Attorneys’ Fees Can Be Awarded to CEQA Litigants Hoping to Preserve Their Home Values

Successful petitioners under CEQA who are motivated to file suit, in part, by their private financial interests are not necessarily ineligible for an award of attorneys’ fees under the public interest fee statute. Heron Bay Homeowners Association v. City of San Leandro, 19 Cal. App. 5th 376 (2018).

Halus Power Systems sought approval from the City of San Leandro for a zoning variance to construct a 100-foot-tall wind turbine on a five-acre industrial parcel. The property is located in the San Francisco Bay Estuary, where many species of waterfowl and shorebirds, including four threatened or endangered species, reside. The property is also roughly 500 feet from the 629-unit Heron Bay residential development. The city approved the construction of the turbine based on a mitigated negative declaration, finding that the significant environmental effects of the project could be reduced to insignificance through eleven mitigation measures.

The Heron Bay Home Owners Association filed suit under CEQA, asserting that the city needed to prepare an EIR for the project. The trial court rejected the mitigated negative declaration, finding a fair argument that the project as mitigated would still have a significant effect on biological and aesthetic resources and noise. It entered judgment in favor of the HOA and directed the city to set aside its approvals and halt any further action on the project until an EIR was certified. Halus Power and the city did not appeal the decision, and Halus Power ultimately abandoned the project.

Heron Bay HOA then requested an award of attorney’s fees under California Code of Civil Procedure section 1021.5, which authorizes an award of attorney’s fees to the prevailing party in a case that enforces an important right affecting the public interest. The trial court awarded the HOA only part of the fees it sought finding that the HOA “had a significant financial incentive to initiate the litigation.” The court found that the HOA members had brought the suit in part because they feared the turbine would cause their property values to decrease. But it also found that they were also motivated by “non-pecuniary” concerns for the project’s impact on wildlife, aesthetics, health and noise levels. As a result, the court apportioned financial responsibility for their attorney’s fees during the administrative proceedings entirely to the HOA, but because of the “different risks and much larger financial commitment” of CEQA litigation, it divided equally the responsibility for the fees the HOA incurred for the litigation between the HOA on one side, and the city and Halus Power on the other.

Halus Power and the city appealed the award of attorney’s fees, arguing that a fee award was not appropriate because the value of the benefit to the members of the HOA (i.e., maintenance of their property values) far exceeded the financial burden of litigation.

The court of appeal disagreed. It found that any financial benefit to the home owners was speculative since the litigation was not certain to prevent construction of the turbine or even change the project, and preservation of property values was not immediately or certainly “bankable.” And while the exact amount of personal benefit to the HOA members was uncertain, the fees could nevertheless be apportioned because the record supported an implied finding that the HOA’s motivations to litigate were not purely financially self-interested. Thus, the court of appeal ruled, the trial court’s apportionment and partial award of attorney’s fees was not an abuse of discretion.

The court of appeal affirmed the trial court’s award to Heron Bay HOA for a little over $181,000 in attorney’s fees for the CEQA litigation, which was less than half the amount that the HOA had requested. The court also awarded the HOA its attorneys’ fees for successfully defending the appeal.

This decision exemplifies the rule that trial courts have considerable discretion in awarding and apportioning attorneys’ fees under section 1021.5 based on the particular facts of each case. More importantly, it makes it crystal clear that CEQA plaintiffs that might avoid a decrease in their property values by successfully challenging a project are not cut off from recovering section 1021.5 attorneys’ fees.

Size Limit on Retail Tenants Not Likely to Cause Urban Decay

A general plan policy that limited the size of retail tenants in certain areas of a city was not likely to cause urban decay and was not inconsistent with other general plan policies encouraging infill development, the court of appeal held in Visalia Retail, LP v. City of Visalia, 20 Cal. App. 5th 1 (2018).

The City of Visalia’s general plan update included a policy that Neighborhood Commercial areas should be anchored by a grocery store and could not have individual tenants greater than 40,000 square feet. Visalia Retail, which owned property designated Neighborhood Commercial, filed a petition for writ of mandate seeking to invalidate the city council’s certification of the EIR and adoption of the general plan update. Visalia Retail argued that the EIR should have analyzed the potential for the tenant size cap to cause urban decay and that the general plan was internally inconsistent. The superior court ruled in favor of the city, and the court of appeal upheld the superior court’s decision.

Potential for Urban Decay

The petitioner argued that the EIR should have analyzed the potential for urban decay to result from the tenant size cap. The petitioner had submitted a report from a real estate broker that explained the policy would likely lead to vacancies, physical blight, and urban decay because, in his opinion, it was unlikely a grocery store anchor would be willing to lease a space that was smaller than 40,000 square feet. In support, the real estate broker stated in his report that (1) he was personally unaware of any grocers willing to build new stores under 40,000 square feet, (2) a typical grocery store for four grocery chains must be at least 50,000 square feet to be profitable, (3) 10,000–20,000-square-foot stores launched by a large grocery chain had been unsuccessful, and (4) three grocery stores in Visalia under 40,000 square feet had closed.

While an EIR does not need to study economic and social changes resulting from a project, physical changes to the environment that are caused by a project’s economic or social impacts are environmental effects that must be considered under CEQA. The court of appeal concluded that the real estate broker’s report did not provide substantial evidence that the 40,000-square-foot limit would cause urban decay in the form of significant physical effects on the environment.

The court explained that the real estate broker’s report did not support an argument that no grocers would be willing to build stores under 40,000 square feet. The court noted that the report’s conclusion was based only on the real estate broker’s personal knowledge, the typical store size for four grocery chains, and one chain’s experience with stores under 20,000 square feet. The court also noted that the report indicated that some grocers in some circumstances had built stores under 40,000 square feet, which contradicted the real estate broker’s conclusion that no grocers would build stores under 40,000 square feet. Moreover, the court noted that the report did not provide a reason why the three stores in Visalia under 40,000 square feet had closed. Finally, the court determined that the real estate broker’s report did not demonstrate that any vacancies in Neighborhood Commercial areas as a result of the tenant size cap would be so rampant as to cause urban decay.

General Plan Consistency

The petitioner also argued that the general plan was internally inconsistent. The petitioner claimed that the 40,000-square-foot limit conflicted with eight other policies and goals in the general plan, including a goal to promote infill development. The court of appeal rejected the petitioner’s argument. The court concluded that the city council could have reasonably concluded that the tenant size cap would not impede infill development because tenants larger than 40,000 square feet were permitted in other areas of the city. The court also explained that the city could reasonably decide to restrict the nature of infill development in some areas in order to pursue other goals, such as encouraging smaller businesses or promoting pedestrian-oriented retail:

“In sum, just because the general plan declares a goal of promoting infill development does not mean all of its policies must encourage all types of infill development. General plans must balance various interests, and the fact that one stated goal must yield to another does not mean the general plan is fatally inconsistent. Few, if any, general plans would survive such a standard.”

EIR For Railyard Did Not Adequately Analyze Air Quality Impacts

Rejecting most challenges to the environmental impact report for a new railyard near the Port of Los Angeles, a court of appeal nevertheless held that the EIR must be decertified because it did not adequately address air quality impacts in the vicinity of the new yard. City of Long Beach v. City of Los Angeles, 19 Cal. App. 5th 465 (1st Dist. 2018).

When BNSF Railway Company proposed the project, the port was served by on-dock railyards, one near-dock railyard five miles north of the port, and two off-dock railyards 24 miles north. Trucks are used to transport cargo containers between the port and the near-dock and off-dock railyards. One of the effects of the new near-dock railyard would be to substitute four-mile trips on surface streets for many existing 24-mile trips via freeway to and from the off-dock railyards. Project opponents concerned about the impacts of this shift in port truck traffic sued under CEQA.

The court held that crucial information regarding air quality was omitted from the EIR. The EIR showed that total particulate matter emissions from trucks would be reduced by the project compared to the no project alternative, because a four-mile truck trip is shorter than a 24-mile trip. But the court concluded the EIR did not adequately explain that in the vicinity of the proposed railyard, air quality would be substantially worse with the railyard than without it, and that the vicinity included homes and schools.

In addition, the EIR did not estimate how frequently or for what length of time the level of particulate air pollution in the area surrounding the new railyard would exceed the EIR’s standard of significance. Rejecting the port’s argument that it would be impractical to run the air quality model for every year of the railyard’s projected operation, the court found that selecting a reasonable number of benchmark years for analysis might be acceptable, but that in this case, “the decision to perform only a single modeling run with a 50-year analysis range does not comply with CEQA.”

The court also rejected one element of the EIR’s analysis of cumulative air quality impacts, holding that the EIR did not adequately focus on the combined impacts of the proposed project and another large railyard expansion proposed by Union Pacific adjacent to the proposed project. The fact that independent CEQA analysis of the Union Pacific project had been delayed did not excuse the port from a focused, rather than general, discussion of two large railyard expansions proposed to be located next to one another.

As to another challenge to the EIR, the court upheld the analysis. Plaintiffs argued that the EIR was defective because it did not describe in its project description, or analyze as an indirect impact, the near-dock rail project’s effect of freeing capacity at BNSF’s existing off-dock “Hobart” railyard. They argued that the EIR was required to account for truck trips to and from the Hobart railyard that would result from its new excess capacity. The court was not persuaded, stating that the record supported the EIR’s conclusion that a predicted level of economic growth would occur over the decades with or without the near-dock rail project, and that the project was not necessary to enable BNSF to service anticipated growth at Hobart. Accordingly, the court concluded, any growth at Hobart would not constitute an indirect impact of the near-dock railyard.

The City of Long Beach case is consistent with a long line of CEQA decisions that focus with particular intensity on claims of air quality impacts to communities located near proposed emitters of diesel particulate and other toxic air contaminants.

CEQA YEAR IN REVIEW 2017

A Summary of Published Appellate Opinions Under the California Environmental Quality Act

In 2017, the California Supreme Court issued two decisions involving highly controversial questions of first impression.  In the closely-watched Cleveland National Forest Foundation case, the court reversed the court of appeal’s ruling that the EIR for SANDAG’s regional transportation plan was fatally flawed because it had not sufficiently considered the 2050 greenhouse gas emissions reduction goal in the Governor’s executive order.  The court held that SANDAG was not required by CEQA to use the executive order’s goal as a standard for gauging the significance of projected emissions.  In a second, noteworthy decision, the court found an EIR certified by the City of Newport Beach deficient because it did not specifically identify which areas on the project site might qualify as Environmentally Sensitive Habitat Areas under the Coastal Act, even though the Coastal Commission has exclusive authority to decide what areas are ESHA during its permitting process.  A third decision by the court addressed an issue of more limited significance: whether CEQA is preempted by a federal statute that regulates railroads.  The court held CEQA is preempted when the project involves a privately-owned line, but not when the line is owned by a state agency.

The courts of appeal also issued several opinions involving controversial topics.  In a case involving an EIR on expansion of operations at an oil refinery, the court extended prior case law by endorsing use of operating data from 2007, the last year of full operations at the refinery, as a component of the EIR’s environmental baseline, even though the EIR’s notice of preparation was not issued until 2013.  Addressing a second question not previously considered in a published decision, the same court upheld the EIR’s determination that the project’s GHG emissions would be less-than-significant because the project would comply with CARB’s GHG cap-and-trade program.  Another significant EIR case involved the often-litigated question whether the project might lead to urban decay, with the court finding the evidence in the record sufficient to support the EIR’s conclusion urban decay impacts were unlikely. Two other EIR cases addressed issues relating to project alternatives; one upheld the EIR and the other did not.  The two opinions make significant contributions to the continually developing body of law on this subject.

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Court Defers to City’s Interpretation of the Building Code

A city’s interpretation of the building code is entitled to significant deference in light of the city’s expertise regarding land-use determinations. Harrington v. City of Davis, 16 Cal. App. 5th 420 (2017).

The City of Davis approved a conditional use permit for a property owner to use a home in a residential neighborhood as professional office space for three therapists. A previous owner had obtained a conditional use permit to use the property for massage services, but the conditional use permit had lapsed.

Petitioner contended that the issuance of the conditional use permit effectuated a change in occupancy that triggered the requirements for new construction under the Building Code, including additional parking. In support, petitioner argued that when the prior owner’s conditional use permit expired, the occupancy had reverted from business to residential. Consequently, issuance of the new conditional use permit changed the occupancy to commercial and required compliance with the accessible parking requirements for new construction. The City maintained that, under the Building Code, changes in occupancy occur only when a building has been made to comply with Building Code requirements and a certificate of occupancy has been issued. Because the City building official did not issue a certificate of occupancy when the previous conditional use permit expired, the City concluded that the occupancy did not change, and the Building Code’s accessible parking requirements were not triggered.

The court began its analysis by observing that the City’s construction of the Building Code was entitled to significant deference, as the City was the agency charged with the code’s enforcement and had significant expertise in land-use determinations. Construing the relevant provisions, the court held that the Building Code places the responsibility for determining whether a change in occupancy has occurred in the hands of the building official. Thus, the court said, where the building official has not made such a determination, no change has occurred because a “change in occupancy can[not] occur sub silentio, without the building official’s authorization or approval.” The court also noted that the City’s conclusion that a change in occupancy had not occurred was supported by substantial evidence. The administrative record demonstrated that the City carefully considered the relevance of the previous permit’s expiration, the period of residential use following the expiration, and the issuance of the new conditional use permit when it determined that the occupancy of the structure did not change.

Department of Interior Declares That Only Deliberate Acts Constitute Take of Migratory Birds

The U.S. Department of the Interior’s Office of the Solicitor has issued Memorandum M-37050, dated December 22, 2017, which concludes that the Migratory Bird Treaty Act’s prohibition on the “taking” or “killing” of migratory birds applies only to deliberate acts, such as hunting, intended to take a migratory bird. The legal opinion reverses the Obama administration’s position that the Act prohibits not only the intentional take of migratory birds but also taking or killing that is incidental to otherwise lawful activity (i.e., unintentional). See our full report on this development, by Donald Baur, Laura Godfrey Zagar, Anne Beaumont, and Christian Termyn

Voter-Approved Initiative to Limit Large Developments and Chain Stores Exceeded Initiative Power

In a case that illustrates the limits of use of voter-approved initiatives to limit development, the court of appeal invalidated an initiative passed by voters in the City of Malibu that sought to limit large developments and chain stores. The Park at Cross Creek v. City of Malibu, 12 Cal.App.5th 1196 (2017).

The initiative at issue, Measure R, consisted of two components. The first required Malibu’s City Council to prepare a specific plan for every proposed commercial or mixed-use development over 20,000 square feet.  Following the City Council’s approval, the specific plan would have to be placed on the ballot for voter approval. The City could not take any “final action on any discretionary approval” relating to the proposed development until voter approval of the specific plan.

The second component of Measure R required any proposed chain store (defined as an establishment with standardized features having ten or more outlets worldwide) to obtain a conditional use permit, which would “run solely with the operation of the [chain store] for which it was approved.

The court of appeal invalidated Measure R’s specific plan requirement on the ground that it exceeded the initiative power.  The electorate’s right to initiative and referendum applies only to legislative acts, not to administrative or adjudicatory actions. The court found that there was a “difference between, on the one hand, voter approval of a specific plan and, on the other, requiring a city council to prepare a specific plan and report, to hold a public hearing about the specific plan and report, and then requiring the plan to be submitted to voters for approval.  The former is a legislative act; the latter is an adjudicative one.”  The court held that by requiring a specific plan and voter approval of a plan before the City’s governing body could issue any permit or approval, Measure R “usurp[ed] administrative authority” by removing the City’s ability to issue discretionary approvals for a project unless the project was approved by voters.

The court also invalidated Measure R’s CUP component on the ground that the CUP was specific to the identified user rather than to the use of land.  Using the example of a Starbucks, the court noted that if “Starbucks, obtains a CUP, the CUP can be transferred to another Starbucks but not to Peet’s, notwithstanding that Starbucks and Peet’s have the same “use,” i.e., both are coffee shops. Measure R CUPs thus are establishment-specific and restricted in their transferability.”  The court held that this ran contrary to the well-established principle that a CUP creates a right that runs with the land and accordingly found the CUP component of Measure R invalid.

“Urban Decay” Not Reasonably Foreseeable Consequence of Relocating Courts from Historic Downtown Courthouse

Citing the likelihood of repurposing Placerville’s historic downtown courthouse and evidence nearby businesses were not dependent on it, the First District Court of Appeal held that “urban decay” was not a reasonably foreseeable consequence of moving judicial activities from downtown to a new building in the outskirts of the city. Placerville Historic Preservation League v. Judicial Council of California (1st Dist. 2017) 16 Cal. App. 5th 187 (2017).

The defendant, the Judicial Council of California, planned to consolidate all judicial activities in El Dorado County from two buildings–one an historic building on main street in downtown Placerville–to a new building on undeveloped land next to the county jail, two miles from the city center.  The Judicial Council prepared an environmental impact report, which identified the Main Street Courthouse as an “historical resource” for purposes of CEQA. This meant that any material impairment of the building as a result of the move would constitute “substantial adverse change” in the environment.

To save the historical resource, the Judicial Council worked with the city and county to establish a committee to explore potential re-use and repurposing of the historic courthouse. And to avoid material impairment, the draft EIR required that any new use of the building retain significant character-defining features of the building compatible with its historic character.  The EIR acknowledged that the withdrawal of judicial activities from the downtown area could affect downtown Placerville. However, it concluded that blight or “urban decay” was unlikely to result because of the city and county’s commitment to repurposing the historic courthouse building and because there were numerous office, retail and commercial businesses in the area which did not rely on courthouse operations.

The Placerville Historic Preservation League disagreed, and filed a petition challenging the certification of the EIR. It argued that the EIR’s evaluation of significant environmental effects was deficient because its conclusion that urban decay would not result was not supported by substantial evidence.

The court ruled in favor of the Judicial Council and found that there was substantial evidence supporting its conclusion that urban decay was not reasonably foreseeable. It noted that businesses come and go, and that one commenter told the Judicial Council that 38 downtown businesses had closed in the last three years, indicating the district’s resilience and ability to survive turnover without physical deterioration. The court emphasized that urban decay is a relatively extreme economic condition, and that there was no evidence to suggest it would occur due to the withdrawal of judicial activities from the downtown area.

The court also stated that a “well-grounded probability” that the city and county would follow through on its commitment to repurpose the historic building was sufficient to support the Judicial Council’s conclusion, and that there was no legitimate evidence that nearby businesses were so dependent on the activities of the historic courthouse that urban decay would result from its move. Significantly, the court  found that repurposing the building was not a CEQA mitigation measure, but a circumstance informing the project’s foreseeable effects which, in this case, did not necessitate mitigation in part because it was highly likely the building would be reused.

The court also distinguished Bakersfield Citizens for Local Control, a key case, decided in 2004, in which the court found the EIR insufficient in addressing the economic impact of locating two new WalMart supercenters in the city. In Bakersfield, the court stated, the lead agency disregarded the risk of urban decay altogether, whereas here, the agency addressed the issue and concluded that urban decay was not a reasonably probable result. Furthermore, the court noted that there was ample evidence in Bakersfield which supported the concern that the projects would lead to urban decay (e.g., an economic study commissioned by the petitioners, citations to numerous other studies of the adverse effects of supersized retailers in other communities, and numerous comments submitted related to the risk of urban decay). The Placerville court found no such evidence.

Perhaps most importantly, the court highlighted the difference between the construction of two supercenters which would siphon business from small shops and cause risk of widespread business failures (Bakersfield), and the relocation of government functions which might reduce some commercial activity but would be offset by re-purposing the courthouse with other activities (Placerville).

Court Upholds Refinery EIR’s 2007 Baseline and Reliance on Cap-And-Trade for Climate Change Analysis

In a precedent-setting decision, the Fifth District Court of Appeal has upheld two key aspects of the 2014 environmental impact report for a refinery expansion project. Association of Irritated Residents v. Kern County Board of Supervisors No. F073892 (5th Dist., Nov. 21, 2017). First, the court approved the use of 2007 operating data for the refinery as part of the baseline environmental condition, even though the EIR’s notice of preparation was not issued until 2013. Second, the court held, on a matter of first impression, that compliance with California’s cap-and-trade program showed the project’s climate change impact would be less than significant. However, the court also found that the EIR erroneously concluded that federal law preempted CEQA review of certain environmental impacts of off-site rail activities, and thus failed to disclose and analyze these impacts; accordingly, the court overturned the county’s certification of the EIR.

The Proposed Refinery Expansion

Kern County approved a project to modify an oil refinery in Bakersfield. The refinery began operation in 1932 and was operating under air district permits that allowed processing of 70,000 barrels per day of crude oil and other hydrocarbons. In 2013, the new owner of the refinery proposed modifications to enable the refinery to process a greater variety of crude oils, including Bakken crude oil from North Dakota. The project did not propose an increase in the refinery’s 70,000 barrels per day capacity, but in addition to the refinery modifications, it proposed expanding existing rail transfer and storage facilities to allow offloading an average of 150,000 barrels per day from two unit trains; the balance of unloaded crude would be sent to other refineries.

The project was controversial because it would increase transport of Bakken crude, which is generally more volatile than other crude oils. The EIR described safety concerns with transporting crude by rail, including reference to several high-profile train accidents in recent years. Project opponents sued, alleging the EIR violated CEQA in numerous respects. The published portion of the court of appeal’s opinion addresses three of these challenges.

Substantial Evidence Supported the EIR’s Use of the Last Year of Full Refinery Operations for the Project Baseline

The court first addressed the county’s approach to establishing a baseline for review of the proposed project’s environmental impacts. The EIR generally used a baseline of environmental conditions as of 2013, when the Notice of Preparation was issued for the project’s EIR. However, to describe the baseline for refinery operations, the EIR adjusted the existing environmental conditions “to the extent necessary to reflect an operating refinery” and presented throughput data for 2007, which was the refinery’s last full year of operation prior to a bankruptcy, refinery shutdown, and subsequent reduced operations that did not include crude oil processing. Petitioners challenged this deviation from CEQA’s “normal” approach to establishing a project baseline.

The court first upheld the county’s finding that existing physical conditions included an operating refinery. Substantial evidence established that refinery operations of up to 70,000 barrels a day had been approved by permits and entitlements still in effect, and that these operations had been the subject of prior CEQA reviews. Furthermore, the refinery was entitled to begin processing crude oil again regardless of the project proposal under consideration.

Second, the court addressed the county’s choice of 2007 as the realistic measure of the baseline physical conditions created by the refinery’s operations. It noted that the refinery’s maximum permitted operation (70,000 barrels per day under existing permits) would have been an inappropriate baseline since that maximum was rarely, if ever, achieved in practice. Instead, 2007 data (60,389 barrels per day) reasonably represented actual refinery operations and was adequately presented by the county as a conservative estimate, given that the average throughput between 2001 and 2008 (when the refinery was fully operational and crude oil was being refined) was slightly higher than the 2007 number.

Cap-and-Trade Compliance Shows Project Would Not Cause Significant Climate Change Impact

Addressing a question not previously decided by any published decision, the court next addressed the EIR’s conclusion that the refinery’s compliance with California’s cap-and-trade program demonstrated that the project would not cause a significant climate change impact. Petitioners argued that cap-and-trade allowances are merely authorizations to emit GHGs, not reductions in GHG emissions for the purpose of a CEQA significance determination.

The court relied on section 15064.4(b)(3) of the CEQA Guidelines, which provides: “A lead agency should consider the following factors, among others, when assessing the significance of impacts from greenhouse gas emissions on the environment: …(3) The extent to which the project complies with regulations or requirements adopted to implement a statewide, regional, or local plan for the reduction or mitigation of greenhouse gas emissions….” The court then ruled that the cap-and-trade program constituted such a regulation, noting: “The idea underlying the cap-and-trade program is not that capped facilities relying on allowances will decrease their greenhouse gas emissions and help the state achieve its target, but that the limited allocation and use of allowances means they are not available for use elsewhere, which affects California’s refining industry as a whole. Specifically, the use or expenditure of allowances will diminish the supply of allowances, which will cause their price to rise and incentivize investment in technologies and equipment that reduce greenhouse gas emissions.” The court concluded: “Based on this industry-wide perspective, we conclude it is appropriate for a lead agency to conclude a project[‘s] compliance with the cap-and-trade program provides a sufficient basis for determining the impact of the project’s greenhouse gas emissions will be less than significant.”
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An EIR Must Disclose and Analyze the Environmental Impacts of Off-Site Rail Activities Arising from a Refinery Project, Even Though Federal Regulation Might Preempt Mitigation Measures

Finally, the court held that the EIR failed to comply with CEQA by erroneously stating that federal law preempted CEQA review of certain environmental impacts of off-site rail activities. Petitioners successfully argued that the Interstate Commerce Commission Termination Act of 1995 (ICCTA), which established the federal Surface Transportation Board in order to administer a regulatory scheme for rail carriers, does not preempt CEQA analysis of the environmental impacts of rail operations that would be caused by a refinery project. Because the disclosure and analysis of environmental impacts stemming from the project’s off-site rail activities would not have burdened or interfered with these activities, the court concluded the impacts needed to have been addressed in Kern County’s EIR.

Petitioners acknowledged that the ICCTA might preempt Kern County’s ability to impose certain mitigation measures, but argued that it would not preempt an agreement requiring the refinery owner to mitigate pollution resulting from off-site rail operations. The court directed that, on remand, Kern County should determine whether the imposition of this or other potential mitigation measures on the refinery owner (a rail carrier’s customer) would indirectly impose an unreasonable burden on or interfere with rail transportation.

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The court of appeal’s opinion addresses three important issues under CEQA. First, it continues and extends the deference that courts have paid to lead agency’s determinations regarding project baseline where modifications to an existing facility are proposed. Here, the court explicitly approved use of a six-year-old baseline year where that year represented the last full year of full facility operations and was consistent with average full facility operations. Second, the decision states that the EIR for a refinery, and presumably for any other facility that is subject to the cap-and-trade program, can rely on compliance with that program to conclude that the project’s climate change impacts are less than significant. Third, the decision provides a useful reminder that an EIR must analyze all potentially significant direct and indirect impacts of a proposed project, even if mitigation of those impacts may be legally infeasible for reasons such as federal preemption.

Court May Order Partial Decertification and Leave Approvals in Place After Finding EIR Legally Inadequate

In Center for Biological Diversity et al. v. California Department of Fish and Wildlife, 17 Cal. App.5th 1245 (2017) the court of appeal held a court order that requires partial decertification of an Environmental Impact Report and leaves some project approvals in place is a legally permissible remedy when an EIR has been found legally inadequate.

Background.  This was the second appeal in this case. The petitioners had challenged the EIR and related approvals for two natural resource plans adopted for the proposed Newhall Ranch development in northwest Los Angeles County. The first trial court judgment and corresponding writ of mandate set aside the project approvals, ordered the Department of Fish and Wildlife to set aside its certification of the EIR, and enjoined the department and the developer from proceeding with any project activity.

The case then worked its way up to the California Supreme Court, which held the EIR’s findings on the significance of the project’s greenhouse gas emissions were unsupported and its measure for protecting a fish species, the unarmored threespine stickleback, was unlawful.  On remand from the supreme court, the court of appeal ruled against the plaintiffs on their other claims, and sent the case back to the trial court for issuance of a revised judgment and writ of mandate.

The trial court entered judgment in favor of the plaintiffs on their claims relating to greenhouse gas emissions and stickleback, and in favor of the department and the developer on all other issues.  The judgment further ordered that a peremptory writ of mandate be issued directing the department to decertify the portions of the EIR that addressed the significance of the project’s greenhouse gas emissions and the validity of the stickleback mitigation measures. Finally, the judgment ordered the department to suspend two project approvals that related directly to these issues, but left four other approvals in place.

On appeal from the post-remand judgment, the plaintiffs’ arguments were purely legal — that the judgment and writ were erroneous under CEQA because Public Resources Code section 21168.9 prohibits partial decertification of an EIR and also prohibits leaving project approvals in place when an EIR is decertified

The Court’s Analysis.  The court of appeal first held that the trial court had authority under the statute to partially decertify the EIR. As noted above, the judgment had directed the department to decertify only the portions of the EIR addressing greenhouse gas emissions and stickleback mitigation measures, rather than the entire EIR. The plaintiffs argued that CEQA permits no such middle ground between full decertification and no decertification.

The court noted that while an agency must certify an entire EIR before approving a project, a court has other options once it has found an agency has certified a deficient EIR.  Public Resources Code section 21168.9(a), the statute that governs court-ordered remedies for a CEQA violation, clearly allows a court to order partial decertification of an EIR following a trial, hearing, or remand.  Specifically, section 21168.9(a)(1) permits a court to void the agency determination in whole or in part.  As a policy matter, the court noted that partial decertification is consistent with the statute’s purpose, which is to give courts some flexibility in tailoring a remedy to fit a specific CEQA violation. Thus, the court held that under section 21168.9(a)(1), a court may order partial decertification of an EIR, so long as the severability criteria in subdivision (b) of that section are satisfied, which the court determined them to be in this case.

For similar reasons, the court also held that the trial court was permitted to leave some project approvals in place after partial decertification of the EIR. Since a trial court has authority under section 21168.9 to order an agency’s determination to be voided in whole or in part, the court concluded that this language allowed for the possibility of leaving some project approvals in place when an EIR is partially decertified. In particular, the court pointed to the language in section 21168.9(b), under which a court is required to order only those mandates which are necessary to achieve compliance with this division and only those specific project activities in noncompliance with this division.  The court held that a trial court may therefore leave some project approvals in place, if doing so will not obstruct CEQA compliance.

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