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A court of appeal has upheld an air district’s EIR for an oil refinery modernization project. Communities for a Better Environment v. South Coast Air Quality Management District, 47 Cal. App. 5th 588 (2020).

The petitioner claimed that to analyze project impacts to air quality, the district should have used a baseline of the refinery’s average existing air pollutant emissions. The EIR instead used a baseline of 98th percentile “near-peak” refinery air pollutant emissions. Applying the rule that a court must uphold an agency’s selection of a baseline for CEQA review if substantial evidence supports that baseline, and rejecting the petitioner’s assertion that the “normal” baseline is an “average” baseline, the court examined the evidence.

The district identified its baseline by examining two years of daily refinery emissions, excluding the worst two percent of days to avoid unrepresentative outliers, and then comparing emissions on the 98th percentile “near-peak” days to the refinery’s peak emission days under the proposed project. The court upheld this approach, holding both that a) the district could reasonably focus on near-peak emission days because those were most relevant to public health and b) the 98th percentile approach matched that used by U.S. EPA for nitrogen dioxide reporting and regulation.

The petitioner also claimed the project would allow the refinery to process heavier crudes than in the past, with environmental impacts the EIR did not address. The court concluded that the EIR consistently and logically explained why the project would not in fact allow this change in the refinery’s crude slate to occur.

The court further ruled that because neither the petitioner nor any other commenter had challenged a particular estimate in the EIR during the CEQA process, the petitioner had forfeited any claim based on that estimate.

Finally, the petitioner argued that the EIR omitted important information: the existing volume of crude oil the refinery processed and its unused capacity. The court held that this information was unnecessary because the project would have no effect on overall refinery throughput.

This case is important for its application of recent case law explaining the leeway – and limits – inherent in a lead agency’s discretion to identify baselines for CEQA review.

On April 6, 2020, the California Judicial Council adopted Emergency Rule 9, which tolled statutes of limitations on civil causes of action for the duration of the state of emergency declared by Governor Newsom on March 4, 2020, and for 90 days thereafter. The effect of the emergency rule was to suspend the running of all statutes of limitations from April 6 until 90 days after the Governor declares the state of emergency related to the COVID-19 pandemic to be over. For example, if the Governor ended the state of emergency on June 30, 2020, any statute of limitations would have been suspended from April 6 through September 28, 2020 (i.e., for 175 days).

The chairs of the Judicial Council’s six internal committees have now proposed the amendment of Emergency Rule 9 to shorten the tolling period and to set different tolling periods based upon the length of the statute of limitations.

Under the current proposal (which could be amended before it is adopted):

  • Statutes of limitations longer than 180 days would be tolled from April 6 to October 1, 2020.
  • Statutes of limitations of 180 days or less would be tolled from April 6 to June 15, 2020.

Impact on Land Use Claims

Many claims involving land use decisions are subject to limitations periods of 180 days or less, including most claims challenging planning, zoning and subdivision decisions (90 days); CEQA claims (30, 35, or 180 days, depending on the triggering event); claims involving LAFCO or the Coastal Act (60 days) and claims involving the validity of fees, dedications or exactions (180 days).

The Council’s stated rationale for establishing a shorter tolling period for matters with shorter statutes of limitations is that (a) long tolling is inconsistent with the Legislature’s intent that such causes of action be brought expeditiously; and (b) most lawsuits with shorter limitations periods are generally challenges to governmental actions and are based solely on the administrative record, as contrasted with claims with longer statutes of limitations that may require investigation and information gathering—actions more difficult to complete promptly in the current environment.

The emergency rule (whether or not amended) tolls only the periods for filing judicial actions or proceedings (such as mandate proceedings) and does not apply to other deadlines, such as requests for reconsideration by the agency or the submission of monetary claims against government entities under the Government Claims Act.

Clarification Regarding Construction Defect Limitations Periods

The proposed amendments also clarify that the emergency rule tolls “statutes of repose” as well as regular statutory limitations periods for civil causes of action. Statutes of repose differ from ordinary limitations periods in that they typically cannot be equitably tolled (i.e., they run regardless of whether the potential claimant knew or reasonably could have known of the existence of the claim). Examples include the statutes of repose for construction defects in Code of Civil Procedure sections 337.1 (four years for patent defects) and 337.15 (10 years for latent defects).

The Judicial Council is likely to take action on the proposed changes to Emergency Rule 9 within the next two weeks.

 

The County of San Diego could not be held liable for damage caused by leakage from a privately-owned storm drain pipe on private property merely because water from public property drained through it. Ruiz v. County of San Diego, 47 Cal. App. 5th 504 (2020).

A storm drain pipe on plaintiffs’ property rusted away, causing flooding that damaged their home. The underground pipe had been installed by the developer to replace an existing above-ground concrete channel, and was a part of a drainage system that carried water from both public and private properties. In 1959, the County had rejected the developer’s offer to dedicate an easement through the pipe.

Plaintiffs filed an inverse condemnation action seeking just compensation, arguing that by using the pipe for 50 years as part of the public drainage system, the County had accepted a drainage easement and had a concomitant duty to maintain the pipe. Plaintiffs also alleged that the County should be held liable because it acted unreasonably by discharging water through the plaintiffs’ pipe without inspecting or maintaining the pipe.

The appellate court held there was insufficient evidence to support a finding that the County impliedly accepted an easement through the pipe. A public entity’s use of private land over a period of time may constitute implied acceptance of an offer of dedication if the entity takes steps to exhibit control over the property, such as assisting in improving, maintaining, or repairing an improvement on the land. In this case, the County had no right of access to the Ruiz pipe and had not participated in planning, constructing, maintaining, inspecting, or repairing the pipe. Also, by declining the offer of dedication, the County demonstrated it was not accepting any maintenance obligation. The court concluded that the facts of the case could not be distinguished from prior case law holding that public water flowing through the watercourse, without more, is insufficient to establish implied acceptance of a drainage system.

The court also found that the evidence did not support the conclusion that the County acted unreasonably in allowing surface water to drain into the watercourse that included plaintiffs’ pipe. A public entity may be liable for inverse condemnation if it makes unreasonable alterations to its upstream property that result in increased volumes of water that cause damage to a downstream property. But liability is only for the proportion of the damage attributable to the public entity’s conduct. Here, plaintiffs’ expert testified that a “fair amount” of the water in the watercourse originated from private, upstream owners, and the expert did not conduct the hydrology study necessary to apportion the damage among the public and private parties. Because it was Ruiz’s burden to establish the proportion of damage attributable to the public entity, the absence of any evidence sufficient to make that determination precluded a damages award.

The Court of Appeal held that where a city councilmember’s actions evinced bias toward the project, the applicant did not receive a fair hearing and the City Council’s denial of a conditional use permit would be set aside. Petrovich Development Co. v. City of Sacramento, No. C087283 (3rd Dist., May 8, 2020).

Petrovich applied for a conditional use permit for operation of a gas station in a shopping center. The Planning Commission’s approval of the permit was reversed by the City Council on appeal.  Petrovich sued, claiming the actions of one of the councilmembers demonstrated hostility and bias toward the project and resulted in denial of a fair hearing.

The appellate court agreed. The court observed that city councilmembers wear “multiple hats,” sometimes serving as local legislators, but also occasionally acting in a quasi-adjudicatory capacity similar to judges, as in the case of a hearing on a conditional use permit. In making such a decision, councilmembers must be “neutral and unbiased.” Bias and prejudice cannot be inferred from mere appearance (such as likelihood that a vote was influenced by personal interests), but must be proven with “concrete facts.”

Applying these principles, the court concluded that the councilmember’s residence in the same neighborhood as the project or membership in the area homeowner’s association (which actively opposed the project) did not establish bias. Nor did the councilmember’s prehearing public comments that a gas station “did not fit” in the shopping center amount to unacceptable bias, since a councilmember “has not only a right but an obligation to discuss issues of vital concern with his constituents and to state his views on matters of public importance.”

But the councilmember’s actions went beyond legitimate representation and “crossed the line into advocacy against the project.” There was evidence the councilmember was actively lining up votes of other councilmembers against the project, as well as advising the president of the HOA on how to lobby the council. The councilmember prepared and sent to project opponents “talking points” whose “only conceivable purpose,” the court said, was to assist in advocacy against the project.  The councilmember also sent the mayor what amounted to a script for orchestrating a “no” vote on the project, including a proposed statement by the mayor to be made after the motion to deny the project had been made and seconded.

These activities, the court found, evidenced both behind-the-scenes advocacy and organization of the presentation at the hearing, including orchestrating the very sequence of actions —the motion and second — that occurred at the hearing. These “concrete facts” showed that the councilmember acted as an advocate, not an impartial decisionmaker, and should have recused himself from voting on the appeal. His actions demonstrated an unacceptable probability of actual bias and denied Petrovich a fair hearing.

The City of San Diego was not required to obtain a coastal development permit for a transitional housing project because the Coastal Commission had certified the City’s local coastal program, whose provisions therefore applied in lieu of the Commission’s regulations. Citizens for South Bay Coastal Access v. City of San Diego, 45 Cal. App. 5th 295 (2020).

The City planned to rehabilitate an existing building in the City’s Coastal Overlay Zone for a transitional housing project. The City’s municipal code exempted improvements to existing structures from the requirement to obtain a CDP for development in the Coastal Overlay Zone. In reliance on the exemption, the City Council approved a conditional use permit for the project without a CDP.

Petitioners sued. claiming the City’s municipal code exemptions were preempted by the Coastal Act because they were more permissive than the existing-structure exemption in the Commission’s regulations.

The court of appeal found that petitioners’ claim was based on the mistaken premise that both the Commission’s and the local costal program’s regulations applied to the project. However, the Coastal Act expressly allows for a local government’s land use decisions to be governed solely by its certified local coastal program. Because the Commission had certified the City’s local costal program in compliance with the Coastal Act, the Commission’s regulations did not apply to the City’s CDP decisions. Thus, the City’s conclusion that the project could proceed without a CDP was correct regardless of whether a CDP would have been required under the Commission’s regulations.

An agency could be equitably estopped from relying on the 35-day statute of limitations applicable to a CEQA Notice of Exemption where the agency had misled the public into expecting the agency would instead circulate a Final EIR for public comment and file a Notice of Determination following project approval. Citizens for a Responsible Caltrans Decision v. California Department of Transportation, 46 Cal. App. 5th 1103 (2020).

Caltrans and the San Diego Association of Governments jointly developed the North Coastal Corridor (NCC) Project, which included multiple highway and railroad improvements along a 27-mile corridor between San Diego and Oceanside. One of the components of the NCC Project was construction of interchange ramps connecting Interstate 5 and State Route 56. Streets and Highways Code Section 103 created a streamlined approval process for the NCC Project, including an exemption of certain project elements from CEQA review.

Caltrans’s Final EIR for the I-5/SR-56 interchange contained conflicting language regarding the CEQA process: while it stated that the project was exempt from CEQA, it also stated that Caltrans would decide whether to approve the project after circulating the Final EIR and would file a Notice of Determination if it approved the project. A few weeks after publishing the Final EIR, and before the start of the public comment period on the Final EIR, Caltrans approved the interchange project and filed a Notice of Exemption with the State Clearinghouse. The Notice of Exemption had a different State Clearinghouse Number than the Final EIR. Caltrans then initiated the 30-day review period on the Final EIR and subsequently responded to the comments that it received on the Final EIR. Continue Reading Misrepresentations Can Bar Agency’s Reliance on CEQA Statute of Limitations

Bay Area Public Health Officers issued revised shelter-in-place orders on April 29 allowing resumption of all construction projects, outdoor businesses and real estate transaction services, with safety protocols specified in the orders. The revised orders, which will be in effect from May 4 – 31, 2020, cover everyone living or working in the counties of Alameda, Contra Costa, Marin, San Francisco, San Mateo, and Santa Clara. Our complete update on the revised orders, by Cecily T. Barclay, Marie A. Cooper and Auria Maleksalehi, is available here.

The court of appeal rejected a claim that a Coastal Development Permit should be invalidated because it was based on intentional misrepresentations, finding that even if accurate and complete information had been submitted, this would not have caused the Coastal Commission to deny the application or require additional or different conditions. Hubbard v. California Coastal Commission, 38 Cal. App. 5th 199 (2019).

The Coastal Commission granted a CDP for the reconstruction of an equestrian facility following a fire. Plaintiffs sought to revoke the CDP on the ground that the applicant intentionally misrepresented on its CDP application that it had received necessary minimum approvals for the development from other state agencies.

On appeal, plaintiffs relied on Section 13105(a) of the California Code of Regulations, which provides for revocation of a permit based on “[i]ntentional inclusion of inaccurate, erroneous or incomplete information in connection with [the] application, where the [C]ommission finds that accurate and complete information would have caused the [C]ommission to require additional or different conditions on a permit or deny an application.”

The appellate court concluded, based on the record, that although the CDP application had contained intentional misrepresentations regarding approvals by other agencies, these had not been material to the Coastal Commission’s decision. Thus, in accordance with section 13105(a), the permit was not revocable based on the intentional misrepresentations because the Coastal Commission would have reached the same decision and included the same conditions had accurate and complete information regarding the other state approvals been included in the application.