The California Supreme Court has issued its decision in Friends of the Eel River v. North Coast Railroad, an important case regarding preemption of state environmental law by the Interstate Commerce Commission Termination Act (ICCTA), which contemplates a unified national system of railroad lines subject to federal, not state, regulation.  The court held that

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

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 Supreme Court Announces New Test for Regulatory Takings Claims

This court of appeal decision was issued upon remand for further proceedings after a California Supreme Court decision in which the court considered the standard of review that applies when an agency makes significant changes to a project that was originally approved based on a negative declaration and determines that no further environmental review is

In a 2-1 decision, the Court of Appeal upheld the California Air Resources Board’s cap-and-trade program for greenhouse gas allowances. California Chamber of Commerce v. State Air Resources Board,  No. C075954 (3rd Dist., April 6, 2017). In upholding the validity of the auction used by the California Air Resources Board to distribute a portion of the greenhouse gas allowances auction, the opinion created an important new test for assessing whether the auction should be considered a tax. The majority found that the allowance auction was not compulsory and provided a valuable commodity to the purchaser, and thus was not a tax requiring supermajority approval under Proposition 13.

Background on CARB’s GHG Cap-and-Trade Program

In 2006, California enacted AB 32 with the goal of reducing greenhouse gas (GHG) emissions to 1990 levels by the year 2020. The California Air Resources Board (CARB) is the designated state agency charged with regulating sources of GHG emissions under AB 32. AB 32 directed CARB to adopt rules and regulations to achieve the maximum technologically feasible and cost-effective reductions in GHG emissions.

Smoking power plantPursuant to AB 32’s directives, CARB promulgated regulations that created a cap-and-trade-program. The program sets an aggregate emissions “cap” on covered entities and enforces the cap by issuing a limited number of allowances, the total value of which is equal to the cap. Covered entities must demonstrate compliance with the program by surrendering allowances that correspond to that entity’s emissions requirements.

Emissions allowances can be obtained in three ways: 1) Some allowances are distributed by CARB for free; 2) allowances are distributed by CARB through an auction; and 3) allowances can be obtained by trading on the secondary market.

CARB’s allowance auction takes place through a single round of sealed bidding, and winners pay the market clearing price. In 2012, the state legislature passed four bills specifying how the auction proceeds would be used to support the regulatory purposes of AB 32.

Several corporations and industry groups challenged the auction mechanism as exceeding CARB’s statutory authority under AB 32 and as an unconstitutional tax that violated the supermajority requirements of Proposition 13.
Continue Reading Court of Appeal, in split decision, upholds CARB cap-and-trade program

A Summary Of Published Appellate Opinions Under The California Environmental Quality Act

In 2016, the California appellate courts issued published opinions in 21 CEQA cases. In several of those opinions, including a ground-breaking decision by the California Supreme Court, the courts grappled with limits on the scope of required environmental review for a subsequent project

The California Court of Appeal has upheld municipal regulation of telecommunications equipment in the public right-of-way against the argument that such regulations are preempted by state law. T-Mobile West LLC v. City and County of San Francisco, No. A144252 (1st Dist., Sept. 15, 2016).

At issue was a San Francisco ordinance passed in 2011

On January 20, 2016, the Governor’s Office of Planning and Research released a revised draft of proposed new CEQA Guidelines to replace automobile congestion-based thresholds for evaluating transportation impacts with thresholds that emphasize proximity to transit and a reduction in vehicle miles traveled (VMT) on a per capita or per employee basis.

SB 743, passed by the Legislature in 2013, requires OPR to establish thresholds for measuring transportation impacts that are designed to promote the reduction of greenhouse gas emissions, the development of multimodal transportation networks, and a diversity of land uses., Further, SB 743 dictates that once the CEQA Guidelines are amended to include those new thresholds, auto delay will no longer be considered a significant impact under CEQA.  SB 743 gives OPR the option of applying the new thresholds only to certain locations near transit, or more broadly throughout the State.

OPR released its preliminary discussion draft of the Guidelines amendments in August 2014. The initial draft applied the new thresholds broadly, and focused generally on an assessment whether a project would result in VMT that would exceed regional averages.

The initial draft also suggested thresholds for measuring significance based on proximity to certain types of transit stops and lines.

In the updated recommendations released on January 20, the proposed Guidelines continue to apply a new VMT-based approach to all areas of the State.  Agencies would have a two-year period to transition to the new VMT-based approach.  Further, as under the initial draft, once this transition period ends, automobile delay could no longer be considered a significant adverse effect under CEQA.

The updated recommendations also continue to include a presumption that development projects located within one-half mile of either an existing major transit stop or a stop along an existing high quality transit corridor may be presumed to cause a less than significant.

A key difference between the newly proposed Guidelines and the initial draft is that the Guidelines themselves do not set forth specific standards to assess whether a project’s effect on VMT is a significant adverse impact. Much of the detail is now found in a Technical Advisory. The Advisory recommends thresholds for specific types of land uses, including the following:

  • Residential: A project exceeding both existing city household VMT per capita minus 15 percent, and existing regional household VMT per capita minus 15 percent, may indicate a significant transportation impact.
  • Office: A project exceeding a level of 15 percent below existing regional VMT per employee may indicate a significant transportation impact.
  • Retail: A net increase in total VMT may indicate a significant transportation impact. Further, “Lead agencies should usually analyze the effects of a retail project by assessing the change in total VMT, because a retail projects typically re-route travel from other retail destinations.”
  • Mixed Use: Lead agencies can evaluate each component of a mixed-use project independently, and apply the significance threshold for each project type included (e.g. residential and retail). In the analysis of each use, a project may take credit for internal capture.

Continue Reading Governor’s Office Moves One Step Closer to Eliminating Automobile Delay as a Significant CEQA Impact