Ninth Circuit Court Paves the Way for Regulation of Stormwater Discharges Under RCRA

The Ninth Circuit Court of Appeals recently ruled that the anti-duplication provisions of the Resource Conservation and Recovery Act (RCRA) do not apply in the absence of a stormwater discharge permit issued under the Clean Water Act. Therefore, unregulated stormwater discharges are potentially subject to RCRA citizen suits and specifically imminent and substantial endangerment suits under 42 USC § 6972(A)(1)(B).

In our report on this case, prepared by Jeffrey L. Hunter, we look at the background of the decision in Ecological Rights Foundation v. Pacific Gas Electric Company and the potential impact on owners of retail, commercial and warehouse facilities that are not required to obtain coverage under a stormwater discharge permit. Our report is available here.

State Authorizes Rental Inclusionary Housing Requirements

One of the 15 housing-related bills signed recently by Governor Brown could have especially significant implications for market-rate, residential rental projects in many jurisdictions, as the new legislation, AB 1505, will authorize cities and counties to adopt inclusionary housing requirements for rental units.  AB 1505 takes effect January 1, 2018.

Nearly a decade ago, the Court of Appeal held that the Costa-Hawkins Rental Housing Act prevented local agencies from imposing inclusionary requirements on rental units that did not receive governmental assistance.  Palmer/Sixth Street Properties, L.P. v. City of Los Angeles, 175 Cal. App. 4th 1396 (2009). The Costa-Hawkins Act grants residential landlords the right to set initial rental rates at the commencement of a tenancy. In Palmer, a city sought to require a rental housing developer either to construct affordable units that would be subject to rent restrictions for at least 30 years or to pay an in lieu fee the city would use to build affordable units elsewhere. The court held that the city’s inclusionary housing ordinance conflicted with and was preempted by the Costa-Hawkins Act’s vacancy decontrol provisions.

Through AB 1505, the Legislature expressly declared its intent to supersede the Palmer decision “to the extent that decision conflicts with a local jurisdiction’s authority to impose inclusionary housing ordinances.” The Legislature sought “to reaffirm” local agencies’ authority to apply affordable housing requirements to rental projects. To do so, AB 1505 specifies that cities and counties may adopt ordinances that “require, as a condition of the development of residential rental units, that the development include a certain percentage of residential rental units affordable to, and occupied by,” households at or below moderate-income levels. AB 1505 requires inclusionary housing ordinances to provide alternative means of compliance that may include in-lieu fees, land dedication, off-site development of units, or rehabilitation of existing units.

Governor Signs Housing Legislation, Including Streamlining Bill

Governor Brown has signed 15 bills designed to address the State’s severe shortage of affordable housing.  Among its other effects, the legislation will (1) generate funds for affordable housing developments; (2) require cities and counties, as they approve new development, to maintain a supply of adequate housing sites for all levels of income; (3) tighten several provisions in the Housing Accountability Act, known popularly as the “Anti-NIMBY” legislation; (4) authorize local governments to establish Workforce Housing Opportunity Zones that can provide the basis for future streamlined approvals; and (5) supersede a court decision holding that local agencies cannot impose inclusionary housing requirements on rental projects.  The bills take effect January 1, 2018, and were the result of substantial negotiation during the legislative session.

This post focuses on another bill in the housing package that, in limited circumstances, will provide a streamlined, ministerial approval process for multifamily residential developments that include affordable housing.  SB 35, shepherded through the Legislature by first-year Senator Scott Wiener, will apply to certain urban infill projects located in jurisdictions the California Department of Housing and Community Development determines are not meeting their share of regional housing needs by income category.

For eligible projects, no conditional use permit can be required, and parking standards will be limited.  SB 35 also will require that any design review or public oversight be “objective” and “strictly focused on assessing compliance with criteria required for streamlined projects, as well as any reasonable objective design standards” of broad applicability adopted by the jurisdiction before a development application was submitted.  This review will need to be completed within 90 days for a project of 150 housing units or fewer, and within 180 days for larger projects.

To be eligible for streamlining under SB 35, projects will need to include units reserved for low-income households as follows:

  • At least 10 percent of total units, if the local agency is not approving enough units for above moderate-income households; or
  • At least 50 percent of project units, if the locality is out of compliance in its provision of low-income housing.

If the city or county is out of compliance with both requirements, the developer may satisfy the lower percentage.  However, if a local inclusionary housing ordinance requires dedication of a greater percentage of units to low-income households, that ordinance will control.

In addition to the requirements identified above and others, projects will need to meet the following standards to qualify under SB 35:

  • The development, excluding any elements authorized by the Density Bonus Law, is consistent with objective zoning standards and objective design review standards;
  • At least two-thirds of square footage is designated for residential use;
  • All construction workers will be paid prevailing wages, unless a project is a public work or has 10 units or fewer; and
  • For certain projects, a “skilled and trained workforce” will be used.

Projects may be excluded from streamlining under SB 35 if located on any one of several types of sites.  Ineligibility may be triggered if a site is (1) within the coastal zone; (2) prime farmland, farmland of statewide importance, or land designated for agricultural protection; (3) wetlands; (4) within certain fire hazard severity zones; (5) a hazardous waste site; (6) within a delineated earthquake fault zone; (7) within a flood plain or floodway; or (8) identified for conservation, habitat for protected species, or under conservation easement.  A development also may be excluded if demolition of a historic structure or of certain types of housing is involved, or if specified unit sales or subdivision occurs.

SB 35 is scheduled to expire on January 1, 2026.

Legislature Seeks To Prevent Local Voters From Enacting Many Types of Pro-Development Initiatives

The California Legislature just sent another “stop me before I vote again” bill to the Governor.  Assembly Bill 890 proposes to limit severely the scope of voter-sponsored, pro-development land use initiatives.  The Governor has until October 15th to decide whether to sign the bill into law.  The actual effect of AB 890, if enacted, may need to be resolved in litigation.

The bill would enact new provisions of the Government Code that delegate exclusive authority to city councils and boards of supervisors to determine certain general plan, specific plan and zoning decisions.  Courts have determined that when the legislature delegates authority over an issue exclusively to councils and boards, voter action regarding those issues is precluded.  However, AB 890 also purports to preserve to the voters their power of referendum, and to allow councils and boards of supervisors to place pro-development measures on the ballot.  AB 890 also proposes to prohibit the approval or amendment of a development agreement by initiative, while retaining provisions of existing law which state that a development agreement is a legislative act subject to referendum.  AB 890 states that it applies to charter cities as well as general law cities.

The general plan, specific plan and zoning decisions that would be exclusively delegated under AB 890 (and therefore could not be pursued in a voter-sponsored initiative) are those that would:

  • Convert a discretionary land use approval necessary for a project to a ministerial approval.
  • Change a land use designation or zoning district to a more intensive designation or district, with the most intense use defined as industrial uses, followed by commercial uses, office uses, residential uses, and then agricultural or open-space uses.
  • Authorize more intensive land uses within an existing designation or district.

Continue Reading

College District’s Approval of Agreement to Buy Land Did Not Trigger CEQA

A community college district’s approval of an agreement to buy land for possible use as a new campus did not trigger CEQA review where the agreement required an EIR before the sale could be consummated and the District had not otherwise committed itself to building a new campus on the site. Bridges v. San Jacinto Community College District, No. E065213 (4th Dist., Aug. 8, 2017).

At a regularly scheduled meeting, the Board of Trustees of the San Jacinto Community College District approved an agreement to acquire 80 acres of property from a regional park district for possible use as a new college campus. There were no public comments on or objections to the agreement at or before the board meeting.

Plaintiffs subsequently sued, alleging the District violated CEQA by failing to prepare an EIR before approving the agreement. The appellate court concluded (1) plaintiffs did not exhaust administrative remedies or demonstrate they were excused from doing so by lack of notice; and (2) even if plaintiffs had exhausted, their claim foundered on the merits because the District had not committed itself to the new campus project and had expressly agreed to prepare an EIR before completing the purchase.

Plaintiffs Failed to Exhaust Administrative Remedies

A party alleging violation of CEQA must exhaust administrative remedies or demonstrate either that there was no public hearing or other opportunity to raise objections before the project was approved or that the public agency failed to give the notice required by law  (Pub. Res. Code § 21177(e)). Here, the District considered and authorized the purchase agreement at a public meeting of its board of trustees. While this was not a public hearing, it nonetheless triggered CEQA’s exhaustion requirement because it constituted an “other opportunity” for members of the public to raise objections prior to the approval of the project.

Plaintiffs contended they were nonetheless exempted from the exhaustion requirement because the District had failed to post the meeting agenda at least 72 hours in advance of the meeting as required by the Brown Act. The record, however, was silent on whether the required notice had been given. Under these circumstances, plaintiffs’ exemption claim failed because they bore the burden of proving inadequate notice. Faced with no evidence on the issue, the court concluded that it had to presume that the District’s official duty had been regularly performed. Continue Reading

City Cannot Compel State University to Collect and Remit City Taxes

UPDATE: The California Supreme Court has granted review of this case.  The issue before the court is: “Can a charter city require state universities that operate paid parking lots within the city to comply with an ordinance that requires parking lot operators to collect from their customers and remit to the city a tax on the fee charged for a parking space?”


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.

Background

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).

Background

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. Continue Reading

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