City Cannot Compel State University to Collect and Remit City Taxes

In City and County of San Francisco v. Regents of the University of California (1st Dist., No. 144500, May 25, 2017), the court of appeal considered whether a city had the power to compel state universities that operate parking lots in the city to collect taxes from the parking users and remit them to the city. This case displayed some of the complexities in the distribution of powers between states and local governments, including the issues of preemption, sovereign immunity, and the local taxing power. Ultimately, the court concluded the city could not compel such action by a state entity.


At issue here was the application of San Francisco’s parking lot tax ordinance. The ordinance imposes the tax on parking lot users and requires parking lot operators to collect the tax. Under the ordinance, operators must hold the taxes and periodically remit them to the city. Operators are liable for failing to collect the tax. While the ordinance provides that it is not to be construed as imposing a tax on the state or state entities, it nonetheless requires such entities to collect, report, and remit the tax and pay any taxes they fail to collect. In 2011, San Francisco directed several state universities, including the University of California, to collect and remit the parking taxes. The universities refused, after which San Francisco sought a writ of mandate to force compliance.

Majority opinion

According to the majority, the issue presented by the case was a conflict between the city’s constitutional power to tax and the longstanding doctrine that exempts state entities from local regulation. This doctrine is based on the California Supreme Court’s 1956 decision in Hall v. City of Taft and its progeny under which local jurisdictions are barred from regulating state entities engaged in governmental activities. After reviewing the case law, the majority determined that the doctrine was straightforward—it exempts state entities from otherwise-valid local regulation when they are engaged in governmental activities unless a constitutional provision or statute says they are not exempt.

The majority likewise found the application of the doctrine to this case to be straightforward: providing parking for students, faculty, staff, and visitors was integral to the universities’ educational purposes and was further authorized by state statute. Therefore, under Hall, the city was precluded from forcing the universities to collect and remit taxes imposed on users of the universities’ parking facilities.

The Dissent

The dissent argued that the applicability of the Hall doctrine was far from straightforward, as Hall and its progeny involved situations where a municipality was attempting to exert regulatory control directly over state entities. These cases, according to the dissent, differed markedly from this case where the municipality was imposing the tax on third parties transacting with state entities. The dissent found that the situation presented in this case was more similar to cases addressing the scope of the municipal taxing power and urged a more “nuanced” approach that would balance the state’s sovereign interests with the municipality’s power to tax third parties.

Federal Courts Lack Jurisdiction to Hear Challenges to EPA Objections to State Water Pollution Discharge Permits

Federal courts of appeal do not have original jurisdiction under the Clean Water Act to hear a challenge to EPA’s objection to a state’s draft water pollution discharge permit, the Ninth Circuit held in Southern California Alliance of Publicly Owned Treatment Works v. EPA, 853 F.3d 1076 (9th Cir. 2017).

The Clean Water Act allows EPA to delegate primary responsibility for issuing pollution discharge permits to a state. When a state assumes permitting authority, it must submit draft permits to EPA for review. If EPA objects to a state’s draft permit, the state may either revise the permit to address EPA’s objection or, if the state does not address EPA’s objection, permitting authority will revert to EPA.

This litigation arose over discharge permits for two water reclamation plants in California, a state that has assumed primary permitting authority. EPA objected to the state’s draft permits, primarily because of concerns related to numeric limitations for whole effluent toxicity. The state revised the permits to satisfy EPA’s objections and, after receiving approval from EPA, issued the permits. The Southern California Alliance of Publicly Owned Treatment Works (SCAP) then petitioned the Ninth Circuit for review of EPA’s objection letter.

                    Environmental Protection Agency (EPA) at Federal Triangle in Washington D.C.

Before reaching the merits, the court considered whether it had subject matter jurisdiction to hear the case. The Clean Water Act gives federal courts of appeal original jurisdiction to hear challenges to certain EPA actions. In this case, SCAP relied on 33 U.S.C. §§ 1369(b)(1)(E), which allows for review of EPA action “in approving or promulgating any effluent limitation, and 1369(b)(1)(F), which allows for review of EPA action “issuing or denying any [effluent discharge] permit.” The court concluded that neither provision gave it subject matter jurisdiction to review EPA’s objection letter.

The court held that it did not have jurisdiction under section 1369(b)(1)(E) because the objection letter was not an action “approving or promulgating any effluent limitation.” The court relied on the Ninth Circuit’s decision in Crown Simpson Pulp Co. v. Costle, 599 F.2d 897 (9th Cir. 1979), which held that EPA’s veto of a state’s draft permit was not the functional equivalent of a newly promulgated regulation. The court explained that promulgating effluent limitations, which set standards for an entire industry, are different from the individualized adjudications that occur in the permitting process; section 1369(b)(1)(E) only allows review of the former.

The court further held that it did not have jurisdiction under section 1369(b)(1)(F) because the objection letter was not an action “issuing or denying any permit.” The court explained that an objection letter is merely an interim step in the permitting process. After EPA issues an objection letter, there remain several possible outcomes: EPA and the state may resolve their dispute, EPA may modify or withdraw its objection after holding a hearing on the permit, the state may agree to accept EPA’s modifications, or EPA may issue a permit itself if the state refuses to accept EPA’s modifications. The court also noted that the Seventh and Eighth Circuits had reached similar conclusions on the issue of whether they had jurisdiction under section 1369(b)(1)(F) to hear challenges to an objection letter.

Thus, the court held that it lacked subject matter jurisdiction to hear SCAP’s challenge to EPA’s objection letter and dismissed the case.

*  *  *

An aggrieved party in a state that has assumed primary permitting authority is not without recourse—it may still pursue state administrative and judicial remedies to challenge a permit that conforms to EPA’s objection letter (with the possibility of ultimate review in the U.S. Supreme Court). Federal courts of appeal, however, are not the proper forum for challenging an EPA objection letter.

NEPA Violations Did Not Undermine Validity of EIS for Nuclear Missile Maintenance Facility

The Ninth Circuit rejected challenges to the Navy’s plans to construct a new nuclear missile maintenance facility. Although the court found that the Navy had violated NEPA by failing to adequately disclose information in the environmental impact statement, it held that these violations were harmless because they would not have improved public participation or changed the Navy’s decisionmaking. Ground Zero Center for Non-Violent Action v. U.S. Department of the Navy (9th Cir. No. 14-35086, June 27, 2017).


The plaintiffs challenged the Navy’s plans to construct a new wharf for maintenance of nuclear missiles at Naval Base Kitsap in Bangor, Washington, alleging that the Navy had violated NEPA. The Navy had redacted three of the appendices to the EIS in their entirety on the ground that they contained sensitive information relating to nuclear material. During the litigation, however, in response to public records requests or as part of the administrative record, the Navy released significant information that had not been previously disclosed in the EIS. This included portions of the EIS appendices that had been redacted when the EIS was published. The new documents indicated that the Department of Defense Explosives Safety Board had rejected the proposed project because of concerns regarding the risk of an explosion. However, the Navy had received an exemption from the Secretary of the Navy allowing it to proceed with construction without conducting additional safety studies required by the Safety Board.

The plaintiffs argued that the Navy had violated NEPA by (1) redacting the portions of the EIS appendices that it later released publicly, (2) not adequately disclosing the project’s risks and the Safety Board’s disapproval, and (3) not evaluating reasonable alternatives in the EIS. The district court granted summary judgment for the Navy on the plaintiffs’ NEPA claims. The district court also sealed portions of the record that contained classified and controlled information that the Navy had inadvertently disclosed, and ordered the plaintiffs not to discuss or reference any of those documents in a court hearing and not to further disseminate those documents. The plaintiffs appealed to the Ninth Circuit.

NEPA Claims

First, the plaintiffs argued that the Navy violated NEPA by not disclosing the appendices when it published the EIS. NEPA requires that an agency disclose information, including appendices to an EIS, “to the fullest extent possible.” The Freedom of Information Act (which applies to NEPA), however, contains an exception for disclosing sensitive nuclear information if it “could reasonably be expected to have an adverse effect” on public safety or security. The Ninth Circuit agreed with the plaintiffs that the Navy violated NEPA by redacting the appendices in their entirety. The court explained that the Navy’s subsequent disclosure of portions of the appendices during the litigation indicated that material should have been disclosed in the EIS. The court concluded, however, that the Navy’s NEPA violation was harmless because the plaintiffs did not demonstrate that information in the appendices would have made a difference in the Navy’s decisionmaking or public participation. Continue Reading

Air District Permit May Be Challenged Under CEQA

In an unsurprising decision, a court of appeal held that CEQA claims may be asserted against an air quality management district.  Friends of Outlet Creek v. Mendocino County AQMD, (First Dist. Ct. App., No. A148508 (decided 3/23/17; ordered published 5/25/17)

The Mendocino County Air Quality Management District granted an “Authority to Construct” – a permit issued after the district determines a project will comply with air quality laws – for an asphalt production project. The district determined that no additional CEQA review was required in light of prior environmental review undertaken by the County.

Friends of Outlet Creek sued, claiming the district violated both CEQA and its own regulations in issuing the permit. The district demurred, contending that the only vehicle for bringing claims against an air district is Health & Safety Code section 40864, which states: “Judicial review may be had of a decision of [an air district] hearing board by filing a petition for a writ of mandate in accordance with Section 1094.5 of the Code of Civil Procedure.” The district contended this section did not authorize claims under CEQA.

The court sided with Friends. It ruled that claims may be brought directly under CEQA, and that a petitioner need not invoke section 40864 to challenge an air district decision.  It noted “there is considerable precedent that air quality management districts can be sued for failing to comply with CEQA,” while “no case . . suggests that only Health and Safety Code section 40864 can be invoked in challenging an action by an air quality management district.” Moreover, the district had acknowledged that it has an obligation to comply with CEQA, in both its decision for the asphalt production project and in its regulations.

The court cautioned, however, that Friends could not obtain greater relief under CEQA than it could under section 40864. The remedy would be limited to a writ of mandate under CCP section 1094.5, and the case could be used only to address the validity of the district’s permit, not the county’s prior decisions related to the project.

Property Owner Who Proceeds With Development Under a Permit Cannot Challenge Land-Use Conditions Attached to the Permit

The California Supreme Court has ruled that a landowner who accepts the benefits of a permit by constructing the project forfeits the right to challenge land-use conditions imposed on the project. Lynch v. California Coastal Commission (Calif. Supreme Court, No. S221980, July 6, 2017).

Factual Background

After storms damaged a seawall and stairway structure beneath their bluff-top homes, plaintiffs sought a permit from the California Coastal Commission to demolish and reconstruct the seawall. The Commission granted the permit subject to conditions that included a prohibition against reconstruction of the stairway and a 20-year limit on the authorization for the seawall, after which plaintiffs would need to apply for a new permit to extend the authorization period.

Plaintiffs filed a petition for writ of administrative mandamus challenging the 20-year expiration condition and the condition prohibiting reconstruction of the stairway. They argued that the 20-year expiration date was unconstitutional because it did not mitigate impacts of the project, and that the Commission could not prohibit reconstruction of the stairway because that activity did not require a permit.

While the litigation was pending, plaintiffs satisfied other permit conditions, secured the coastal development permit, and built the seawall. The Court of Appeal held that plaintiffs’ challenge could not proceed because they had waived their claims by constructing the project.

California Supreme Court Decision

Under the Pfieffer/McDougal line of cases, a landowner may not challenge a permit condition if he or she has acquiesced to it either by specific agreement or by failing to challenge the condition while accepting the benefits of the permit. Instead, the landowner must file a timely challenge to the conditions and await the outcome before proceeding with the project.

An exception to this rule exists under the Mitigation Fee Act, which allows a property owner to challenge fees, dedications, reservations or exactions imposed on a permit by paying or otherwise complying with the exaction under protest and filing suit within 180 days after issuance of the permit. However, the Act covers only requirements that divest the property owner of money or a possessory interest in property; it does not include land-use restrictions, such as setbacks or height limits.

In Lynch, plaintiffs maintained that the Pfeiffer/McDougal rule was inapplicable because, unlike the landowners in those cases, plaintiffs had filed a timely mandamus challenge to the permit conditions. Moreover, they had not acquiesced to the conditions by fulfilling them and thus could not fairly be said to have waived their objections to them.

The California Supreme Court disagreed. While plaintiffs may not have waived their objections – in that they never intentionally relinquished the right to challenge them – that  conclusion did not save their case. The crucial point, according to the court, was that plaintiffs proceeded with the construction before obtaining a judicial ruling on the validity their objections. By accepting the benefits of the permit, the court said, plaintiffs effectively forfeited the right to maintain their otherwise timely objections, citing the equitable maxim “He who takes the benefit must bear the burden.” (Civil Code § 3521).

Plaintiffs also argued that because the objectionable permit conditions did not affect the design or construction of the seawall, they should have been allowed to challenge them while the project was being built. The court declined to create what it characterized as an “exception that would potentially swallow the general rule that landowners must take the burdens along with the benefits of a permit.” Permit applicants, it observed, frequently accept permit conditions they dislike in order to secure the permit. Creating an exception based on whether the conditions did or did not affect the construction itself, the court said, “would change the dynamics of permit negotiations and foster litigation.” It would also be difficult in practice, the court reasoned, to determine whether a particular condition attached to a permit was truly severable from the construction. Further, requiring a timely challenge and adjudication before construction commenced would allow the agency to revise the conditions to address the identified issue. If the condition were invalidated after construction, alternative mitigation measures might be rendered impracticable.


Under Lynch, barring an express agreement with the agency providing otherwise, landowners who object to permit conditions not covered by the Mitigation Fee Act must litigate their objections in a mandamus proceeding before constructing the project. Proceeding with the project before conclusion of the mandamus case results in forfeiture of the challenge.

California Supreme Court Holds Governor’s Executive Order Setting 2050 GHG Targets Need Not Be Used As CEQA Significance Threshold

In November 2014, we reported on the controversial court of appeal decision that overturned the environmental impact report for the San Diego Association of Governments’ 2050 Regional Transportation Plan and Sustainable Communities Strategy.  The court faulted the EIR for failing to assess the plan’s consistency with the 2050 greenhouse gas emissions reduction goal contained in an executive order issued by the Governor in 2005. This decision has now been reversed by the California Supreme Court in a 6-1 decision.  Cleveland Nat’l Forest Found. v. San Diego Ass’n of Gov’ts, Supreme Court Case No. S223603 (July 13, 2017).

Background of the Plan and SB 375

In 2005, Governor Schwarzenegger issued an executive order establishing statewide targets to reduce greenhouse gas emissions to 1990 levels by 2020 and to 80 percent below 1990 levels by 2050.

The Legislature adopted several laws to address these targets, including AB 32 and SB 375. SB 375 required metropolitan planning organizations like SANDAG to incorporate “sustainable communities strategies” into their regional transportation plans.. The state then set initial targets for the San Diego area:  a 7% CO2 reduction by 2020 and a 13% reduction by 2035.

In 2011, the SANDAG Regional Transportation Plan became the first in the state to be adopted with a Sustainable Communities Strategy. SANDAG’s EIR found that the plan would reduce greenhouse gas emissions until 2020 but would increase them in later years. Although the EIR discussed the 2050 emissions reduction target in the executive order, it did not treat the order’s 2050 emissions reduction target as a standard for assessing the significance of the plan’s greenhouse gas impacts.

The Supreme Court Majority Opinion

The majority reversed the court of appeal decision, concluding that SANDAG was not required to use the executive order targets as a standard of significance.

The court, however, did not entirely excuse agencies from discussing the executive order in their CEQA analyses of greenhouse gas emissions. According to the court, the goals in executive order express “the pace and magnitude of reduction efforts that the scientific community believes necessary to stabilize the climate” and the information “has important value to policymakers and citizens in considering the emission impacts” of a project. The court found that SANDAG’s analysis was adequate in this regard because it “did not obscure the existence or contextual significance” of the executive order, making clear that the executive order’s 2050 goals were part of the regulatory setting for the plan. In this case, it was sufficient that the EIR conveyed the “general point” that the upward trajectory of emissions might conflict with the executive order’s 2050 emissions reduction goal.

The court also upheld SANDAG’s use of three different GHG significance thresholds authorized by CEQA Guidelines section 15064.4(b), as these three methods “together adequately informed readers of potential greenhouse gas emissions impacts.”

The court cautioned, however, against using SANDAG’s analysis as a template for future EIRs, observing that GHG analysis under CEQA should reflect improvements in data and methods and should also incorporate new legislation and regulations.

The Dissent

Dissenting from the majority opinion, Justice Cuellar concluded that the EIR was too “vague and shortsighted” to fulfill SANDAG’s duty to adequately acknowledge the impact of a transportation and land use plan that would increase, rather than reduce, transportation GHG emissions from the region.

Supreme Court Announces New Test for Regulatory Takings Claims

Under the doctrine of regulatory takings, a regulation of property that goes “too far” in burdening property rights will be recognized as a Fifth Amendment taking. The Supreme Court’s recent decision in Murr v. Wisconsin (U.S. Supreme Court No. 15-214, June 23, 2017), represents an important step in the evolution of regulatory takings jurisprudence. It addresses the issue of how to define the “proper unit of property” in the regulatory takings analysis, a question often termed “the denominator problem.” In Murr, the Court rejected the notion that a legally defined parcel is necessarily the relevant unit of analysis finding that, under certain circumstances, multiple legal parcels may jointly constitute the relevant unit of property. But the Court avoided adopting a bright-line rule to determine the relevant unit of property and instead adopted a complex, multifactor test to address the denominator problem.

Background of this Case

The property at issue in Murr consisted of two adjacent lots, Lot E and Lot F, in Troy, Wisconsin, owned by two brothers and two sisters, the petitioners in the case. Local regulations prevented these lots from being sold or developed unless there was a minimum of one acre of developable land. A lot merger provision also provided that adjacent lots under common ownership could not be sold or developed as separate lots if they did not meet the size requirement.

The two lots were situated along the St. Croix river, with a steep bluff cutting through the lots limiting the lots’ developable area. Though each lot was approximately 1.25 acres in size, the lots’ combined buildable area was only 0.98 acres due to the terrain.

The petitioners’ parents purchased Lot F in 1960 and built a small cabin on it. Lot F was later transferred to the family plumbing company. In 1963, they purchased neighboring Lot E, which they held in their own names. The lots remained under separate ownership until 1995, when they were transferred to the petitioners.

The petitioners became interested in moving the cabin on Lot F to a different portion of the lot and selling Lot E to fund the project. However, based on the lot merger provision, the local zoning board determined that the lots could not be separately sold or developed.

The petitioners filed an action, alleging that these restrictions amounted to a regulatory taking by effectively depriving them of all or practically all use of Lot E.

The Takings Clause

The Takings Clause of the Fifth Amendment provides that property shall not “be taken for public use, without just compensation.” Traditionally, the Takings Clause reached only a direct appropriation or physical occupation of property. The Court’s regulatory takings jurisprudence was initiated by Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922), which declared that “while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.”

Two subsequent Supreme Court decisions provide guidance on application of this principle. In Lucas v. South Carolina Coastal Council, 505 U. S. 1003 (1992), the Court stated that, with certain qualifications, a regulation which “denies all economically beneficial or productive use of land will require compensation under the Takings Clause.” When a regulation impedes the use of property without depriving the owner of all economically beneficial use, a taking may still be found based on multiple factors described in Penn Central Transportation Co. v. New York City, 438 U. S. 104, 124 (1978), which include (1) the economic impact of the regulation; (2) the extent to which the regulation has interfered with distinct investment-backed expectations; and (3) the character of the governmental action. Continue Reading

Double Trouble – Is Black Sky Capital Blue Skies for Lenders?

An annoying question for lenders is whether a lender can enforce two loans to the same borrower and secured by the same property.   The nagging issue is usually raised when a lender makes (1) a first loan and an additional advance to the borrower secured by the same property, (2) a first secured loan followed by a secured credit line, or (3) a first secured loan and a new secured second loan to finance other properties.

In California, there can only be “one form of action,” either a judicial foreclosure or a non-judicial foreclosure.  In a judicial foreclosure, if the real property collateral is sold for less than the amount owed under the secured debt, the lender may sue for a deficiency judgment – the difference between the amount owed and the fair market value of the property.  (Cal. Civ. Pro. Code § 726.); in a judicial foreclosure, the borrower has a right of redemption.  In a non-judicial foreclosure,  no deficiency judgment is allowed under a power of sale in a deed of trust.  (Cal. Civ. Pro. Code § 580(d).); in a non-judicial foreclosure, the borrower has no right of redemption. When there is a senior deed of trust and a junior deed of trust and the senior lender sells the property by a non-judicial foreclosure and the real property collateral is sold for less than the amount owed under the total secured debt, the junior lender becomes a “sold-out junior,” and the junior lender may enforce its promissory note against the borrower in a judicial proceeding,  (Roseleaf Corp. v. Chierighino (1963) 59 Cal.2nd 35, 43-44.) Continue Reading

Referendum that Leaves in Place Zoning That is Inconsistent With General Plan Upheld

Rejecting prior case law, the Sixth District Court of Appeal held that citizens may referend a zoning ordinance even when the result of doing so is to leave in place pre-existing zoning that is inconsistent with the general plan.  City of Morgan Hill v. Bushey (6th Dist., No. H043426, May 30, 2017)

In the prior case, the city council of Norco adopted an ordinance to bring zoning for certain property into consistency with the city’s recently-amended general plan. Norco voters opposed the zoning ordinance by presenting a referendum petition, but the city council refused to place the referendum on the ballot. The council contended that the repealing the ordinance would result in reinstatement of the prior zoning, which was inconsistent with the general plan, resulting in an invalid zoning scheme. In a 1985 decision, the Fourth District Court of Appeal upheld the council’s decision. It stated that zoning that is inconsistent with the general plan is invalid when passed, and repeal of the targeted zoning ordinance would have resulted in such inconsistency.  DeBottari v. City Council, 171 Cal. App. 3d 1204 (1985).

In City of Morgan Hill v. Bushey, a similar situation came before the Sixth District, which reached a different conclusion.  The Morgan Hill council enacted a zoning ordinance to bring zoning into consistency with a recently-amended general plan, and voters processed a referendum petition.  The trial court ordered the referendum removed from the ballot based upon DeBottari.  The Morgan Hill court reversed.  It acknowledged the principles relied on in DeBottari:  that state law prohibits a city from enacting zoning inconsistent with a general plan, and requires a city to amend a zoning ordinance within a reasonable time after it becomes inconsistent to bring it into consistency with the general plan. Thus, an initiative that attempted to enact zoning inconsistent with the general plan would be invalid. On the other hand, a referendum, the court stated, does not enact inconsistent zoning; it simply maintains the status quo by preventing a council-enacted zoning ordinance from ever taking effect. Further, the referendum in this case targeted a zoning ordinance that represented just one of a number of available consistent zonings. Because the council would have been free to comply with consistency requirements by adopting different zoning if the referendum had succeeded, the referendum did not prevent the city from complying with its duty to bring inconsistent zoning into consistency with the general plan within a reasonable time. Accordingly, the referendum should have remained on the ballot.

Action to Invalidate Building Permit Barred by Failure to File Timely Challenge to Underlying Site Development Permit

In Citizens for Beach Rights v. City of San Diego, 10 Cal.App.5th 1301 (2017), the court of appeal held that a challenge to issuance of a building permit necessarily included a challenge to the validity of the underlying site development permit, which was barred by the 90-day statute of limitations in Government Code section 65009.


In 2006, the City of San Diego obtained a site development permit (SDP) to build a new lifeguard station on Mission Beach. Under the City’s municipal code, the SDP was required in order for a building permit to issue for the project. The SDP stated that failure to “utilize[]” the permit within 36 months would automatically void the permit. Over the ensuing years, the City worked to obtain funding for the station and secure a coastal development permit from the California Coastal Commission. Due to the late 2000s economic downturn, the City was not able to secure funding for the project until 2015.

The City issued a building permit for the lifeguard station on April 20, 2015. Over four months later, on August 26, 2015, Citizens for Beach Rights sought a writ of mandate and injunction to stop construction. The group argued that the SDP had expired automatically because it had not been utilized within 36 months of its issuance. The trial court agreed and enjoined the construction.

Challenge to the Building Permit Was Predicated on Invalidity of the Site Development Permit

The City contended that its issuance of the building permit necessarily included a decision that the SDP remained valid, and that any challenge to that decision had to be brought within 90 days under Government Code section 65009(c)(1). The court of appeal agreed. The purpose of Citizens’ lawsuit, it reasoned, was to stop construction by challenging the City’s decision, when it issued the building permit, that the SDP remained valid. That decision was required under the City’s municipal code; i.e., without a valid SDP, the building permit could not have been lawfully approved. Because Citizens’ suit was filed more than 90 days after the City decided that the SDP remained valid and because the building permit was based on that decision, the suit was time-barred.

The SDP Was Valid Because Utilization of the SDP Included the Pursuit of Funding and Other Permits

The court of appeal also found that San Diego’s municipal code permitted utilization to be defined by standards developed by the City Manager, and that uncontested evidence demonstrated the City’s policy was to treat the pursuit of funding and other permits as “utilization.” Although one condition of the SDP was that “construction, grading or demolition” must begin within 36 months, that requirement needed to be harmonized with the municipal code and other parts of the SDP, which required the City to obtain other permits first. Because the City had sought funding and had continuously pursued the SDP within 36 months of the SDP’s issuance, the SDP was valid at the time the building permit was issued in 2015.