ fees to be awarded. Here, SOURCE had advanced multiple land-use and CEQA claims and sought an order setting aside the approvals pending preparation of an EIR. However, it succeeded solely on one of its CEQA claims and obtained only an order setting aside the approvals pending further review on the single issue of wastewater treatment. The trial court thus acted well within its discretion in reducing the requested fee award based on degree of success.

The trial court likewise did not abuse its discretion in finding several elements of the fees excessive, including 40 hours preparing a 14-page reply brief that consisted primarily of reiterating the arguments made in the opening brief; charging nearly $10,000 for a “run-of-the-mill” attorney fees motion; and billing 8.3 hours at partner rates for basic research on matters such as standards of review, “CEQA law and guidelines” and “requirements for opening brief.”

Additionally, the court remarked that while SOURCE claimed its counsel’s rate were reasonable for the Los Angeles area, it failed to show why those rates were reasonable in San Bernardino County. Absent a specific showing of why adequate lawyers in the local market could not be obtained, the trial court was justified in calculating attorneys’ fees based on reasonable local market rates.

The court also found no justification for petitioner’s request for a multiplier of two based on the purported risk assumed by the law firm, the complexity of the questions involved, or the superior skills allegedly displayed by its attorneys in presenting them.