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California Land Use & Development Law Report

Legal Commentary on Planning and Development

Criminal Penalties for Bird Deaths Caused by Wind Projects

Posted in Endangered Species, Environmental Regulation

In the first criminal case ever prosecuted under the Migratory Bird Treaty Act, the U.S. Fish and Wildlife Service and Department of Justice filed misdemeanor charges against Duke Energy for more than 163 migratory bird deaths, including golden eagles, at its wind power projects near Casper, Wyoming.  On November 22, 2013, the case was resolved by an agreement that requires Duke Energy to pay $1 million in restitution and implement a comprehensive Migratory Bird Compliance Plan to avoid or minimize further bird mortalities at its projects.

For further details on this case, please see our December 2, 2013 Update.

County’s Application for State Funding Does Not Trigger CEQA

Posted in CEQA

In December 2011, the Orange County Board of Supervisors passed a resolution authorizing the County to submit an application for $100 million in state funding to expand the  James A. Musick Jail Facility to add over 500 beds.  The City of Irvine, which sits adjacent to the jail, filed a lawsuit alleging that the County failed to comply with CEQA before submitting the application. The court of appeal rejected the City’s challenge, ruling that the County’s application did not constitute an “approval” of a project under CEQA.  City of Irvine v. County of Orange, No. G047895 (4th Dist., Nov. 22, 2013).

Using the test established by the Supreme Court in Save Tara v. City of West Hollywood, 45 Cal. 4th 116, 127 (2008), the court of appeal concluded that the state funding application did not effectively commit the County to proceed with the expansion.  Emphasizing the distinction between “advocating or proposing a project and committing to it,” the court explained that a commitment that triggers CEQA must preclude or foreclose alternatives or mitigation measures that CEQA otherwise would require the agency to consider. 

Here, the court found, the County retained all of its discretion under CEQA to consider alternatives and mitigation measures.  Based on a review of the legal provisions governing the state prison funding program, the court determined that the submission of an application “was merely a preliminary step” in the process. In particular, the court explained that the state’s initial approval of an application was only a “conditional award,” which did not guarantee any funding and only meant the applicant was qualified to move forward to the next phase of the process. The state program expressly required a number of additional steps, following issuance of a conditional award, to secure the funding, including CEQA review. The court therefore concluded that the application “committed the County to nothing.” 

In reaching this conclusion, the court rejected the City’s claim that the County’s application triggered CEQA due to its high level of detail.  The court stated:  “The amount of detail or the advanced stage of the project’s design, however, covers only part of the analysis for determining whether an agency’s action constitutes an approval under CEQA.  An approval under CEQA requires both a definite course of action and a commitment to that definite course of action.”  Because there was no commitment here, there was no approval and thus no requirement yet for CEQA review. 

High Hurdle for EIR Recirculation Claims Set by Appellate Court

Posted in CEQA

In a recently published decision,  a California court of appeal rejected a challenge to an EIR alleging the agency was required to recirculate the EIR when a new alternative was proposed after the draft EIR had already been circulated. South County Citizens for Smart Growth v. County of Nevada, 2013 WL 5936664 (Cal. App. 3 Dist.)  The decision is important because it clearly lays out the heavy burden facing a petitioner bringing such a challenge.

The case involved a proposed shopping center project in Nevada County.  When the planning commission held a hearing on the final EIR, the staff recommended a modified alternative to the project.  The commission agreed with staff and recommended that the board of supervisors certify the final EIR and approve the staff alternative.  The project applicant, responding to the planning commission’s concerns, proposed a revised version of the project that was met by the staff’s approval.  The commission met again, recommended the applicant’s modified project to the board of supervisors, and the board certified the final EIR and approved the project.

A citizens group challenged the county’s actions, claiming it had violated CEQA by failing to recirculate a revised draft EIR including the staff alternative.  Under CEQA, agencies must recirculate an EIR when “significant new information” is added.  Applying the standards in the CEQA Guidelines, the court held that a new alternative constitutes new information only if all three tests in the Guidelines are met: (1) the alternative was feasible; (2) the alternative was considerably different from alternatives already analyzed; and (3) the alternative would clearly lessen the significant environmental impacts of the project.

The court next laid out the petitioner’s burden of proof when challenging an agency’s failure to recirculate after a new alternative was introduced.  Not only must the petitioner show that there was evidence that the alternative might constitute significant new information under the tests laid out in the Guidelines, the petitioner also has the burden to show that there was no substantial evidence that would support determination by the agency that the alternative was not significant new information.  According to the court, an agency’s decision to certify an EIR without recirculating it implies a finding that one or more of these tests is not met.  Consequently, a petitioner challenging an agency’s decision not to recirculate an EIR must show that no substantial evidence supports a negative finding for each test. The petitioner thus must show that:

  • No substantial evidence supports the agency’s express or implied finding that the alternative was not feasible;
  • No substantial evidence supports the agency’s express or implied finding that the alternative was not considerably different from alternatives already analyzed; and
  • No substantial evidence supports the agency’s express or implied finding that the new alternative would not lessen the significant environmental impacts of the project.

The court found that the petitioner failed to meet this burden. Among other things, the petitioner did not demonstrate the absence of substantial evidence that the staff alternative was not considerably different from all of the others in the EIR.  Moreover, the petitioner did not meet its burden of “setting forth all the evidence favorable to the county” and showing where it was lacking.

In a related issue, the petitioner also asserted that the county had violated CEQA by failing to make findings regarding the feasibility of the staff alternative.  The petitioner argued that because the board did not adopt the staff alternative, it had to make findings that it was infeasibile.  The court disagreed, ruling that although a lead agency must give reasons for rejecting an alternative as infeasible during the scoping process, the staff alternative was proposed well after preparation of the final EIR.  At that stage, the county “was only required to find that the staff alternative was not significant new information, a finding that may be implied from its decision to certify the EIR without recirculating it.”

This case provides clear guidance on when a new alternative, proposed after circulation, triggers recirculation.  By requiring the petitioner to establish that no substantial evidence supports the agency’s express or implied finding that the new alternative was not significant new information, South County Citizens sets a  high bar for petitioners bringing a recirculation challenge.

Comment Periods Open on New Fracking Regulations and Scope of Statewide EIR

Posted in CEQA, Environmental Regulation

In the face of mounting public pressure to address the potential perils of hydraulic fracturing, California has embarked upon a multi-faceted program to strengthen its oil and gas regulations, perform comprehensive environmental studies, and increase public disclosure.  On November 15, 2013, the Department of Conservation published two notices seeking comments on steps it is taking to implement recently enacted legislation:

  • Notice of Proposed Rulemaking to Adopt Well Stimulation Treatment Regulations.   The Division of Oil, Gas and Geothermal Resources has proposed regulations intended to ensure that well stimulation is performed safely  by setting requirements to ensure integrity of wells, well casings, and the geologic and hydrologic isolation of the oil and gas formation during and following well stimulation treatments.  The regulations also require disclosure of the composition and disposition of well stimulation fluids, and impose new procedures for issuance of well stimulation permits, public disclosure, neighbor notification and well testing.  The 60-day comment period on the proposed regulations closes on January 14, 2014.
  • Notice of Preparation of an Environmental Impact ReportThe Department of Conservation will prepare an EIR to evaluate the impacts of existing and potential future oil and gas well stimulation treatments occurring within California.  While the notice does not use the label “program EIR,” it includes a summary of the CEQA Guideline governing program EIRs as the basis for preparing a single EIR to address a series of actions.  To grapple with the complexity of evaluating impacts throughout the state, the notice states that the EIR will evaluate potential impacts in each of the Division of Oil, Gas and Geothermal Resources’ six administrative districts.  The notice also states that the EIR may be used to consider future permits authorizing well stimulation.  Comments about the scope of the EIR must be submitted by January 16, 2014.

Both of these steps stem from Senate Bill 4, the only fracking bill to make it out of the Legislature and off the Governor’s desk in 2013.  SB 4 defines oil and gas well stimulations as “any treatment of a well designed to enhance oil and gas production or recovery by increasing the permeability of the formation.”  Well stimulation includes hydraulic fracturing treatments and acid well stimulation treatments, but does not include enhancement of oil and gas recovery through flooding or steam.  SB 4 requires:

  • An independent scientific study on the hazards and risks that well stimulation treatments pose to natural resources and public, occupational and environmental health and safety.  The study is to be completed by January 1, 2015 and is expected to lead to additional regulation by 2020.
  • Issuance of well stimulation permits prior to performing a well stimulation treatment.
  • Disclosure of well stimulation permits to neighboring property owners, who may request baseline water quality sampling and testing before well stimulation commences.
  • Disclosure of well stimulation fluid composition and disposition (with possible exceptions for trade secrets).
  • Identification of all geologic features within the fracture zone.
  • Monitoring and disclosure of detailed information about well history and well operations.
  • Preparation of an EIR, to be certified no later than July 1, 2015, to address activities that may occur at oil wells in the state, and provide the public with detailed information regarding any potential impacts of well stimulation in the state.

SB 4 contains a streamlined interim procedure to be used for a one-year period, which allows operators to proceed with well stimulation without a permit if they comply with specified requirements.  According to the Senate Bill 4 Implementation Plan, the Division of Oil, Gas and Geothermal Resources intends to “use its emergency regulatory authority to set up rules for this 2014 interim process.”  The interim regulations are scheduled for release on December 13, 2013.

Court Rejects Claim That New General Plan Housing Element Requires New EIR

Posted in CEQA, Planning and Zoning

Affordable housing advocates have lost a claim that Napa’s new General Plan Housing Element required a new environmental impact report.  Latinos Unidos de Napa v. City of Napa, No. A134959 (1st Dist., Oct. 10, 2013, publication ordered Nov. 5, 2013).  The court upheld the city’s decision that its 2009 Housing Element was not a new project, but rather a modification of the General Plan the city had adopted, and studied in a 1998 EIR.  Therefore, in examining the Housing Element under CEQA, the city needed to ask only whether the Housing Element would cause new or substantially more severe environmental impacts than those found in the 1998 General Plan EIR.  The plaintiff failed to demonstrate that such impacts would occur. 

The 2009 Housing Element increased minimum and maximum residential densities in certain areas of the city, permitted single-family detached homes at the same densities as single-family attached homes, and provided for co-housing, among other changes.  The city prepared an initial study and determined, under Public Resources Code § 21166, that implementation of the Housing Element would not cause impacts that would require a supplement to the city’s 1998 General Plan EIR. 

Citing Save Our Neighborhood v. Lishman, plaintiff argued that whether the Housing Element was a new project or a modification of the 1998 General Plan project was a question of law for the court.  The court declined to follow this precedent, agreeing instead with Mani Brothers Real Estate Group v. City of Los Angeles that the “question-of-law” approach would inappropriately undermine the deference courts owe to a city’s decisionmaking.  Following Mani, the court ruled that the city’s decision to treat the Housing Element as a modification of the General Plan rather than as a new project would be upheld if substantial evidence supported it. 

The court found such substantial evidence.  First, the 1998 General Plan EIR addressed the city’s then-existing Housing Element. Second, every 2009 Housing Element feature to which the plaintiff objected represented a change to density standards that were included in the Land Use Element of the 1998 General Plan and analyzed in the General Plan EIR.

Finally, substantial evidence supported the city’s conclusion that the 2009 Housing Element would not cause new or substantially more severe impacts than those shown in the 1998 General Plan EIR.  The record showed the City had, in fact, added housing at a substantially slower rate than the 1998 General Plan EIR anticipated.  Plaintiff did not meet its burden of showing that the increased residential density allowed under the 2009 Housing Element would be inconsistent with the residential growth impacts anticipated in the1998 EIR.

Latinos Unidos provides useful guidance in two respects. First, the case follows the Mani rule affording deference to a lead agency’s decision whether a project is new or rather represents a modification to a previously studied project.  Second, the case supports the point that EIRs do not automatically go ”stale” after some period of years; the plaintiff failed in its effort to characterize a 1998 EIR as too old to support the City’s 2009 Housing Element.

Does An EIR Have To Be Certified By A City’s Decision-Making Body?

Posted in CEQA, Land Use

Yes, according to a recent decision by a California court of appeal.  The court held that CEQA does not allow a city council to delegate certification of an Environmental Impact Report to a planning commission, where the council is the decision-maker on the project.  The court further ruled that, where such a delegation occurs, the project opponent is not required to appeal the planning commission’s certification to the city council or repeat its comments on the draft EIR when the council later considers certification anew.  California Clean Energy Committee v. City of San Jose, Case No. H038740 (6th Dist., Oct. 29, 2013).

The City of San Jose published a draft EIR on a comprehensive update of its general plan.  The plaintiff submitted comments objecting to the environmental analysis.  The planning commission certified the final EIR and recommended that the city council approve the general plan update.  The plaintiff did not appeal the certification to the city council, though the matter was already slated to go to the council.  The council then independently recertified the EIR and approved the general plan update.  The plaintiff filed a CEQA lawsuit challenging the EIR, raising the claims it had presented in its comments on the draft EIR.

The court of appeal concluded that the plaintiff adequately exhausted its administrative remedies.

The court first ruled that CEQA requires that decision-makers on a project independently consider and review the adequacy of the environmental analysis before deciding whether to approve the project.  Based on this ruling, the court held that the decision-making body with project approval authority must certify the EIR and may not delegate the certification to a body that lacks this authority.  Applying these principles, the court found that San Jose’s city council could not delegate certification of the EIR to the planning commission, since the commission lacked the power to approve the general plan update.

Having found the delegation to the planning commission improper, the court then ruled that the project opponent was not required to follow the procedures in the city’s code for appealing the commission’s decision to the city council.

Finally, the court ruled that the plaintiff had adequately exhausted its administrative remedies even though it did not repeat the CEQA claims in its comment letter when the matter reached the city council.  The court reasoned that the city council, as the ultimate decision-makers on the general plan update, had the plaintiff’s comment letter before it when it approved the project, and that the letter adequately apprised the council of the plaintiff’s environmental objections.

While the rulings in the case are procedural, the decision could have a substantial impact on how cities and counties make their decisions under CEQA and how those decisions may be challenged by project opponents.

Ninth Circuit Rules that Plaintiffs Lack Standing to Compel State Agencies to Regulate Greenhouse Gas Emissions

Posted in Climate Change, Environmental Regulation

Do environmental groups have standing to sue to force state agencies to regulate greenhouse gas emissions under the Clean Air Act?  In a case decided on October 17, the Ninth Circuit said no.  Washington Environmental Councilv. Bellon, No. 12-35323 (9th Cir. Oct. 17, 2013).

The plaintiffs argued that several governmental agencies in Washington State were required to set regulatory standards for GHG emissions from the state’s oil refineries pursuant to Washington’s Clean Air Act “State Implementation Plan.”  But according to the court, the chain of causation between the plaintiffs’ alleged injuries and the agencies’ refusal to regulate was too attenuated to support a lawsuit.  Therefore, the court concluded, the plaintiffs lacked standing under Article III of the United States Constitution. 

The court emphasized that to demonstrate standing, the plaintiffs were required to show that their “specific, localized injuries” were fairly traceable to the agencies’ failure to set standards.  But here, the plaintiffs offered “only vague, conclusory statements” of causation.  Further, the localized climate impact resulting from the GHG emissions from the state’s oil refineries was “scientifically indiscernible.”  The court accordingly dismissed the case without reaching the merits of the dispute. 

 For more on the case, see our update of October 24.  

California Supreme Court Makes It Easier To Challenge Local Affordable Housing Requirements

Posted in Exactions and Assessments, Land Use

Under the Mitigation Fee Act, when a city imposes a fee, dedication, reservation or other exaction on a development project, the developer has the right to pay under protest, obtain the necessary project approvals and proceed with construction, while at the same time disputing the legality of the requirement.  In Sterling Park v. City of Palo Alto, No. S204771 (Cal. S. Ct., Oct. 17, 2013), the California Supreme Court held that this procedure was available to challenge the City of Palo Alto’s inclusionary housing requirements. 

To obtain approval for its 96-unit condominium project, the developer was required to set aside 10 affordable units, giving the city the option to purchase them at below-market rates (which the city could then assign to qualifying buyers).  The developer was also required to pay in-lieu fees based on a percentage of the actual selling price or fair market value of its market-rate units, whichever was higher.  The developer agreed to comply and the city approved the project.  As the project was nearing completion a year later, the city requested conveyance of the affordable units, but the developer submitted a protest letter and, when the city failed to respond, filed a lawsuit.

In dismissing the case as untimely, the court of appeal relied on a provision in the Subdivision Map Act (Govt. Code § 66499.37) that requires any lawsuit challenging a condition of a subdivision approval to be filed within 90 days of the approval.  Under this provision, the developer must delay construction until the dispute is resolved by the courts.  Relying on Trinity Park, L.P. v. City of Sunnyvale, 193 Cal. App. 4th 1014 (2011), the court of appeal ruled that the “pay under protest” option is available only to challenge fees and exactions designed to defray the costs of public facilities related to the project and that Palo Alto’s affordable housing requirements did not fit this description.

The Supreme Court reversed, ruling that the “pay under protest” provision in the Mitigation Fee Act (Govt. Code § 66020) governed.  The Court found that Palo Alto’s requirement that the developer provide it with an option to purchase the 10 affordable units amounted to an “exaction” under this provision.  The Court explained that, in enacting the “pay under protest” statute, the Legislature did not want developers to be compelled to choose between either acceding to a disputed exaction with no recourse or delaying the project while challenging it.  The Court observed that the interpretation set forth in Trinity Park conflicted both with this clear legislative intent and with the broad language in the statute, which encompasses “any fees, dedications, reservations or other exactions.”

The decision, however, leaves several key questions unanswered.  First, the court did not address whether, in fact, the lawsuit was timely.  Under the “pay under protest” procedure, the developer must file a protest within 90 days after being notified by the city that the exaction is being imposed and the protest period has begun.  Here, the developer argued that since the city never provided this notification, the protest was timely.  But the Supreme Court expressly avoided this issue and remanded the case to the court of appeal to resolve it.

Second, the Supreme Court decided only that the “pay under protest” statute applies to Palo Alto’s requirement that the developer provide it with an option to purchase the affordable units.  The Court found it unnecessary to decide whether forcing a developer to sell some units below market value, by itself, would constitute an exaction under the Mitigation Fee Act.

Despite its limited rulings, the Court’s decision is noteworthy in that it removes a significant obstacle to challenges to local affordable housing rules and thus provides developers with greater flexibility when faced with these types of requirements.  The case may also presage the outcome in California Building Industry Association v. City of San José, No. H038563 (June 6, 2013). As we reported in our September 16th post, the California Supreme Court has granted a petition by the California Building Industry Association for review of the appellate court’s decision upholding a San Jose affordable housing ordinance. The court of appeal there held that the affordable housing requirement was not an exaction, but rather simply an exercise of the City’s police powers, a holding that appears at odds with the Supreme Court’s ruling in this case.


Ninth Circuit Clarifies Standards For Housing Discrimination Claims

Posted in Planning and Zoning, Real Estate

Can a city protect itself from discriminatory zoning claims by adopting a facially neutral ordinance that treats similarly situated land uses the same? Apparently not, said the Ninth Circuit in Pacific Shores Properties v. City of Newport Beach (Case No. 11-55460), decided on September 20. In a challenge brought against a City of Newport Beach zoning ordinance imposing restrictions on group homes, the court ruled that the plaintiffs could prevail merely by showing that the City acted with discriminatory animus. Continue Reading

EPA Publishes Draft Scientific Report To Support Significant Expansion of Clean Water Act Jurisdiction

Posted in CEQA, Environmental Regulation, NEPA, Wetlands

On September 17, 2013, the Environmental Protection Agency announced the release of a draft scientific report that is widely seen as a prelude to upcoming regulations that would significantly expand federal permitting jurisdiction under the Clean Water Act. See our update for more information about the draft report, which is titled “Connectivity of Streams and Wetlands to Downstream Waters: A Review and Synthesis of the Scientific Evidence.” Continue Reading