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.

The Court of Appeal held that an agreement obligating a developer and city to indemnify LAFCO against claims arising from its annexation decision lacked consideration because the agreement simply required LAFCO to do what it was already obligated to do by statute. San Luis Obispo Local Agency Formation Commission v. City of Pismo Beach, No. B296968 (2nd Dist., March 3, 2021).

The City of Pismo Beach approved a 252-unit residential subdivision and the City and developer applied to the San Luis Obispo LAFCO to annex the property. The LAFCO application signed by the City and developer included an agreement to indemnify LAFCO against any claims arising out of its action on the application, including claims brought by the City and/or developer. The City and developer later filed a mandamus action challenging LAFCO’s denial of their application. The suit was unsuccessful and LAFCO sought attorney’s fees of more than $400,000 under the indemnity agreement.  The City and developer refused to pay, contending there was no consideration underlying the indemnity agreement because LAFCO was already legally required to accept and act upon the annexation application.

The Court of Appeal agreed. It noted that all contracts must be supported by consideration in the form of either a benefit to the promisor or a detriment to the promisee, and a promise to do what the promisor is already legally bound to do is neither. LAFCO had a statutory duty under the Cortese-Knox-Hertzberg Act to accept all completed applications and to review and approve or disapprove them. LAFCO argued that, under its power to assess fees to cover processing costs, it was entitled to charge anticipated attorney fees as part of the application fee. The court rejected this claim, noting that the statute authorized fees to fund the cost of the administrative process, not costs of post-decision court proceedings. Moreover, the statute required that any such administrative fees be adopted in compliance with the Mitigation Fee Act. LAFCO had not complied with the procedural requirements of the Act with respect to assessment of attorney’s fees and these procedures could not “be avoided by inserting a provision in an application form.”

The court likewise rejected LAFCO’s claim that it had the power to require the indemnity agreement implied from other express powers granted by statute. The court pointed out that Code of Civil Procedure section 1021 allows recovery of attorney’s fees only as “specifically provided for by statute,” not implied by the grant of other powers. Because LAFCO lacked such specific statutory power and the indemnity agreement lacked consideration, there was no legal basis for recovery of attorney’s fees.

The state was required to reimburse municipalities for the cost of state-mandated trash receptacles at transit stops because local governments lacked authority under Proposition 218 to impose fees either on transit agencies or on owners of adjacent property to recover such costs. Department of Finance v. Commission on State Mandates, No. B292446 (2nd Dist., Jan. 4, 2021).

The Regional Water Quality Control Board, Los Angeles Region issued a permit authorizing the County of Los Angeles and certain cities (collectively, the Operators) to operate stormwater drainage systems. The permit required the Operators to (1) install and maintain trash receptacles at transit stops; and (2) periodically inspect commercial facilities to ensure compliance with various environmental regulatory requirements. Some of the Operators filed claims with the Commission on State Mandates seeking a determination that the state must reimburse them for the costs related to the trash receptacle and inspection requirements under article XIII B, section 6 of the California Constitution. The Commission determined that the trash receptacle requirement was a reimbursable state mandate but that the inspection requirements were not.

In general, when the state imposes a new program or higher level of service on a local governments, section 6 of the California Constitution requires the state to reimburse the local governments, unless they have the authority to levy service charges, fees, or assessments sufficient to pay for the mandated program or increased level of service.  The court found that local governments did have authority to levy fees to cover the inspection costs based upon their police power authority to impose regulatory fees that did not exceed the reasonable cost of the inspections.

The court reached the opposite conclusion regarding fees for the trash receptacles. The trash receptacles would be located either on the local government’s own property or that of the local transit district, and the court concluded that local governments lacked authority to impose fees for the receptacles on transit agencies. Responding to the state’s argument that local governments could, instead, impose fees on owners of property adjacent to the transit stops, the court found that such fees would likely run afoul of Proposition 218, which prohibits fees incident to property ownership unless, among other requirements, the fees are for a service that “is actually used by, or immediately available to, the owner of the property in question.”  The court observed that “common sense dictates that the vast majority of persons who would use and benefit from trash receptacles at transit stops are not the owners of adjacent properties but rather pedestrians, transit riders, and other members of the general public; [and that] any benefit to property owners in the vicinity of bus stops would be incidental.” Moreover, the court said, even if local governments could establish that the need for the trash receptacles was in part attributable to, and would be used by, adjacent property owners, the fees for that service would violate a separate provision of Proposition 218, which prohibits fees for a “service available to the public at large in substantially the same manner as it is to property owners.”

Another court of appeal has held that local special taxes adopted by a citizen-sponsored initiative do not require two-thirds voter approval.  Howard Jarvis Taxpayers Association v. City and County of San Francisco, No. A157983 (1st Dist., Jan. 27, 2021, as modified Feb. 22, 2021).

In June 2018, 51 percent of San Francisco voters passed the “Universal Childcare for San Francisco Families Initiative.” This initiative proposed a tax on certain commercial rents to fund early childcare and education.  The Howard Jarvis Taxpayers Association brought suit challenging the initiative, claiming that Proposition 13 (1978), Proposition 218 (1996) and the San Francisco City Charter required two-thirds approval for all special taxes, including those adopted via a citizen-sponsored initiative.

The case was considered by Division Five of the First District, which rejected the Association’s challenge.  The Division Five justices agreed with a decision issued by Division Four of the First District regarding a similar challenge the Association had brought against a special tax enacted by the San Francisco voters in the November 2018 election, City and County of San Francisco v. All Persons Interested in the Matter of Proposition C.

Division Five agreed with the All Persons Interested decision that California Supreme Court precedent mandated a conclusion that the provisions of Propositions 13 and 218 imposing requirements on cities, counties, special districts and other local governmental entities were to be interpreted as applying only to councils, boards and other representative bodies, not the electorate.  As determined in those prior cases, there is nothing in either Proposition 13 or Proposition 218 that implicitly overruled the power of initiative to enact laws by simple majority vote.  Moreover, while voters are bound by the substantive limitations applicable to legislative actions taken by boards and councils, they are not bound by procedural requirements such as a two-thirds vote requirement.

Division Five also addressed two new issues.  First, it considered the fact that a member of the Board of Supervisors had been a proponent of the initiative.  The Association argued that the supervisor’s involvement was tantamount to the Board itself proposing a tax to the voters, which would have required a two-thirds majority vote.  The opinion noted that “we fail to see how the sponsorship and involvement of the single official here gives rise to the inference that the City intentionally circumvented Propositions 13 and 218 or effectively controlled the initiative.”

Second, in a lengthy footnote, the court issued a warning to all litigators by discussing the failure of the Association’s attorneys to bring the All Persons Interested case to its attention.  The court “admonish[ed] counsel to candidly acknowledge such authority in the future.”  It quoted a treatise noting that “Your failure to confront unfavorable relevant holdings will be regarded as an attempt to deceive and mislead the court.”   It cited Rule 3.3(a)(2) of the Rules of Professional Conduct stating that “A lawyer shall not:. . . fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel.”

The court upheld the summary judgment the trial court had granted for San Francisco.

The Court of Appeal held that a landowner’s petition for “exclusion” under the Subdivision Map Act seeking orders declaring a parcel map void and restoring the historical lot lines was barred under the doctrine of laches. Decea v. City. of Ventura, 59 Cal. App. 5th 1097 (2021).

Decea bought a house in the Lake Sherwood community of Ventura County in 2007. The house sat within “Parcel A” on a map recorded by a former owner in 1974. The 1974 map also included historical lot lines from a subdivision map recorded by the original developers in 1923. Parcel A overlaid three of these historical lots and parts of two others, totaling 1.04 acres.

In 2017, Decea sought to reconfigure Parcel A into two half-acre lots, but was told by the County that Parcel A consisted of one legal lot, not five. This meant Decea could not subdivide the property without falling below the area’s one-acre minimum lot size. Decea disputed the validity of the 1974 parcel map and whether the former owner had legally merged the five original lots into one.

The County did not change its position, and Decea filed suit seeking to exclude his property from the 1974 map under the Subdivision Map Act’s “exclusion” provisions, which require local agencies to disregard a recorded map under some circumstances. Decea claimed that even if the 1974 map had been properly recorded, it had not been intended to erase the 1923 lots and merge them into Parcel A. His evidence included excerpts of a prior owner and County officials discussing the effect of the parcel map at two administrative hearings in 1985.

The County objected to Decea’s petition for exclusion, arguing that the prior owner knew at the 1985 hearings that the land was considered a single parcel by the County and failed to contest that interpretation of the 1974 parcel map. The County moved to dismiss the petition under the doctrine of laches, under which an otherwise timely claim may be dismissed when a party unreasonably delays enforcing a right, resulting in prejudice to the other party.

The court upheld the trial court’s dismissal of the petition under the laches doctrine, finding that there were unnecessary and prejudicial delays because the prior owner had known of possible errors on the parcel map in 1985 but failed to raise them.  The court noted that the prior owner’s dialogue with the County in 1985 showed that he acknowledged the 1974 map’s validity and knew what he had to do to correct any errors. However, the County heard nothing further from the property owner until Decea approached it 2017.

The court pointed out that the testimony of the prior owner and his contemporaries would have been highly probative as to the issues raised the petition, and that the loss of this testimony constituted substantial evidence of prejudice to the County. “The time to address the map’s purported errors,” the court said “passed 35 years ago [and] [i]t would be inequitable to awaken the issues now.”

A regional water board is not required to estimate the compliance costs for individual permittees before issuing a permit. City of Duarte v. State Water Resources Control Board, 60 Cal. App. 5th 258 (2021).

The case involved the National Pollutant Discharge Elimination System permit issued to 86 municipal entities in Los Angeles County that operate municipal separate storm sewer systems (commonly referred to as MS4s). The Los Angeles Regional Water Quality Control Board issued the permit in November 2012, and the State Water Resources Control Board upheld the permit with modifications in June 2015. The permit included numeric effluent limitations rather than effluent limitations based on best management practices.

The City of Duarte, one of the MS4 permittees, filed a petition for writ of mandate, asserting that the regional and state water boards did not sufficiently consider the costs of compliance with the permit. When imposing pollutant restrictions that are more stringent than the requirements of the federal Clean Water Act, a regional water board must consider a list of factors set forth in Water Code section 13241. These factors include economic considerations.

The court of appeal held that the regional and state water boards sufficiently considered economic considerations before issuing the permit. (The court assumed, without deciding, that the water boards were required to consider the factors in Water Code section 13241 because the permit imposed restrictions that were more stringent than federal law.) The regional board had prepared an economic analysis of the permit’s requirements prior to its issuing the permit, and the permit included 11 findings regarding economic considerations. Among other things, these findings recognized that the permit would impose additional compliance costs that would be highly variable among permittees, provided data on compliance costs for existing MS4 programs and on households’ willingness to pay for improvements in water quality, identified potential funding sources for permittees’ compliance costs, and described the costs of not regulating MS4 discharges. The court concluded that the water boards explained their reasoning and acted well within their discretion in their analysis of economic considerations. The court rejected the City of Duarte’s contention that the water boards were required to do a more detailed analysis of compliance costs for each permittee.

 

The Ninth Circuit held that a private nonprofit club that leased city property was not a state actor that could be held liable for constitutional claims under 42 U.S.C. § 1983. Pasadena Republican Club v. Western Justice Center, No. 20-55093 (9th Cir., Jan 21, 2021).

The City of Pasadena leased city-owned property to the Western Justice Center, a private nonprofit that provided law-related services and occasionally rented out its event space to community groups after hours. The terms of the lease required WJC to independently manage the property and pay for repairs, renovations, and maintenance.

In April 2017, the Pasadena Republican Club rented space from WJC for an evening speaking event. The afternoon before the event, WJC rescinded the rental agreement because WJC had recently learned of the speaker’s affiliation with an organization that promoted causes antithetical to WJC’s values. The Club filed suit against WJC, WJC’s executive director, and the City under 42 U.S.C. § 1983, which provides individuals a cause of action for government actions that infringe on their constitutional rights.

The court dismissed the Club’s argument that there was “joint action” or a “symbiotic relationship” between WJC and the City that created “state action” required to bring a claim under § 1983. The court distinguished this situation from other cases that found state action when a city leased property to a private entity. WJC and the City managed their operations independently of each other, and the City did not perform any City functions on the property. WJC and the City were also not “financially integrated” because the City did not financially support WJC’s operations; nor did it profit or receive revenue from WJC’s rental agreements. The fact that the City may have intangibly profited off WJC’s civic activities was also not a valid argument.

The court also dismissed the Club’s argument that WSJ’s executive director should be held liable for conspiring to deprive someone of their constitutional rights under § 1985(3). In order to have a claim under that section, at least one of the conspiring parties must be a state actor. Because the Club alleged that the executive director conspired only with members of the staff and executive committee of WJC, its claim was not actionable under § 1985(3).

On January 26, 2021, attorneys from Perkins Coie presented the 31st Annual Land Use and Development Law Briefing. Topics included:

    • Key Developments in Land Use Law
    • Legislative Changes Affecting Housing Development
    • CEQA: Key Cases and Trends
    • COVID 19 — Real Estate Impacts
    • Wetlands, Endangered Species and NEPA Update

A full set of the written materials, in pdf form, is available here.
If you would like a bound, hard copy of the materials, please click here.

Selected materials from the presentation have also been posted on the California Land Use and Development Law Report (See CEQA Year in Review;  2020 Land Use Case Summaries).

Below are summaries of the key California and Ninth Circuit land use and development cases decided in 2020. Each case name is linked to our more extensive discussion of the case on the California Land Use & Development Law Report.

1.  Planning and Zoning

GRANNY PURPS, INC. v. COUNTY OF SANTA CRUZ
53 Cal. App. 5th 1 (2020)

The court of appeal held that the County of Santa Cruz was required to return approximately 2,000 medical marijuana plants seized from a dispensary. Local law enforcement had seized the plants due to a violation of a county zoning ordinance that prohibits cultivation of over 99 medical marijuana plants. The court reasoned that the plants were not subject to seizure because the local zoning ordinance did not change the legal status of medical marijuana under state law. Because medical marijuana is not contraband in California, and local governments are bound by state law, local governments cannot withhold legally possessed marijuana plants.

LATEEF V. CITY OF MADERA
45 Cal. App. 5th 245 (2020)

Plaintiff appealed to the City Council after his conditional permit was denied by the Planning Commission. At the time of the hearing, only five of the seven councilmembers were eligible to vote: one council seat was vacant, and one councilmember had recused himself from voting. Although the Council voted four to one to overturn the Planning Commission’s decision, the City determined that the motion failed to meet the requirement in the municipal code that “five-sevenths vote of the whole of the Council shall be required to grant, in whole or in part, any appealed application denied by the Commission.” The court confirmed the City’s interpretation, finding that nothing in the municipal code indicated that the “whole of the council” meant only those present and voting.

PETROVICH DEVELOPMENT CO., LLC v. CITY OF SACRAMENTO
48 Cal. App. 5th 963 (2020)

The court invalidated the City Council’s denial of plaintiff’s application for a conditional use permit for operation of a gas station, finding that the actions of one of the councilmembers demonstrated hostility and bias toward the project and resulted in denial of a fair hearing. The court relied on evidence that the councilmember was actively lining up votes of other councilmembers against the project, as well as advising a project opponent on how to lobby the council. These concrete facts showed that the councilmember acted as an advocate, not an impartial decisionmaker, and should have recused  himself from voting on the appeal. His actions demonstrated an unacceptable probability of actual bias and denied plaintiff a fair hearing. Continue Reading 2020 Land Use and Development Case Summaries

The Ninth Circuit vacated U.S. Department of the Interior approvals for a proposed offshore oil drilling and production facility in Alaska after finding its EIS improperly failed to consider impacts associated with foreign oil consumption and the U.S. Fish and Wildlife Service’s Biological Opinion relied on overly vague mitigation measures and improperly failed to quantify the project’s nonlethal take of polar bears. Center for Biological Diversity v. Bernhardt, 982 F.3d 723 (9th Cir. 2020).

Conservation groups challenged the Bureau of Ocean Energy Management’s (BOEM) approval of the “Liberty Project,” which proposes to produce crude oil from Foggy Island Bay off the northern coast of Alaska, for failure to comply with procedural requirements of NEPA, the ESA, and the Marine Mammal Protection Act (MMPA).  Project proponents estimated that the Project would produce approximately 120 million barrels of crude oil over a period of fifteen to twenty years.  To do so, the Project would require construction of various new facilities including an offshore gravel island, wells, a pipeline to transport the oil, a gravel mine, and additional ice roads and crossings. The Project site is characterized by its ecological diversity and for providing habitat and food sources for threatened and endangered marine mammals, including polar bears.

EIS That Failed to Address Greenhouse Gas Emissions Resulting from Foreign Oil Consumption Violated NEPA

The Ninth Circuit was persuaded by one of two arguments raised by the conservation groups concerning BOEM’s compliance with NEPA.  The court held that BOEM had failed to analyze “indirect effects” of the Project as required by NEPA by arbitrarily failing to include emissions estimates resulting from foreign oil consumption in its analysis of the Project’s no-action alternative. Counterintuitively, the EIS had concluded that maintaining the status quo under the no-action alternative would result in greater air emissions of priority pollutants as compared with the Project because, BOEM said, the production gap would be filled with substitutes produced from countries with “comparatively weaker environmental protection standards.” However, the EIR did not quantify the purported change in foreign oil consumption. BOEM argued that it could not have summarized or estimated foreign emissions associated with changes in foreign consumption with accurate or credible scientific evidence.

The court rejected BOEM’s failure to either quantify downstream greenhouse gas emissions or to “thoroughly explain why such an estimate is impossible.” The court specifically faulted the EIR for failing to “summarize existing research addressing foreign oil emissions” and for ignoring “basic economics principles,” including changes to equilibrium price and demand effects of the Project. Moreover, the court declined to accord deference to BOEM’s economic analysis of greenhouse gas emissions, stating that “BOEM’s area of expertise is the management of ‘conventional (e.g. oil and gas) and renewable energy-related’ functions, including ‘activities involving resource evaluation, planning, and leasing.’” Based on these findings, the court found that the BOEM’s failure to address global emissions constituted an impermissible failure to evaluate reasonably foreseeable environmental impacts required to be analyzed under NEPA. Continue Reading EIS and Biological Opinion Invalidated for Offshore Alaska Oil Project