In a dispute over a traffic impact fee imposed on a residential building permit by El Dorado County, the U.S. Supreme Court unanimously rejected the long-standing position of California and other state courts that the Takings Clause of the U.S. Constitution applies differently when permit conditions are imposed legislatively rather than administratively. Sheetz v. County of El Dorado, No. 22-1074 (U.S. Supreme Court, Apr. 12, 2024). Our report on the decision, by Perkins Coie partners Cecily Barclay, Matt Gray and Alan Murphy is available here.

Supreme Court of the United States. Washington DC, USA.

The court of appeal held that a City Council resolution approving a development agreement that included policy decisions regarding development of a public park was a legislative act subject to referendum. Move Eden Housing v. City of Livermore, 100 Cal. App. 5th 263 (2024).

In 2018, the City of Livermore and Eden Housing entered into a Disposition and Development and Loan Agreement for development of a below-market rate housing project to be developed on land acquired by the City’s former Redevelopment Agency. The City approved entitlements for the project in 2021. Opponents filed a CEQA and Planning and Zoning Law challenge against the project and had their petition denied.

In 2022, the City Council adopted a resolution approving an Amended and Restated Disposition, Development, and Loan Agreement between the City and Eden.  The Amended and Restated DDA provided for the City to make a loan to Eden for the cost acquiring the City property and reflected the City’s decision to spend $5.5 million on constructing and improving a public park (called Veteran’s Park) as part of the project.

Within 30 days of approval of the City Council resolution approving the Amended and Restated DDA, project opponents gathered signatures and submitted a petition for a referendum of the decision. The City Clerk confirmed that the referendum petition contained the required number of signatures but declined to process the petition on the ground that the resolution adopting the Amended and Restated DDA was an administrative act, not a legislative one, and therefore not subject to referendum.

The Court of Appeal noted that the standard for preelection review of a referendum’s validity is “one of great deference where a court will remove the initiative [or referendum] from the ballot only “on a compelling showing that proper case has been established for interfering.”  An election official “may not ‘refuse to submit an initiative [or referendum] measure to the electorate on the ground that it deals with a matter not subject to the initiative [or referendum].”

In this case, the elections official determined that the number of signatures, prima facie, equaled or exceeded the number required. In these circumstances, the law directs that the clerk shall accept the petition for filing and shall examine it and certify the results pursuant to statute procedures.

The Court of Appeal went on to address the merits of whether the referended resolution was a legislative or administrative act.  Legislative acts are those “which declare a public purpose and make provisions for the ways and means of its accomplishment.  Administrative acts, on the other hand, are those which are necessary to carry out the legislative policies and purposes already declared by the legislative body.”

The 2022 Amended and Restated DDA, for the first time, made the policy decision to fund the construction and improvement of Veteran’s Park.  The court acknowledged several other cases where a municipality’s decision to sell land to a private party has been considered administrative and not subject to referendum.  The court distinguished those cases, noting that in the present case, the City was not merely disposing of land, but instead making a determination about a sizable public expenditure to develop a public park. 

Petitioner’s challenge to a Specific Plan, which was filed before that plan was adopted, was barred as premature, and its belated attempt to amend its petition after the Specific Plan had been adopted was barred by the statute of limitations.  Fix the City, Inc. v. City of Los Angeles 100 Cal. App. 5th 363 (2024).

The City of Los Angeles approved its Metro Exposition Light Rail Transit Line project by enacting certain General Plan and zoning provisions in July 2018.  At the time, it considered but did not adopt a Specific Plan for the project.  An organization named “Fix the City” filed suit challenging the project, alleging inconsistency with the General Plan.  It sought, among other things, to set aside not only the zoning ordinances, but also the not-yet-adopted Specific Plan. 

More than a year later, in November 2019, the Council enacted the Specific Plan. Fix did not amend its petition within the statute of limitations applicable to that action.  Later, after the trial court ruled that Fix’s challenge to the Specific Plan was premature but granted Fix leave to amend, Fix amended its petition to challenge the 2019 Specific Plan.  The trial court ruled for the City and Fix appealed.

Fix argued that its amended petition was not time-barred as it related back to the original 2018 filing date.  Fix noted that its initial petition had timely challenged the zoning ordinances, and argued that no real significance should be attached to the fact that two legislative acts were involved.  It claimed the acts were closely related and noted the zoning ordinances provided they would not become effective until adoption of the Specific Plan. It contended that the Specific Plan claims were based on the same general set of facts as the zoning claims, that the City had timely notice of the claims, that the claims alleged the same injury, and that they were caused by the same instrumentality in that the Specific Plan and zoning ordinance both were inconsistent with the General Plan.

The appellate court rejected Fix’s arguments and affirmed a judgment for the City. It observed that the applicable statute of limitations – Government Code section 65009 – was enacted with the express purpose of providing certainty and finality to local land use decisions.  Prior caselaw allowing relation back for wrongful conduct of a continuing nature was not applicable, as the City had made two separate legislative decisions.  Nor did Fix’s amended petition simply add detail to claims alleged earlier; it instead challenged conduct that had not yet occurred at the time the original petition was filed.  “Because this case involves two distinct legislative acts governed by section 65009’s 90-day statute of limitations, and Fix failed to timely challenge the second legislative act, we conclude that the relation back doctrine does not apply.”

After deciding in a prior appeal in the same case that offsite agricultural conservation easements (ACEs) were not effective at reducing a project’s conversion of agricultural land, the Fifth Appellate District held that ACEs can mitigate such impacts.  V Lions Farming, LLC v. County of Kern, Nos. F084763, F085102, F085220 (5th Dist., March 7, 2024).

Kern County approved an ordinance streamlining the permitting process for new oil and gas wells after certifying an EIR for that project. The County had established a no-net-loss threshold of significance for agricultural land, effectively requiring that the net impact of a project on loss of farmland be reduced to zero acres. The EIR determined that the project’s provision of ACE’s satisfied this threshold by mitigating the impact of loss of farmland to a less-than-significant level. In the first appeal, the Fifth Appellate District invalidated the EIR, in part based on its ruling that ACE’s were not effective at reducing the conversion of agricultural land to a less than significant level for purposes of CEQA. On remand, Kern County prepared a Supplemental Recirculated EIR.  The SREIR stated that it did not require ACEs as mitigation for significant and unavoidable impacts to agricultural land because the appellate opinion had determined that ACEs do not provide effective mitigation.   

In the second appeal, the court concluded that its first opinion had decided only the narrow issue of whether ACEs were effective at reducing the agricultural impacts to a less than significant level, and not “the broader question whether ACEs are effective at providing any type of mitigation for purposes of CEQA.”  The court examined CEQA Guideline 15370(e), which defines mitigation to include “compensating for the impact by replacing or providing substitute resources or environments, including through permanent protection of such resources in the form of conservation easements.” It parsed the text of the Guideline, acknowledged federal agencies’ treatment of habitat preservation as mitigation, and addressed First Appellate District decisions upholding the use of ACEs as mitigation. 

The court reasoned that accepting ACEs as compensatory mitigation would advance CEQA’s purpose of long-term protection of the environment, while a contrary holding would diminish the use of ACEs and result in less long-term protection of agricultural land.  It accordingly ruled that ACEs are a type of compensatory mitigation for the conversion of agricultural land even though, operating by themselves, they do not replace the converted land or otherwise result in no net loss of agricultural land.  The County therefore failed to comply with CEQA when it eliminated the use of ACEs as a mitigation measure for the conversion of agricultural land in situations where other mitigation had not reduced the net loss of agricultural land to zero acres.

The completion of a shooting range redevelopment project did not moot CEQA claims regarding the project even though the plaintiff had not sought an injunction against development or operation of the project.  Moreover, the County’s decision not to exercise jurisdiction, as opposed to its mere inaction, could support a viable CEQA claim.  Vichy Springs Resort, Inc. v. City of Ukiah, Case Nos. A165345 and A167000 (Ist Dist., March 29, 2024).

Ukiah Rifle and Pistol Club operated a shooting range on land owned by the City of Ukiah and located in unincorporated Mendocino County.  The County determined it had no jurisdiction over the project, and the City issued a building permit to redevelop the shooting range.  Vichy Springs Resort, which operates a nearby resort and spa, sued, contending that the City and County unlawfully failed to conduct CEQA review.  It did not seek an injunction.  While the action was pending in the trial court, Ukiah Rifle completed the project and the City issued a certificate of occupancy.  The trial court sustained demurrers and entered judgment for the City and County on the CEQA claims. 

On appeal, the court concluded that the CEQA claim against the City was not mooted by construction of the project because effective relief was still available.  Ukiah Rifle could be required to implement a lead removal program, use only lead-free ammunition, or limit hours of use and uses at the main range.  The City could revoke the permit and certificate of occupancy and hold them in abeyance pending environmental review.  The court distinguished earlier cases holding that construction of a project had mooted CEQA claims on the ground that, in this case, the petition included allegations explaining what post-completion mitigation measures were available. The court also found no legal basis for concluding that a plaintiff’s failure to seek injunctive relief required a court to find a CEQA claim moot in a situation in which effective relief remains available.

The CEQA claim against the County also was viable. The County argued that only the County’s initial determination that the project was under the City’s exclusive jurisdiction was at issue, which is not a CEQA claim.  The court disagreed.  “We think that narrow reading of [CEQA] would be overly formalistic when Vichy is complaining of the County’s resulting failure to follow any of CEQA’s requirements.”  It further noted that CEQA’s definition of “project” did not require that the County have issued a permit.  It rebuffed the County’s attempts to characterize the claims as involving only Ukiah Rifle’s “bold decision” to proceed without obtaining a County permit, and the County’s inaction.  The court pointed to allegations that the County affirmatively declined to regulate the project.  For similar reasons, it rejected the County’s argument that, because it had not approved the project, any claimed violation of CEQA was not ripe.  “[T[]he petition alleges the existence of a project that the County determined was not subject to regulation. Whether that determination was correct is a question ripe for review.”

The County of San Diego planning staff found a project qualified for a CEQA exemption under Guideline 15183, which applies to projects consistent with a general plan for which an EIR had been prepared.  On appeal, the Board of Supervisors reversed staff’s decision, finding an EIR was required due to environmental impacts peculiar to the project.  The court overturned the Board’s decision, concluding there was no substantial evidence supporting the Board’s conclusion that impacts would not be mitigated by application of uniform policies and procedures, which meant they were no “peculiar” impacts that would prevent application of Guideline 15183.  Hilton Group, Inc. v. County of San Diego, No. D081124 (4th Dist., Feb,.16, 2024).

The Hilltop Group proposed to develop a facility that would recycle inert materials from construction projects.  The project was consistent with the general plan designation and zoning the County had applied in connection with its most recent general plan update, for which it had certified a Program EIR.  The County’s review of the recycling project was convoluted.  First, the County prepared an initial study finding potentially significant impacts and issued a notice of preparation of an EIR.  Second, after the applicant submitted numerous studies and a proposed draft EIR, the County reversed its position.  The zoning administrator found the project exempt under Guideline 15183, and the County’s Planning and Development Services approved the project’s site plan.  Third, several parties appealed, and the Board of Supervisors reversed staff’s decision.  The Board found the project would result in peculiar environmental effects that would not be mitigated by uniform policies and procedures, and that an EIR was required.

The Hilltop Group sued.  The court overturned the Board’s decision, finding the project exempt.  It addressed several aspects of Guideline 15183. 

Relevant Provisions of Guideline 15183Guideline 15183 implements Public Resources Code section 21083.3.  Subdivision 15183(a) provides that projects consistent with zoning or general plan policies for which an EIR was certified shall not require additional environmental review, except as might be necessary to examine whether there are project-specific significant effects peculiar to the project or its site.  Subdivision (b) limits review of such projects to impacts that (1) are peculiar to the project or the parcel, (2) were not analyzed as significant effects in the prior EIR, (3) are potentially significant off-site impacts and cumulative impacts not discussed in the prior EIR, or (4) were previously identified significant effects but substantial new information shows the impacts will be more severe.  Subdivision (f) provides that impacts shall not be considered “peculiar” if uniformly applied development policies or standards were adopted with a finding that they will substantially mitigate the environmental effect, unless substantial new information shows that the uniform policies or standards will not do so. 

Substantial Evidence Standard Applies to a Guideline 15183 DeterminationThe court first confirmed that the substantial evidence standard governs a court’s review of CEQA exemptions, including that of Guideline 15183.  The County argued that the fair argument standard should apply because a project’s eligibility for the 15183 exemption depends on whether the project will have a significant impact.  The court disagreed, noting that the agency also must determine whether the impacts were analyzed as significant impacts in the prior EIR.

Guideline 15183 Can Provide a Partial Exemption By Narrowing the Scope of Subsequent Review.  The court rejected the County’s argument that a project otherwise eligible for the 15183 exemption is entirely ineligible if there are any impacts peculiar to the project or its site.  Rather, the court ruled, Guideline 15183 can provide a partial exemption that limits the scope of a project-level EIR to significant impacts that were not covered in the prior general plan EIR.  While an agency has discretion to choose which streamlining procedure it will use, it is required to limit environmental review of a project when a program EIR has been certified for a general plan and a later project is consistent with the general plan.  Here, the County chose Guideline 15183, which precludes additional review except as might be necessary to examine whether there are project-specific significant effects peculiar to the project or its site. Accordingly, the issue before the court was the extent to which the process was streamlined and what further review was required based on substantial evidence of the project’s peculiar environmental impacts.

Prior Initial Study Did Not Preclude Later Use of 15183 Exemption.  The court rejected the County’s argument that the initial study it had prepared at the outset precluded later use of the 15183 exemption.  It explained that the original initial study merely indicated that more evidence and analysis was required.  Distinguishing several cases decided outside the Guideline 15183 context, the court concluded that “to unequivocally require the preparation of an EIR based on the initial study, even in the face of County staff’s later findings that the project qualified for an exemption, would elevate form over substance.”

The Board’s Finding that Impacts Peculiar to the Project Would Not Be Mitigated by Uniform Policies Was Unsupported in the RecordThe Board found the project would have impacts that would not be mitigated by uniformly applied policies and procedures.  The court overturned this conclusion, finding no substantial evidence in the record to support it.  Numerous studies and the proposed draft EIR submitted by the applicant established that there were no such impacts.  In contrast, the Board’s finding was conclusory and did not identify with specificity either the impacts peculiar to the project or what effect uniform policies and standards would have.  The County claimed its finding was supported by public comments and staff communications expressing concerns that the project may have significant impacts.  The court found these statements were largely speculative and, in any event, failed to address whether the purported project-specific impacts would be substantially mitigated by uniform policies. 

Board’s Decision Was Prejudicial Even Though the Project Was Not DeniedThe County argued that merely subjecting a project to further environmental review was not prejudicial.  The court noted that this position could lead to an indefinite review process without judicial recourse so long as the project application was not formally denied.  It also noted that under Public Resources Code section 21168.5, a prejudicial abuse of discretion is established if the agency has not proceeded in a manner required by law or if the determination is not supported by substantial evidence.  Such a prejudicial abuse of discretion was demonstrated here.

The City of Malibu determined that an attached accessory dwelling unit (ADU) did not fall within the coastal development permit exemptions set forth in its local coastal program (LCP). The court overturned the City’s interpretation of its own LCP, finding the ADU exempt from the coastal permit requirement.  Riddick v. City of Malibu, No. B323731 (2nd Dist., Feb. 1, 2024).

Under the Coastal Act, coastal development permits are required for most development.  Owners of a home in Malibu applied to expand their home and add an attached ADU. The City denied the original application, then refused to consider a revised application limited to adding an attached ADU, claiming a coastal development permit was required.  The homeowners sued, contending the project was exempt. 

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Malibu’s LCP ordinance exempts from the requirement for a coastal development permit improvements to existing single-family residences, “including all fixtures and structures directly attached to the residence and those structures normally associated with a single-family residence, such as garages, swimming pools, fences, storage sheds and landscaping but specifically not including guest houses or accessory self-contained residential units.” 

The court ruled that the plain meaning of this text describes two categories of exempt structures:  (1) all fixtures and structures directly attached to the house; and (2) structures normally associated with a single-family residence but not including guest houses or self-contained residential units. The court rejected the City’s argument that its interpretation of its own ordinance, under which the phrase excluding guest houses and accessory units would be read to modify the first category as well as the second, was entitled to “great deference.”

The court acknowledged that it must give deference to an agency’s interpretation, but not to the exclusion of other tools of statutory construction.  Here, the language and legislative history of the LCP ordinance were unambiguous, so there was no need to defer.  The text was not technical, obscure, complex, open-ended or entwined with issues of fact, policy and discretion, so did not require the City’s expertise.  The City’s interpretation was not the result of careful consideration by senior City officials and was not long-standing, but was issued by staff in response to this particular application.  The language was not crafted in response to unique local conditions.  Instead, it reflected, almost verbatim, a Coastal Commission regulation implementing the Coastal Act, which described the two categories referenced above. 

The court found irrelevant another provision of the LCP, which states that coastal development permits for both attached and detached ADUs shall be processed as administrative coastal development permits.  The court interpreted this language to indicate how coastal permit applications will be processed and not whether coastal permits are required.  Finally, the court rejected the argument that exempting attached ADUs would be inconsistent with the LCP statutory scheme by allowing an increase in the intensity of coastal development without a coastal permit.  The court noted that the LCP contained exceptions to its exemptions for projects that involve a risk of adverse environmental impact, including ADUs in locations such as a beach or wetland.  It ruled that this language reflects a policy choice to treat single family residences in environmentally sensitive areas differently from other areas in the coastal zone. 

The court declined to rule on the question whether approval of the ADU was mandated by Government Code section 65852.2, which it described as establishing standards under which ADUs must receive ministerial approval. Plaintiffs argued that, under that statute, their ADU application must be deemed complete and they were entitled to ministerial approval of their application. However, the court of appeal ruled that the unique procedural stance of the case – the application was allegedly not completed until after the judgment was entered, and plaintiffs’ cross-appeal, which was limited to the judgment, did not include the trial court’s post-judgment order denying plaintiffs’ motion to enforce the judgment by declaring the revised ADU application complete – precluded the court from considering whether plaintiffs were entitled to a permit within 60 days of the completeness date. 

A court of appeal held a CEQA challenge time-barred because it was not commenced within 30 days after a Notice of Determination (NOD) was filed for approval of a subdivision map based upon a Mitigated Negative Declaration (MND). The fact that the map and its vested rights were conditioned upon a later rezoning did not change that conclusion.  Similarly, the fact that the city re-adopted the MND for each project approval was not dispositive.  “It is the first approval that triggers the running of the statute of limitations, and later approvals do not restart the statute of limitations clock.”  Guerrero v. City of Los Angeles, Nos. B326033 and B327032 (2nd Dist., Jan. 17, 2024).

Developers proposed 42 homes on a parcel in Los Angeles.  The project included a vesting subdivision map and a rezoning ordinance.  In March of 2020, the city adopted an MND for the project, approved the vesting tentative map, and filed an NOD.  In May of 2020, the city again adopted the MND, approved some retaining walls, and filed a second NOD.  More than a year later, in June of 2021, the city again adopted the MND, rezoned the site, and filed a third NOD.

Project opponents filed suit on July 16, 2021, alleging CEQA claims.  They argued their petition was timely because it was filed within 30 days of the third NOD.  The appellate court disagreed, ruling that the suit was barred because it was not commenced within 30 days of the first NOD.   

The court focused on CEQA’s directive that an agency must conduct environmental review at the earliest feasible opportunity, which occurs when an agency commits to a project.  It found that the city made its earliest firm commitment to the project when it approved the tentative map.  Neither the conditions attached to the map nor the fact that rights would not vest until the rezoning was complete were relevant.  Delaying vested rights impacts only the developer’s protection against subsequent changes in local regulations; it does not affect the conclusion that approval of the tentative map constituted a project approval under CEQA. The court also rejected arguments based upon the city’s re-adoption of the MND, reasoning that “because there [had] been no changes to the project requiring a subsequent or supplemental MND, the later adoptions of the same MND [could not] restart or retrigger a new limitations period.”

A court rejected a developer’s attempt to take advantage of provisions in the Housing Accountability Act that prohibit a City from requiring a rezoning when zoning is inconsistent with the General Plan.  It upheld Los Angeles’ determination that the existing zoning was consistent with the General Plan, even though the zoning was not expressly listed as a “corresponding zone” for the applicable General Plan land use designation and the existing zoning allowed less development that the “corresponding zones” that were listed in the Plan. Snowball West Investments v. City of Los Angeles, No B314750 (2nd Dist., Oct., 2023).

Snowball West Investments proposed 215 homes in Los Angeles. The existing zoning for the site was RA and A1, and Snowball requested that it be rezoned to RD5 and R1 to allow its proposed higher density. The City’s General Plan included community plans, and the community plan applicable to the property designated the site Low Residential and Low Medium I.  For each land use designation, the community plan listed “corresponding zones” that were deemed consistent.  It did not expressly list the existing zoning districts, but included a footnote stating that each land use category includes the zones expressly listed as well as any more restrictive zones not listed.

The City denied Snowball’s rezoning application. Snowball then asked the City to accept and process the Project’s approved Vesting Tentative Tract Map for clearance of conditions required for Final Map approval, arguing that under the Housing Accountability Act (HAA), no rezoning could be required. The City refused, and Snowball filed a petition for writ of mandate.  Californians for Home Ownership and the California Building Industry Association filed amicus briefs in support of Snowball’s position.

The court sided with the City.  It ruled that the City acted within its discretion in concluding that the community plan footnote meant the existing zoning was consistent. It rejected the argument by Snowball and Amici that the City violated the spirit of the HAA by relying on low-density zoning to deny this housing project.  “[C]ompliance with the HAA does not mean that every proposed project must be approved or that maximum allowable density must be allowed at every site.” 

Snowball also argued that the City was required to make findings under Government Code section 65589.5(j) of the HAA when denying the rezoning.  The court noted that subdivision (j) requires certain findings for denial of a housing project only when the project complies with applicable zoning in effect at the time the development application is complete. Here, the project did not comply with the existing zoning.  Finally, Snowball argued that the City’s denial of its rezoning application was based on invalid findings under the City’s municipal code, which were also lacking evidentiary support.  The court found the City Council’s decision, which adopted findings made by other City bodies, sufficient.  It also held that they were supported by a voluminous record documenting problems that could result from the rezoning, including inconsistency with the density of surrounding properties and concerns about the ability to evacuate in the event of a wildfire.

The Housing Crisis Act of 2019, which enacted Government Code section 66300, generally precludes a city from reducing the intensity of land use on a parcel where housing is allowed below what was allowed on January 1, 2018.  A court held that this provision prohibits reductions in the Floor Area Ratio (FAR) as well as reductions in density.  Yes in My Back Yard v. City of Culver City, No B321477 (2nd Dist., Oct. 27, 2023).

Culver City initiated proceedings to address community concerns regarding “mansionization” in the City’s R-1 single family residential zoning district. A consultant concluded that houses maximizing the existing FAR are “consistently disliked.”  A staff report opined that because recent state laws preclude counting second units in FAR calculations, the original intent of the FAR had been undermined. Accordingly, an ordinance reducing the FAR in the R-1 district was proposed.

Staff asked the California Department of Housing and Community Development (HCD) whether the proposed ordinance would violate the Housing Crisis Act.  HCD warned that the Act “ta[lk]s about intensity of uses,” and stated that because the proposed FAR reduction could affect the number of bedrooms, the proposed ordinance “might trigger the less intensive use provision.”

In 2020, the Council enacted an ordinance reducing the FAR from .60 to .45.  Yes In My Back Yard sued to invalidate the ordinance. 

The City defended its ordinance by relying on dictionaries to argue the terms “density” and “intensity” are ambiguous. It further argued that the Legislature intended that only a reduction in density, meaning the number of housing units, violates the Act. The court disagreed, noting that the Act itself defines “reducing the intensity of land use” to include reductions in floor area ratio.  “A statute itself furnishes the best evidence of its own meaning, and if an act’s intent can be ascertained clearly from its own provisions, that intent prevails and courts do not resort to other aids for construction.”  The ordinance therefore violated the Act.