The court of appeal held that plaintiffs’ inverse condemnation and damages claims based on dredging in the bay adjacent to their properties was barred under the doctrine of res judicata based on a 1931 judgment conclusively establishing that the property alleged to have been taken or damaged was not owned by plaintiffs. SLPR, LLC v. San Diego Unified Port District, No. D074958 (4th Dist., May 22, 2020).

Plaintiffs, a group of Coronado property owners, brought a quiet title and inverse condemnation action against the State of California and the Port contending that dredging in the San Diego Bay from 1998 to 2005 had damaged and taken portions of their bayfront properties without just compensation.

The appellate court found that a 1931 judgment resolving a title dispute between plaintiffs’ and defendants’ predecessors-in-interest established the boundaries between their respective properties, and that the property plaintiffs claimed had been taken or damaged was not within plaintiff’s ownership. Evidence admitted at trial showed that there had been both artificial improvements and artificial fill placed in the immediate vicinity of plaintiffs’ properties over many years and that a dispute had arisen between the parties’ predecessors as to the correct property boundaries. This litigation was resolved by a settlement and stipulated judgment fixing the boundaries between the tidelands and uplands properties. This judgment, the court explained, was conclusive and binding on plaintiffs under the doctrine of res judicata, under which parties are barred from relitigating claims previously resolved by a judgment in litigation between the same parties or their predecessors-in-interest.

Plaintiffs argued that for res judicata to apply, defendants were required to present “unequivocal evidence” of the mutual intention to determine the boundary. The court disagreed with plaintiffs’ asserted burden of proof, but nonetheless found that the “overwhelming” evidence presented demonstrated unambiguous intent to establish the boundaries. This included not only the record in the 1931 action itself but also extrinsic evidence showing that, following entry of judgment, temporary wood stake boundary markers had been replaced with concrete monuments, reflecting a “permanent fixed line” between tidelands and uplands property.

The City of Lafayette violated the Brown Act by not including a litigation threat discussed in closed session in the agenda packet made publicly available before the meeting, but plaintiffs failed to show any prejudice resulting from the violation. Fowler v. City of Lafayette, 46 Cal. App. 5th 360 (2020).

Homeowners sought approval from the City build a cabaña near a tennis court on their property. Plaintiff neighbors appealed the Planning Commission’s approval to the City Council. During consideration of the appeal, the homeowner’s attorney threatened to sue the City if it denied the project. The City Attorney notified the City Council of the litigation threat orally in a closed session. The threat was not noted in the agenda for any of the public meetings, and there was no mention of it in the information packets made available to the public before the meetings. At its final public meeting, the City Council denied the appeal and upheld the Planning Commission’s approval of the application.

Plaintiffs sued, contending that the City violated the Brown Act by discussing the application in closed hearings, and that plaintiffs were deprived of their right to a fair hearing.

Brown Act Violation

Plaintiffs claimed the City violated the Brown Act by failing to announce or make available for public inspection the litigation threat that served as the basis for closed session discussions. The City argued it was not required to include the litigation threat in the pre-meeting agenda packet because the threat was not distributed in written form to the City Council. The court of appeal rejected this argument, stating that under the Act, the record of a litigation threat to be discussed in closed session must be reduced to writing and included in the agenda packet made available upon request before a meeting. Therefore, the City violated the Brown Act.

Nullification of Agency Action

Plaintiffs urged the court to nullify the project approval under provisions of the Brown Act authorizing a court to declare null and void an action taken in violation of specified portions of the Act. The court was unpersuaded for two reasons. First, plaintiffs’ complaint was that they were not informed of the litigation threat before the City Council discussed the threat in closed session. But the action they sought to nullify was the approval of the cabaña, which occurred in an open session that was properly noticed. Second, plaintiffs failed to make the showing of prejudice necessary to support nullification under the Act. The application was thoroughly considered at four open City Council meetings, and there was no reasonable argument that plaintiffs lacked a fair opportunity to present their case, that the City failed to consider it fully, or that plaintiffs would have achieved a more favorable result had they known the City Council had discussed the litigation threat in closed session.

Fair Hearing Claim

Plaintiffs argued they were deprived of their right to due process and a fair hearing because the architect for the project was a member of the City’s Planning Commission and a member of the Design Review Commission, which had initially reviewed and approved the project. The court rejected this argument, noting that the architect had recused himself from both the Design Review Commission’s and the Planning Commission’s consideration of the project.  The court also rejected the contention that City staff and the City Attorney exhibited bias in favor of the project, observing that the City Council, not staff members or the City Attorney, was the decision-maker, and nothing showed that the City Council was infected by bias.

An action for breach of a statutory development agreement should be reviewed as a breach-of-contract case, not as an administrative law proceeding in which the court gives deference to the City’s findings. Oakland Bulk & Oversized Terminal, LLC v. City of Oakland, No. 18-16105 (9th Cir., May 26, 2020).

The City of Oakland entered into a statutory development agreement with the plaintiff to redevelop a portion of the decommissioned Oakland Army Base as a commercial shipping terminal. While development agreements generally freeze existing regulations in place, this agreement provided that the city could adopt and apply new regulations if the City determined “based on substantial evidence and after a public hearing that a failure to do so would place existing or future occupants or users . . . neighbors, in a condition substantially dangerous to health or safety.”

Subsequently, in response to public opposition to shipping coal through the terminal, the City Council held public hearings, analyzed evidence presented by experts, and approved an ordinance prohibiting coal shipping. The City Council adopted factual findings in support of its determination that shipment of coal created a substantially dangerous health or safety condition.

The appeal turned on whether the case should be treated as a breach-of-contract action (in which the trial court makes factual findings based on the evidence presented at trial, which are accorded deference on appeal) or as an administrative law proceeding (in which the evidence is limited to the record before the agency and the agency’s factual findings upheld if supported by substantial evidence). The court concluded that administrative law principles should not apply in a breach-of-contract action because, among other things, deferring to the government agency’s findings would “effectively create an escape hatch for the government to walk away from contractual obligations” through “self-serving regulatory findings insulated by judicial deference . . . .”  The court therefore concluded that the trial court owed no deference to the City’s factual determinations and did not err in considering evidence not presented at the public hearings to “shed light on the adequacy of the evidence that was actually before the City Council.” Continue Reading Suit for Breach of Development Agreement Should Be Treated as a Breach-of-Contract Action, Not an Administrative Law Proceeding

The U.S. Court of Appeals for the Fifth Circuit found multiple defects in a Kern County EIR for a proposed ordinance streamlining the permitting process for new oil and gas wells. King and Gardiner Farms, LLC v. County Kern 45 Cal.App.5th 814 (2020).

The published portions of the Court’s 150-page opinion held the EIR: (1) impermissibly deferred formulation and implementation of mitigation measures addressing significant impacts to water supplies, and did not adequately discuss the effectiveness of those measures; (2) failed to properly mitigate farmland conversation impacts due to inappropriate reliance on agricultural conversation easements as offsetting mitigation; and (3) improperly applied a single threshold for determining the significance of the project’s noise impacts.

The Ordinance

Kern County approved an ordinance to streamline the permitting process for new oil and gas wells under which all such activities would require a permit involving, at minimum, a ministerial conformity review. This ministerial permit review process incorporated mitigation measures identified in the project’s EIR and certified by the County, which estimated that 2,697 new producing oil and gas wells would be drilled annually from 2013 through 2040, and 2,221 old wells would be capped and abandoned each year.

Water Supply Impacts

The appellate court concluded that mitigation measures to address water supply impacts — including requiring oil industry users to work together to develop and implement a plan to reduce water use — inappropriately deferred formulation of the measures or delayed their implementation.  The EIR did not commit the County itself to the measures, improperly relying on unidentified third parties who might or might not implement them at some unknown point in the future. Meanwhile, the County could continue to issue permits for oil and gas activities without mitigation in place. Continue Reading EIR Improperly Deferred Formulation and Implementation of Mitigation Measures for New Oil and Gas Drilling

As we previously reported, on April 6, 2020, the California Judicial Council adopted an emergency rule suspending (or “tolling”) the running of statutes of limitations on civil claims during the state of emergency declared by Governor Newsom on March 4, 2020. The emergency rule tolled all civil 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.

The Judicial Council has now amended the emergency rule to shorten the tolling period and to set different tolling periods based on the length of the statute of limitations. Under the rule as amended:

  • Statutes of limitations longer than 180 days are tolled from April 6 to October 1, 2020.
  • Statutes of limitations of 180 days are tolled from April 6 to August 3, 2020.

Land Use Claims

The shorter tolling period will apply to statutes of limitations for most claims involving land use decisions (including most claims under the planning and zoning law, CEQA, LAFCO, and the Coastal Act). The amended rule, for example, will effectively add 119 days to the 90-day limitations period for a claim involving planning and zoning decisions (Gov’t Code § 65009(c)), provided the 90-day deadline for that claim had not expired as of April 6, 2020.

The Council’s decision to set specific expiration dates (rather than basing the tolling period on the duration of the COVID-19 emergency) was prompted in part by concerns that the state of emergency potentially could be in effect for years. Suspending deadlines for challenges to governmental approvals for such a period would significantly impair the ability to secure construction financing and have a correspondingly debilitating effect on homebuilding throughout the state. Continue Reading Judicial Council Shortens Tolling Period for Statutes of Limitations

The State of Hawaii Land Use Commission’s reversion of 1,060 acres from a conditional urban land use classification to the prior agricultural use classification was not an unconstitutional taking because the landowner could still reap economic benefits from the property, the reclassification did not substantially affect the overall valuation or any potential sales, and the landowner should have anticipated reversion for failure to satisfy certain conditions. Bridge Aina Le’a, LLC v. State of Hawaii Land Use Commission, 950 F.3d 610 (2020).

In 1989, the Commission approved the then-owner’s request to convert 1,060 acres of largely vacant and barren, rocky lava-flow land from an agricultural to an urban use classification to accommodate development of a mixed residential community. Twenty-two years later, following numerous unfulfilled representations by various landowners concerning development of the land, the Commission ordered the land’s reversion. The Commission specifically found that the owners had failed to comply, and were unlikely to comply, with a condition of the changed classification requiring completion of 385 affordable housing units.

Property owner Bridge Aina Le’a, LLC sued the Commission alleging, among other things, that the reversion constituted an unconstitutional taking. The U.S. Court of Appeals for the Ninth Circuit analyzed the claim under the separate Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992) and Penn Central Transportation Company v. City of New York, 438 U.S. 104 (1978) takings tests. Continue Reading Reclassification of Land From Urban to Agricultural Did Not Result in Unconstitutional Regulatory Taking

After a public agency approves a project, the agency’s actions to implement the project—in this case, applying for and accepting a streambed alteration agreement from the California Department of Fish and Wildlife—are not subsequent discretionary approvals that require supplemental environmental review under CEQA. Willow Glen Trestle Conservancy v. City of San Jose, No. H047068  (6th Dist., May 18, 2020).

The project in this case involved the City of San Jose’s replacement of a wooden railroad bridge with a new steel truss pedestrian bridge that would connect with a local trail system. The City adopted a mitigated negative declaration and approved the project in 2014. (The MND was challenged in a prior lawsuit and, as we previously reported, in 2016 the court of appeal upheld the MND and the city’s determination that the railroad bridge was not a historical resource.)

After approving the project, the City applied for and received a streambed alteration agreement from CDFW. The original SAA for the project expired at the end of 2017, before the project was completed. The City then applied for a new SAA and, following some negotiations over measures with CDFW, accepted and signed a new SAA in 2018. By that time, the railroad bridge had been added to the California Register of Historical Resources.

The petitioner sued the City, arguing that the City’s application for and acceptance of a new SAA were discretionary approvals that required supplemental environmental review under CEQA. (Under Public Resources Code section 21166 and CEQA Guidelines section 15162, supplemental environmental review following project approval is required only in connection with a subsequent discretionary approval for the project.) Continue Reading Agency Actions to Implement an Already-Approved Project Are Not Subsequent Discretionary Approvals Requiring Supplemental Environmental Review

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.