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The U.S. Supreme Court has issued a wide-ranging decision regarding the rights of homeowners affected by Superfund response actions, ruling that they are bound by CERCLA’s ban on additional remedial actions beyond those authorized by the EPA. The case, Atlantic Research Company v. Christian et al., 590 U.S. ___ (April 20, 2020), concerned historical releases from the former Anaconda smelter site in Butte, Montana, which had impacted surface soils at nearby residences. Unhappy with the response action selected by the EPA — which allowed soil impacted below risk-based goals to be left in place and capped — the homeowners filed suit in state court under a variety of common law theories. The Supreme Court’s decision includes significant limitations on the ability of homeowners to force additional cleanup actions without agency approval, and reduces the toxic tort risk faced by clients working to remediate Superfund sites with residential impacts. Our full update on the case and its implications, by Christopher D. Thomas, P. Derek Petersen and Katherine E. May, is available here.

Kern County’s ordinance banning marijuana dispensaries was validly reenacted because a “material change in circumstances” had occurred since the County previously repealed a similar ordinance in response to a referendum petition.  County of Kern v. Alta Sierra Holistic Exchange Service, No. F077887 (5th Dist., March 6, 2020).

In 2011, the County adopted an ordinance banning medical marijuana dispensaries.  Opponents of the ban presented a valid referendum petition to the County.  In response, the County Board of Supervisors repealed the 2011 ordinance.

In 2016, the County adopted an urgency measure placing a moratorium on new medical marijuana dispensaries.  Later that year, California voters passed Proposition 64, a statewide initiative legalizing recreational marijuana.  In 2017, the County adopted an ordinance declaring the operation of both recreational and medical marijuana dispensaries a public nuisance.

The County brought nuisance abatement proceedings against the defendant marijuana dispensaries.  Defendants argued that both the 2016 and 2017 ordinances violated the Elections Code by reenacting an “essential feature” of the 2011 ordinance despite the successful referendum petition. The appellate court disagreed and crafted a new rule for determining the circumstances under which a county may reenact essential features of an ordinance repealed by referendum.

The Material-Change-in-Circumstances Test

Elections Code section 9145, which governs county referenda procedures, does not provide a time limit for reenacting ordinances previously repealed by referenda. This contrasts with Elections Code section 9241, which prohibits cities from reenacting a protested ordinance within a year after the ordinance was disapproved by the voters. Analyzing the two statutes, the appellate court determined that the legislature’s silence in section 9145 on the “question of procedure involving the protection of the referendum power” left it to the court to create procedures to protect the power. Continue Reading Counties May Reenact Essential Features of an Ordinance Previously Repealed by Referendum After a “Material Change in Circumstances”

On April 8, 2020, the U.S. Fish and Wildlife Service announced the finalization of a Candidate Conservation Agreement with Assurances (CCAA) for the monarch butterfly. Authorized by the Endangered Species Act, a CCAA is a voluntary conservation agreement that addresses the conservation needs of at-risk species before they are listed as endangered or threatened. Under the agreement, more than 45 transportation and energy companies and numerous private landowners will participate in monarch butterfly conservation by providing and maintaining habitat along energy and transportation rights-of-way corridors on public and private lands across the country. This will provide potentially millions of acres of overwintering habitat for the monarch butterfly with the goal that listing under the ESA will become unnecessary. A Perkins Coie team including Don Baur, Bill Malley, Bob Maynard, Anne Beaumont, Cassie Roberts, Christina Bonanni and Sheri Pais represented the Monarch Butterfly CCAA Task Force, which prepared the CCAA.

As reflected in our earlier report (How Developers Can Help Save the Monarch Butterfly and Why They Should), long-term declines in the population of monarch butterflies have significantly increased the probability that they may become extinct in the near future. A U.S. Geological Survey and Scripps Institution of Oceanography study found that the Eastern migratory monarch population declined by 84 percent between 1997 and 2015, indicating a substantial probability of “quasi-extinction” over the next two decades. A quasi-extinct population is one with so few remaining individuals that recovery is effectively impossible — while the remaining numbers may survive for a brief time, the population as a whole will inevitably become extinct.

Research indicates that the most effective way to increase monarch butterfly numbers is to focus on restoration of their breeding habitat in the northern U.S. and southern Canada. Monarchs depend on several species of milkweed to provide food for developing larvae. Milkweed has declined precipitously as a result of a combination of herbicide use, climate change, insecticides (including neonicotinoids) and other factors. Continue Reading U.S. Fish and Wildlife Service Approves Historic Agreement for Protection of Monarch Butterflies

A California Court of Appeal upheld denial of a petition by vintners challenging the prohibition on new vineyards within the Santa Monica Mountains Coastal Zone in deference to the California Coastal Commission’s finding that viticulture adversely impacts sensitive habitats, water quality, water supply, and scenic resources. Mountainlands Conservancy, LLC v. California Coastal Commission, No. B287079 (2d Dist., Apr. 1, 2020).

The California Coastal Act requires the California Coastal Commission to review and certify local coastal programs (LCP) developed by local authorities that control land use planning within their respective areas of the coastal zone.  Los Angeles County proposed to amend the LCP for the Santa Monica Mountains Coastal Zone in a manner that would ban new agricultural uses.  Commission staff recommended approval of the LCP with modifications that lightened restrictions on some new agriculture but retained the ban on new vineyards.  Commission staff reasoned that the majority of land within the LCP area was “unsuitable” for agriculture, and new vineyards should “remain prohibited due to a number of identified adverse impacts attributed specifically to those operations, including increased erosion from removal of all vegetation, use of pesticides, large amounts of water required, their invasive nature, and their adverse impact to scenic views.”

The Commission unanimously voted to approve the LCP as modified and certified the LCP in October 2014.  Landowners within the LCP area sued, contending principally that the Commission erred in failing to heed policies favoring the preservation of agricultural lands within the coastal zone and that there was insufficient evidence to justify its ban on new vineyards.

The Court of Appeal found no legal error in the Commission’s consideration of California Coastal Act policies requiring the Commission to maintain the “maximum amount of prime agricultural land . . . in agricultural production” and forbidding the conversion of other lands “suitable for agricultural use” unless “continued or renewed agricultural use is not feasible.”  The court observed that the LCP fully protected existing agricultural production, including existing vineyards.  It also noted that the California Coastal Act definition of “feasible” includes “economic, environmental, social, and technological factors” that the Commission properly considered in support of its finding that the LCP lands were mostly “unsuitable” for agriculture.

In response to the landowners’ further contention that new vineyards should be treated equally to other agricultural uses not subject to a total ban, the court found substantial evidence in the record supporting the special ban under the LCP.  The court pointed to a UCLA Institute of the Environment & Sustainability report, which studied urbanization within the Santa Monica Mountains National Recreation Area and found that “[a]dditional vineyard development has the potential to severely disturb natural areas, which could result in fragmentation and loss of native species.”  The court also relied upon administrative testimony from the Commission’s staff ecologist, who opined at the Commission hearing that new vineyards in the LCP area would threaten habitat loss, disrupt wildlife corridors, reduce biodiversity, and impact freshwater resources.  Evidence of the economic feasibility of new coastal vineyards, such as federal recognition of the Malibu Coast American Viticulture Area, did not override competing environmental and ecological factors in the view of the Commission or the Court of Appeal.

The Second District Court of Appeal held that a project’s potentially significant environmental impacts required preparation of an EIR rather than the mitigated negative declaration adopted by the City. Save the Agoura Cornell Knoll et al. v. City of Agoura Hills et al., 46 Cal.App.5th 665 (2020).

The project at issue consisted of 35 residential apartment units plus retail, restaurant, and office space on an 8.2-acre site located in Agoura Hills, California. The City approved a Mitigated Negative Declaration (MND) for the project, finding no substantial evidence of a significant effect on the environment because the project incorporated feasible mitigation measures that would reduce any potential impacts to a less-than-significant level.

  1. Impacts on Cultural Resources

The court of appeal determined the MND’s mitigation measures were insufficient to avoid or reduce potential impacts to prehistoric cultural resources to a less-than-significant level. He proposed mitigation measures, it found, lacked any analysis of whether the archeological resources within the proposed construction site could be avoided. Nor did the measures specify any performance criteria for evaluating the feasibility of avoidance as an alternative to excavation. Further, substantial evidence provided by an expert in Native American archeology and history demonstrated that the project could likely cause significant permanent damage to the site and the proposed data recovery program was inadequate to mitigate that damage.

  1. Impacts on Sensitive Plant Species

The project site contained three special-status plant species that would be significantly impacted by project grading, landscaping, and fuel modification activities. The court found that, even with the proposed mitigation measures, the project could still have a significant impact on these sensitive plant species. It concluded that the mitigation measures improperly deferred formulation of certain mitigation efforts, failed to set forth specific performance criteria to ensure that mitigation would be effective, relied on outdated botanical surveys of the area, and did not provide for any feasible alternatives if proposed salvage and replanting efforts failed. Continue Reading Mitigated Negative Declaration Inadequate for Mixed-Use Project

The Ninth Circuit upheld dismissal of a takings claim as unripe because plaintiffs did not seek a timely exemption from the City’s requirements for conversion of property into condominium ownership. Pakdel v. City and County of San Francisco, No. 17-17504 (9th Cir., March 17, 2020).

The City of San Francisco allows conversion of property owned as a tenancy-in-common to condominium ownership on condition that the owner agree to offer any existing tenants lifetime leases in units within the converted property.  Plaintiffs purchased an interest in a tenancy-in-common property and rented their portion of the property to a tenant. When they later applied to convert their property to condominium ownership, plaintiffs initially agreed to offer their tenant a lifetime lease as a condition of receiving final conversion approval from the City. In November 2016, they signed an agreement with the City committing to offer the lifetime lease and specifically “covenant[ed] and agree[d] that [they] w[ould] not seek a waiver of the provisions of the [applicable ordinance] after that stage of the approval process.” In exchange, plaintiffs sought and received a partial refund of the permit conversion application fee.

Plaintiffs’ final conversion map was approved in December 2016. Six months later, they requested that the City either not require them to execute the lifetime lease or compensate them for the value of the lease interest. When the City refused to do either, plaintiffs sued, contending that the lifetime lease requirement violated the Takings Clause of the Fifth Amendment. Continue Reading Takings Claim Unripe Where Property Owner Knowingly Failed to Seek Exemption from City Requirements

On March 31, six Bay Area counties—Alameda, Contra Costa, Marin, San Francisco, San Mateo, and Santa Clara—jointly issued new shelter-in-place restrictions that expand, clarify, and extend certain restrictions until May 3, 2020. Previous county orders issued on March 16 allowed almost all Bay Area housing construction to continue, as well as certain other construction projects (as did Governor Gavin Newsom’s March 19 safer-at-home order, which applies statewide). The new orders, however, allow only construction for essential infrastructure, healthcare projects directly related to addressing the COVID-19 pandemic, housing and mixed-use projects that include at least 10% income-restricted affordable housing, projects required to maintain safety, sanitation, and habitability of residences and commercial buildings, and construction necessary to secure an existing construction site that must shut down. Our complete report on the new orders, by Cecily T. Barclay, Marie A. Cooper and Auria Maleksalehi is available here.

The coronavirus (COVID-19) is placing businesses in situations where facilities have to be shut down, staff are sent home, laboratories that test monthly samples are temporarily closed, and contractors who normally conduct sampling or testing are not available. These circumstances create challenges for environmental regulatory/permit compliance. An update highlighting various ways that COVID-19 can adversely affect a facility’s environmental compliance and outlining steps that can be taken to address these issues, by Christopher (Chris) W. Rich, Sloane A. Wildman, Jeffrey (Jeff) L. Hunter, and Christopher (Chris) J. Sutton is available here.

As the widespread economic impacts of the coronavirus (COVID-19) worsen, Governor Gavin Newsom has issued Executive Order N-28-20 to assist Californians experiencing financial hardship. The order implements measures specifically aimed at helping homeowners, tenants, borrowers and others that have lost their source of income due to business closures or layoffs in the wake of COVID-19. It includes removal of statutory restrictions in order to allow local governments to impose eviction restrictions, including a suspension on residential or commercial evictions, for tenants unable to pay their rent because of COVID-19. Our update on the Executive Order, by Allan E. Low, Anne Li and Rachael Rutkowski is available here.

As the coronavirus (COVID-19) continues to spread, rapidly evolving economic and social changes are presenting a host of legal issues for the real estate industry. Attorneys at Perkins Coie, LLP, have published guidance on some of the more pressing issues affecting developers, landlords, tenants, and lenders. The guidance, prepared by Cecily T. Barclay, Allan E. Low, Camarin E.B. Madigan, Anne Li, Rachael Rutkowski and Shaun K. Devereaux  is available here.