Indian Gaming Act and NEPA Irreconcilable, Ninth Circuit Rules

The Ninth Circuit has held that the National Indian Gaming Commission’s approval of a tribal gaming ordinance does not require review under the National Environmental Policy Act because there is an irreconcilable conflict between NEPA and the Indian Gaming Regulatory Act.  Jamul Action Committee v. Chaudhuri, No. 15-16021 (9th Cir., June 9, 2016).

The Indian Gaming Regulatory Act provides that before an Indian tribe can conduct gaming on its land, the tribe must first enact a gaming ordinance that describes how the tribe will operate its gaming facilities. The ordinance must then be approved by the Gaming Commission. The Jamul Indian Village (Tribe), a federally recognized Indian tribe in California, enacted a gaming ordinance and obtained Gaming Commission approval, which was challenged for failure to comply with NEPA.

NIGAday2_0025The Ninth Circuit began its analysis by identifying “two circumstances where an agency need not complete an EIS even in the presence of a major federal action and despite an absence of express statutory exemption”: (1) where doing so would create an irreconcilable conflict with the substantive statute at issue; and (2) where a substantive statute displaces NEPA’s procedural requirements. This case, the court concluded, fell into the first category because the Act requires that the Gaming Commission to approve or disapprove a gaming ordinance no later than 90 days after the tribe submits the ordinance, and if it does not approve or disapprove within that time, the ordinance is deemed approved by operation of law. This short time period, the court concluded, was insufficient to accommodate the demands of NEPA review.

In reaching this conclusion, the court first acknowledged that it has been generally reluctant to find a statutory conflict between NEPA and other federal statutes in order not to undermine Congress’ intent that the NEPA apply broadly. There can be no irreconcilable conflict, for example, when a deadline is imposed by the agency rather than by Congress or when “the triggering act for a short statutory time table” is under the agency’s control. An irreconcilable conflict occurs only where Congress has determined the period within which the agency must act and the event that triggers the beginning of the period.

The deadline for approval of a gaming ordinance is imposed by Congress, not the Gaming Commission. Moreover, the event that triggers the 90-day period under which the Commission must act is a tribe’s submission of the ordinance, an event over which the Commission has no control.

Mono_WindsAfter determining that the Act was potentially irreconcilable with NEPA, the court further determined that it would be impossible for the Gaming Commission to prepare an EIS within the Act’s required timeframe. Under previous Ninth Circuit precedent, the court assumed that it takes an agency at least one year to prepare an environmental impact statement. Not standing on precedent alone, however, the court calculated the environmental review timeline based on both statutory and regulatory requirements and concluded that “assuming it takes no time to respond to the public’s views on scope and implementation, prepare a draft EIS, and incorporate public comments into the final EIS, the shortest time frame in which NIGC could prepare an EIS would be one hundred and twenty days.” This, the court held, gave rise to a clear and irreconcilable conflict between the mandatory agency deadline imposed by Congress and NEPA.

Ninth Circuit Upholds BLM’s Approval of Renewable Wind Energy Project

On the heels of a decision nullifying the Bureau of Land Management’s approval of a wind energy project under the National  Environmental Policy Act (reported on here),  the Ninth Circuit rejected a challenge to BLM approval of another wind turbine project, finding it consistent with NEPA, the Migratory Bird Treaty Act and the Bald and Golden Eagle Protection Act.  Protect Our Communities Foundation v. Jewell, No. 14-55666 (9th Cir., June 7, 2016).

Plaintiffs challenged BLM’s decision to grant a right-of-way permitting Tule Wind, LLC, to construct and operate a renewable wind energy project on federal lands in southeastern San Diego County. Wind_turbine_constructionTule Wind’s original project involved the construction of 128 wind turbines and supporting infrastructure. The BLM ultimately granted a right-of-way for a more modest facility, eliminating 33 turbines. In addition, several turbines were repositioned to reduce the risk of avian collisions. The project’s required mitigation measures included an 85-page Avian and Bat Protection Plan, developed in conjunction with the BLM and the U.S. Fish and Wildlife Service.  The plan relied on scientific literature and research studies, including field surveys in the project area conducted by Tule Wind over a period of several years. Plaintiffs nonetheless argued that the project would harm birds in violation of the MBTA and Eagle Act. Plaintiffs also challenged the adequacy of the BLM’s review of the project’s environmental impacts under NEPA.

In affirming the district court rejection of the challenge, the Ninth Circuit concluded that liability under the Migratory Bird Treaty Act does not extend to an agency acting in a purely regulatory capacity. The court held that the Act “does not contemplate attenuated secondary liability on agencies like the BLM that act in a purely regulatory capacity, and whose regulatory acts do not directly or proximately cause the ‘take’ of migratory birds within the meaning of [the statute].”  In the court’s view, the BLM merely authorized Tule Wind to construct and operate the project. It therefore did not act to “take” migratory birds within the MBTA’s meaning. For similar reasons, the BLM was not liable for any Eagle Act violations independently committed by right-of-way grantees.

As an alternative argument, plaintiffs claimed the BLM’s action was “contrary to law” within the meaning of the Administrative Procedure Act, since it permitted Tule Wind to engage in otherwise lawful activities that would lead to incidental migratory bird fatalities. The court again disagreed, concluding that the BLM’s regulatory role in this case was too far removed from the ultimate legal violation and therefore could not be independently in violation of the APA.

The Ninth Circuit also rejected plaintiff’s various NEPA claims, determining that (1) the project’s purpose and need statement contained in the Environmental Impact Statement was sufficiently broad, (2) the BLM had discretion to dismiss alternatives for the project, (3) the mitigation measures were sufficiently detailed and contained adequate baseline data, and (4) the EIS took the requisite “hard look” at the project’s environmental impacts.

Court of Appeals Nullifies Environmental Review of Wind Energy Project

Observing that “[r]enewable energy projects, although critical to the effort to combat climate change, can have significant adverse environmental impacts,” a Ninth Circuit panel has invalidated the environmental review of a major wind turbine project by the Bureau of Land Management. The court held that the BLM did not adequately consider the project’s impacts on the greater sage grouse because the Environmental Impact Statement failed to assess baseline sage grouse numbers during the winter months. Oregon Natural Desert Association v. Jewell, No. 13-36078 (9th Cir. May 26, 2016).

Greater_Sage-GrouseThe greater sage grouse is a relatively large ground-dwelling bird that relies on sagebrush for its survival year-round. As part of the proposed Echanis Wind Energy Project in southeastern Oregon, the BLM selected a transmission line that cut across, in part, the Steens Mountain Cooperative Management and Protection Area, which is located near the center of one of the last remaining strongholds of contiguous sagebrush habitat.

In particular, sage brush habitat is essential for winter survival of sage grouse. The Final EIS acknowledged the project’s potential impact during winter months, but despite the concern, no surveys were conducted to determine if sage grouse were present at the Echanis site during the winter months. Instead, the BLM relied on surveys done at nearby sites and, from those surveys, assumed that no grouse used the Echanis site during winter.

The Ninth Circuit concluded that the BLM had improperly extrapolated data from the nearby surveys rather than conducting a survey at the actual Echanis site to see if sage grouse were present there. The court acknowledged that under NEPA, the establishment of a baseline “is not an independent legal requirement,” but rather a “practical requirement.”  Nonetheless, the court cited several cases finding environmental analyses deficient for failing to establish an environmental baseline. The court also cited the BLM’s own comments on another project, in which the BLM had urged another agency to assess baseline winter sage-grouse populations.

Compounding this extrapolation flaw, the extrapolated data was itself incorrect. Contrary to what the Final EIS stated, four sage grouse in fact were found at the nearby site, and the Final EIS therefore did not comply with NEPA’s requirement to provide “[a]ccurate scientific analysis.” In the court’s view, the fact that some sage grouse were found at the nearby site in mid-winter “greatly undermines the validity of the BLM’s assumed absence of sage grouse at the Echanis site.”BLM - The Bureau of Land Management

The court held that the Final EIS’s inaccurate data concerning the nearby site “rendered its assumption concerning the winter presence of sage grouse at the Echanis site arbitrary and capricious.” Had the BLM assumed the presence (rather than the absence) of sage grouse at the Echanis site, the site would have been deemed Category-1 Habitat, and the Project would not have gone forward there. Thus, errors in the BLM’s analysis were not harmless, and “materially impeded informed decisionmaking and public participation.”

 

Fish and Wildlife Service Reissues 30-Year Eagle Take Rule

As we previously reported, in August 2015, a U.S. District Court in San Francisco nullified the U.S. Fish and Wildlife Service’s new rule increasing the length of programmatic permits to “take” bald and golden eagles from 5 years to 30 years.  Shearwater v. Ashe, No.14-CV-02830-LHK (N. Dist. Ca, Aug. 11, 2015). In striking the rule, the court held that the Service had not demonstrated a sufficient basis in the administrative record for its decision not to prepare an EIS or EA and therefore failed to comply with NEPA’s procedural requirements.

bald-and-golden-eagle-informationThe Service subsequently prepared a draft programmatic Environmental Impact Statement (available here) and, on May 6, 2016, issued a new version of the proposed rule. As with the 2013 version invalidated by the District Court, the rule would substantially change how the Service administers its conservation and management program under the Bald and Golden Eagle Protection Act (Eagle Act). The rule would extend the maximum permit term under the Eagle Act from five to 30 years, and change permit criteria and mitigation standards. These proposed changes, if adopted, would impact renewable energy and other project development, particularly in the Western United States. Our full Update on the rule is available here.

Wetlands Jurisdictional Determinations are Final Agency Actions Subject to Immediate Judicial Review

The U.S. Supreme Court ruled yesterday that a wetlands jurisdictional determination by the U.S. Army Corps of Engineers under the Clean Water Act is a final agency action subject to judicial review.  Hawkes Co., Inc. v. U.S. Army Corps of Engineers, 578 U.S. ___ (2016).  The Supreme Court’s decision resolves a circuit split on the issue, and it has important implications for landowners, developers and regulators. Our full report on the case is available here.

County Board May Not Take Actions That Implement Essential Feature of a Referended Ordinance

When a referendum petition is presented against an ordinance and the board of supervisors decides to “entirely repeal the ordinance” rather than present it to the voters, the board must revoke the challenged ordinance in its entirety and may not take additional action that has the practical effect of implementing the essential feature of the ordinance. County of Kern v. TCEF, 246 Cal.App.4th 301 (2016)

OLYMPUS DIGITAL CAMERA

In 2009, the Board of Supervisors of Kern County enacted a zoning ordinance that effectively allowed medical marijuana dispensaries in commercial zoning districts. In 2011, the Board enacted a new zoning ordinance, the Dispensary Ban Ordinance, which banned all medical marijuana dispensaries throughout the county’s jurisdiction. Opponents circulated a referendum petition, and obtained the requisite signatures. The Board responded by repealing the entire chapter of the zoning ordinance that included both the Dispensary Ban Ordinance and the 2009 ordinance allowing dispensaries in commercial zoning districts. The result was that dispensaries were not allowed in any zoning district anywhere in the county.

Elections Code section 9145 requires that when a county board of supervisors is presented with a qualified referendum petition, it must either “entirely repeal the ordinance against which a [referendum] petition is filed” or submit the ordinance to a vote. The court of appeal agreed with Kern County that this language did not necessarily require the county to return all circumstances to the status quo that existed before the Dispensary Ban Ordinance was enacted, and that the county had discretion to take other actions besides repealing the referended ordinance. However, this discretion is limited by the overriding principle that these actions may not have the practical effect of implementing the core element of the challenged ordinance. Continue Reading

Court Blocks Implementation of Level 3 School Fees

A Sacramento Superior Court judge has issued a temporary restraining order barring the State Allocation Board from formally notifying the California Senate and Assembly that state funds for new school facility construction are no longer available. The order, issued yesterday, effectively blocks implementation of Level 3 school fees, which would otherwise have been triggered as a result of the notification.

As we reported yesterday (see State Allocation Board Approves Level 3 Fees), on May 25, the State Allocation Board voted to provide notice to the Senate and Assembly that “state funds for new school facility construction are not available.” Under Government Code § 65595.7, this notice authorizes school districts that have adopted Level 2 fees to increase the fees to a Level 3 rate, which may be up to 200% of the Level 2 fee. Under the State School Facility Program, Level 2 fees are intended to fund 50% of the cost of providing school facilities for new residential development, with the other half paid for from state bond revenues. However, upon a determination by the State Allocation Board that such state funds have been exhausted, the law authorizes school districts to increase their fees to cover the full cost of new facilities. The formal trigger for Level 3 fees is the notice from the SAB to the Senate and Assembly that school facility funds are not available.

cmjc-front-03

The judge’s order barring the SAB from transmitting the notice results from a lawsuit filed by the California Building Industry Association on the same day as the SAB’s action. In the suit, CBIA contends that the SAB erred in concluding that state funds have been exhausted because funds from bonds authorized by the voters in 2006 through Proposition 1D remain available for new school construction. CBIA maintains that the SAB used “creative accounting” to relabel certain funds designated under Proposition 1D for new construction as “seismic repair” funds and concluded that such funds were therefore not available for new construction. This action, CBIA argues, was unlawful both because only the legislature or the voters are authorized to reallocate funds approved for a specific purpose by the voters, and because under Proposition 1D, seismic repair funds are a subcategory of the funds approved for new construction.

The court’s decision is not a ruling on the merits of the CBIA’s claims.  Rather, it is intended to preserve the status quo pending a hearing on CBIA’s motion for a preliminary injunction, set for July 1, 2016.  The restraining order will remain in effect until that hearing, at which time the court will decide whether to extend the bar against the SAB notice pending a trial on the merits, which could be several months away.

In the interim, CBIA, together with the Coalition for Adequate School Housing, a school district-sponsored advocacy group, will continue to campaign for voter approval of a $9 billion school bond initiative on the November 2016 ballot. This initiative, placed on the ballot through the efforts of Californians for Quality Schools — an entity formed by CBIA and CASH — would include $3 billion in new school construction funding, effectively mooting the issue of whether such funds remain from the last bond authorization.

Social and Psychological Impacts of Changes in Community Character are Outside the Scope of CEQA

Poway, California, touts itself as the “City in the Country.” For 20 years, Harry Rogers operated a horse boarding facility in Poway known as the Stock Farm.  Rogers decided to close down the Stock Farm and build twelve homes in its place, most of which would be on one-acre lots, with enough room for  horses, a permissible use under existing zoning. Over objections from some members of the community, the city council unanimously approved the proposed development based on a mitigated negative declaration. Preserve Poway v. City of Poway (D066635)  4th Dist., March 9, 2016.

Palo Alto Stock Farm horse barn, Fremont Rd., Palo Alto, CA

Opponents of the development filed suit to challenge the city council’s actions, claiming that an EIR was required because the loss of the Stock Farm would have a significant impact on Poway’s horse-friendly “community character:” Children would not be able to continue riding horses and will spend their free time “sitting in front of a computer or video game, or getting into trouble;” riding horses at the Stock Farm taught children valuable life lessons, and brought families together; and Poway would lose its “City in the Country” feel. The trial court agreed with these arguments, and ruled against the city.

The city appealed, and the court of appeal upheld the city’s actions, holding that the impact of closing the Stock Farm on the character of the community is outside of CEQA’s scope.

The court observed that to the extent community character has been discussed in CEQA cases, it has been limited to aesthetic impacts.  However, the court explained, “The community character issue here is not a matter of what is pleasing to the eye; it is a matter of what is pleasing to the psyche.”   The opponents’ claims went beyond aesthetic concerns to include “psychological and social factors giving residents a sense of place and identity, what makes them feel good and at home in Poway.”

The court explained that CEQA does not require an analysis of subjective psychological feelings or social impacts, and that the fact that there was a heated public debate about community character does not by itself put the project within CEQA’s reach. As the court stated, “CEQA’s overriding and primary goal is to protect the physical environment;” the “environment” for purposes of CEQA is the physical conditions  within the area that will be affected by a proposed project.

The CEQA Guidelines and case law make it clear that a project’s social and psychological effects are not to be treated as effects on the environment.  Cases decided under NEPA,  the court noted,  have also rejected claims that a project’s social and psychological effects should be treated as environmental impacts.  Thus, the opponents’ repeated assertions that the Stock Farm was integral to Poway’s community character as the “City in the Country” did not sway the court, because it saw the project’s claimed impacts on community character as psychological and social effects.

The court concluded that CEQA did not require the city to study psychological and social impacts upon its community character; if the Legislature had wanted to define the “environment”  to include psychological, social or economic impacts on community character, it could have done so, but it did not.

 

State Allocation Board Approves Level 3 Fees — CBIA Seeks Injunction

In a move that could result in doubling developer fees overnight in more than 200 school districts, the State Allocation Board last night voted to formally notify the California Senate and Assembly that state funds for new school facility construction are no longer available. The decision, by a 6 to 4 vote, will enable school districts that have adopted Level 2 fees to collect fees at twice the Level 2 rate.

ApprovedSenate Bill 50, which became law in 1998, authorizes school districts to charge developer fees at one of three levels. The base statutory rate, known as the “Level 1 fee,” is currently $3.48 for residential development and $0.56 for commercial development. School districts that satisfy certain criteria may charge “Level 2” fees in an amount intended to fund 50% of the cost of providing facilities for students from new residential development. SB 50 authorizes districts that have adopted Level 2 fees to charge fees at a “Level 3” rate if the State Allocation Board certifies that state funds for new school facility construction are no longer available. The Level 3 rate can be up to double the amount of the Level 2 fee adopted by the school district. Over 200 school districts have adopted Level 2 fees. The doubling of such fees could result in developers in some districts paying more than $30,000 in school mitigation for each new home.

The SAB’s action comes as a deep disappointment to the building industry, which has been actively working to pass a statewide $9 billion school bond currently on the November 2016 ballot. The school bond initiative was sponsored by Californians for Quality Schools – a coalition of the California Building Industry Association and the Coalition for Adequate School Housing, a school district organization. (See our report on the background of the $9 billion bond measure — $9 Billion School Bond Measure Headed for November 2016 Ballot). The full text of the bond measure can be found here.

The CBIA is seeking immediate injunctive relief in Sacramento Superior Court to prevent the SAB’s action from going into effect. CBIA contends that the SAB’s determination that state funds are no longer available is erroneous because over $150 million in funding for new construction approved by the voters in 2006 remains to be apportioned.  A court decision on CBIA’s request for a temporary restraining order is expected later today.

Ordinance Prohibiting Mobile Medical Marijuana Dispensaries Was Not a “Project” Under CEQA

A California Court of Appeal has held that a city ordinance prohibiting mobile medical marijuana dispensaries within city boundaries did not constitute a “project” under the California Environmental Quality Act.  Union of Medical Marijuana Patients, Inc. v. City of Upland, 245 Cal.App.4th 1265 (2016).

In 2007, the City of Upland adopted a zoning ordinance prohibiting any medical marijuana dispensary — whether fixed or mobile – in any zone within the city. The City prepared and adopted a negative declaration under CEQA, which concluded that the ordinance would have no significant effect on the environment. No one challenged the City’s negative declaration.Flowers

In 2013, the City adopted an ordinance that specifically prohibited mobile marijuana dispensaries within the City. Based on its findings that mobile dispensaries are associated with increased criminal activity and that 34 mobile dispensaries just outside the City advertised direct delivery of marijuana, the City concluded that there was “a high likelihood that mobile dispensaries will immediately flourish in the City without the adoption of this Ordinance.”

The Union of Medical Marijuana Patients, Inc. (UMMP) submitted comments arguing that the 2013 ordinance constituted a “project” under CEQA that would have “foreseeable environmental effects,” including “(1) increased travel by residents who would now be forced to travel outside the City to obtain medical marijuana; and (2) increased indoor cultivation activity within the city” which would result in increased utility use and hazardous waste. The City did not respond to these comments, and UMMP filed a petition for writ of mandate challenging the validity of the 2013 ordinance for failure to comply with CEQA.

The Court of Appeal affirmed the trial court’s denial of the petition, holding that the 2013 ordinance was not a project subject to CEQA because the ordinance “merely restates the prohibition on mobile dispensaries that was imposed by the 2007 ordinance.” The Court noted that the ordinance met the first prong for determining whether the ordinance was a project subject to CEQA because “it was an activity directly undertaken by [a] public agency.” Nonetheless, the ordinance, as a mere restatement of the previous ordinance, failed the second prong because it was not an activity that “may cause either a direct  physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.” (Guidelines § 15378.)

The Court rejected UMMP’s contention that the 2013 ordinance was not a restatement of the 2007 ordinance because the 2007 ordinance was essentially a zoning ordinance adopted to regulate land use, not to regulate activities undertaken with motor vehicles. According to the Court, the 2007 ordinance did not regulate land use only, and its codification in the municipal code’s zoning title did not so limit the scope of the provision. While the main focus of the 2007 ordinance was on fixed dispensaries, which is a proper zoning function, the Court found no impediment to City prohibiting any dispensaries, whether fixed or mobile.

Finally, the Court concluded that even if the 2013 ordinance was not a mere restatement, it did not constitute a project for CEQA purposes because ‘[t]he ostensible environmental impacts UMMP cites” were based on layers of assumptions about what might occur as a result of the ordinance. UMMP offered no evidence to support its argument that residents currently obtaining marijuana from mobile dispensaries “would be forced to travel greater distances” to obtain the medication or that the ordinance would result in indoor cultivation, leading to increased electrical and water consumption, waste plant material and odor, and hazardous waste materials associated with fertilizing and harvesting marijuana plants. These alleged impacts, the court ruled, were too “speculative and unlikely” to be deemed “reasonably foreseeable.” (Guidelines § 15064, subd. (d)(3).)

The case follows a long line of California decisions rejecting challenges to municipal regulation of medical marijuana facilities on various grounds. (See, e.g., our recent post, California Cities and Counties Can “Just Say No” to Medical Marijuana Dispensaries)

LexBlog