In March 2020, as part of a series of emergency measures in response to the COVID-19 pandemic, Governor Newsom signed Executive Order N-29-20, allowing local and state agencies to hold virtual meetings via teleconference and to make meetings accessible electronically notwithstanding the open meeting requirements in the Bagley-Keene Act and the Brown Act. These provisions were due to expire on June 15, 2020.

On June 2, 2021, in response to a written request by a coalition of local government agencies, the Governor announced that N-29-20 will not terminate on June 15, and that state and local agencies can continue to conduct virtual public meetings as needed. The Governor did not set a new expiration date for N-29-20 and committed to provide advance notice before rescinding the order to provide the agencies the time needed to meet statutory and logistical requirements.

Under the Governor’s announcement, state and local agencies may continue to hold meetings in California via teleconferencing and allow members of the public to observe and address the meeting by telephone or on the internet. All requirements of the Bagley-Keene Act and Brown Act requiring the physical presence of agency officials, staff or the public at public meetings remain suspended.

California Governor Gavin Newsom recently signed legislation, Senate Bill No. 7, that reenacts a streamlined litigation process for certain “environmental leadership development projects” and extends eligibility to additional housing projects. Previous legislation offering similar benefits to a narrower range of developments expired on January 1.

To qualify for judicial streamlining under SB 7, a project must meet the following criteria:

  • The project is for residential, retail, commercial, sports, cultural, entertainment, or recreational uses.
  • The project is located on an infill site.
  • For residential projects, at least 15 percent of units are set aside for lower-income households.
  • For non-residential projects, the project is certified as LEED Gold or better, and achieves a 15 percent improvement over comparable projects in vehicle trips per capita.
  • The project is consistent with the Sustainable Communities Strategy or Alternative Planning Strategy and does not result in any net additional emission of greenhouse gases, including greenhouse gas emissions from employee transportation.
  • The project will result in an investment in California of at least $15 million for housing projects and at least $100 million for other projects.
  • The project creates highly skilled jobs, promotes apprenticeship training, and pays prevailing wages for construction.

Certain wind and solar energy projects, and clean energy manufacturing projects also are eligible for SB 7 streamlining.

The new law provides for the Governor to certify projects that are eligible for streamlining and then to submit that determination to the Joint Legislative Budget Committee for review and concurrence or non-concurrence.

If a project qualifies for SB 7 streamlining, the public agency must prepare the record of proceedings during the CEQA review process and must certify the record within five days of approving the project. The applicant must agree to pay the costs of preparing the record, as well as court costs. Court proceedings, including any appeals, should be resolved, to the extent feasible, within 270 days after the certified record of proceedings is filed.

SB 7 streamlining is available only to projects that are certified by the Governor before January 1, 2024 and that receive approvals before January 1, 2025.

SB 7 also authorizes projects to proceed under the litigation streamlining legislation that expired earlier this year (AB 900) if the project was certified by the Governor before January 1, 2020 and is approved no later than January 1, 2022.

Plaintiff’s Brown Act claims were barred because unreasonable delay in prosecuting the lawsuit substantially prejudiced parties and the general public. Julian Volunteer Fire Company Association v. Julian-Cuyamaca Fire Protection District, No. D076639 (4th Dist., March 30, 2021).

The Julian-Cuyamaca Fire Protection District requested the San Diego Local Agency Formation Commission to dissolve the District and have the County of San Diego assume fire prevention services in the area. Two weeks later, the Julian Volunteer Fire Company Association sued, alleging the District had violated the open meeting laws of the Brown Act in its approval of the resolution requesting dissolution. While the lawsuit was pending, the dissolution proceedings moved forward: The County voted to seek to expand its sphere of influence over the District’s functions and serve as its successor agency, and LAFCO held a special election, resulting in a majority vote favoring the District’s dissolution. After the election, the Volunteer Association filed a motion asking the court to enter judgment in its favor on its Brown Act claims.

On appeal, the court found that the Volunteer Association’s Brown Act claims were barred by the laches doctrine because plaintiff unreasonably delayed in prosecuting its claims and prejudice resulted. The Volunteer Association did not seek a ruling on the merits until almost a year after filing suit, at which point LAFCO’s special election results had already been announced and the entire LAFCO process had been completed. The Volunteer Association “made a deliberate decision to wait and see whether the same result could be achieved through means other than pursuing its Brown Act allegations.” But Brown Act claims are “subject to an unusually short limitations period because it is vital that the validity of an agency’s actions be resolved expeditiously.” In light of this policy, coupled with the policy underlying the LAFCO Act to ensure orderly and efficient transfers of authority, a party could not justify waiting to resolve Brown Act allegations merely because other avenues existed for obtaining the same result. By waiting until after the proceedings were complete to seek adjudication of its Brown Act claims, the Volunteer Association caused County and LAFCO to incur substantial and potentially unnecessary costs to comply with statutorily required procedures. Such a result would be “inequitable to the District voters, LAFCO, and County under the circumstances.” Because the Volunteer Association’s tactical delay resulted in significant prejudice to LAFCO, the County and the public, its Brown Act claims were barred by laches.

An initiative measure that required new development to mitigate not only its individual traffic impacts but also cumulative impacts of other projects on traffic levels of service violated the rough-proportionality standard of Nollan and Dolan and was therefore unconstitutional. Alliance for Responsible Planning v. Taylor (County of El Dorado, No. C085712 (3rd Dist., May 4, 2021).

El Dorado County voters adopted Measure E, whose stated purpose was to end the practice of “paper roads” under which developers paid fees to mitigate traffic impacts but construction of the improvements was often delayed, resulting in unacceptable levels of service. Measure E modified County General Plan Policies to require that all necessary road improvements be completed by the project proponent so as to “fully offset and mitigate all direct and cumulative traffic impacts . . . before any form of discretionary approval can be given to a project.”

Petitioner sued, contending that the measure violated the takings clause by effectively requiring the developer to pay not only for the project’s impact, but also for the incremental effects of other projects.

The appellate court agreed. Under the “rough-proportionality” standard of Nollan v. California Coastal Commission, 483 U.S. 825 (1987) and Dolan v. City of Tigard, 512 U.S. 374 (1994), the government must “make some sort of individualized determination that the required [exaction] is related both in nature and extent to the impact of the proposed development.” Here, by requiring an individual project proponent to complete “[a]ll necessary road capacity improvements” to prevent peak-hour gridlock, Measure E “plainly cast[] a wider net than the harm resulting from an individual project.” Under any reasonable interpretation of the measure, it “required a developer to construct improvements exceeding the extent of the project’s own impact.”

The court rejected the defendant’s claim that Measure E was a land use control, not an exaction. The court distinguished California Building Industry Assn. v. City of San Jose, 61 Cal.4th 435 (2015), in which the challenged measure required developments to sell a percentage of units at below-market rates. There, the court said, the ordinance did not require the developer to give up a property interest but “simply place[d] a restriction on the way the developer may use its property by limiting the price for which the developer may offer some of its units for sale.” Under Measure E, by contrast, the developer had to give up a property interest — the cost of construction of roadway improvements — as a condition of approval. The measure thus constituted an unconstitutional exaction, not a land use control.

Senate Bill 35 (Government Code section 65913.4) was enacted in 2017 as part of an effort by the State Legislature to increase housing production. The law compels local agencies, including charter cities, to issue streamlined approvals for qualifying multifamily residential projects, even, at times, where a project conflicts with a local ordinance. In Ruegg & Ellsworth v. City of Berkeley, the court rejected Berkeley’s claim that SB 35 impermissibly interfered with the constitutional “home rule” authority over historic preservation granted to charter cities. No. A159218 (1st Dist. Apr. 20, 2021). The decision represents the first published opinion to uphold SB 35 against challenge.

To qualify for streamlined, ministerial approvals under SB 35, a project is required to comply with several criteria, among them that the development is not located where it would require demolishing “a historic structure” placed on a national, state, or local historic register. (Gov’t Code § 65913.4(a)(7)(C).) In Ruegg, the City of Berkeley denied a streamlining application on several grounds, including that the controversial, proposed mixed-use development would affect part of the West Berkeley Shellmound, a designated local landmark. The court rejected the City’s determination, finding there was no evidence that this (widely-acknowledged) subsurface resource reasonably could be viewed as an existing “historic structure” under SB 35.

The court also held that the Legislature was not prohibited from addressing through SB 35 the “municipal affair” of local historic preservation. SB 35, the court determined, addresses a matter of statewide concern—the lack of affordable housing—and the streamlining law is reasonably related to resolving that issue and does not unduly interfere with the City’s historic preservation authority. On these grounds, the court determined that the project at issue was not subject to a requirement in Berkeley’s Landmark Preservation Ordinance that a city commission approve construction in a designated landmark.

The court’s conclusion rested, in part, on its recognition that “historical preservation is precisely the kind of subjective discretionary land use decision the Legislature sought to prevent local government from using to defeat affordable housing development.” In upholding SB 35, the court had little trouble sustaining the direct connection the Legislature drew between subjective local land use decisions and the statewide affordable housing crisis.

Multiple applications for a development project are not required where the first permit denial makes clear that no development of the property would be allowed under any circumstance. Felkay v. City of Santa Barbara, No. B304964 (2nd Dist., March 18, 2021).

Felkay purchased an ocean-front lot with the intention of building a residence. The planning commission rejected the application for the residence finding that it violated City Policy 8.2 which prohibits any development on the bluff face regardless of size. On appeal to the City Council, the City found that Felkay’s takings claim was not ripe because Felkay had not investigated other potential uses of the land, including development of the area above the bluff face, agricultural or educational uses, or merging the property with the adjoining lot he owned. Felkay filed a consolidated petition for writ of administrative mandamus and complaint for inverse condemnation.

The court of appeal explained that, in general, before an inverse condemnation action is ripe, a landowner must have made at least one development proposal that has been rejected and pursued at least one meaningful application for a zoning variance or similar exception, which has also been finally denied. Once the permissible uses of the property are known to a reasonable degree of certainty, a takings claim is likely to have ripened. However, in this case, the court found that Felkay was not required to submit a second development proposal because the City “made plain” that it would not allow any development below the 127-foot elevation, and had determined that the area above that elevation was “not buildable.” Therefore, submission of a second application would have been futile because the agency’s decision was certain to be adverse. For these reasons, the court found that Felkay’s claim was ripe and that all administrative remedies had been exhausted.

Additionally, the court rejected the City’s argument that Felkay’s failure, as part of his mandamus claim, to challenge the City’s decision declining to waive the requirements of Policy 8.2 estopped him from seeking damages for inverse condemnation. The City had stipulated that limited issues would be heard under the mandamus claim and that the inverse condemnation claims would be reserved for trial — the Policy 8.2 waiver was not among the claims to be heard as part of the mandamus proceeding. The City forfeited the issue by failing to object to the apportionment of issues between the writ proceedings and inverse condemnation trial. Therefore, Felkay had also effectively exhausted his judicial remedies.

Three months ago, the Fourth District Court of Appeal upheld a Coastal Commission fine of $1 million on homeowners who performed major reconstruction on their Malibu home without obtaining coastal permits and refused to halt construction after notification of the violation by Commission staff. (See our report: Coastal Commission Order to Homeowners to Remove Seawall and Pay $1 Million Fine Upheld). Now, the Second District Court of Appeal has upheld a Commission penalty of $4,185,000 on Malibu homeowners who refused to remove structures that blocked a public access easement granted to the Coastal Commission by a prior owner of the home. Lent v. California Coastal Commission, No. B292091 (2nd Dist., April 5, 2021).

Background

In 1978, the owner of beachfront property in Malibu applied to the Coastal Commission for a coastal development permit to build a house. As a condition of approving the permit, the Commission required, and the owner dedicated, a five-foot-wide easement for public access through the property from the highway to the beach.

Notwithstanding the easement, in 1983, the owner built a wooden deck and stairway (shown in the photo below) over most of the easement area. The owner also constructed a fence and gate that entirely blocked access to the easement area from the highway. The Coastal Commission did not issue a permit or otherwise approve any of these structures.

 

The Lents bought the property in 2002. In 2007 the Commission notified the Lents that the structures were inconsistent with the easement and violated the Coastal Act. After subsequent failed attempts to convince the Lents to remove the structures, the Commission served them with a notice of intent to issue a cease-and-desist order. The notice informed the Lents that the Commission could impose administrative penalties under Public Resources Code section 30821 of up to $11,250 per day per violation.

Two weeks before the hearing on the cease-and-desist order, Commission staff issued a report stating that a penalty of up to $8,370,000 was warranted because the violations caused “significant blockage of public access” and the Lents refused to undertake any “voluntary restoration efforts” despite the Commission’s efforts over many years.  The staff report, however, recommended a penalty between $800,000 and $1,500,000, and specifically $950,000.

The $4 Million Penalty

After hearing testimony from the Lents and other interested parties, the Commission voted unanimously to issue the cease-and-desist order, requiring removal of the structures and imposing a penalty of $4,185,000 (50% of the maximum authorized penalty). The Lents sued to set aside the penalty, contending that its imposition violated their rights to due process of law and that the penalty was an excessive fine under the federal and state constitutions.

The appellate court found no merit in the Lents’ due process claims. “[A]lthough not as robust as trial-like proceedings,” the notice and hearing procedures governing imposition of penalties by the Commission guaranteed that a property owner had notice of the alleged violations, an opportunity to present evidence, notice of the recommendation by the Commission staff and supporting evidence prior to the hearing, and an opportunity to present a defense prior to and at the hearing. The court likewise rejected the claim that the Commission violated due process by imposing a penalty over four times the amount recommended by its staff. The court said due process did not mandate advance notice of the exact penalty the agency intended to impose, so long as the agency provided adequate notice of the substance of the charge.  The court also pointed out that staff had informed the Lents in writing that the statute authorized a penalty of up to $11,250 per day; “the Lents at that point knew all they needed to know about the potential penalty they faced, how the Commission would calculate it, and why.”

The court also found that the penalty did not amount to an excessive fine under the state or federal constitutions. A fine is constitutionally excessive only if “grossly disproportionate to the offense.” Examining the factors relevant to proportionality, the court held that the penalty was constitutionally valid because (1) the Lents had a high degree of culpability evidenced by their willful refusal to remove the structures for over nine years after the Commission told them the structures violated the Coastal Act; (2) the Lents’ conduct effectively precluded the Commission from using the easement to enable public access to a beach that was part of a three-mile stretch of the coast with no other public access; (3) other statutes authorized daily penalties for activities similar to those involved here—including undertaking activity without obtaining a required permit—some of which were higher than the amounts authorized under section 30821; and (4) the Lents had submitted no evidence of inability to pay the penalty.

A City municipal transit agency did not violate equal protection, substantive due process or state anti-age discrimination laws when it disfavored some taxi cab medallion holders from accessing lucrative airport pickups because, among other things, the law was rationally related to legitimate government interests. San Francisco Taxi Coal. v. City & Cty. of San Francisco, 979 F.3d 1220 (9th Cir. 2020).

Taxi cabs that operate in San Francisco and pick up riders from the San Francisco International Airport are regulated by the San Francisco Municipal Transportation Agency (SFMTA). Among other things, the SFMTA issues taxi cab medallions that allow the taxi cabs to operate within SFO. In 2010, the SFMTA enacted regulations that provided for the sale of medallions (at a price of $250,000) and changed the medallion structure to create three tiers of drivers: (i) those issued medallions pre-1978, (ii) those issued medallions between 1978-2010, and (iii) those that purchased issued medallions after 2010.

The only relevant difference among the tiers was that the post-2010 medallion holders paid $250,000 to the City for each medallion. Uber, Lyft and other ride hailing technologies began to disrupt the industry shortly after the post-2010 medallion holders began purchasing taxi medallions. In response the SFMTA adopted regulations in 2018 that, among other things, disfavored pre-2010 medallion holders “from [airport] pickups with priority given at a fluctuating ratio to [p]urchased medallion holders depending on demand.” The pre-2010 medallion holders sued the City, the SFMTA, and its directors for violations of substantive due process, equal protection, CEQA, and anti-age discrimination law.

The court rejected the substantive due process claim, observing that the court was not free to engage in policy judgments regarding laws that were otherwise constitutional. The court also rejected the CEQA claim, holding that the 2018 regulations did not qualify as a “project” under CEQA and that plaintiffs’ claim that the regulations would have indirect effects on physical environment was speculative. The court also held that the pre-2010 medallion holders did not plausibly state a claim for age discrimination.

The court likewise found no equal protection violation because there were legitimate reasons for the distinctions the policy drew amongst medallion holders. The court upheld the trial court’s ruling that the 2018 regulations rationally served several legitimate purposes, including (1) reducing traffic congestion at the airport; (2) encouraging drivers to service the City; and (3) mitigating economic injury to holders of purchased medallions. The court reasoned the 2018 regulations did “not single out [p]urchased medallion holders for favorable treatment with no rational or logical reason for doing [so].” Purchased medallion holders obtained expensive permits from the City only “to have the rug pulled out from under them by an unexpected disruptive technology.” Mitigating the adverse impact on those most affected by a shift in the market was a permissible state purpose, even if some might question its policy wisdom.

A challenge to a water district’s increase in its ad valorem property tax was untimely under the 60-day statute of limitations in the validation statutes. Coachella Valley Water District v. Superior Court (Roberts), No. E074010 (4th Dist., March 9, 2021).

Code of Civil Procedure sections 860-870 provide for accelerated procedures for determining the validity of certain bonds, assessments and agreements entered into by public agencies. Referred to as the validation statutes, they allow a public agency to file an action to promptly determine the validity of any of the agency’s acts that fall within the scope of their provisions. They also allow any “interested person” to bring an action challenging the validity of such acts (sometimes referred to as “reverse” validation actions) within 60 days of the challenged action.

The Coachella Valley Water District adopted a two-cent increase in its ad valorem property tax levied annually to satisfy its contractual obligations to the State Water Project (SWP). Roberts filed suit to invalidate the tax under provisions of the Water Code and the California Constitution (Propositions 13, 26, and 218) and to obtain a refund. The water district argued the entire action was time-barred because the validation statutes required Roberts to present his claims in a “reverse validation action” no later than 60 days after the water district adopted the tax.

The appellate court agreed and ordered the case dismissed. The court began its analysis by noting that the validation statutes do not specify the matters to which they apply; rather, their procedures apply to “any matter which under any other law is authorized to be determined” under the Code of Civil Procedure. The court concluded that provisions of the County Water District Law empowering water districts to levy and collect taxes on “property within the district” and providing that an action “to determine the validity of an assessment, or of warrants, contracts, obligations, or evidences of indebtedness pursuant to [the County Water District Law] may be brought pursuant to [the validation statutes]” constituted such authorizing law.

Roberts argued that this wasn’t the case because the word “tax” did not appear in the provisions authorizing a validation action. The court found this focus unduly narrow in light of “the County Water District Law’s overarching tax scheme and the obvious interplay [between] provisions authorizing imposition of property taxes and those making the validation procedures applicable to any county water district ‘assessment.’” The court relied on another provision of the Water District Law defining an “assessment” in this context as including setting a tax rate based on the value of property. The tax at issue, it concluded, was “clearly such an ‘assessment.’”

Roberts also contended that even if his claims were barred under the validation statutes, they were still valid as a taxpayer action under Code of Civil Procedure section 526a because he challenged both imposition of the tax and the act of expending the allegedly illegal funds. The court disagreed, observing that a validation action and a taxpayer action were not mutually exclusive. Both types of claims could be pursued provided they were filed within the 60-day period governing a validation action. The “crux of Roberts’ claim,” the court said, was “a challenge to the validity of the SWP tax.” Roberts’ taxpayer claim was based on his allegation that the SWP tax was invalid; hence “Roberts’ imposition and spending challenges [were] two sides of the same coin.”

The court likewise found no merit in Roberts’ argument that imposing the 60-day statute of limitations in this setting would effectively immunize the water district’s future tax rates from judicial scrutiny. It pointed out that a water district must fix the SWP tax rate anew annually, thereby creating a new “assessment” the validity of which could be challenged under the validation statutes. And in fact, the court noted, Roberts had already filed a timely reverse validation action against the SWP tax rate the water district fixed for the following fiscal year.

The Ninth Circuit reversed a conviction for three counts of violations under the Clean Water Act because the district court failed to instruct the jury that the defendant needed to knowingly discharge material “into water” to convict. United States v. Lucero, No. 19-10074 (9th Cir. March 4, 2021).

In the summer of 2014, Lucero executed a scheme under which he charged construction companies to dump dirt and debris on lands near the San Francisco Bay, including wetlands and a tributary subject to the Clean Water Act. Although Lucero admitted to “walking the land” where the dumping happened, the period when the dumping occurred was unusually dry due to drought. The trial court found Lucero guilty on two counts of discharges into wetlands and one count of discharge into a tributary.

The Ninth Circuit overturned Lucero’s conviction because the trial court had failed to instruct the jury that the defendant needed to knowingly discharge a pollutant in violation of the Clean Water Act. In order to determine the proper standard of proof, the court analyzed the language of section 1319(c) of the Clean Water Act, which makes it a felony to “knowingly violate[] section 1311” of the Act. The majority concluded that the statute requires the defendant to knowingly add a pollutant “into water” but does not require that the defendant must knowingly discharge pollutants into “waters of the United States.” The majority reasoned that this was the proper reading based on the construction of the statute and Congress’s broad concern for preventing water pollution.

The court concluded that the failure to include instructions regarding the knowledge requirement was not harmless error and warranted a remand. The evidence that Lucero knew he was dumping into water was “underwhelming and contested” due to the drought conditions at the time.

The court rejected the defendant’s argument that the definitions of “waters of the United States,” “wetlands,” and “tributaries” were unconstitutionally vague. The court held that the term “wetlands” was not vague, despite the Supreme Court’s “significant nexus” interpretation, because it provided an “ascertainable standard” given the facts of the case. The term “tributary” was not vague because the court had long recognized a common understanding of the term. Lastly, the narrower 2020 “waters of the United States” definition did not apply to Lucero because the incident occurred in 2014 and the new statute did not apply retroactively.