Failure to Make Findings Specified in Mitigation Fee Act Requires Refund of All Unexpended Development Fees

The Fourth District Court of Appeal has upheld an order requiring refund of over $10 million in accumulated development impact fees because the City’s findings “were mere conclusions, not the specific findings required under the [Mitigation Fee] Act.” Walker v. City of San Clemente, No. G050552 (Fourth Dist., Aug. 28, 2015).

Statutory Requirements. Under the Mitigation Fee Act, Gov’t. Code §§ 66000 et seq., each development fee must be deposited in a separate capital facilities account and may be expended only for the purposes for which it was collected. For all unexpended fees, the agency must make findings every five years that (1) demonstrate a reasonable relationship between the unexpended balance and the purpose for which the fee was charged; (2) identify the sources and funding for any as-yet uncompleted public improvements; and (3) designate the approximate date the agency expects the funding for uncompleted improvements to be deposited in the account. § 66001(d)(1) The Act provides that “[i]f the findings are not made as required by [the Act], the local agency shall refund the moneys in the account” to the current owners of the properties for which the fees were paid. § 66001(d)(2).

800px-San_Clemente_BeachThe Beach Parking Impact Fee. In 1989, the City of San Clemente adopted a “Beach Parking Impact Fee” whose stated purpose was to “mitigate the impact of the increased demand on beach parking caused by new residential development.” For some 20 years, the City collected the fee, but expended very little of it (less than 3%) on beach parking improvements. In 2009, the City Council “receive[d] and file[d]” a “Five-Year Required Report” prepared by staff to justify its continued retention of the fees under the Mitigation Fee Act. Plaintiffs challenged the City’s retention of the fees, contending that the Five-Year Report failed to satisfy the requirements of the Act. Continue Reading

Federal Court Blocks Enforcement of New Clean Water Act Rule

The U.S. District Court for the District of North Dakota yesterday issued a preliminary injunction that bars the EPA and the Army Corps of Engineers from enforcing a new rule defining federal jurisdiction under the Clean Water Act in 13 states.  North Dakota v. U.S. Environmental Protection Agency, 3:15-cv-00059 (D.N.D. Aug. 27, 2015).  The injunction (available here), issued the day before the rule was to go into effect, was sought by and granted in favor of Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota and Wyoming.  In all other states, the rule went into effect today.  The court concluded that the states were likely to prevail in the case on the gounds that the EPA had violated its Congressional grant of authority in promulgating the rule and had failed to comply with the Administrative Procedures Act in adopting the rule.  Read our full Update here.


Court Rejects “Gotcha” Theory of Waiver Under Public Records Act

A California appellate court has ruled that inadvertent disclosure of documents containing attorney-client communications in response to a Public Records Act request does not result in a waiver of the privilege. Newark Unified School District v. Superior Court, No. A142963 (1st Dist. Ct. App., August 1, 2015). A contrary interpretation, the court concluded, would not advance the purposes of the statute and would create an irreconcilable conflict with Evidence Code section 912, under which accidental disclosure of attorney-client information does not constitute a “disclosure” triggering its waiver provisions.

Background.Confid - Attorney client priv Two community organizations requested documents from a school district under the Public Records Act. Within hours of releasing the documents, the district realized it had inadvertently included documents containing attorney-client communications. It immediately contacted the recipients, informing them of the inadvertent inclusion and seeking return of the privileged documents. The two organizations refused, contending that disclosure of the documents waived any privileges by operation of section 6254.5 of the Act, which states that disclosure of a public record to any member of the public waives otherwise applicable exemptions.

The Public Records Act broadly grants access by members of the public to all records relating to the public’s business. The Act contains a number of exemptions, including the exemption for records subject to privileges in the Evidence Code, such as the privilege that extends to records containing attorney-client communications.  Section 6254.5 of the Act, however, provides that “Notwithstanding any other provisions of law, whenever a state or local agency discloses a public record which is otherwise exempt from this chapter, to any member of the public, this disclosure shall constitute a waiver of the exemptions” specified in the Act. Continue Reading

District Court Strikes 30-Year Eagle Take Rule

The U.S. District Court for the Northern District of California has invalidated the U.S. Fish and Wildlife Service’s adoption of a new rule increasing the maximum duration of programmatic permits to “take” bald and golden eagles from 5 years to 30 years.  Shearwater v. Ashe, No.14-CV-02830-LHK (N. Dist. Ca, Aug. 11, 2015).  This 30-Year Rule was adopted in response to concerns by wind energy companies that the uncertainty surrounding renewal of programmatic eagle take permits (which allow for the incidental take of eagles from operation of wind turbines) was preventing operators from obtaining financing for wind energy projects that might last up to thirty years.  The Fish and Wildlife Service issued the 30-Year Rule without preparing either an Environmental Assessment or an Environmental Impact Statement under the National Environmental Policy Act, concluding that the 30-Year Rule was categorically exempt.  In striking the rule, the court found that the Service had not demonstrated an adequate basis in the administrative record for its decision not to prepare an EIS or EA and therefore failed to comply with NEPA’s procedural requirements.  Read our full Update here.800px-Golden_Eagle_1

Supplement to Curtin’s California Land Use and Planning Law (34th Ed.) Available as Free Download

The 2015 Supplement to the 34th edition of Curtin’s California Land Use & Planning Law is being made available as a free download on Solano Press.  It can be accessed here: Supplement — Curtin’s California Land Use

2015 SupplementThis Supplement is intended for use in conjunction with Curtin’s California Land Use & Planning Law, Thirty-Fourth Edition (2014), authored by Perkins Coie attorneys Cecily Talbert Barclay and Matthew S. Gray. In lieu of publishing the Thirty-Fifth Edition in 2015, the authors have prepared a Supplement containing analyses of the most important decisions published in 2014 and 2015 (through May 1st) affecting California land use and planning. Chaptering of the Supplement is consistent with the Thirty-Fourth Edition for ease of reference.

The hard-copy version of the 34th edition book is sold out on Solano Press, but it is still available as a Kindle e-book.

A State Agency’s Duty To Mitigate Significant Environmental Impacts Does Not Depend On A Legislative Appropriation Of Funds For Mitigation

The California State University system may not condition its funding of mitigation for off-site impacts of a campus expansion project on receipt of a legislative appropriation earmarked for that purpose, according to a decision issued yesterday by the California Supreme Court. City of San Diego v Board of Trustees of the California State University, No. S199557 (Cal. Supr. Ct. Aug. 3, 2015). The effect of the decision is that state agencies will have to look to existing appropriations and other available sources to fund off-site mitigation for projects they undertake, and will be precluded from shifting the cost of mitigation to regional and local agencies simply because the Legislature has not appropriated specific funds for mitigation. The court’s opinion does, however, leave a key question unanswered: When can a public agency considering one of its own projects decide that a measure designed to mitigate one of its significant environmental impacts is economically infeasible?


StudentServicesThe case involved a challenge to the environmental impact report for a plan to expand the San Diego State University campus. The plan calls for housing for faculty and staff; a hotel and campus conference center; new student housing; expansion and renovation of the student union; and new buildings for academic, research and medical use, along with a supporting parking structure.

The EIR found that the expansion project would worsen congestion on city streets and a nearby freeway. The CSU Board agreed with the city and CalTrans on the University’s fair share of the cost of mitigation – about $15 million — but declined to commit the funding, taking the position that the University is required to pay for off-campus mitigation only if the Legislature appropriates funds specifically for that purpose.

Reasoning that the Legislature might not appropriate funds for mitigation, the Board determined that off-campus traffic mitigation was infeasible and adopted a statement of overriding considerations.

No legal support for University’s determination off-site mitigation is infeasible.

The California Supreme Court unanimously rejected the University’s legal arguments, concluding that:

  • The court’s 2006 decision discussing the University’s duties under CEQA to mitigate environmental impacts through fair-share payments (City of Marina v Board of Trustees) did not support the Board’s claim that the University may lawfully contribute funds for off-campus mitigation only through a legislative appropriation earmarked for that purpose.
  • Most of the proposed new campus facilities will be financed with non-appropriated funds through revenue bonds, student fees, donations, and joint ventures with private interests. The University’s authority to undertake such projects necessarily includes the authority to budget for mitigation costs.
  • The expansion plan EIR calls for a variety of on-site mitigation measures that will be funded through project budgets. There is no reason to conclude that off-site mitigation measures cannot be funded the same way. CEQA does not draw a distinction between on-site impacts and off-site impacts, and instead refers to the environment as the entire area that “will be affected by a proposed project.”
  • CEQA expressly subjects the Board‘s decisions concerning campus master plans to its requirements and does not exempt those plans from the duty CEQA imposes to mitigate significant environmental impacts when it is feasible to do so.

Continue Reading

Building Industry Challenges Public Art Requirements

The Building Industry Association of the Bay Area has filed a lawsuit in federal court in the Northern District of California challenging the City of Oakland’s recent adoption of a public art ordinance on constitutional grounds.

The challenged Ordinance requires developers to install art works (worth at least 1/2% of the total cost of residential projects or 1% of commercial projects) as part of their developments using artists approved by the City. Builders may opt out of the public art requirement only if they pay an in-lieu fee to the City to be used to fund installation of publicly owned art on City property.

Public Art -- Oakland

BIA’s complaint in the case contends that the Ordinance’s requirements violate the Fifth Amendment by imposing exactions that do not have a sufficient nexus to an identifiable adverse impact of development, and thereby amount to unconstitutional conditions. The lawsuit also claims that the Ordinance’s requirement that developers install art works as part of their projects, and that such art be approved by the City, violates their rights to free expression under the First Amendment.  BIA seeks an injunction preventing implementation of the Ordinance.

If At First You Succeed, Don’t Try, Try, Try Again

The Fifth District Court of Appeal has confirmed that the 90-day statute of limitations under the Subdivision Map Act includes takings claims arising out of Map Act decisions. Honchariw v. County of Stanislaus, No. F069145 (Fifth Dist., June 3, 2015).  (Honchariw III)

This is the third published decision arising from denial of plaintiff Honchariw’s nine-lot subdivision. Honchariw won the first case (Honchariw I), obtaining a ruling invalidating the denial of his map for failure to make certain findings specified in the Housing Accountability Act, Government Code section 65589.5(j). (See our Nov. 18, 2011 Update). The Board of Supervisors subsequently approved the subdivision.dca_dist5

Honchariw (who was self-represented) then sought to recover attorneys’ fees against the County under the same statute.  In Honchariw II, the court of appeal rejected his claim, ruling that the statute authorized attorney fees only for denial of a development containing affordable housing, which Honchariw’s did not. (See our August 22, 2013 case report: No Affordable Housing, No Attorney’s Fees Under Housing Accountability Act).

Undeterred, Honchariw filed another lawsuit contending that the denial of his tentative map resulted in a temporary taking of his property without just compensation. He sought damages of $2.5 million for the alleged taking. The County successfully demurred on the ground the action — filed years after the challenged decision — was barred by the 90-day limitations period for actions under the Subdivision Map Act.

On appeal, Honchariw acknowledged the California Supreme Court’s 1994 decision in Hensler v. City of Glendale that an inverse condemnation claim arising from a Map Act decision was subject to that statute’s 90-day limitations period. He argued, however, that Hensler allowed the inverse condemnation action to be filed after the successful conclusion of a mandamus action challenging the decision, as long as the latter case was timely filed under the Map Act. The court of appeal rejected this expansive interpretation of Hensler. It pointed out that Hensler allowed an inverse condemnation action to be filed after the conclusion of an administrative mandamus action only if it “alleges the existence of a final judgment establishing that there has been a compensable taking of the plaintiff’s land.” In other words, the initial mandamus action must present the unconstitutional takings claim to the court as one basis for invalidation of the Map Act decision. Only if such a claim is timely filed under the 90-day Map Act statute and litigated to a successful conclusion may a plaintiff then seek damages for the unconstitutional taking. Because Honchariw’s original mandamus action did not include a takings claim, his subsequent effort to obtain damages for a taking was time-barred.

Courts Continue to Reject Claims That Reasonable Reliance on Public Agency Representations Establishes an Entitlement to an Existing Use of Property

Property owners should not rely on courts to uphold equitable estoppel claims against local agencies to establish an entitlement to an existing use of property. Under the doctrine of equitable estoppel, a public agency may be barred, or “estopped,” from asserting that an existing use of property is invalid if the property owner justifiably relied on the agency’s representation that the use was consistent with applicable zoning ordinances. In land use cases, courts are required both to find that the requirements of estoppel are met and to balance any adverse effect on public interest against the avoidance of injustice caused by failing to uphold the estoppel claims. Courts usually consider the public’s interest in maintaining the character of an area through established zoning plans and processes to be dispositive. Schafer v. City of Los Angeles, No. B253935 (2nd App. Dist., May 20, 2015).

Over the course of fifty years, Los Angeles and a property owner, Triangle Center, interacted several times regarding two adjacent lots being used as a parking lot. During this period, Los Angeles repeatedly recognized the parking lot as an existing use. No certificate of occupancy was issued at any time, however, and at one point the zoning was amended to remove parking lots as a permitted use. Ultimately, two residents of the nearby neighborhood challenged the use of the lots.

In its decision finding that the parking lot was not a legal nonconforming use, the Los Angeles zoning administrator noted that a certificate of occupancy was required. Triangle appealed this decision to the city’s planning commission, which reversed the zoning administrator’s decision, finding that its prior interactions with Triangle estopped Los Angeles from disallowing continued use of the property as a parking lot.

The two neighbors filed a petition for a writ of mandate challenging the planning commission’s decision. The trial court directed Los Angeles to set aside the planning commission’s decision. On appeal, the court affirmed the trial court’s decision, holding that the circumstances were not sufficiently exceptional to bind the government by equitable estoppel.

When evaluating equitable estoppel claims against a government, courts must balance the interests of the property owner with those of the general public. However, courts are especially wary of granting equitable estoppel against governments. The Schafer court explained that such a grant of equitable estoppel could negatively affect public policy if “estoppel can too easily replace the legally established substantive and procedural requirements for obtaining permits.”

In conducting this balancing test, the Schafer court gave heavy weight to the public’s interest in the “enforcement of the land use laws enacted by its elected representatives” and found that economic hardship alone was insufficient injustice to outweigh the public’s interest. From the perspective of property owners, the lesson stemming from this case is that one is wise to be wary of implied representations made by local agencies about the validity of an existing use. Even reasonable reliance that causes economic injury to the property owner is unlikely to be found to outweigh the public’s interest in enforcement of established zoning and permitting requirements.


The Importance of Independence: The Ninth Circuit Provides Helpful Clarification on Connected Actions in the Energy Project Development Context

The Ninth Circuit Court of Appeals has held that a right-of-way for an access road over Bureau of Land Management (BLM) land to connect a wind project to a state highway did not trigger formal consultation under the Endangered Species Act because the proposed access road would not have significant impacts to the environment. Sierra Club v. Bureau of Land Management, 786 F.3d 1219 (9th Cir. 2015).

North Sky River Energy developed a wind project on 12,000 acres of private land in the Tehachapi area. North Sky applied to the BLM for a right-of-way across federal lands for an access road to connect the wind farm with a state highway. North Sky could have accessed the highway through a private road, but preferred the access road over BLM land because the private road required substantial grading and would have greater environmental impacts. If the BLM had denied North Sky’s application, North Sky could have pursued the private road option.

After reviewing North Sky’s application and evaluating the potential environmental impacts, the BLM issued an Environmental Assessment concluding that the proposed road project would not have significant environmental impacts. Therefore, the BLM concluded that it need not prepare an Environmental Impact Statement or formally consult with the Fish and Wildlife Service under the Endangered Species Act. The BLM’s determination depended in large part on its finding that the private-road option was a viable alternative to the BLM access road project and thus the wind project had independent utility from the BLM access road project. The BLM issued a permit for the BLM access road project.

Project opponents — the Sierra Club, the Center for Biological Diversity, and the Defenders of Wildlife — alleged that the BLM right-of-way violated the Endangered Species Act and the National Environmental Policy Act (NEPA). The primary basis for the project opponents’ arguments was the theory that the environmental impacts of the BLM access road project should have been considered together with those of the wind project. They argued that when the impacts of the wind project and the access road were considered together, there would be significant impacts requiring the preparation of an Environmental Impact Statement and formal consultation under the Endangered Species Act. Continue Reading